According to the sources of business daily Vilagazdasag Health Minister Mr Molnar expects a tax-like co-payment from the Hungarian drugmakers to the Hungarian drug subsidy budget to replace the current negotiation based absolute amount contribution. The new tax would be based on sales revenues Health Ministry is working on a "drug-economy law", which would stipulate the price competition through public price contest versus the earlier price negotiation system.
Our view:
The idea of the open price contest is new in the Hungarian drug subsidy system. The effect of this on earnings of pharmas is completely uncertain at the moment; however, it will likely cut into profits of pharmas on those therapeutic areas where there is a room for generic competition. The new tax-like contribution of pharmas, will be similar to the existing system, in our view, which takes into consideration pharmas share in the subsidy payments. If this principal remains, than the potential negative impact on Hungarian generic pharmas will remain limited.