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Chapter 1 | The impact of the crisis on the health system and health in Belgium
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In Belgium, the reference price level is based on a simple linear reduction
(percentage) in the original ex-factory price of the brand drug (Vrijens et al.,
2010). The result is then increased by the distribution and delivery margins to
obtain the public price. When the reference price system was first introduced in
2001 for off-patent reimbursable drugs – provided that a low-cost 10 alternative
existed – the percentage reduction was fixed at 16% (imposed by the government).
It was then progressively increased throughout the years and since April 2011 has
been 31% for drugs included in the reference price system for the first time, with
an additional reduction of 6% for drugs included in a reference group for over
two years plus a reduction of 5.5% for drugs included for over four years.
Since April 2012, drugs in reimbursement category A (no co-payment) have
enjoyed a price decrease of 41% instead of 31% if they are included for the first
time, with an additional reduction of 7% (instead of 5.5%) if they are included
for over four years. A large number of companies producing branded drugs
lowered their price to the reference price level. This method for setting the
reference price has the benefit of guaranteeing savings to the public authorities,
but it has, in general, not generated price reductions of generic medicines below
the reference price (Dylst, Vulto & Simoens, 2012).
On 1 April 2012, an overall price reduction of 1.95% for all drugs came into
force. Pharmaceutical companies can choose between this linear reduction of
1.95% on all their products or a flexible reduction of prices for some products
(some more than 1.95% and others unchanged). The flexible reduction can
only be applied in certain conditions, for example a maximum 20% reduction
per product for pharmaceuticals that have been in the reference price system for
less than four years and a maximum of 6% otherwise; pharmaceuticals under
a compulsory substitution policy (antibiotics and anti-inflammatory drugs)
are excluded. The 1.95% price reduction was also applied on 1 April 2013,
resulting in a price reduction for more than 2500 drugs.
In order to allow price comparisons, pharmaceutical companies since 2012
have been required to submit the ex-factory prices of drugs under patent on
the Belgian market for more than 5 and less than 12 years as used in six EU
countries with a comparable standard of living (Austria, Finland, France,
Germany, Ireland and the Netherlands). If a significant decrease is observed
abroad, the reduction will also have to be applied in Belgium.
Overhead costs
In 2011, the federal government decided to reduce the budget for overhead
costs of the sickness funds (i.e. administrative costs) by €43.3 million in 2012,
€91 million in 2013 and €112 million in 2014. In response, in 2011 some
sickness funds reduced their number of employees.
10 Low-cost drugs are generic drugs and brand name original products with lowered price to the reference price.