A gradual reduction in the clawback tax will keep generic drugs on the market and lead to budget optimisation, Daniel Bran, member of the Administrative Council of the Association of Generic Drug Manufacturers in Romania (APMGR), said on Tuesday at the PRIA Finance for Keys Business Sectors conference.

„In Romania, there are over 40 drug production facilities and all of the drugs are generic. The impact of the local production of generic medicines is 1.1% of GDP, and as for the budgetary contribution, it amounts to 0.3%. Moreover, having a strong industry, we can say that we also contribute to balancing trade through the exports we make. There are over 9,000 highly qualified people working in the industry. Doctors, pharmacists, researchers work. We are talking about a strong industry, with a particularly economic impact. On the other hand, as far as the budgetary impact is concerned, we have a situation here. As you know, in Romania there is the lowest price policy, but on the other hand, we are talking about the clawback tax, which is seen as an income, but at the same time as an obstacle to budget optimisation, because 70% of the patients who are treated in Romania are treated with generic drugs. 80-90% of medicines are cheap medicines. Or, having the lowest price a clawback tax makes cheap drugs go out of the market. Then, in fact, the state pays for the slightly more expensive medicines, because those affected by the clawback tax are always priced at RON 5, 10 , 20 and some 50 medicines,” Bran said.

He added that the first budget optimisation that the Association of Generic Drug Manufacturers in Romania proposes aims to reduce the clawback tax by 5% in the first year to keep generic drugs on the market.

„The first budget optimisation we propose entails cutting the clawback tax in a gradual way. In the first year, we can cut 5%, which will keep generic drugs on the market. And it’s not a lie. We can see that in 2016-2023, by introducing generic medicines on the market, we had a budget optimisation of EUR 1 billion and we estimate that, by 2028, this budget optimisation will bring another EUR 500 million. If we gradually lower the clawback tax, let’s say by 5%, and keep cheap drugs on the market, this budget optimisation increases. I know it seems somehow the other way around: if I lower a tax, I don’t have any money left in the budget. In fact, I optimise the budget, leaving cheap drugs on the market and then you spend less. The second proposal we have relates to the Waste Water Directive. These additional investments can create major dysfunctions in the industry. Because at the time when this directive was conceived, the budgetary impact at European level was calculated at somewhere around EUR 1 billion. Today, when we think about implementing that directive, we see that a country like Finland has an impact of only EUR 800 million, and a country like Germany has an impact of EUR 1.5 billion.”

The association requests the postponement of the application of the Urban Waste Water Directive and the creation of a working group to establish the real impact on the economy.

„The impact calculated at the moment at the level of the European Union is EUR 10-15 billion, although it is a directive that was somehow unhappily conceived, because we started from EUR 1 billion, and now we are somewhere between EUR 10 and 15 billion, and that can have a devastating effect on the manufacturing industry. We want to bring more production facilities to Romania, but at the same time we have some regulations that do not help us. Our suggestion is to see, to ask for this simplification of the directive, to see once again the effect it has, to see what we can do to postpone the application of the directive in the first phase and to discuss it in Finance, in the Environment, in industry. If it is necessary to set up a working group to discuss and see what the real impact of this directive is and to resume the impact study, because it is not natural to have an impact 10-15 times higher than the one initially assessed when we started,” said Bran.

As for the clawback tax, Finance Minister Barna Tanczos said that the healthcare policy is designed by the Ministry of Health.

„Regarding the pharma industry, we cannot make the healthcare policy at the Ministry of Finance. We have a relevant ministry and we can come up with specialists, with clear data, with information from the money collected from the costs of various medical services, on analyses, on the medical system as a whole. Even the clawback tax is a tax that comes from the relevant sector and is applied by the Ministry of Finance, but it is not a tax specific to Finance. Medium and long-term healthcare policies must be made at the relevant ministry. The challenges are very big, because the Health Insurance House is a system that requires years of money from the national budget. The amounts collected from health insurance do not cover the total expenses of the system and hence the discussions about how far this need can extend to make up for the deficit of the house and go ahead with all the medicines, with all the services, with all the products that are practically financed from this system. I agree with you that even for this sector, special programmes for these companies can be developed, together with the Ministry of Economy. Why not also have a programme for the pharma industry, so that we can balance domestic production here as well, to help generic drugs manufacturers as well, because there will always be a dispute here. It is the dispute of the sector, it is not the dispute of the Ministry of Finance,” Tanczos told the same specialist event.

Tanczos and officials from the financial, industry, healthcare, construction industries, circular economy and environment and automotive sectors discussed on Tuesday the most important subjects for securing macroeconomic balances, strengthening resilience and increasing competitiveness at the PRIA Finance for Keys Business Sectors event.

AGERPRES