Liberalisation and Health: an impossible compromise

1
Liberalisation and Health an impossible
compromise

• Annarosa Racca
• Federfarma
• Bruxelles, 15 April 2009

2
The deregulation of 1888 (Crispi)

• In 20 years, the number of pharmacies in the 12
  biggest cities has doubled
• In 1907, 35 of all Italian pharmacies was
  clustered in these 12 cities
• Many rural areas have been deserted and left
  without any health service

In 1888 all rules on pharmacy establishment have
been deleted
3
The re-regulation of 1913 (Giolitti)

• In 1913, the legislator reintroduced rules on
  pharmacy establishment (geographic and
  demographic criteria)
• After almost one century these rules are still in
  force. Some changes were made in order to keep up
  with the evolution of the society
• In 2008, only 15 of all italian pharmacies is
  established in the 12 biggest cities
• Almost all rural areas have at least one pharmacy
  service.

Since 1913 there have been rules on pharmacy
establishment in Italy
4
Aids for rural pharmacies

• National legislation
• The discount that each pharmacy must grant to the
  NHS on reimbursed medicines is reduced for rural
  pharmacies
• Each Region must give an economic aid in order to
  guarantee the survival of rural pharmacies
• ? average yearly subsidy 1.132 for towns up
  to 3.000 inhabitants
• ? 5.250 for pharmacies with
• turnover lt 150.000
• Regional Legislation
• Further subsidies for pharmacies serving few
  patients due to geographical locations (ie.
  Small islands)

• In 2006, FEDERFARMA decided to create a
  solidarity found for low turnover pharmacies
• All 17.000 Italian pharmacies, members of
  Federfarma, contributed to the found
• Proceeds are being distributed as an aid to the
  monthly income of pharmacies in need
• We are currently considering other ways to help
  these pharmacies

5
ECJ Hartlauer Judgement C-169/0710 March 2009

• Healthcare settings territory planning is an
  essential health need
• Establishment criteria for dentists is necessary
  in order to guarantee the same level of
  healthcare in all the territory without leaving
  rural areas uncovered
• The economic law of supply and demand cannot be
  applyed to health
• An increase in demand does not lead to lower
  prices but to a higher performance level

The demographic criteria is compatible with the
EU Treaty
6
The Bersani Decree July 2006

• Supermarkets and parapharmacies can sell all non
  prescription medicines but with the mandatory
  presence of the pharmacist
• After 2 and a half years, these new channels
  represent 6 of the market
• The chart on the right highlights the economic
  success of mass market corners they are fewer
  than the parapharmacies, but they sell almost as
  much
• Are supermarkets boosting medicines
  consumption?????????

Above the number of parapharmacies and mass
market corners and their market shares
7
OTC market in 2008

• OTC 1.494 millions
• SOP (no advertisement) 535 millions
  
• OTC-SOP outside pharmacies 131
  millions

Value 2006/2007 2007/2008
OTC (in all channels) 3,5 0,7
OTC (outside pharmacies) n.a. 105
Supermarkets sell TWICE as many OTC medicines
compared to pharmacies established on the
territory for a long time
8
A parapharmacy
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The liberalisation of ownership

• In Italy pharmacy ownership is reserved to
  pharmacists a partnership of pharmacists can
  own up to 4 pharmacies
• In case of partnerships of pharmacists with 4
  pharmacies, 1 associated pharmacist can be
  responsible for just 1 pharmacy
• Some public pharmacies (around 200) are instead
  managed by big wholesalers (Alliance Boots,
  Celesio, Phoenix))
• The Government was pushed to liberalise the
  sector
• In 2004 Celesio made a complaint to the EU
  Commission that started an infringement procedure

10
ECJ Yves Bôts Opinion 16/12/09on cases
C-531/06, C-171/07, C-172/07

• Ownership is a Member State competence
• Each Member State can decide on its healthcare
  level and the means through which this level can
  be achieved
• Pharmacists are indipendent only if the ownership
  and the professional indipendence coincide
• No to the economic pressure from joint stock
  companies
• No to the vertical integration

If the ECJ will share Mr Bots Opinion, the
ownership issue will be closed at EU level
11
Conclusions

• A positive ruling from ther ECJ will not stop
  liberalisation trends at national level
  pressures are still strong and lobbyes still
  economically powerful
• However, if the ECJ will validate ownership and
  establishment criteria, this will represent an
  important result
• Pharmacies will be forced to give a true meaning
  to these principles by increasingly offering more
  social and health services to citizens
• It would be crucial if the European Parliament
  could confirm the importance of these principles
  in a political statement

12

• Annarosa Racca
• box_at_federfarma.it
• Thank you very much