HUNGARY AGREES ON SUPPLY DEAL WITH DRUG SECTOR

Hungary's drugmakers and drug distributors have agreed to a deal with the government, paying compensation for budget overspends by the country's social insurance fund, OEP. This year, some HUF20bn (US$97.49mn) will be contributed by the sector, with HUF22.5bn (US$109.68mn) payable in 2006.

According to reports, producers and distributors will be obliged to decide how they will share the bill, possibly basing contributions on turnover, or on the number of products each firm offers in Hungary.

The Hungarian government has been attempting to reduce drug prices in the last few years, as it struggles to finance modernisation. In March 2004, the government attempted to impose 15% price cuts for medicines reimbursed by the OEP. However, these measures were overruled by the country's Constitutional Court, and the government has turned to drug companies to help cover the shortfall.