Cablegate: Poland - Price Cuts On Refundable Drugs List

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Anne W McNeill 10/06/2006 12:01:52 PM From DB/Inbox: Search Results

Cable
Text:

UNCLAS WARSAW 01611

SIPDIS
CXWARSAW:
ACTION: ECON
INFO: DCM ORA AMB POL ADM FCS MGT PAS

DISSEMINATION: ECOX
CHARGE: PROG

APPROVED: EXEC:RRORVIG
DRAFTED: ECON:EKURHANOWICZ
CLEARED: NONE

VZCZCWRI152
RR RUEHC RUCPDOC RUCNMEM RUEHBS RUEHKW
DE RUEHWR #1611/01 2191333
ZNR UUUUU ZZH
R 071333Z AUG 06
FM AMEMBASSY WARSAW
TO RUEHC/SECSTATE WASHDC 1574
RUCPDOC/USDOC WASHDC
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHBS/USEU BRUSSELS
RUEHKW/AMCONSUL KRAKOW 1238

UNCLAS SECTION 01 OF 02 WARSAW 001611

SIPDIS

STATE FOR EUR/NCE/DKOSTELANCIK/MSESSUMS
STATE PASS USTR FOR DONNELLY/ERRION
COMMERCE FOR 4232/ITA/MAC/SUR/OECA/MROGERS

E.O. 12958: N/A
TAGS: ETRD KIPR TBIO EINV PL
SUBJECT: POLAND - PRICE CUTS ON REFUNDABLE DRUGS LIST

1. (U) On July 22, 2006 Embassy received a copy of a letter from
Polish Health Deputy Minister Boleslaw Piecha to Pawel Zelewski,
President of the Innovative Pharmaceutical Companies Association
(IPCA). The letter is the Ministry of Health's response to IPCA's
concerns with regard to a 13 percent price cut for imported drugs
placed on the reimbursement list. According to American
pharmaceutical companies affected by this price cut, Piecha's letter
does not address any of IPCA's concerns. The letter quotes
paragraphs of bills and resolutions justifying the Ministry's
action.

2. (U) Polish Health Deputy Minister Boleslaw Piecha's letter.

BEGIN TEXT:

Warsaw, 14 JUNE 2006

Mr Pawel Zelewski
President
Management Board
Association of Innovative
Pharmaceutical Companies'
Representatives

In response to a letter dated 29 May 2006 concerning remarks made
during public consultations and inter-ministerial agreements to
drafts of regulations amending the lists of reimbursed drugs, I
should present the following explanations:

I cannot share a position expressed in the said letter as if the
drafts of secondary laws concerning the lists of reimbursed drugs
sent to public consultations and inter-ministerial agreements were
prepared in violation of the procedure applicable while determining
prices for drugs.

Pursuant to Art. 5 of the Prices Act of 5 July 2001 (Dz.U. [Journal
of Laws] No. 97, item 1050, as amended), it is the right of the
Minister of Health to determine and update official prices of
medicinal products and medical devices included in the lists of
reimbursed drugs.

Exercising the right of determining official prices he is entitled
to, the Minister of Health signed and forwarded for announcement a
regulation governing determination of such prices. It is the
currently applicable regulation of 20 December 2004 on determining
official wholesale and retail prices for medicinal products and
medical devices. Pursuant a procedure under the Prices Act this
regulation contains prices that have been determined in the manner
and pursuant to the principles specified in the Act.

A draft of the regulation that was forwarded for inter-ministerial
agreements and public consultations on 17 May 2006 reflects,
however, only a change in objective macroeconomic conditions that
occurred between Q4. 2003 and Q1. 2006. Due to the fact that
official prices determined by the Minister in the currently
applicable regulation, though being the same as regards their value
expressed in terms of money in relation to the amount of negotiated
prices, do not correspond to the actually set value, since they do
not include a change in macroeconomic conditions that occurred over
the period of those years, therefore it has become necessary to
updated and equalise them to the level reflecting the price
determined pursuant to the principles and the manner specified in
the Prices Act.

The change in objective macroeconomic conditions is not a
price-determining factor, and the effected adjustment of prices is
de facto aimed at maintaining the negotiated price level, and not at
changing them. Due to the fact that actions to this end undertaken
by the Ministers are not to determine the amount of price, but
rather to maintain the price at the negotiated level, I cannot agree
with charges made on behalf of the Association of Innovative
Pharmaceutical Companies' Representatives. As authorised to
determine prices in the manner provided for in applicable
regulations, I am also authorised to maintain them at the level
negotiated with a pharmaceutical company.

I should point out that maintaining the price at the previously
determined level is important not only in view of the provisions
under the Prices Act, but it is also of critical importance in
relation to proper execution of other applicable acts of law.
Pursuant to the provisions of the Act on Health Care Financed from
Public Funds of 17 August 2004 (Dz.U. [Journal of Laws], No. 210,
item 2135), a drug is reimbursed by the National Health Fund (NFZ)
that is obliged to refund the price of a reimbursed drug from health
insurance premiums to the extent and manner provided for in the Act.
A price the value of which exceeds the negotiated price thus
unreasonably increases outflow of financial resources from the NFZ
at the expense of other health care services financed by it. In the
opinion of the Minister of Health, financial resources that are
spent on an unjustified increase of the negotiated price should
contribute to positive financial consequences, especially for the
patients, through decreasing co-payments for drugs and introduction
of new lists of drugs planned in the future, new molecules
included.

A price that is determined by the Minister of Health that pursuant
to the currently applicable regulations set in Art. 5.4.1 is a price
within the meaning of the Prices Act. Pursuant to Art. 3.1 of the
said Act whenever there is a reference to a price, it shall be
understood to mean the value expressed in monetary units that the
buyer is obliged to pay to an entrepreneur for an item of goods or
service, inclusive of the value added tax and the excise tax. Due to
the fact that the price determined by the Minister concerns an
official wholesale and retail price, such price should also include
a margin in the amount specified in the Act.

Having explained the above, I should also point out that the terms
and manner of agreeing acts of law are governed by regulations,
among others, provided in a resolution No. 49 of the Council of
Ministers of 19 March 2002 on the rules of work of the Council of
Ministers (M.P. No. 13, item 221). The regulation's draft was
subject to two-week long public consultations and inter-ministerial
agreements during which individual entities had the right to present
their positions concerning presented amendments which was reflected
in remarks made by over 100 entities which were thoroughly reviewed
and justified reservations were included in the final draft of the
regulation.

Boleslaw Piecha
The Minister of Health
Secretary of State

SIPDIS

END TEXT

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