ITALY BACKS DOWN ON PHARMACEUTICAL PRICING CONTROVERSY

Italy's health ministry and pharmacy association Federfarma have reached an agreement on plans to cut prices on non-reimbursable drugs and OTCs. The government has pledged to halt any further reductions in drug prices, citing technical and legal reasons for its decision.

Pharmacy groups had especially opposed the authorities' strategy of targeting price cuts in individual therapeutic segments. The agreement now removes one element of the government's plans for the sector, but other moves remain strongly opposed by the pharmaceutical sector. A mechanism introduced in January, which imposes a 10% discount on all branded pharmaceuticals with sales rising above the national average, has been the subject of strong protests.

Further, the latest agreement does little to resolve concerns over other issues in the drug retail sector, such as late payments by the country's beleaguered reimbursement system and the role of direct distribution. Further, despite rapidly falling prices caused by such measures as compulsory generic substitution, consumer groups and competition authorities continue to push for further cuts.