Cyprus Mail

HIO paying extortionate rates on medicines, MPs hear

The HIO is paying extortionate rates on medicines, far more than the government used to before the rollout of the national health system, it emerged in parliament on Thursday.

Lawmakers piled on the Health Insurance Organisation – the agency running the national health system or Gesy – after hearing from both the auditor-general and a senior health ministry official how spending on drugs has skyrocketed.

Auditor-general Odysseas Michaelides said the HIO buys medicines and consumables at prices far higher than what the health ministry used to prior to the introduction of Gesy.

In other European countries, he noted, it takes months to assess the quality of drugs and determine prices – whereas here the HIO agrees to whatever price traders quote, and in a matter of days.

The government watchdog accused the HIO of negligent conduct in this respect and said that tenders procedures are often overlooked.

This created the conditions for the offering of bribes, he asserted.

Citing numbers, Michaelides said that in 2018 spending on drugs came to €115 million; this rose to €134 million by 2021, while for this year total expenditures are expected to reach €200 million.

Weighing in, the health ministry’s permanent secretary Christina Yiannaki said that, before Gesy, the ministry would drive a hard bargain when negotiating drug prices.

This no longer appears to be the case.

She mentioned various examples of past practices – a medicine with a wholesale price of €84, which the health ministry had managed to negotiate down to €7. With another drug carrying a wholesale rate of €7, the ministry got it for just 41 cents.

In addition to medicines, authorities are also paying too much for consumables. For instance, pacemakers now cost about 120 per cent more than what they used to.

Yiannaki stressed that this state of affairs is counterintuitive. Prior to Gesy, the ministry used to buy medicines for around 600, 000 beneficiaries; with the number of beneficiaries under Gesy having increased to 950,000, logically that should have driven prices down. Instead, the opposite has happened.

The official suggested that a special committee be set up to assess and negotiate prices.

She said it cannot stand that certain cancer patients, who are Gesy beneficiaries, are forced to turn to the health ministry seeking treatment drugs.

“Once treatment starts, it should continue. Patients have the right to life.”

For his part, HIO boss Stavros Michael acknowledged that “distortions” exist, but attributed this to teething problems within the “nascent” national health system.

Gesy was first rolled out in March 2019.

He told MPs the HIO is currently looking at practices in other countries, and he asked for time until the new HIO board makes the right decisions.

Whereas in some cases the HIO pays higher rates on drugs, in others it pays less.

Christodoulos Kaisis, the Supervision Commissioner for Gesy, highlighted a related issue – that under Gesy, pensioners face higher co-pay rates for certain painkillers or dietary supplements.

In remarks later, Diko MP Zacharias Koulias spoke of a “big party” going on inside Gesy on the taxpayer dime.

“The impunity shows when you compare medicine prices [from before and after],” he said.

Edek’s Marinos Sizopoulos pointed out that constantly inflating budgets put in jeopardy the viability of the national health system itself.

“It’s no accident that two-and-a-half years after the implementation of Gesy, the global budget of €900 million has today climbed to €1.5 billion,” he said.

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