The Czech healthcare environment has undergone a bit of a revolution this year. The reform laws that have just been issued are responding to changes brought about by technology, but also as a response to an increasing number of patients that are equipped with the skills to manage their conditions and want to be seen as equals in the “Doctor-Patient-Health Insurance Company” equation. That is why the healthcare system reform aims to bring economic stability to the healthcare system, as well as empowering patients and enabling them to make choices regarding their treatment. The new set of regulations (which aims to replace the previous, 1960s-issued public health law) benefits patients more than it has ever done before. The reform also introduces the concept of an ‘eAuction’, which significantly reduces the price of drugs, as well as other healthcare inputs. It is only natural that the newly issued set of regulations will have a significant impact on the Czech Republic’s pharmaceutical market in the near future.

The new set of regulations came into effect on the 1st of April 2012, which is also the starting date of the phase two of healthcare system reform. Newly issued laws include the Health Services Act, the Specialty and Emergency Services Act, and an amendment to the Public Health Insurance Act. These regulations will respond to an increasing requirement for more patient rights, as well as allowing them to play the role of partner to physicians and healthcare providers, rather than simply being passive consumers of healthcare services.

The healthcare system reform aims to …empower patients and enable them to make choices regarding their treatment

Reform laws are based on the concept of empowering patients, which also means enabling them to take greater responsibility regarding medical treatment. Due to concerns regarding patient adherence, many doctors have refused treatment to those who were not following treatment instructions. New regulation will ensure that patients are well looked after, even if for whatever reason, they have not followed the prescribed treatment as directed by the consultant.

The average household spend on health is also expected to increase, gradually reaching the level of financial participation seen in Western Europe, although it is crucial that the impact of this on all population groups be considered. There will, of course, always be an alternative to paid healthcare services, i.e. services fully covered by a healthcare provider with zero patient financial participation. Since 2012, people can pay extra for more costly treatments such as contact lenses, limb fractures and certain vaccines. However, the new system of payment will see money go directly to hospitals for patients, which is expected to improve the overall quality of service in healthcare facilities, as they will be more motivated to pursue customer satisfaction.

The amendment to the Public Health Insurance Act has also introduced changes in terms of drug reimbursement policy. According to this amendment, drugs are automatically excluded from the reimbursement system if it is not imperative that they be prescribed (despite being available as an option). The reimbursement system will only cover these medicines if all the major healthcare providers demand it.

The population of the Czech Republic has seen an increase in life expectancy over the last few years, especially amongst its male population, whose life expectancy has risen to 74 years from 67. Women can now expect to live to 80, compared to a life expectancy of 75 a few years ago. Senior citizens (over 60) now make up 22% of the population, and by 2030, this number is expected to increase to one third of the total population of the country.

As the number of people who contribute to the health insurance system decreases, the number of those who demand those services is on the rise, which is an issue that has to be taken into account early to prevent crises and shortages.

Savings in the healthcare system will be made by holding an eAuction to gain the lowest reimbursement of the medicine. The State Institute for Drug Control has already launched the system in 2011. The eAuction will only be open when the insurance companies demand it and with the approval of the Ministry of Health. Doctors, on the basis of these auctions, will then be required to prescribe the lowest priced medicines. The State Institute for Drug Control is currently compiling a list of drugs that will not be covered by health insurance at all from July 2012.

The next amendment to the Health Insurance Act is expected to come into effect at the beginning of 2014, bringing tougher competition and greater accountability to the health insurance market. At the moment, waiting times for procedures such as operations are not regulated, creating a situation where patients often have to wait too long for treatment. The new set of laws will insure that patients have the right to start their treatment within a certain amount of time from referral, setting maximum waiting times. Another significant aspect to the amendment is the ability to develop commercial health insurance. There will be pressure on health insurance companies to establish commercial health insurance subsidiaries.

Financial participation in healthcare is not a fundamental item for the vast majority of Czech households. It represents on average less than 3% of household expenditure, ironically slightly less than average household spend on alcohol and/or tobacco. Less than half of households’ spend on health is for treatment that is considered ‘necessary’ such as dentist treatments or drugs. Approximately 53% of the average household spend on healthcare covers various vitamins, nutrition supplements, and homeopathic drugs. The annual amount of money patients pay is over 7 billion CZK for prescription drugs, and over 8 billion CZK for OTC/non—prescription drugs.

Pharmaceutical companies that sell prescription drugs will be banned from visiting doctors’ offices directly.

As prices continue to fall, some medicines are becoming increasingly attractive for export. It is important to mention that parallel export is not illegal. Preventing the parallel export of drugs abroad and preserving their availability for Czech patients have both been taken into account and are included in the Ministry of Health Act on Pharmaceuticals, which comes into effect this August. According to the State Institute for Drug Control, the amount of drugs that end up abroad every year amounts to approximately one fifth of the total Czech drug market. For example, in 2010, the total value of medicines that ended up in other countries, making them unavailable for Czech patients, was 16 billion CZK.

Anti-corruption measures are an integral part of the healthcare reform, and as such, the financial flow from pharmaceutical companies to physicians/healthcare facilities will become more heavily regulated. Pharmaceutical companies that sell prescription drugs will be banned from visiting doctors’ offices directly. These new regulations, which will most likely come into effect starting January 2013, will consider practices such as market research and post-marketing studies (which were previously carried out in exchange for a fee) as promotional practices, which will lead to them being banned. The amendment also clarifies and significantly limits the sponsoring of congress tourism. The amendment will prohibit contests, raffles and games that affect drug sales in any way.

Medical tools that make use of emerging channels have been in use for many years now, but 2012 is the year we have started to hear more about physicians’ use of them in the Czech Republic. In general, it is fair to say that healthcare professionals in the Czech are open to incorporating digital technology into their professional resource mix, and have realised that emerging channels have ‘changed the game’, although enrolling into most eHealth initiatives remains optional.

Creation Healthcare’s growing presence in Eastern Europe now includes the Czech Republic. To find out how we can help you plan your healthcare engagement in the region, contact us.

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