Essential Drugs Monitor No. 033 (2003)
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View the documentNew initiative to develop drugs for neglected diseases
View the documentThe Balkans: critical times for pharmaceutical sector reform
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The Balkans: critical times for pharmaceutical sector reform


G. Petrova

DECENTRALISATION and a move to market-driven economies have been at the heart of changes to the pharmaceutical sector in the Balkan countries. Although reorganization started from different points, the critical steps taken for successful transition and long-term sustainability in the pharmaceutical sector have been very similar in the different countries. Recent analyses4 - 11 focus on the similarities and critical periods in the transition process in five neighbouring Balkan countries - Bulgaria, Bosnia Herzegovina, the former Yugoslav Republic of Macedonia, Romania and the Federal Republic of Yugoslavia*. The countries are different in population size, but all have low or negative growth, low GNP per capita and fluctuating inflation (see Table 1).2,4,10,11 Life expectancy is high, and in the future pressure on the health sector will increase because of the growth in the elderly population.

There has been a rapid increase in the number of medicines licensed for sale (Table 2) - in Bulgaria and Romania this has doubled during the last 10 years. The countries reimburse between one- and two-thirds of the registered International Nonproprietary Name (INN) drugs, and so need to be careful to maintain health insurance funds, because all of them are publicly funded and compulsory for the population.

Population expenditures finance most patient needs in terms of medicines in Romania and Bosnia Herzegovina, while in Bulgaria and Macedonia health insurance funds and government or regional budgets cover 60% of the pharmaceutical market.4 - 9 Only Yugoslavia finances medicines needs mainly through health insurance funds (Figure 1). Lack of funds for pharmaceuticals is a problem in countries with newly developed health insurance systems - Romania and Bosnia and Herzegovina. Administrative capacity is a problem in Bulgaria and Macedonia, while Yugoslavia's pharmaceutical sector suffers from both problems. These factors make the affordability of the drugs questionable.

In line with market dynamics, the pharmaceutical sector is developing rapidly and the number of pharmaceutical facilities - mainly newly licensed private pharmacies - increases constantly, leading to a shortage of pharmacists. In Bosnia the situation is even worse, with the number of pharmaceutical facilities greater than the number of pharmacists, resulting from a lack of central control during the war there (Figure 2). Regulatory authorities in the countries should be greatly concerned that in the future lack of professionalism and responsible pharmaceutical care may be the main problems rather than lack of funds.

To keep pace with rapid economic changes and market pressures, pharmaceutical legislation is in a constant development process, but countries seem to lack the strategic vision to achieve a balance between the private and public sectors. For example, national medicines policy documents have been developed and officially approved only in Romania and Macedonia, while in Bulgaria a draft paper is circulating for discussion. Bulgaria and Romania have recently approved pharmaceutical laws to harmonise national laws with European legislation. Macedonia's drug law is not supported by regulations, and Yugoslavia's has not been updated since 1993. In Bosnia both entities (Republika Srpska and Federation Bosnia and Herzegovina) have different laws. Further efforts should be devoted to creating legislation that adequately reflects the economic situation in Bosnia and Herzegovina, Macedonia and Yugoslavia.

Table 1
Socio-demographic characteristics




Bosnia Herzegovina















Average annual population growth (%)






Life expectancy






GNP per capita (US$)






Inflation rate






Table 2
Registered drugs

Number of drugs



Bosnia Herzegovina



Trade names






Dosage forms












Positive drug list/INN/






Figure 1. Pharmaceutical market financial characteristics

Figure 2. Pharmaceutical sector development

Three critical factors affect the legislation development process. The first is pharmacy ownership and licensing procedures. The ministry of health issues licences for pharmacies in all countries except Bosnia Herzegovina, where regional federal authorities can still grant a licence. Licences are given after presentation of the required documents, but if inspection capacity is low, as is the case in all the countries, the licence cannot guarantee strict compliance with the relevant legislation. Pharmacy ownership is either unclearly stated in the legislation or is outside regulatory control. In Bulgaria the licence is granted to the pharmacist as manager of the pharmacy but the question of ownership is not covered by pharmaceutical legislation. As a result, chains of private pharmacies have grown up and some of them belong to the joint stock companies that include pharmaceutical manufacturers and wholesalers, which is against the drug law in Bulgaria. There is a similar situation in Romania where anyone can open a pharmacy. In Macedonia, Yugoslavia and Bosnia Herzegovina there are two types of pharmacies - governmental (51% or more belongs to the government) pharmaceutical companies possessing a warehouse and chain of pharmacies, as well as independent private pharmacies with a pharmacist manager and unclear ownership. The two types of pharmacies set different standards and performance in practice.

The second critical question is public sector procurement of pharmaceuticals. Four countries (all except Yugoslavia) require tenders for drug supply in hospitals or in the case of central procurement at national level for some medicines. Unfortunately in all these countries the tender system is based on laws valid for the whole public sector not just the health sector. The relevant pharmaceutical legislation does not have specific regulations for tendering for medicines. Consequently there are different procedures and unclear criteria for drug procurement in the public sector.

Pricing policy is the final factor to be considered. Bulgaria and Romania use regressive pricing scales with limited maximum wholesale and retail margins. Macedonia, Yugoslavia and Bosnia Herzegovina limit maximum wholesale and retail margins. Countries seem to rely more on price decreases than on the establishment of effective price control measures. For reimbursement purposes all countries, except Macedonia, establish prices lower than the maximum retail price. Macedonia is organizing a tender with price volume agreement for the reimbursed quantities and prices. Because of the lack of resources and administrative capacity, the reimbursement drug lists change often and regular patient access to medicines is not guaranteed.

Resulting from the problems discussed here, what should we expect in the very near future? Driven by powerful economic forces, the pharmaceutical market will increase its sales both in units and financial volume. This will lead to an increase in the number of reimbursed drugs and an expanded role for health insurance funds in drug financing and control of pharmaceutical expenditure, through changes in pricing and reimbursement policy. Particular attention should be paid to the tender process for drug procurement in hospitals and other public facilities - a process which should be based on transparent criteria and reliable methodologies.

To respond to market pressure, pharmacists should increase their knowledge of market intelligence, economic market strategies, patient education and patient care. Strong pharmaceutical associations are an essential element in ensuring a successful transition process. The pharmaceutical association is expected to develop a systematic continuous postgraduate education and to serve as a defender of professional performance and ethical market behaviour. Nevertheless there has been progress in privatisation and opening up of the market, and that is a good basis for future development and increasing professional skills.

Guenka Petrova, is Associate Professor at the Medical University's Faculty of Pharmacy, Sofia, Bulgaria.

* This article was written before February 2003 when the Federal Republic of Yugoslavia was renamed Serbia and Montenegro.


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10. National drug policy - A development meeting in Skopje, report. Copenhagen: WHO Regional Office for Europe; 2000.

11. Zavod za zdravstvenu zastitu BiH: Mreza, kapacitet i djelatnost zdravstvene sluzbe u Federaciji BiH 1991 - 1995 [National health institute BiH. Network, capacity and activities in the health sector in BiH 1991 - 1995]. Sarajevo: NHI; 1997.

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