Hungarian Government in New Attempt to Rein in Drugs Bill

Hungary's government has halved its 15% price subsidy on reimbursed drugs, which had been intended to compensate consumers after the failure of its attempt to fix prices at 15% below April 2004 levels. The measure was defeated in a legal challenge late last year.

The country's drug spending has been growing rapidly in recent years, with annual rises of up to 20% commonplace since the start of the decade. Sales growth slowed to 14% last year, and a new agreement between manufacturers and the government to freeze drug prices until December 2006 is expected to help contain prices this year. The arrangement affects about 4,000 products, with the maximum increase set at 7%, or about the level of inflation expected in 2005.

Meanwhile, the government has set a target of single-digit growth in drug consumption, which it somewhat optimistically hopes will contain the country's drugs bill to little more than last year's level of HUF289bn (US$1.51bn). Authorities also continue to encourage generics makers, having added 200 generic products to the national reimbursement list, which currently accounts for about 80% of the country's spending. Observers also report that the authorities are in talks with the local drug sector to create a sustainable policy for future drug consumption.