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Kosovo: Transformation and Reform of the Pharmaceutical Industry in Kosovo

Kosovo: Transformation and Reform of the Pharmaceutical Industry in Kosovo

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The pharmaceutical sector in Kosovo is undergoing three major policy and legal reforms to increase its competitiveness and transparency. These reforms are part of a national project to improve the underdeveloped and under-regulated pharmaceutical market which would, in turn, encourage increased spending in the healthcare and pharmaceutical sector.

These reforms include regulating the pricing of pharmaceutical products, mandating health insurance and functionalizing the health insurance fund, and completing and functionalizing a comprehensive health information system.

The first reform relates to regulating the price of pharmaceutical products, as a precondition of implementing the health insurance fund, and as a control mechanism for the tendering procedures for the purchase of pharmaceutical products in light of increased public funding.

The proposed legal framework calls for minimal intervention and mandates a comparison between the price proposals of the holders of marketing authorizations, and a comparison of those price proposals with the average prices in Montenegro, Albania, North Macedonia, and Croatia (known collectively as the “Basket of Reference Countries”).

The final price would be determined on the basis of the lowest internal proposal or that offered in the Basket of Reference Countries. It is hoped that this reform will bring transparency and increase competitiveness, based on an expected increase in demand and a fairly under-regulated market.

The second reform relates to the functionalization and implementation of the health insurance fund to establish universal access by citizens and residents to quality basic healthcare services. Kosovo is one of the few countries without a mandatory health insurance scheme, with marginal enrollment in private health insurance, and with the public healthcare sector and purchase of medicinal products directly supported by the state budget.

The creation of a health insurance fund which will collect premiums based on level of income (reaching up to 7% of gross salary (paid jointly by an individual and his/her employer, at 3.5% each)). Once the health insurance fund is made functional, it is expected that spending on healthcare services and medicinal and medical products will increase. This will open the road to new companies investing in Kosovo.

The third reform will consist of implementing health information systems, to facilitate a shift to data-based decision-making in the healthcare and pharmaceutical sectors.

The main objective here is to develop a health information software platform, which, as a nation-wide platform, can be used for such things as clinical registries, medical decision support, public health statistics, and so on. However, this reform is facing delays due to its complexity.

To conclude, these three reforms will have a great impact on the pharmaceutical and healthcare sector in Kosovo. First, the regulation of pricing of pharmaceutical products in Kosovo will increase transparency and competition and open the market to new foreign companies. Second, the implementation of the health insurance law will significantly increase investment in the healthcare and pharmaceutical industry. Third, the implementation of the health information system will transform the industry by providing real-time insights and data-based decision making.

By Visar Ramaj, Partner, and Metin Qestaj, Associate, RPHS Law

This Article was originally published in Issue 8.5 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.