by Robert Galbraith

ROME, Aug 7 (APM) - Italy is aiming to overhaul its drugs reimbursement systems and scrap payback used to cover overspending, which has been identified as the biggest problem, by the end of the year.

Talks involving the pharma industry, regulators, regional administrators and government officials have been going on for some time, according to Antonio Messina, CEO of Merck Serono in Italy.

"We are talking about this in meetings now because the government, the economy and health ministry officials are fully aware that the current system does not work," Messina told APM after an oncology event in Rome in July (APMMA 53997).

Payback, which is used to cover overspending on drugs used in hospitals and elsewhere, is seen to be the biggest problem. Messina says it is being called into question by different stakeholders.

"The industry body Farmindustria is ready to discuss this and I believe medicines agency AIFA and the economy and health ministries are also ready to talk about it. The question is whether we can find a win-win situation to allow us to come out of a system which is now blocked," Messina said.

Changes so far too piecemeal to be effective - analyst

Davide Integlia, an analyst and economist at economic think tank I-Com, also senses there is agreement among stakeholders to reform the system. He notes that the process actually started at the end of last year.

"There has been talk about introducing new governance for medicines for some time. This has led to some makeshift measures, but they do not adequately address the problems. They are too piecemeal," he told APM in an interview in Rome at the end of July.

Integlia noted that three main changes have come into effect this year:

• The ceiling on spending on hospital drugs was raised from 3.5% of total national health funding to 6.89% to allow for it to pay for all directly procured drugs as well. The budget for drugs dispensed by pharmacies was lowered from 11.35% to 7.96%
• The budget law at the end of 2016 introduced separate funding of 1 billion euros a year to pay for innovative drugs, half which will go on cancer drugs (APMMA 50814)
• In April, medicines agency AIFA drafted the criteria to be used to select the drugs which will be paid for through the separate funding (APMMA 52570).

New budget ceilings useless if resources stay the same

According to Integlia, the new reimbursement budgets will have the same problems as before. "The changes to the spending ceilings will be ineffective because the amounts of resources available to pay for reimbursed drugs have not been increased. The funding for hospital drugs is far below what is necessary because of the growing demand for new, costly drugs," he explained.

Integlia welcomed the funding for innovative drugs but warns that it will not resolve the problems either, partly because he does not believe the definition of innovation is objective enough. "There is a big distinction being made between products recognised as innovative and those that are not. The definition of innovation is not clear and a product could be rejected just to avoid spending on it," he said.

The I-Com analyst noted that potentially innovative drugs will not have access to special funding, but regions will have to make them immediately available to patients. This means they will be paid for through normal reimbursement budgets and any overspending will have to be half covered by pharma through payback.

Integlia stressed that the problems can only be resolved through an integrated and forward-looking plan for reimbursement spending which addresses the growing costs of innovation and takes into account the investments made by pharma.

Autumn budget may include reforms, but beware election

According to a source familiar with the progress of talks to draft new reforms, the government is hopeful it will have something to propose by the end of the year. "I understand the plan is to include the reforms in the 2018 budget legislation which will be drawn up in the autumn," he told APM on the sidelines of the presentation of Milan's bid to host the European Medicines Agency (EMA).

However, Merck Serono's Messina is wary of the fact that next year will be an election year. "It is complicated at a time when the political situation is so delicate. We are in a sort of pre-electoral phase and we will have to see if the different sides can get together and resolve something by the end of the year," he said.

/rg/clg