“Keeping this tax in its current state can have serious economic and social consequences, first of all for the public, as certain drugs disappear from the market or access to them at reasonable prices is limited, and for producers of generic drugs,” said APMGR chairman Dragos Damian.
Damian argued the current tax is unfair and illegal, since it is applied to the shelf price, which includes the margins charged by the distributor and pharmacies, as well as VAT. Moreover, the tax is computed using flawed data, supplied non-transparently by the National Health Insurance House (CNAS).
The clawback tax places a significant fiscal burden on the producers of generic drugs, Damian said, and affects the companies’ cash flow, since the tax is paid every quarter, but authorities have 300 days to refund the producers.
Damian warned the members of the association will reevaluate their product range and will eliminate the least profitable products, affecting the public’s access to treatment. The companies will likely also reevaluate their production costs and cut upwards of 1,000 jobs. “Investments in the hundreds of millions of euro will be put on standby or cancelled, because medium- and long-term plans cannot be made without knowing the exact value and duration of this tax, which the IMF considers temporary,” Damian said.
To limit the clawback tax’s ill effects, APMGR asks the authorities to take a series of steps, such as charging the tax to the producer price and correlating the tax payment timeframe with the refund delay, currently set to 210 days, under the frame-contract on healthcare. The association requests a plan to reduce payment delays in accordance with Directive 2011/7/EU on combating late payment in commercial transactions.
To guarantee the accuracy of data provided by CNAS, APMGR requests the creation of a transparent mechanism to monitor the documents and cash flow in pharmacies and hospitals.
In addition, the authorities should set a maximum ceiling for the clawback tax paid in a single year by generic drug producers, to encourage their use, said Damian.