NEW CZECH PLAN TO REDUCE PHARMACY MARGINS

The Czech government has approved a measure reducing pharmacy mark-ups for medicines covered by health insurance. From January 1 2006, pharmacies will be limited to a 29% profit margin, compared to the current 32%.

Pharmaceutical spending in the Czech Republic has been rising rapidly of late, increasing by 7% in 2004 to reach a record CZK56bn (US$2.32bn). Meanwhile, the government is planning to reduce healthcare spending by US$1.4bn by 2007, which should help clear debts of US$403mn.

Pharmacies in the country have opposed the measure, which they say will lead to financial difficulties. However, the government has pledged to ensure that no bankruptcies occur, while reiterating its desire to improve public access to medicines.

The Czech Republic's drug costs have reportedly spiralled in recent months, with many blaming the country's recent accession to the EU. In 2004, spending increased by CZK170 (US$7.04) on average per capita, bringing total drug expenditure to CZK56bn (US$2.3bn), of which 73% was reimbursed by the government.