The role of the Ministry of Social Affairs is to organise the policies of medicinal products and medical devices and plan their implementation.
The main objectives of the medicinal products policy are to guarantee:
- the safety, efficacy, and quality of medicinal products;
- the geographic and financial accessibility and rational use of medicinal products.
From January 1, 2018, the Estonian Health Insurance Fund is handling the price agreements and amendments of prices of discount medicines, calculates the discounted prices for medicines, processes the applications for a list of discount medicine products and coordinates the work of the Committee for Medicinal Products. More information on pricing and reimbursement of medicines can be found here. The list of updates will be announced on the EHIF website.
Medicinal products distributed at a discount
The distribution of medicinal products at a discount or paying for medicinal products from national funds either in full or in part is one of the measures intended to facilitate the availability of medicinal products. The Estonian Health Insurance Fund participates in the payment of medicinal products that are included in the list of medicinal products distributed at a discount.
The establishment of a discount to a medicinal product is based on the following criteria:
- the need for a medicinal product, including the financial accessibility of a medicinal product distributed without a discount or with a lower discount rate;
- proven efficacy and safety of a medicinal product;
- the cost-effectiveness of a medicinal product (price and efficiency ratio, justification of price level);
- the existence of alternative medicinal products or treatments;
- possibilities for misuse and overuse of the medicine and their consequences;
- possibilities for providing the rational use of a medicinal product and a reliable prognosis of its retail sale volume;
- compliance with the financial means of health insurance, including the principle that the expenses incurred to provide medicinal benefits must not exceed 20 per cent of the expenses prescribed for health care benefits in the annual health insurance budget.
Amendment of the list of medicinal products distributed at a discount
The list of medicinal products distributed at a discount will be amended regularly, once per quarter (on 1 January, 1 April, 1 July and 1 October), simultaneously with the adjustment of reference prices.
Application for a new active substance to be added to the list of medicinal products distributed at a discount will be made by manufacturers of medicinal products who plan to launch a new product on the market and who have the most information about the efficiency, safety, and intended price level of the new medicinal products. Price negotiations will be held with them. Any interested party, including manufacturers of medicinal products and associations of specialised medical care specialists, can make applications with respect to the prescription of medicinal products that have already been entered to the list of medicinal products distributed at a discount.
The submission and processing of applications is described in the regulation of the Minister of Social Affairs: ‘Procedure for drafting and amendment of a list of medicinal products of the Estonian Health Insurance Fund and the content of criteria establishing the list and evaluators of compliance with the criteria’. The Minister of Social Affairs solves applications by issuing directives.
In cases where the amendment of the list of medicinal products distributed at a discount might bring along important changes in the use of medicinal products and the financial obligations of the Estonian Health Insurance Fund, the Committee for Medicinal Products is included in the processing of applications.
The Committee for Medicinal Products has eight members – the representatives of the Estonian Medical Association, the Family Physicians Association of Estonia, the Estonian Chamber of Disabled People, the Estonian Patients Union, the State Agency of Medicines, the Estonian Health Insurance Fund, the Institute of Family Medicine and Public Health of the University of Tartu, and the Ministry of Social Affairs. The committee is an advisory body to the Minister of Social Affairs and the minutes of the discussions of the committee are public. The meetings of the committee are held at an average of every two months.
The procedure for calculating and establishing reference prices is described in the regulation of the Minister of Social Affairs ‘Methodology for calculating reference prices, time limits for establishing reference prices and terms and conditions and time limits for amendments’.
The establishment of reference prices is the most efficient measure used to reduce the prices of medicinal products and applicable in almost all of the member states of the European Union. In general, reference prices are applied to active substances that have been on the market and used for a longer period and on which the largest amount of efficacy and safety information has been gathered. With regard to the expiration of patents and the emergence of competition between manufacturers of medicinal products, such active substances are also significantly cheaper than the active substances with still valid patents.
Reference prices are applied to a group of medicinal products with the same active substances and methods of administration included in the list of medicinal products distributed at a discount. When calculating reference prices, the packages of medicinal products with the same active substances and methods of administration are collected first, then the average prices of their daily doses are found and on the basis of the second cheapest package, reference prices are calculated for all of the packages included in the group. The Estonian Health Insurance Fund bases the distribution of discount medicinal products on the reference prices established for the packages of medicinal products and if a patient has been prescribed a medicinal product or if they wish to buy a medicinal product, the price of which is higher than the established reference price, then they will have to pay the difference between the reference price applying to the medicinal product and its sales price.
With the addition of each new medicinal product to an existing reference price group, the existing reference prices are recalculated and as new medicines are usually cheaper than the current ones, the reference prices will start to decrease as the number of medicinal products belonging to a group increases.
Entrepreneurs distributing medical devices which are more dangerous or have a more complicated intended purpose are obligated to register such devices in the medical devices and appliances database maintained by the Health Board. With many medical devices, this database helps to identify the entrepreneurs distributing such medical devices and their contact information. This database also includes information about all of the medical devices reimbursed by the Estonian Health Insurance Fund and the Social Insurance Board.
Information for entrepreneurs involved in the distribution of medical devices
The Health Board must be notified if a class I medical device, custom-made medical device, system of medical devices, procedure pack or in vitro diagnostic medical device is placed on the European Union market. The competent authority in the field of medical devices, the Health Board, must also be notified of the first time distribution or professional use of class II a, II b or III medical devices or active medical devices in Estonia.
In the field of value-added tax, supervision is exercised by the Tax and Customs Board.
VAT rate applicable to medical devices
In the distribution of medical devices in Estonia, a 20% VAT rate from the taxable amount of the device is generally applied, but in the case of some devices, an exemption from VAT or a 9% VAT rate is applied. VAT is not applied to dentures transferred by dentists or dental physicians and a 9% VAT rate is applied to medical devices and appliances intended for the personal use of people with disabilities.
A 9% VAT rate is applied to all medical devices with a description and a combined nomenclature code (hereinafter CN-code) which correspond to the description and CN-code listed in section 2 of the Regulation of the Minister of Social Affairs of 4 December 2006 No. 63 ‘Medicinal products, contraceptives, sanitary and hygiene products, medical devices and appliances taxable with a 9% value-added tax rate’.
Questions about value added tax incentives or exemptions from value added tax should be addressed to the Medicine Department of the Ministry of Social Affairs. All proposals for the amendment or improvement of the list of medical devices taxable with a value added tax incentive should also be addressed to the Medicine Department of the Ministry of Social Affairs. To submit a proposal, an application must be drafted in a free format and include the description, user manual, and existing CV-code of the medical device.
Applying for reimbursement
If an entrepreneur wishes to receive reimbursement from the Estonian Health Insurance Fund or the Social Insurance Board for purchasing medical devices they distribute, they must contact the Estonian Health Insurance Fund or the Social Insurance Board.
Procurement of medicinal products
The procurement of medicinal products is financed from the state budget through the Ministry of Social Affairs. Purchasing medicinal products is part of the activities carried out under the respective national health programmes. The Ministry of Social Affairs procures:
- antiretroviral drugs;
- tuberculosis drugs;
- vaccines and immunoglobulins/antitoxins.
Medicinal products are procured in accordance with the public procurement procedure. The public procurement procedures of the Ministry of Social Affairs are established in the directive ‘Confirmation of the procedure of procurements and contracts of the Ministry of Social Affairs’ (EST).
In order to determine the range and quantity of medicinal products and organise delivery and logistics, the Ministry of Social Affairs has established respective procurement committees. The committees consist of the representatives of treatment centres, the Ministry of Social Affairs and the State Agency of Medicines and the representative organisation of patients.
The procured antiretroviral drugs and immunological preparations are stored in the warehouse of the Health Board and the procured tuberculosis drugs in the pharmacy of the Tartu University Hospital. From the storage facilities, the medicinal products are distributed between an agreed set of providers of health services at an appropriate time and in necessary quantities. The medicinal products are given or administered to patients free of charge.
The Ministry of Social Affairs procures 23 antiretroviral drugs, including nine drugs for children. The range of medicinal drugs is confirmed by a procurement committee pursuant to the existing treatment guidelines and needs; the committee meets once or twice a year. More information about the names and quantities of medicinal products procured is included in the procurement plan.
The Ministry of Social Affairs procures 28 main drugs for tuberculosis and eight drugs for the side effects of tuberculosis, as well as tuberculin tests. The range of the medicinal products is confirmed by a procurement committee in accordance with the existing treatment guidelines and needs once or twice a year. More information about the medicinal products and their quantities procured is included in the procurement plan.
Public procurements are also carried out to order the central warehouse service and transport service (the movement of medicinal products from the central warehouse to the providers of health services) for tuberculosis drugs.
- WHO treatment guidelines for drug-resistant tuberculosis
- WHO treatment guidelines for drug-resistant tuberculosis (new medicinal products)
- Procurement plan as at 2018-2019
Vaccines and immunoglobulins/antitoxins
The Ministry of Social Affairs procures 14 vaccines and six immunoglobulins/antitoxins as well as tuberculin tests. The vaccines are procured in accordance with the immunisation plan confirmed by an expert committee on immunoprophylaxis. The committee meets once or twice a year. More information about the names and quantities of vaccines and immunoglobulins/antitoxins is included in the procurement plan.