DEVELOPMENT OF THE HEALTHCARE SYSTEM, 1990–2015
The main objective of this study is to prepare an overview of the healthcare system to introduce the concept of developing pricing and reimbursement of medicinal products, while providing comments on reference pricing and the reimbursement system in Bulgaria.
Healthcare reform in Bulgaria after the establishment of the National Health Insurance Fund, switching from the “Semashko” model to the “Bismarck” model, continued for 25 years. It began in 1990 with legislative changes and authorization of private property and, eventually, privatization of the state-run health sector. Until 1998, Bulgaria's healthcare system was state-owned and supported by state taxes. With the health sector privatization in 1990, new public rules were adopted to justify the introduction of rules for private entities that gradually began to emerge in this sector (Reference Dimova, Rohova and Moutafova1).
The average cost of health care as a percentage of gross domestic product, according to the World Bank data for Bulgaria, in the period 1995–2013, was 6.74 percent, reaching a minimum of 4.57 percent in 1996 and a maximum of 8.44 percent in 2014 (2).
In 1998, the National Assembly passed the Health Insurance Act (HIA), which introduced compulsory health insurance in the country. The National Health Insurance Fund (NHIF) was established and started functioning on March 15, 1999. Its main task is to implement and administer compulsory health insurance in Bulgaria, with respect to the management of collected funds and payment of health activities and medicinal products that are used for the benefit of insured persons (Reference Dimova, Rohova and Moutafova1;3).
The NHIF is an absolute monopoly in the domestic market for health services and the health needs of the population remain largely unsatisfied. This fact necessitates the creation of an alternative and competitive NHIF scheme of health insurance. Introducing the possibility of voluntary (private) health insurance, the HIA allows for the implementation of this alternative through voluntary health insurance companies, which were re-licensed as insurance companies in August 2013 (3;4).
Reimbursement of medicinal products for outpatient care is provided by the NHIF on the basis of the Positive Drugs List (PDL). The funds earmarked annually for medicinal products have been growing in recent years, while the cost of medicinal products for outpatient care in the NHIF stands at an average of 25 percent of all NHIF costs. The annual data for outpatient drug expenditure at the NHIF are based on healthcare insurance legislation (Figure 1) (5).

Figure 1. Funds for medicinal products for outpatient care in the period 2000–15 (in Bulgarian lev, BGN). Data for 2014 and for 2015 included 185 and 175 Million BGN for oncology medicinal products, respectively. (The data are prepared according to the published budget legislation for every year; 1.95 BGN =1 €.)
RESEARCH METHODS
Documentary method: review of regulations, review articles, reports of international organizations and analyses in the European Union (EU). Analytical method: a method using historical analysis to track the dynamics of the reform in the healthcare and pharmaceutical sectors, respectively, started in 2000 after the establishment of the Health Insurance Fund.
Pricing and Reimbursement System in Bulgaria
Legislation in this field dates back to 2000 when the NHIF was established and the first PDL was introduced and promulgated in State Gazette, issue 55 of the same year. After the accession of Bulgaria to the EU in 2007 a new national Law on Medicinal Products in Human Medicine (LMPHM) came into force. It was intended to regulate all aspects of the registration of medicinal products, and it introduces a Pricing Chapter, harmonized with the Transparency Directive 89/105/EEC (6;7).
In Bulgaria, the following prices of medicinal products have been formulated: the Price for a product included in the PDL and paid for by public funds; the Ceiling price for products under prescription, and the Maximum selling price for over-the-counter (OTC) products (the latter two not reimbursed at all by the State). All three are specified in national currency – Bulgarian lev (BGN). A new body, the National Council at Prices and Reimbursement of Medicinal Products (NCPR), subordinate to the Council of Ministers and Ministry of Health and dealing with the domestic assessment of pricing and reimbursement, has published four annexes to the PDL on its Web site based on internal and external reference price (RP) setting since 2013 (8).
Criteria for pharmacoeconomic analysis were established and in April 2015 the NCPR guide was published on the Web site of NCPR until the new Regulation on Health Technology Assessment took effect in December 2015 (9).
Price of a Medicinal Product Included in the PDL and Paid for with Public Funds
The price of a medicinal product included in the PDL and paid for with public funds is established by means of a NCPR decision. Traders can sell up to this ceiling price, but also lower than it. This price is determined by NCPR and published on the NCPR Web site as follows (8): (i) according to the current Bulgarian legislation ex-factory price cannot exceed the lowest ex-factory price for the same product in 10 countries: Romania, France, Latvia, Greece, Slovakia, Lithuania, Portugal, Spain, Italy, Slovenia (used as the main reference countries); (ii) referencing seven additional Member States: Belgium, the Czech Republic, Poland, Estonia, Hungary, Finland, and Denmark (when there is no price registered in the first group of 10 countries); (iii) pre-set margins for distributors and pharmacies are added as well as; (iv) 20 percent value-added tax (VAT), while not introducing differentiated VAT on medicinal products, unlike in several EU countries.
There are four annexes to the PDL, which are publicly available on the Web site, depending on the reimbursing institution. The NHIF, the Ministry of Health, and medical facilities should pay the reference value per package (8;9).
Annex 1 to the PDL
Medicinal products for treatment of diseases that are reimbursable under the Health Insurance Act. This annex affects products for out-patient care directly reimbursed to the patient by the NHIF. The medicinal products in this annex have four levels of reimbursement: 25 percent, 50 percent, 75 percent, and 100 percent.
Decisions on the reimbursement rate are made on the basis of an assessment by medical professionals (physicians) who are external experts to the NCPR, but the final decision is taken by the NCPR. For the past 2 years, namely 2013–14, this approach has been used to classify thirty-three new INNs in various PDL annexes, while the opinions serving as justifications for their inclusion and the budgetary impact from them are not publicly available, unlike in several other institutions such as National Institute for health and Care Excellence, German Joint Federal Committee, Haute Autorité de santé, etc. (8).
It is noteworthy that in 2015 an amendment to Ordinance No. 10 of March 24, 2009 was published, where marketing authorization holders (MAHs) with single INNs in the PDL were to return 20 percent of the total sales under reimbursement to the NHIF at the end of the year, namely 2015. Due to overspending of the NHIF budget the companies returned these funds without objections, and the Treasury recovered 40 million BGN at the end of 2015. It is envisaged that, pursuant to Article 21, paragraph 1 of the said Ordinance, returns in 2016 would amount to 10 percent of all sales of medicinal products with single INN with one trademark, whether innovative or generic drugs (6;10).
Medicinal products for chronic illnesses are 100 percent reimbursable, while in Bulgaria socially significant diseases are not defined in any current legislation or other normative act, except for AIDS and infectious diseases whereby medicinal products are 100 percent reimbursable by the Ministry of Health.
According to data from the Bulgarian Audit Office, the main consumer of funds—nearly 60–70 percent of all costs for outpatient care—are drugs for socially significant diseases, while only 30 percent of these funds are for all other patients with chronic diseases. Therefore, cover for chronic patients is very limited (11).
Annex 2 to the PDL
This annex lists medicinal products reimbursable from the budget of the hospitals at 100 percent reimbursement rate, according to the Summary of the Product Characteristics. State-owned medical facilities should purchase medicinal products at reference value and are not allowed to exceed it. No summarized data for the drug expenditure and medical outcomes is available in the health establishments, which face a serious problem in the health sector (8;9).
Annex 3 to the PDL
This annex includes medicinal products intended for treatment of AIDS, infectious diseases, treatments outside the scope of HIA, immunizations and booster vaccines, vaccines at special indications and upon extraordinary circumstances, specific serums, immunoglobulins with 100 percent reimbursement rate, which are negotiated and paid for by the Ministry of Health budget through auctions. The Ministry acts like a health insurance, while in 2014–16, a serious problem with vaccine supply exists, along with 20 million BGN that were additionally allocated from the national budget in the beginning of 2016 (8;9).
Inclusion of Medicinal Products in the PDL and New INNs for 2013–15
The statutory deadline for issuing a decision on inclusion, modification, or exclusion of a medicinal product in PDL by NCPR is 30 days for generic medicinal products, all procedures concerning changes, and OTC price registration; and 60 days for innovative medicinal products. Compared with Directive 89/105/EEC, these periods are extremely short (7;9). For the new INNs, discount negotiations are also part of the reimbursement agreements and are mandatory for inclusion in the PDL in 2015. The average pricing and pharmacoeconomic assessment period for listing the thirty-four new INNs in the PDL was 5 months on average in 2013–14 and was shortened to 4.2 months in 2015. Nevertheless, no published pharmacoeconomic evaluations/appraisals for the new INNs in 2015 are part of the procedure by the competent authority, NCPR for the period 2013–15 (Table 1) (Reference Benisheva-Dimitrova, Petrova and Stoimenova12).
Table 1. New INN Included in the PDL in Bulgaria in 2013 and 2014

Note. Sources: Benisheva et al., DIA Euromeeting - April 2015, Paris; and (14).
INN, international nonproprietary names; ATC, anatomical therapeutic chemical classification system; PDL, Positive Drugs List.
Patient access to the new INNs, included in the PDL, has been extended until the beginning of the consecutive year. In 2014, the overall evaluation and approval process of new INNs was shortened by 40 percent (77 days) as compared to 2013, which is obviously due to the improved administrative and regulatory process. The reimbursement dossiers of the new INNs were submitted within 14.5 months (453 days in average) in Bulgaria after EU Commission marketing authorization (EU-MA) in 2013 and 2014. The market entry in Bulgaria was delayed due to the MAH decision which is more that an year after receiving EU-MA. Some of the INNs, such as like posaconazole, vandetanib, and bosutinib, are submitted for pricing and reimbursement in Bulgaria within 3–5 years after the EU-MA. In the past 3 years, almost 83 percent of the INNs were 100 percent reimbursed, which is a great benefit for the patients (Table 2) (Reference Benisheva-Dimitrova, Petrova and Stoimenova12).
Table 2. New INNs Included in the PDL: Annex 1 for Outpatient Care and Annex 2 for Hospital Care in Bulgaria for 2015 (January - October 2015)

Note. Sources: Benisheva at al., ISPOR - Milano, 2015; (Reference Benisheva-Dimitrova, Christoff and Stoyanova13).
ATC, anatomical therapeutic chemical classification system; INN, international nonproprietary names; EU-MA, European Union Committee marketing authority; PDL, Positive Drugs List; NCPR, National Council at Prices and Reimbursement of Medicinal Products.
Referencing of Medicinal Products Included in the PDL
In Bulgaria, internal and external referencing of the price of medicinal products is applied. External reference pricing has the highest impact on the market of generic medicinal products, without exerting such a serious impact on the market of innovative medicinal products (9).
The majority of the public funds for medicinal products, approximately 60–70 percent, is intended for medicinal products that are earmarked innovative. In generics, in addition to referencing, competition with other drugs with the same INN plays a major role in the dynamics of pricing (11).
A common practice in generics is that they are manufactured by one company, while another company holds the marketing authorization. In the event of a manufacturer who is a Marketing Authorization Holder producing the same medicinal product for another MAH simultaneously, the latter is obliged to comply and to refer to the prices of the product not only under its name, but also to the prices of the manufacturer-owned product and the prices of the same product from the same manufacturer under the name of any other MAH on the territories of reference countries.
It is hardly believable that a manufacturer would offer its lowest price to another MAH. Thus, any new MAH of this product from the same manufacturer must often refer to prices considerably lower than the agreed purchase price, suffering serious financial losses in further price cuts as a result of the referral. This, in turn, results in the withdrawal of these medicinal products from the market, thereby creating shortages of certain medicinal products in the end. The strategy of referring to the ex-factory manufactory prices leads to serious difficulties in the supply of medicinal products and, therefore, a more flexible strategy needs to be considered.
On the other hand, the generic market is subject to certain regulations, which are strictly market-oriented, based on competitiveness. In this way, companies offering generic medicinal products are constantly subject to regulation and pressure from two sides, mandatory legal and almost mandatory market regulation, which in many cases leads to their inability to continue the sales of certain medicinal products.
As a result of referencing, in the period 2013–14, a total of 1,991 medicinal products in Bulgaria had their prices reduced administratively, while leading countries used as referrals for price cuts are Greece, Slovakia, Romania, and Spain; apparently countries that have developed an external reference system and whose prices for medicinal drugs are among the lowest in the EU (14–17).
Ceiling Price of a Medicinal Product Subject to Medical Prescription without Reimbursement and OTC Drugs
A separate list, ceiling prices register, includes the prices of the medicinal products subject to medical prescription, which are not included in the PDL, nor are reimbursed by NHIF. The price registration mechanism is similar to the one for the products included in the PDL and reimbursed by the State, the lowest ex-factory price from the same 10+7 referent countries. The main difference is that the price referencing is performed only initially and further the competent authority (NCPR) does not control these prices.
Additionally, there is a separate list, maximum sales price register, only for OTC products. Within the price approval procedure there are no price restrictions. The MAH declares their maximum selling price, whereas NCPR publishes it officially on the Web site in the above-mentioned register (9).
The price applied is not compared with prices in any reference countries and is not subject to control. By the end of 2017, the OTC prices will be fixed. It would be more realistic and efficient to have control and “fix” drugs prices showing the highest cost, like innovative medicinal products that exhaust 60–70 percent of the outpatient drug budget. For the 2 years (2013–14) NCPR approved prices for an average of 200 new OTC medicinal products per year (Reference Benisheva-Dimitrova, Christoff and Stoyanova13–16).
CONTROLLING MEDICINAL PRODUCT PRICES ACCORDING TO THE RPs IN THE EU
MSs and HTA
An existing mechanism to reduce the prices of medicinal products is carried out by the NCPR administration checking for the presence or absence of price changes in the reference countries. This verification of the RPs is performed every 6 (for single INN included in the PDL) or 12 (for all INN with more than one MAH in the group) months from the date of the price approval. In the event that during this official check it is found that the price in the seventeen reference countries is lower than the currently registered price of the product in Bulgaria in the PDL, the NCPR takes an ex officio decision to administratively change the approved price and amends it in the relevant annex to the PDL.
Therefore, several complaints to the Commission on Transparency suspend the implementation of this price change, because the workload of over 300 pieces a year does not allow this additional Committee with the Council of Ministers to keep the statutory term. These processes should also be analyzed and reviewed to make sense of such supervisory control. Data of that Committee are not publicly available and transparent, which does not improve the process (Reference Benisheva-Dimitrova, Christoff and Stoyanova13–16).
Since December 1, 2015, the National Centre for Public Health and Analysis in Bulgaria has expanded its activity by adding the preparation of HTA assessment for innovative drugs before submitting documentation to the NCPR for pricing and reimbursement. A new HTA Commission to the Minister of Health was set up to review the clinical evidence and the pharmacoeconomic analysis (16).
As this body is based on ordinance of December 2015 and there is no experience on how effective it would be, it is difficult to make an analysis of its activity before starting actual operations. HTA methodology and the procedures in place are different for the different Bulgarian Competent authorities, dealing with HTA and with pricing and reimbursement (HTA Commission and the National Council at Prices and Reimbursement, NCPR). For example, whether those will be legally bound to the NCPR decisions, because the HTA assessment of the HTA Committee will be part of the documentation to be submitted to the National Council on Prices and Reimbursement is very controversial.
Maintaining the Reimbursement Status
The changes of November 2015 introduced a new procedure called “reimbursement status maintenance”, which should be carried out every 3 years by re-filing the entire dossier. Those failing to do so need to submit documentation with HTA requirements to the NCPR. For the MAHs that do not submit such a dossier, the medicinal product will drop out from PDL automatically.
This period for new analysis of a new molecules’ effectiveness will be extremely short for assessing the effectiveness within 3 years after the reimbursement approval. The NCPR will evaluate HTAs of innovative medicinal products upon renewal. These two HTA procedures at the entry of the PDL and at the renewal are quite similar but are based on different HTA criteria and different HTA dossier format need to be submitted (9;15).
CONCLUSION
The path of pricing and reimbursement processes through a variety of committees for prices and reimbursement of medicinal products in the period 2000–12, which are, respectively, with the Council of Ministers or the Ministry of Health, has generated many practices either positive and negative and has undermined the system's stability.
One of the main issues in the NHIF management is the transparency in the financial mechanisms and the lack of financial indicators throughout the years to monitor and measure the financial performance and health outcomes of the medicines. In the country, the scarcity of epidemiological data and records of many socially significant diseases hinders any budgetary forecasts and analysis and reporting of the costs of funds.
Bulgaria currently has legislation on pricing and reimbursement, which is harmonized with the EU rules. Chronological indicators to annually report and track these processes and financial resources and to provide an overall objective assessment and analysis year on year is necessary to be developed. Therefore, this should become a national policy to monitor the health system on financial indicators gradually. Assessment at HTA of medicinal product at PDL entry and at the renewal of the same medicinal product is separated into two stages with different methodological criteria. To harmonize the HTA process at the PDL entry and at renewal stage of same INN these two steps need to be harmonized because they are focused on the same medicinal product which is serious workload for the both parts, industry and competent authorities.
CONFLICTS OF INTEREST
The author have nothing to disclose.