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More than 100 million euros of debt for medications

The healthcare issues and complicated administrative procedures in this sector are the second most common topic in NALED’s Grey Book, and the biggest problem are the accumulated debts of state health institutions towards the suppliers, for purchased medicines and medical devices.

The due receivables are reaching the levels that could jeopardize the entire health care system, the work of wholesalers and producers, and reduce availability of medicines for citizens. The previous incurred debt was acknowledged as public debt 6 years ago, but it took a long time to resolve the problem which led to the termination of a large number of wholesalers and a drastic impoverishment of the once-strong domestic pharmaceutical industry.

The total debt of state health institutions now exceeds 100 million euros. Most of it refers to medicines delivered through centralized procurements performed and financed by the Republic Health Insurance Fund (RHIF). Sooner or later, the state will have to pay for these debts which will seriously affect the budget. Every further delay will have major bad implications for wholesalers and producers.

The reasons for incurred debts are numerous – ranging from the lack of funds in the RHIF and health institutions’ budget, to misuse and inappropriate controls and sanctions.

There is a need to urgently note and record these debts in the budget, along with appropriate budget planning in RHIF and health institutions, as well as the establishment of centralized control over all institutions through amendments to the Healthcare Act.

The biggest problem is the state-owned pharmacies whose operations are threatened to collapse due to an inadequately prescribed margin. There are two options the state could do to solve the problem: either conduct privatization of these institutions or make a decision that they are important for the society and introduce a series of measures that would enable their operations to become sustainable and controlled. We need brave decisions that will provide uninterrupted supply on the long run without further negative consequences for participants in the supply chain, and particularly the state budget.

NALED and its members have timely noted this problem: three years ago we started the "Healthy Initiative" and prepared the first analysis of the ongoing debt issues along with proposed solutions. In the jubilee tenth edition of the Grey Book, the recommendation for improving the procurement and payment system for medicines was one of the ten most important issues. NALED has also indicated the development of a sustainable healthcare financing model as one of the organization’s priority goals in the following three years. We seek to work together with the Government of Serbia towards resolving this problem, by establishing a Joint group, as this recipe has been proven successful in countering shadow economy and improving Serbia's position on the Doing Business list.