Present at the International Health Forum Thursday, Health Minister Eugen Nicolaescu said the ministry is working on a bill to apply a different clawback tax for generic and brand-name drugs.
The minister pointed out that generic drugs, whose penetration rate in Romania has fallen gradually since 2006, are taxed the same as brand-name drugs, whose market share has increased, adding that this “absurd” situation is “a serious problem” which must be set right before the end of the year.
Also present at the event, National Health Insurance House head Cristian Busoi said he backs the proposition, adding that once a new list of subsidized medicines is introduced, Romania should have a different tax for generic drugs and brand-name medicines.
According to Busoi, the clawback tax should continue to be applied next year and in 2015.
Under the current clawback system, drug producers contribute between 5% and 11% of their sales revenues to financing the public healthcare system.
Generic medicine producers asked the government for a differentiated rate, saying the margins and prices are considerably different for generic drugs compared to the innovative ones, so that the tax impact on their business is stronger.
“We propose using the producer price for computing the clawback tax,” said Dragos Damian, president of the Romanian Association of Generic Medicine Manufacturers APMGR. Currently, the tax is applied to the retail price, which includes the profit margins of both wholesalers and pharmacies. “Thus, every entity on the supply chain will be taxed on their corresponding income.”
The association also wants that drugs priced at below 30 lei (less than EUR7) to be exempted from the clawback tax, as those products account for 88% of the sale volumes, but only 29% of the total medicine costs.
The clawback tax is a system through which pharmaceutical producers contribute to the public health system by a percentage of their sales of drugs paid by the state.