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Medicine Supply- Every EU Country by Itself

by Little L Sun Feb 12th, 2006 at 05:50:04 AM EST

Ever since its creation the European Union is trying to enforce to its current or aspiring member states regulations and uniform standards for everything. When it comes to determining the prices of medicines for the state health systems, the "ever-closer" Union follows another scheme- every country by itself.This presents a challenge to the prosperity of the health sector and an obstacle for the successful integration of the ten new member states and the other two, Bulgaria and Romania, which are awaiting a carte-blanche from the European Commission later this year.

The obvious explanation is the significant wealth gap among the countries in United Europe. Overall, the healthcare budget of the EU countries is between eight and nine per cent of the country's national GDP. In Bulgaria, the percentage is twice as small. The widest discrepancies can be found in the percentage of the healthcare budget devoted to purchase of medicines- in Western Europe it is about 15 per cent, whereas in a poorer country like Slovakia it can go up to 50 per cent.

Then follows the explanation- big pharmaceutical companies are far more reluctant to negotiate discounts for purchase of expensive drugs with a medium-income country like for instance Bulgaria, which has a small market volume. Its low healthcare state budget does not offer space for high patient reimbursement for the purchase of expensive and often life-saving prescription drugs. For a certain drug, a country like Norway would reimburse the patient fully, while in Bulgaria a patient would have to pay up to 70 per cent of the price for the same medicine. This results in inequality of the European citizens to the access of new medicines and therapies and therefore, considerable discrepancy in the health standards of the different countries.

The governments of the European countries are reluctant to collaborate when working with pharmaceutical firms, which are trying to impose maximum prices for their newest products. The whole negotiation process is often kept a secret, because rich countries are afraid that they can miss the good deal with the pharmaceutical company as they are the only ones that have the capacity to work out a discount. In poorer countries, such negotiations take much longer time and by the end of the day, governments may find themselves forced to wait for years until a prescription medicine becomes old and therefore cheaper. Sometimes, this presents a life-threatening situation to the patients.This way innovative medicines are often left out of the market of a poorer country. Neither can one take a drug across the border because prescriptions apply only in the country if origin. An avian flu pandemic is threatening Europe and now every country negotiates the price of the vaccine Tamiflu separately, without presenting any information about the deal or the negotiated price to the public.

For now, the Baltic countries are the only ones who are experimenting with a joint purchase of pharmaceutical products. This would also be a good idea in other regions of Europe- for example the Czech Republic, Slovenia and Slovakia could also unite their efforts to get better prices and offer better health services to their citizens. Of course, Western countries would rather opt for differential pricing of drugs instead of having the market adjust them, because they would have to pay more than they do now. But a joint action is always a better example to follow and will hopefully prove economically feasible to the Union, especially having in mind that the European healthcare market is still falling behind its main competitor- the US.


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especially having in mind that the European healthcare market is still falling behind its main competitor- the US.

What does that mean exactly?

by Colman (colman at eurotrib.com) on Sun Feb 12th, 2006 at 01:02:28 PM EST
Corporations can't make nearly as much money off sick people in the EU as in the US.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Carrie (migeru at eurotrib dot com) on Sun Feb 12th, 2006 at 01:05:35 PM EST
[ Parent ]
Yes, and the overall quality of healthcare in the US as compared to the countries in the EU is better too.

I can resist anything but temptation.- Oscar Wilde
by Little L (ljolito (at) gmail (dot) com) on Sun Feb 12th, 2006 at 01:57:10 PM EST
[ Parent ]
Not in my experience it isn't.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Carrie (migeru at eurotrib dot com) on Sun Feb 12th, 2006 at 01:59:52 PM EST
[ Parent ]
Sorry to hear that, I hope everything worked out good for you eventually.

I can resist anything but temptation.- Oscar Wilde
by Little L (ljolito (at) gmail (dot) com) on Sun Feb 12th, 2006 at 02:03:01 PM EST
[ Parent ]
I haven't had any life-threatening condition, but my experience of basic, everyday health care (including dental and optical) in Southern California was rather poor compared to Madrid or London.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Carrie (migeru at eurotrib dot com) on Sun Feb 12th, 2006 at 02:14:47 PM EST
[ Parent ]
My experience in Finland is that we have a very high quality of care. In my city I pay just 22 € per year for local treament.

I  fact today I had cause to use the service.  I had an infected thumb that I thought would go away, but it got worse and gave me pain last night. So I popped into the local hospital today, got an appointment for 16.00, arrived and waited about 30 secs - then in to see the doctor. Quick lancing (ughh disgusting) and clean up, a prescription and I was outta there in 3 minutes.

Most Finnish couples - if abroad - return to Finland for the birth of their kids. I've had two - you (the lady of the house) can give birth in the pool, with your own music, however you like.

You can't be me, I'm taken

by Sven Triloqvist on Mon Feb 13th, 2006 at 12:01:16 PM EST
[ Parent ]
Well, a lot depends how you measure (and particularly in the US if you include people with a less than optimal amount of money for the treatment they require...)
by Metatone (metatone [a|t] gmail (dot) com) on Sun Feb 12th, 2006 at 02:26:37 PM EST
[ Parent ]
For those who can afford that level of care, perhaps, but I'd like some string evidence that "the overall quality of healthcare in the US" is better than that in the EU.  

The thing is, we can have the best technology and medicine in the world, and we probably do, but if you can't afford it, you are stuck getting vaccines from the back of missionary vans, checkups from 3rd world-esque free clinics, and everything else fom overcrowded ERs.  

I have great insurance, but I was in the hospital last year and it was my insurance company that decided how long I could stay and what services I could get.  Quality of care means little if people are denied access to it.

Those who can make you believe absurdities can make you commit atrocities. -Voltaire

by p------- on Sun Feb 12th, 2006 at 04:42:29 PM EST
[ Parent ]

Quality of care means little if people are denied access to it

Excellent (and terrible) phrase... Maybe we can use it elsewhere?:


High average income means little if people are denied access to it


In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Sun Feb 12th, 2006 at 05:06:12 PM EST
[ Parent ]
I don't know.  Somehow the "average" in that phrase doesn't make it as catchy.  

You seem to be preoccupied with the idea that if we only knew how inequitably concentrated all that wealth is then ... Well, we'd all wake up to the truth, or something.

But to be frank (no pun intended) Americans don't need a Frenchman to tell them about the concentration of wealth & CEO earnings.  They know it and are simultaneously 1)mad about it and 2)not willing to do anything about it because of some combination of Protestant work ethic, religious faith and national mythology.  Or laziness.  I don't know.  But all the obvious facts and graphs in the world aren't going to help us when over half the country is making decisions based on religious and nationalist ideology and stubbornly held outdated convictions about how the world works.

We won't respond to graphs.  But we are famous for trying to keep up with the Joneses.  So it is incumbent for Europe to continue to prosper and better the lives of its citizens so that if we don't refom out of reason or social justice, we'll do so out of plain envy.

Those who can make you believe absurdities can make you commit atrocities. -Voltaire

by p------- on Sun Feb 12th, 2006 at 05:27:16 PM EST
[ Parent ]
They know it and are simultaneously 1)mad about it and 2)not willing to do anything about it because of some combination of Protestant work ethic, religious faith and national mythology.

This is so very true. I remember hearing a radio report about an initiative to get libertarians to move to New Hampshire in the hopes that if enough moved there they could start the libertarian dream. In the report, they interviewed a woman who had tried a few jobs and was working on her other start-up businesses. None had really succeeded and she was not all that well off. Still, she wanted no income tax and low taxes on everything else. When asked her reasons, she said that when she became a millionaire, she didn't want any of her money going to the government. This to me completely explains how Americans can be angry and not want to do anything about it...even commonsense measures.

It also demonstrates that the individualism that Tocqueville warned us about in 1860 or so is well upon American society. Please do keep up the arguments Jerome, but I agree with poemless. The US didn't listen to an astute Frenchman then, and is unlikely to listen to one now. :)

Enough of getting off topic...

by gradinski chai on Mon Feb 13th, 2006 at 02:18:38 AM EST
[ Parent ]
This issue of medicine supplies should be an incredibly easy one to solve at an EU level. This is exactly where the benefits of the economy of scale argument that neoliberals are always talking about should work for everyone. Think of the money saved by having drugs bought either at a regional or, even better, an EU level. It's got to have advantages in bookeeping costs for companies as well.

This is such a commonsensical idea. It is also an idea that can either be done through the EU political process or through state initiated cooperation plans. The incentives are certainly there for smaller states to cooperate. Leave it once again to the Baltics to show us how cooperation can have benefits. This issue definitely needs to be investigated.

by gradinski chai on Mon Feb 13th, 2006 at 02:23:30 AM EST
There are roughly 260 state mandated insurance companies in Germany. However the bulk of the people are members in one of the three largest companies, like the AOK (German network of General Local Health Insurance Companies) which alone insures 20.1 million persons. In other words: If all the citizens of the three Baltic countries were to join 1 insurance company its size would still be only 30% of the AOK.

"The USA appears destined by fate to plague America with misery in the name of liberty." Simon Bolivar, Caracas, 1819
by Ritter on Mon Feb 13th, 2006 at 03:31:59 PM EST
[ Parent ]
Lack of cooperation betwen countries resulting in higher prices in those weaker at bargaining -a good point I never thought of.

However, here are some critical notes.

  • There are some further factors why medicine is more expensive here. One is PPP: these drugs are imported with the normal exchange rate, but our money is less worth (i.e., say, if you exchange as much Euros as you'd spend on food for a month in Vienna for levs, you could buy food for two or three months in Sofia).
  • The discounts a phamraceutical company itself gives and the social discount a welfare state gives are very different things - the latter is paid in the end to the pharmaceutical by the state. To do an European levelling on the latter front, we'd need an EU-wide welfare redistribution framework, not common negotiation with pharmaceuticals. (I would favour it, though.)
  • That spending on medicines is lower as a percentage of GDP (and not just in absolute per capita numbers) in countries of our region is not a fault of anyone in the West: that damns the priority-setting of our governments.
  • I think comparing healthcare in our region and Western Europe is not a simple thing. While doctors are overworked and less nice, and hospitals and equipment looks aged, in some countries it is still more comprehensive than in Western Europe, waiting lists are shorter and required in less cases.
  • Same for (Western) Europe and the USA. In the USA, as others told, there are strong class differences in the level of treatment people get. But every statistics shows that overall, the US level of service is lower, while it is more expensive. Some studies that I saw quoted here on ET pointed mainly at private insurers' administrative costs as reason, but I think a rush to provide profitable (expensive) services even if they aren't necessary (plastic surgery etc.) also plays a role. (Fat suction is more profitable than healing AIDS in the Third World.)
  • The only field where the European and American healthcare markets are in competition is top-end luxury treatment for jet-set millionaires. That is too small a market to spoil the system at the damage of the overwhelming majority. For the above reasons too, I don't want to see a healthcare 'market' - I want healthcare to be public service.


*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Mon Feb 13th, 2006 at 06:04:38 AM EST
I forgot another important point up front:

* The poor health of the populations in our region also reflect a more unhealthy lifestyle (which also leads to increased demand for medicines relative to the West). Public authorities could battle this with preventive measures (not budget increases).

Furthermore, notes on two specific countries I know:

  • In Slovakia, the outgoing government acted as a neoliberal avantgarde, and the worst and most clearly hated of its 'reforms' was the elimination of social supports and privatisation in healthcare. The number you quote reflects that - in fact, many poor Slovakians just don't buy medicines anymore. This is the reason left-populist parties are now in wide majority in polls.

  • In Hungary, the main problems in healthcare (beyond the unhealthy lifestyle) are the underfunding of hospitals and, even after social discounts, the price of medicines for retirees. But hospital privatisation was averted for the time being, and at the moment the two main parties compete with promises to further increase supports.


*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Mon Feb 13th, 2006 at 06:18:18 AM EST
[ Parent ]
Dodo, thank you for the feedback and the important comments you made on the problem. I couldn't agree more with you. If anyone is also interested in borader health issues, "Transparency International" released its Global Corruption Report. It is mainly about corruption in the health sector.

And I wish everyone to stay healthy:-)!

I can resist anything but temptation.- Oscar Wilde

by Little L (ljolito (at) gmail (dot) com) on Mon Feb 13th, 2006 at 06:54:49 AM EST
[ Parent ]
Little L: excellent diary! Top of the charts! But I would also challenge the statement that the US has the best medicine. I think this really bears more digging into, though I would be hard pressed to say how you could compare systems, beyond anecdotal statements...

"Once in awhile we get shown the light, in the strangest of places, if we look at it right" - Hunter/Garcia
by whataboutbob on Mon Feb 13th, 2006 at 01:09:39 PM EST
[ Parent ]
Thank you for saying that, whataboutbob, and for encouraging my first efforts to put a diary together. I will later give my reasons why I believe American healthcare is generally better than European (it's personal experience above everything else).

I can resist anything but temptation.- Oscar Wilde
by Little L (ljolito (at) gmail (dot) com) on Mon Feb 13th, 2006 at 01:54:11 PM EST
[ Parent ]
When I read through Little L's diary entry, I felt surprised from the perspective the text provides. Indeed, poor countries can't afford as good a deal as their richer counterparts, but something else come to mind. Many poorer countries copy (under licence or not) western medicine and sell it under a similar name.

An example - some months ago I had to buy an antibiotic. The lady pharmacist pointed out that I have three options for the same drug (she stressed they are basically the same, but produced in different countries).

The American version was 27 leva (1 euro = 2 leva), the German version was 12 leva and the Bulgarian version was 1.70 leva.

So is the situation so grim? Probably, yes, but only for specialized medicine (for example the Tamiflu vaccine, which I want to point out doesn't actually protect you from the H5N1 strand, but does include vaccine for two of the H5 variations).

Be careful! Is it classified?

by darin (dkaloyanov[at]gmail.com) on Mon Feb 27th, 2006 at 05:04:06 PM EST


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