In an effort to increase average life expectancy from 67 years to 75 and reduce drastically a high mortality rate, all within 10 years, the Russian government is moving forward with a number of radical healthcare reform strategies. However, as we recently presented at the ISPOR European Congress in Berlin, a lack of transparency surrounding the planned changes means that the future of the fragmented Russian healthcare system is far from certain.
Reform began in earnest in 2005 with the introduction of a state reimbursement programme, the DLO, designed to provide outpatient drug coverage to certain beneficiaries and for specific disease groups. While this programme initially offered extended drug coverage to around 14 million people (10 per cent of the population), beneficiaries began withdrawing to take a monetary alternative, reducing the number enrolled to four million by 2011.
The remainder of the population is covered through a health insurance system, providing coverage for inpatient drugs and services only. Although an Essential Drugs List (EDL) forms the basis of this coverage, inadequate funding often leads to high out-of-pocket expenditure, forcing some patients to go without even basic medical provision.
More recently, two reform concepts have been introduced in an effort to fill the gaps in the system – The Development of Health 2020 concept and Pharmaceutical 2020 concept. A core objective of the former is to improve the level of healthcare coverage through a universal health insurance system. While there is a lack of clarity around how universal coverage will be implemented, payer-advising key thought leaders (PA-KTLs) expect the EDL to form the basis of the scheme, with outpatient drugs provided at around 50 per cent reimbursement.
Pilot schemes are due to begin in a number of regions in 2013. In 2014 a pilot reimbursement programme will launch in some regions and extend to all regions in 2015 with a view to full implementation by 2019. However, PA-KTLs believe this will take much longer in reality with some suggesting that 20 years would be more realistic.
The Pharmaceutical 2020 concept is centred on improving the quality and quantity of drugs made in Russia. By 2017, the government aims to substitute 50 per cent of all generic drugs with domestic alternatives and manufacture domestically 50 per cent of all innovative drugs by 2020. These goals set an implicit precedent for both domestic and international investment in the Russian pharma industry on a large scale. Indeed, PA-KTLs noted that domestically produced drugs may gain preferential access to state reimbursement lists, further incentivising international manufacturers to invest in Russian infrastructure.
The significance of these reforms means that international drug manufacturers will need to adapt their approaches in Russia. Currently manufacturers engage in a highly regionalised process to gain inclusion on regional and local hospital formularies. However, with the forthcoming changes to healthcare coverage, it will become increasingly important for manufacturers to engage with central stakeholders who determine which drugs are included on the EDL, and therefore are reimbursable under the new system.
The anticipated future role of the four major stakeholder groups are:
- PA-KTLS will form specialist committees to advise central P&MA stakeholders
- Ministry of Health and Social Development will determine national reimbursement lists
- Ministry of Trade and Industry will oversee the industry and implementation of the Pharmaceutical 2020 concept
- Regional/local health authorities will determine regional reimbursement lists.
Furthermore, PA-KTLs believe international manufacturers should adopt a tailored approach in Russia – developing domestic infrastructure, engaging stakeholders proactively and implementing initiatives that support the overarching goals of the healthcare strategy.
Recent changes to the Russian healthcare system have proved somewhat ineffectual, fostering a belief among domestic stakeholders that the planned reforms will suffer the same fate. The lack of transparency regarding specific details of implementation further confounds the issue. Nevertheless, pharmaceutical manufacturers should monitor these trends closely as they will direct the optimal approaches in this vital market over the coming decade.
