New Health Minister Tomas Julinek, plans to introduce new drug decree as of January 2007, which will substantially decrease compensation for basic healthcare drugs and plans to increase compensation for special drugs for seriously sick people. There is also possibility that selling of drugs will be again restricted only to pharmacies and any OTC sale in supermarkets and filling stations will be forbidden.
Our view:
Part of reimbursement for cheapest drugs will show relative strength and price advantage of generics in comparison to branded drugs for basic health care. Impact on Zentiva will depend on specific reimbursement that will be agreed. Forbidding OTC sales could be viewed as slightly negative, however given the volumes sold via supermarkets and filling stations is only marginal.