The Hungarian Association of Innovative Pharmaceutical Manufacturers (AIPM) has welcomed the fact that the size of the pharmaceutical budget (the price subsidy for medicinal products available in pharmacies) will increase according to the draft budget for 2018.

According to the draft legislation, the size of the pharma budget will be 337.4 billion forints ($1.22 billion), which is 18 billion forints higher than the 2017 plan. 72.4 billion forints of this amount is planned to be paid by pharmaceutical manufacturers, making it a significant contribution to the financing of the supply of medicinal products in line with the practice of previous years. To put this into perspective: in 2016 the entire pharma spending including manufacturers’ payments was 328 billion forints in total, which represents an increase of almost 10 billion forints, and the portion of the pharma budget that is financed from state subsidies will increase as well.

Nevertheless, due to the complexity of the Hungarian pharmaceutical financing system, this budget should not be confused with total pharmaceutical spending. As the aforementioned budget line includes neither subsidies for hospital medicines, nor the amount spent on medicinal products through so-called itemized financing (typical examples include modern oncological and biological therapies). Increasing the latter amount would be necessary to make it possible for patients to access the most advanced therapies.

If one looks at the net pharmaceutical spending (corrected for manufacturers’ payments) of the V4 countries, it can be concluded that even with this increase, the pharmaceutical spending of the Czech Republic will remain around 50% higher than that of Hungary, and the country is still far from reaching the average values for the V4 countries.

As a result of the relentless efforts of pharmaceutical manufacturers, newer therapies that are more effective or are associated with fewer side effects than previous treatment options are constantly being developed due to innovations in biotechnological and genetic engineering. The good news is that six new pharmaceutical products are expected to be included in the price subsidy system in Hungary starting in June. However, it must be added that currently almost 50 innovative medicinal products in various therapeutic fields that incorporate the latest healing methods are still waiting for inclusion in the subsidy system.

Finally, it should be borne in mind that the tax burdens for pharmaceutical manufacturers in Hungary are the highest in the region. Pharmaceutical manufacturers pay about 20% of the annual pharma budget in the form of various types of taxes, and the contributions from the pharmaceutical industry as well as total turnover and subsidy expenditures increase every year.