Life Sciences Blog

​Can “Affordable Medicines” become a reality for Ukraine?




A recent survey, “Cost(less) Medicine”, commissioned by the United States Agency for International Development (USAID) and conducted by the Patients of Ukraine charity, highlighted some of the major anomalies encountered within the current Ukrainian healthcare system. In a country which promises free medical care, and where salaries are among the lowest in Europe, Ukraine has remained the only European country where until very recently patients have largely had to pay out-of-pocket themselves for out-patient medicines, at relatively high prices. Indeed, half of all patients surveyed claimed to have refused or postponed treatment because of money shortages, with 94% in focus groups highlighting the high cost of out-patient medicines as the major source of the problem. Of these, 43% admitted to borrowing money or selling valuables or property to pay for treatment, and 69% had resorted to self-treatment. All of this was compounded by concerns over adulterated or low-quality medicines. The full report (in Ukrainian, with a summary in English) may be accessed on the Patients of Ukraine website here.

The executive director of Patients of Ukraine, Olga Stefanyshyna, noted that these findings completely contradict the theory of free healthcare in Ukraine, with outpatients ending up bearing the "bulk of the financial burden".

In this climate, acting Ukrainian health minister Uliana Suprun’s, “Affordable Medicines” programme, offering reimbursement of essential drugs for outpatients, seems long overdue. However, in a country where tenure of a health minister is precarious (with a succession of resignations and suspensions, and allegations of corruption for at least three in the last decade), it has been hard to implement long-term reforms. Suprun’s drug reimbursement programme is part of an extensive and ambitious reform package covering almost all sectors of the Ukrainian healthcare system, including a national health insurance scheme. The full “Affordable Medicines drug pricing and reimbursement programme will incorporate a new National List of Essential Medicines, government price controls for drugs on this list, based on international reference pricing, and a reimbursement programme. The project has been allocated an overall government budget of UAH500 million.

The “Affordable Medicines” pilot reimbursement project
The first phase of the “Affordable Medicines” programme has been a small pilot out-patient drug reimbursement scheme, initially restricted to a list of 21 specified drugs for the treatment of three indications. The pilot scheme finally rolled out on 10 April after initial delays, and participating pharmacies (under a voluntary agreement) displayed a distinctive government logo (shown here). Patients with prescriptions for the specified drugs are entitled to receive them from those pharmacies free of charge, or with a partial surcharge, and fully or partially covered by the state. This procedure was set to operate from 10 April at specific pharmacies covered by a voluntary agreement, signed with local authorities, to become participants in the programme.

Initially, only drugs indicated for the treatment of cardiovascular disease, type 2 diabetes, and asthma have been made eligible for reimbursement as part of the pilot project. The list includes standard drugs such as amlodipine for high blood pressure, the anti-cholesterol drug simvastatin, salbutamol for asthma, and metformin for type-2 diabetes. These therapeutic areas had been highlighted as including priority target diseases for Ukraine, since they have major effects on mortality rates and quality of life, and could be treated effectively at the out-patient level. According to the ministry, cardiovascular disease currently accounts for 65% of total mortality in Ukraine, type 2 diabetes affected about 1 million Ukrainians in 2015, and around 210,000 asthma patients were registered in Ukraine in 2015.

Price regulation of reimbursable drugs on the list, and charges to patients
To control its own reimbursement costs, the health ministry undertook a pricing review of all drugs on the pilot project list, and fixed new maximum wholesale prices according to international reference pricing, using the comparable economies of the Czech Republic, Hungary, Latvia, Poland, and Slovakia as reference countries. The ministry then stressed that the state would only compensate full costs for the cheapest version of each drug participating in the programme. For more expensive drugs, patients would pay the difference between the minimum set price and the retail price of the chosen drug, although any medicines whose price exceeded the reference price from the five countries would be ineligible for reimbursement.

The ministry emphasised that these pricing controls were intended to avoid “unwarranted overpricing of medicines” and ensure availability of affordable medicines to the population. They based the ceiling wholesale price on the median price in the five reference countries, and the maximum retail trade allowance on reimbursable drugs was set at 15%. The maximum price at a pharmacy was the wholesale price per pack, plus a 10% surcharge, up to 15% permitted trading allowance, and 7% value-added tax (VAT). 

The ministry also advised doctors to use the INN rather than brand name for prescriptions, although patients could choose whether to receive the cheapest version free, or choose a different branded version and pay a surcharge.

The current ministry plan is to expand the international reference pricing and reimbursement scheme over time to their entire new National List of Essential Medicines, which was recently completed.

Roll-out of the scheme – progress so far
The scheme, originally scheduled for launch in early February, was postponed at the eleventh hour to 1 April, following complaints from pharmacies that they were having difficulties adjusting to and advertising the new prices. However, it turned out in practice that this deadline still presented too many last-minute problems, and the final official launch of the scheme took place on 10 April.

As of early April, sources were reporting that not all eligible pharmacists had yet signed up to an “Affordable Medicines” listing. To compound this, publication of the official drug list was apparently delayed by "technical problems", including time constraints between the publication of the list of eligible medicines by active ingredient and the launch of the scheme within a mere 10 days. The Ukrainian source Pharma.net.ua quoted a pharmacist who noted that the necessary data had not been published in full on the ministry website in time for the launch of the scheme, resulting in “some confusion”. News provider UNN remarked that no Affordable Medicines labels seemed to be visible on any pharmacies visited by their correspondent on 1 April, and pharmacy staff had received little information.

However, as of early May, the health ministry reported officially that 3,150 pharmacies had signed up to the reimbursement scheme. Admittedly, there had been teething problems, with some doctors being poorly informed about the programme, and errors in processing the prescriptions, particularly if a trade name instead of an INN was used. Also, on the first day of the scheme, there were “long queues” outside participating pharmacies, creating problems for patients requiring other drugs and products, some having to go elsewhere. Confusions were evident regarding full or partial payments, and pharmacy staff were complaining about the increased administration required. The ministry has pledged to review these issues and work towards solutions.

The current Ukrainian health ministry probably has an uphill task ahead in implementing this and other ambitious healthcare reform plans successfully, especially since timing will be crucial. Suprun and her ministry hope to push through the most major initial changes in advance of the next round of Ukrainian elections (2019–20) – a very tight turnaround. Any delay could result in virtual derailment of these reforms because of conflicting priorities.

Considering that numerous previous attempts at healthcare reform in Ukraine have been scuppered by changes in priorities, instabilities in the administration and/or with corruption concerns, this ambitious scheme is somewhat precarious. We must also take into account the precedent of short tenure for a whole series of previous health ministers. Suprun herself has come in for criticism over recent public drug procurement issues with international organisations, but has held on to her “acting health minister” position for several months. Her current administration has taken on the mammoth task of tackling medicine price control, reimbursement, national insurance, and decentralisation of the overall healthcare infrastructure, within three years. If her current administration survives the next few months and the pilot reimbursement project is successful, then affordable medicines in Ukraine may indeed become a realistic proposition.

Janet Beal is a life sciences analyst for IHS Markit
Posted 4 May 2017

About The Author

Janet Beal is a research analyst for the UK, Switzerland, Russia and CIS countries. She has many years of experience covering the biotech/pharma R&D sector, as Biotech Editor and Research Support Manager at Pharmaprojects (Informa Citeline), and also worked for GlobalData and Thomson Derwent. She holds a BSc in Microbiology from the University of Aberdeen, and an MSc (by research) in Biochemistry and Applied Molecular Biology from the University of Manchester Institute of Science and Technology (UMIST). She has a reading knowledge of French, German, Hungarian and Romanian.