About the Sector

In the past decade of healthcare reforms in Bulgaria, the most widely discussed topics have been those of high government pharmaceutical expenditure, pharmaceutical and reimbursement policy objectives, pharmaceutical prices and generic penetration. No particular actions have been taken by the governments to encourage generic use, despite the public criticism of the high patient co-payment for reimbursable pharmaceuticals and government decisions for reduction of public costs for reimbursed pharmaceuticals.


In the period 2005 – 2009, the government introduced the trademark reference system and the administrative registration of the lowest prices in eight EU countries. The results of this pseudo reform of prices were undoubtedly negative. Both public and personal pharmaceutical costs increased.


This led to a severe crisis in pharmaceutical supplies, limited access to pharmaceuticals for a number of patients with statutory health insurance and further aggravated the dire condition of Bulgarian healthcare. Along with these negative therapeutic and organizational effects, the costs of the monopolistic National Health Insurance Fund grew by 68% – from BGN 245 million in 2005 to BGN 410 million in 2009.


To the contrary, the European practice of containment of pharmaceutical costs has shown that the leading strategy should be a responsible national pharmaceutical policy providing incentives for generic prescriptions and generic use. That would increase the access to therapies, improve the quality of treatment and reduce public and personal pharmaceutical costs by at least 30% as an initial economic effect with the tendency to increase.

The experience of the developed European markets shows that generic use may be stimulated in one or more of the following ways:

–   delisting from the positive drug list of all medicines exceeding the INN or ATC reference price by 20%

–   referencing the pharmaceutical prices at the course of treatment level or ATC group level

–   reimbursement of patient therapies according to monthly limits per disease (ICD), and not per pharmaceutical (АТС)


These strategies can help with the achievement of important therapeutic and economic goals, such as a reimbursement rate of over 80% of the patient’s monthly pharmaceutical costs, increased efficiency of the management and forecasting of public pharmaceutical costs, increased quality of disease diagnostics and improved control on the dispensing in pharmacies.


The trends in the Bulgarian pharmaceutical market result from the clash of the inadequate pharmaceutical policies with the developments in the European markets. For comparison, the use of generics in the past five years has dropped by 6%, while the use of costly trademark pharmaceuticals with patent protection has increased by 50%. This is the only reason for the 68% increase of reimbursement costs for the period.


When we look at the development of the Bulgarian pharmaceutical market, we see that every year the sales of patented pharmaceuticals show a faster growth rate than the average for the total pharmaceutical market in the country. Moreover, in 2009 it was even reversely proportional – while the total use of pharmaceuticals decreased by 4%, the sales of patented pharmaceuticals increased by 8%.


The above analysis of the 2005 – 2009 health policy government decisions shows their ineffectiveness. It also shows the negative impact of the actions of the Positive Drug List Committee and the Limit Drug Prices Registration Committee. Despite the constant assertions about a reimbursement policy stimulating generic prescriptions, the actual results show that such measures haven’t been taken and that in the respective period generic penetration was decreasing instead of growing. This underlies the constantly increasing costs, the poor access to pharmaceutical therapies, the lack of management and treatment of chronic diseases in outpatient care, as well as the over-hospitalization and high disability and mortality rates.


These conclusions are further supported by the analysis of the different segments in the pharmaceutical market. The market’s total value for the period 2006 – 2009 grew by 31.98%, from BGN 1,242 mln to BGN 1,640 mln, respectively. In the same period the value of sold trademark patented products grew by 40.39%, from BGN 536.7 mln to BGN 735.5 mln, respectively. We see again a higher growth rate of the so called original products compared to the average growth rate for the whole pharmaceutical market.


We can conclude that the sales of generic products in terms of both value and quantity had a growth rate lower than the average for the period. Between 2006 and 2009 the value of the generic market grew by 25.58%, from BGN 705.9 million to BGN 886.5 million. The development of the Bulgarian pharmaceutical market shows that the relative share of generic pharmaceuticals is shrinking while their average price is increasing. Thus the value of generic sales for the four-year period increased by 25.58%, while the cumulative inflation for said period was 23.40%. Meanwhile, the use of trademark pharmaceuticals increased by 40.39% and their average price decreased by 5.49% from the average BGN 18.22 in 2006 to BGN 17.22 in 2009.


The analyzed processes in the Bulgarian pharmaceutical market contradict the global development of pharmaceutical markets, which tend to use more and more generic pharmaceuticals with gradually decreasing prices.


The reasons for such deviation in Bulgaria could be the following:

1. The reference system for patented pharmaceuticals has its impact and the prices relatively decrease.

2. Generic prices increase because the reference price system is trademark-based and not INN-based. This means that the price is not compared to the prices of competing manufacturers’ pharmaceuticals with the same INN and different trademarks.

3. The prescription and use of patented pharmaceuticals are growing faster because, thanks to the about four times higher unit prices and a similarly higher profit, the drug manufacturers have a number of incentives to influence the therapeutical choices of Bulgarian prescribing doctors and patient organizations.

4. The fact that no pharmacoeconomic analysis and efficiency assessment through the cost-benefit ratio is applied when pharmaceuticals are included in the Positive Drug List allows for the inclusion of pharmaceuticals which have recently gone off patent at prices significantly higher than already included therapeutic analogs. This contributes directly to the higher average prices of generic pharmaceuticals.


The inappropriate pharmaceutical and reimbursement policy causes inconsistent development of the Bulgarian pharmaceutical market. The costs for pharmaceutical supplies are continuously increasing and the access to therapies is gradually decreasing.


Urgent measures have to be taken for INN-based price referencing upon the registration and positive drug list inclusion for all pharmaceuticals, as well as towards a transition to reimbursement of therapies at disease level and not at pharmaceutical level.