In her capacity as CEO of CATENA, Alina Marinescu was invited to hold a speech at ZF Pharma Summit ’15, an event that lasted for two days and was organized by the newspaper Ziarul Financiar at the World Trade Center Bucharest, New York room. Here are some excerpts from the speech:
“Thank you for the invitation. I want to congratulate you that you were able to gather at the table all the players in the health system: manufacturers, distributors, pharmacists, hospitals, law firms and foreign partners.
Catena is a chain of pharmacies in Romania with hundred percent Romanian capital, which has grown in recent years through the acquisition of pharmacies in the pharmaceutical market. What we want is a consolidated development, both for us and for the system. We believe that if we will have a predictable health system, with laws to be applied by everyone, implemented on time, not after I do not know how many years, it will be good for everyone.
“No one took into account the effects that the price change can generate.”
Look at the price changes: it was a measure highly acclaimed by the media at that time, considered very good for the patient. But no one took into account the effects it may cause. I think we must go toward a health system in which the patient is on the first place. I think that all of us, the players on the pharmaceutical market and on the health system market, we had in the foreground the patient. Everything that was done was done for the patient, so that the patient to have access to good medicines, to cheap medicines, as it was desired, to be the country with the cheapest medicinal products, but we have never thought if we could ensure the continuity of the treatment and reap the results of investments made in years. Currently, there are quite many medicines that are difficult to be found. I mean usual medicines, I do not speak now of expensive drugs, to which a limited number of health insured persons would have access. I’m talking about medicines that are needed by a large number of insured persons. We find them increasingly difficult, the manufacturers have their reasons for not producing them, they do not bring them any more, or they bring them in limited quantities, the distributors receive inadequate quantities and can not meet the orders from all the pharmacies. And then we, as pharmacists, are forced to refuse the patients and to give them alternatives permitted by law, under compensated and free recipes, which are more expensive and for the patient this means additional costs.
It was a quite high grief among the patients on July 1, when everyone said that the medicines will become cheaper, but when, in reality, in the pharmacies, for certain therapies and certain types of medications, they had to pay more than they used to formerly pay. And it was due to the referencing, due to the fact that product that gave the reference price was not available, and this happened because neither the manufacturers, nor the distributors, were ready to bring in pharmacies the necessary quantities, due to various reasons. This measure to reduce the prices, whether it was good or not good, must be applied. Probably it had to be adjusted to what it happened in 2015, not to what happened in 2009. Perhaps, if it was updated in 2009, 2010, another was the impact.
“Competition makes you innovative”
Regarding bankruptcies … it is likely that they will appear, it is likely that many pharmacies will better manage their financial resources, will much better manage their storing capabilities … I cannot make now a prediction about how many bankruptcies will also be and about what will happen … We clearly do not want to fail. I believe that in a free market the competition is needed and the competition makes you innovative.
To move forward, we believe transparency is needed at all levels. We, as pharmacy, report in the Insurance House system the items we deliver at every moment. I believe that when the Insurance House will ensure transparency with respect to everything that is consumed, to everything that is settled, with respect to whom and how and why is settled, a lot of these frauds about which they speaks in the system would be eliminated, the money also would probably be consumed more thoughtfully and we would not be obliged to find funds from the clawback tax, from the reduction in prices, and we would have enough money to finance the system. The Insurance Houses, through the reporting made by the pharmacies, know at any time what was released. They know, for each area of the country, which is the specific prescription, which is the incidence of diseases, and can make various statistics: why, in I do not-know-what county a more expensive treatment scheme is used for the cardio-vascular diseases and why, possibly, in the south of the country another scheme is used. The therapeutic guidelines the system needs can be compiled much better so that we can all go in the same direction.
“The introduction of the health card is a very good measure”
The introduction of the health card was a very good measure, which we, the pharmacies, expected to be introduced even in December 2014. Finally, it became operational on 1 September. I repeat, it is a very good measure, which needs to be improved so that no more misfires to occur, the system not to stop any more, because we still live in the era of reporting system stopping… This health card will give us a clear picture of what happens in the consumption of medicines. I speak only of medicines but the health card is used on hospital services, the labs, the offices of family doctors … A literally extraordinary measure, that must be perfected, that must be implemented with much more involvement by the officials, and here I believe it would be necessary a much better training of the insured, I wouldn’t like to talk about the patient. Until we reach to use medicines, we all are insured of the health system. I think that if explanation would have been given to the insured why it is necessary they to go in time to take the card, if they have not received it, we wouldn’t have witnessed these queues formed at the Insurance Houses, these inconveniences that occur in the Pharmacy when people come and they are told that the system cannot be validated in the absence of the card. I think that if the insured would be much better trained, with everything that happens in the system, things would go much better. But I think transparency is needed, I insist on transparency. When the Romanian insured will know on what his money is consumed, I think he will trust, will appreciate much more medical services, pharmaceutical services offered in Romania and I think that the dream could be realized our health system to become a health system that does not export patients, but receives patients.
Our system is a highly regulated system, but I think that not all the regulations that underlie a business are joined together … When the price of a product is reduced, if it is reduced by the Ministry of Health, the pharmacies and the distributors are obliged to reduce the said price also for what they have in stock. This means you bought the item with RON 1 and you sell it with RON 0.50. And in that moment, it is a loss on stock that is supported by every pharmacy, every distributor…
“The matter of the medicines exit from this country can be solved through transparency”
Regarding the medicines that exit from this country, I think this matter will also be resolved through transparency. From what I know, distributors and manufacturers report to the National Agency for Medicines everything that is produced and everything that is imported. In their turn, all the distributors report to the National Agency for Medicines all the outputs from the warehouses. I think that, by a control made between input and output, we can greatly reduce these exports, which, because Romania is a European Union member, is legal. There were Distributors fined by the Competition Council that, I do not know how many years ago, they failed to export. Therefore I say: legislation at all levels – health, pharmacy, Competition Council, taxes – must be harmonized. We, even we are a chain, and even if everyone makes the difference between chain pharmacies and independent pharmacies, currently we are, as all the pharmacies throughout Romania, affected by the lack of medicines. I do not think a manufacturing company exists, which wouldn’t have a defective product in pharmacies, which cannot be offered to the patient.
With respect to the financial projections, I think for 2015, because of what is happening from July onwards, it is premature to set a figure, everyone wants to grow. Due to the legal conditions, the economic conditions, due to the fact that since July, the market is in place, as addressability by the patients, I think that one cannot make a very clear prediction. Currently, some grow, others decline, I want to grow. The privatization of health services is at the beginning. We started it in ’99, and since then we grow and grow, and now we are on a consolidated growth. This year, we bought few pharmacies and paid fewer for licenses on pharmaceuticals, around 50 thousand, but we paid a lot in the last years. The trend is towards decreasing, it is possible the same no longer be purchased, simply to close.
“We need profits to reinvest”
Steps to accommodate the new prices have been taken ever since we learned about it, besides the fact that we expected the price to be changed in April but the change was made in July and we remained quite cautious regarding the stocks. We look forward to changes; a year-end with changes in margins is announced, both for distributors and for pharmacies. We must be aware that if it is well for the distributors, also for the pharmacies is well. And for the producers, obviously will be well. Perhaps the word “profit” is hated by everyone because it originated from “to profit of something”. But I think that we should all be aware that we need to realize these profits in order to reinvest it. I do not think any big player in the market left with the profits to Bahamas. I think that the same were reinvested in personnel, in facilities, in improvements, in everything it is need to be a professional pharmaceutical system.
“From October 1 a new list of compensation will come into force”
From October 1, a new list of compensation will come into force. I think it will be difficult, because you have to tell the patient that until now, for certain categories of patients, the state compensated 90% and the patient paid just 10% of the reference price, and now you must tell the patient that the state only compensates 20% and that the patient will have to pay 80%. Or 70% more, or 40% more. Not to say there are 17 molecules that will not be compensated, so they will not be found any more and will not be allowed to be released starting from October 1. These are everyday medicines … The 17 medicines were taken off internationally, it was considered that these molecules cannot be compensated, but they are molecules that are used by quite many patients. They are molecules pretty much sold in pharmacies, they are sought. As part of a molecule, there are cheap products and expensive products. The compensation is made at the level of the molecule, not at the level of the product. “