CZECH REPUBLIC CRITICISED OVER DRUG COST SYSTEM

The European Commission has criticised the Czech government over its drug cost regulations, which do not comply with European Union (EU) standards. This is another blow to the country's reimbursement system, which is already suffering from soaring drug expenditure and a growing debt burden.

Currently, Czech law does not require the Ministry of Health to provide objective and verifiable criteria to justify the distribution of insurance funds intended for drug reimbursement. Czech drugmakers claim that the lack of a coherent set of rules governing drug costs has left the system open to corruption. If the Czech republic does not address the situation satisfactorily, the European Commission has threatened to implement court proceedings.

Meanwhile, the Czech health insurance sector is struggling to control debt levels, which have risen by CZK10bn (US$405.52mn) this year alone. In July 2005, the government announced that it would introduce a number of cost-cutting measures designed to reduce healthcare spending by up to US$1.4bn by mid-2007. These will include implementing controls on prescribing, reducing pharmacy mark-ups and encouraging bulk buying by hospitals. Also being considered is the consolidation of the health insurance sector with state-controlled insurer VZP getting a larger role. VZP spends around CZK40bn (US$1.62bn) per year on medicines, accounting for around 73% of total expenditure.