Economy
Hungary to levy 14-16% “tax" on subsidised drugs sales
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"The owner of the licence to distribute the given drug ... has the obligation to pay (into the budget) 14% of the full-year amount of the subsidy on producer prices on drugs which carry a fixed subsidy ... and 16% on drugs which carry a non-fixed subsidy," the bill says.
The shares of Hungary's two listed drug producers, Richter Gedeon and Egis, reacted to the news of the taxes, outlined earlier this week, by falling sharply on the Budapest Stock Exchange (BSE).
The OEP and the producers will jointly pay for an overshoot of the drug fund budget up to 9% (see details below), while any excess budget overspending above 9% will be solely covered by drug makers.
Details:
a) 5% drug budget overshoot --- the state and drug firms share this cost 50-50%;
b) overshoot between 5% and 6% --- drug firms will pay 60% of the amount;
c) overshoot between 6% and 7% --- drug firms will pay 70% percent;
d) overshoot between 7% and 8% --- drug firms will pay 80%;
e) overshoot between 8% and 9% --- drug firms will pay 90%.
f) for any overshoot over 9% of the annual target, drug firms will have to pay the entire cost of excess subsidies
The government will also require drug companies to pay a HUF 5 million one-off fee and a HUF 1 million annual fee for each salesperson working for the firm.
The shares of Hungary's two listed drug producers, Richter Gedeon and Egis, reacted to the news of the taxes, outlined earlier this week, by falling sharply on the Budapest Stock Exchange (BSE).
The OEP and the producers will jointly pay for an overshoot of the drug fund budget up to 9% (see details below), while any excess budget overspending above 9% will be solely covered by drug makers.
Details:
a) 5% drug budget overshoot --- the state and drug firms share this cost 50-50%;
b) overshoot between 5% and 6% --- drug firms will pay 60% of the amount;
c) overshoot between 6% and 7% --- drug firms will pay 70% percent;
d) overshoot between 7% and 8% --- drug firms will pay 80%;
e) overshoot between 8% and 9% --- drug firms will pay 90%.
f) for any overshoot over 9% of the annual target, drug firms will have to pay the entire cost of excess subsidies
- Owners of distribution licences for drugs will contribute to the cost of drug subsidies in proportion with the amount of subsidised drugs they sell;
- State subsidy is fixed to a reference drug. Drugs with the same active agent and medical impact cannot carry a higher subsidy than the reference drug;
- Subsidy is defined either as a percentage, or a fixed amount. Fixed-amount subsidy is for drugs with the same active agent or for a group of drugs that remedy the same illness;
- The owner of the licence to distribute a given drug has the obligation to pay (into the budget) 14% of the full-year amount of the subsidy on producer prices on drugs which carry a fixed subsidy, and 16% on drugs which carry a non-fixed subsidy;
- An exemption can be made on those fixed-subsidy drugs, which are cheaper than the reference drug;
- An allowance may be earned if the given company agrees to lower the producer prices of certain drugs and undertakes to keep them at the level agreed for a minimum of three years;
- Pharmacies whose annual gross margin exceeds HUF 30 million will have to pay a "solidarity fee", which is 1% of the margin and payable on a monthly basis.
The government will also require drug companies to pay a HUF 5 million one-off fee and a HUF 1 million annual fee for each salesperson working for the firm.
