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Spain to Guarantee Drug Payments in Centralized Purchases

Spain will guarantee regional governments’ payments to pharmaceutical companies to try to win support for a plan to centralize drug purchases and narrow the European Union’s largest budget deficit.

Documents will be published as early as this week for Spain’s Instituto Nacional de Gestion Sanitaria, or Ingesa, to seek offers from suppliers of health products, said a senior Health Ministry official who asked not to be named as the information isn’t yet public.

Guaranteeing payments may ease industry opposition to the centralized purchases. The tender is the second attempt after a first in December was challenged by the industry and withdrawn, said a spokeswoman for the Health Ministry who asked not to be named in line with government policy.

Spain’s tax-funded health-care system is run by the nation’s 17 semi-autonomous regions and represents two-thirds of their spending along with education. The government last year changed rules to increase patients’ contributions for prescription drugs and is trying to secure further savings through centralized buying.

The regions can choose whether to participate in the tender that will include drugs such as anti-TNF medicines used to treat rheumatoid arthritis and other inflammatory illnesses. Also covered would be medical products such as surgical gloves, said the spokeswoman.

Single Price

The Health Ministry has designed the process to guarantee buyers’ solvency and a single price per product, the official said. There are no restrictions to the number of participants as long as providers are qualified suppliers, the person said.

The government is targeting savings of 400 million euros ($525 million) from the first batch of centralized purchases, which will also include antibiotics in September, the Health Ministry official said.

Spain’s pharmaceutical spending was 799.3 million euros in May, dropping 12.1 percent from a year earlier, the Health Ministry said in an e-mailed statement today. The average spending per prescription was 4.45 percent less than in May 2012, it said.

Prime Minister Mariano Rajoy, in power since December 2011, last year organized close to 19 billion euros in loans to the regions to help them pay down accumulated unpaid bills, including hospitals’ debt. The government also announced 7 billion euros in health-care spending cuts such as measures to contain pharmaceutical spending as lower tax receipts have left the regions struggling to pay suppliers and cut their budget deficits.

For Related News and Information: Spain Races to Sell Bonds as Tax Revenue Disappears: Euro Credit

To contact the reporter on this story: Angeline Benoit in Madrid at abenoit4@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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