A potential three-year framework agreement between the Greek government and the pharmaceutical industry, starting at the beginning of 2025, has been the focus of recent discussions between the Ministry of Health (MoH) and associations representing the pharmaceutical industry in Greece. Various healthcare-focused online news sources in Greece, including HealthReport and News4Health, have published reports indicating that the main objective of the framework agreement will be to develop a stable and predictable environment for the industry, after years of shocks due to high clawback and rebate payments, which have pushed the industry to its limits. 

Last month, the Pharmaceutical Research and Manufacturers of America (PhRMA) Innovation Forum (PIF), which represents the interests of the PhRMA in Greece, set out its proposals for a 'Pharmaceutical Innovation Fund' or 'transitional reimbursement scheme'. This should involve, according to the PIF:

• Horizon scanning, to identify the resources required by the healthcare system to fund the innovative products coming onto the market;

• Assessment based on set criteria, comparable with those in place in other European countries;

• Provision of additional, separate funding from the main pharmaceutical reimbursement budget;

• Transition from the 'transitional reimbursement scheme' to the standard reimbursement system after a defined time period, with the corresponding allocation of funding.

Similarly, the head of the Hellenic Association of Pharmaceutical Companies (SFEE), Olympios Papadimitriou, presented the SFEE’s proposal for an innovation fund that would act as a 'transitional reimbursement scheme', initially focused only on advanced therapy medicinal products and/or medicines with EMA PRIME designation, and subsequently expanded to include orphan drugs and other therapies.

Aris Aggelis, the secretary general for strategic planning in the MoH, has been put in charge of implementation. Aggelis stated in September that the MoH was planning to complete a pilot programme for a prospective “pharmaceutical innovation fund” by March 2025, ahead of a full rollout during 2025. He stated his expectation that the fund would rely on a mix of public financing and pharma industry contributions. Its key aims would include faster access to new innovative treatments while ensuring the sustainability of the Greek healthcare system. This would include risk-sharing, although details were not given. Subsequently, MoH Health Minister Adonis Georgiadis appeared to confirm the MoH’s commitment to a prospective framework agreement during a speech at the HealthWorld conference of the American-Hellenic Chamber of Commerce (23-24 September). Georgiadis indicated that there was support for the plan from both the government and the industry. His expectation was that an agreement could be reached by the end of the year, with implementation from next year.

News of a potential framework agreement comes before a milestone year in 2025, when the clawback mechanism is due to expire. Intended initially to only be a temporary measure that addressed the ongoing aftershocks of Greece’s sovereign debt crisis, its application has been extended in law three times. It was last extended in 2021 for the period from 2022 to 2025, and conditions were imposed to guard against its unrestrained growth. With 2020 set as the base year, it was ruled that if clawback liabilities were to exceed the 2020 level in any year from 2022 to 2025, the pharmaceutical budget would have to be increased by specific amounts: €50m ($54.1m) in 2022, €150m in 2023, €300m in 2024, and €400m in 2025. These funds come from the EU’s Recovery and Resilience Facility (RRF).

Meanwhile, clawback has increased exponentially. According to data from the 2023 report by the SFEE and the Foundation for Economic and Industrial Research on the Greek pharmaceutical market, clawback and rebate payments in 2020 amounted to €1.97bn, increasing to €3.51bn in 2023. The government has been obliged to supplement the pharmaceutical budget from RRF funds by an increasing amount from 2022 onwards. However, this has little impact on the vast clawback and rebate liabilities. Therefore, the discussions on a framework agreement are reportedly heavily focused on the size of the pharmaceutical budget, and the need to increase it substantially.

Discussion of the framework agreement has been overshadowed by the recent publication of clawback liabilities for the first half (H1) of 2023. For hospital drugs not subject to closed budgets, pharma companies supplying Greek hospitals are liable for 72% of the spending on hospital drugs in H1 2023; in the case of medicines priced over €30, this increases to as much as 83%.

The main cause of the rising clawback levels is the fact that the public reimbursement budget has remained virtually unchanged since 2014 while demand has risen and many new, more expensive therapies have entered the market. While Greece has some more leeway in setting budgets since exiting enhanced surveillance in July 2022, it has been reluctant to use this greater freedom in the case of pharmaceutical reimbursement.

Commitments have been given for an additional €850m for the pharma reimbursement budget in 2024-25, which includes the €700m that it is obliged to make available from the RRF to cover clawback levels above the 2020 figure. However, given the size of the clawback and rebate liabilities, this does little to placate the industry.

Success, or lack of, for a Pharma Innovation Fund, or framework agreement, is likely dependent on the government agreeing to increase the reimbursement budget by a considerably higher amount, and, if it concerns a separate fund for new innovative therapies, keeping this fund completely distinct from the main pharmaceutical budget. Individuals in the government have reportedly informed HealthReport that Georgiadis is unwilling to give manufacturers estimates of what they may have to pay in the period up to 2027 under a reconstituted or reformed clawback system, which is widely expected to be implemented before the end of next year. Manufacturers are unlikely to accept promises of structural reforms to rein in pharmaceutical spending, since they have heard such promises since the clawback mechanism has been in existence. A long and difficult negotiation process beckons.