Updated: October 2009
Validated by: (in process)
Austria

Decision Makers and Decision-Making Processes Diagram



Model description and Symbols:
The ultimate decision maker is listed at the top of the model

Boxes: Decision-making bodies
Solid Arrows: Required step in decision-making process
Broken Arrows: May or may not impact decision

BACKGROUND

The Austrian health insurance system is based on a social insurance system, which includes health, accident, pension as well as unemployment insurance. The underlying law is the Austrian Social Insurance Law (Allgemeines Sozialversicherungsgesetz, ASVG), which was put into effect in 1955.

The Federal Ministry of Health, Family and Youth (Bundesministerium für Gesundheit, Familie und Jugend, BMGFJ) is the main policy-maker in health care at a federal level.

The Main Association of Austrian Social Security Institutions (Hauptverband der österreichischen Sozialversicherunsträger, HVB) and its 19 sickness funds ensure the implementation of the social insurance system, which covers approximately 98% of the population of 8.2 million Austrians.
Generally health care contributions are based on the income of the insured, although exemptions are made for low income households and patients with communicable diseases such as HIV and tuberculosis.

Health insurance contributions account for about50% of health care in Austria. The rest is funded through private expenditure such as out of pocket payment and private health insurance (30%) and general taxation (20%).

In 2006 total health care spend was about 10.1% of the gross domestic product (GDP). In 2007 total of 40,798 medical doctors provided inpatient and outpatient care for the population. General practitioners (GPs) offer primary care and act as gatekeepers, although patients can also access office based or outpatient specialists directly. In general, GPs have contracts with one or more sickness funds and are remunerated by flat- rate fees and by fee-for-service payments. There are no prescribing budgets in place for physicians. However the HBV issues economic prescribing guidelines (Richtlinien über die ökonomische Verschreibweise von Heilmitteln und Heilbehelfen, RöV), which require physicians to prescribe the most cost effective product when several therapy options are available.

There were 264 hospitals in Austria in 2006, around 60% of which were publicly owned. All public and private non profit generating hospitals are reimbursed according to a diagnosis-related groups system (Leistungsorientierte Krankenanstaltenfinanzierung, LKF/DRG).   
The legal framework of the production, marketing authorisation and distribution of pharmaceuticals is the Medicines Act. The classification of pharmaceuticals is laid down in the Prescription Act. The Price Act builds the overall legal framework for the pricing of reimbursable pharmaceuticals. Reimbursement of pharmaceuticals is regulated in the ASVG.

Total pharmaceutical expenditure amounted to € 2913 million in 2005. The proportion of public pharmaceutical expenditure related to total health care expenditure rose from 5.4% in 1995 to 8.5% in 2005. In 2006 pharmaceutical sales at ex factory level amounted to €2,544 million. Both wholesalers and pharmacists are remunerated via regressive margins. VAT on pharmaceuticals in 2009 is 10%.

Austria had a relatively low share of generics (14.5%) in 2007.

Approximately 220 pharmaceutical companies are represented in Austria. Manufacturers deliver their pharmaceuticals to about 35 wholesalers of which only 8 provide the full range of products. Pharmaceuticals are mainly sold through pharmacies or subsidiary pharmacies which are supervised by a community pharmacy. In 2008 1217 community pharmacies and 5 hospital pharmacies were licensed to dispense to outpatients. Additionally Austria has a high number (962 in 2008) of self-dispensing physicians (hausapothekeführende Ärzte). Internet pharmacies are currently not allowed. 


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DECISION-MAKERS/INFLUENCERS AND DECISION MAKING PROCESS

The Austrian Federal agency for Safety in Health Care (Bundesamt für Sicherheit im Gesundheitswesen, BASG) is responsible for granting the marketing authorization and classifying pharmaceuticals according to prescription status.

The BMGFJ has overall responsibility for the reimbursement and pricing of pharmaceuticals in Austria. The BMGFJ is assisted by the Pricing Committee (Preiskommission, PK) on taking pricing decisions and by the HBV on reimbursement decisions .The HBV in turn relies on the recommendation of the Pharmaceutical Evaluation Board (Heilmittel-Evaluierungskommission, HEK).

An independent drug commission (Unabhängige Heilmittel-Kommission, UHK) within the Federal Ministry for Health, Family and Youth (BMGFJ) is charged with monitoring the HBV and the HEK. The UHK acts as an appeal board for manufacturers and has the power to veto (but not overrule) any decisions taken in relation to reimbursement applications.

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REIMBURSEMENT AND PRICING APPROVAL PROCESS

Reimbursement Approval Process and Time Frame

Austria applies a positive list for pharmaceuticals in outpatient care, which is called the Reimbursement Code (Erstattungskodex, EKO).
Pharmaceuticals are granted reimbursement by the statutory health insurance which covers 98% of the Austrian population. The 19 sickness funds are represented by the HBV. The HBV is consulted by the HEK and responsible for deciding on reimbursement of a drug. The following decision criteria are applied for the assessment:

  1. pharmacological analysis (comparison with therapeutic alternatives and perceived degree of innovation),
  2. medical-therapeutic evaluation (target patient group, effectiveness, expected duration and treatment frequency)
  3. Economic considerations (this includes budget impact and PE evidence).

Additionally manufacturers must submit pricing comparisons (at ex-factory level) with the same or similar products in Austria as well as all available EU prices of their own drug. They are also required to generate a 3 year sales volume forecast and submit current sales data.

The HEK consists of 20 members (representatives from sickness funds, government, doctors and pharmacy chambers)

Pricing and reimbursement systems are closely linked. There are special pricing rules for pharmaceuticals applying for inclusion into the reimbursement code (EKO). Generally drugs included into EKO do qualify for reimbursement. However some pharmaceuticals have special prerequisites attached to their reimbursement.

The different categories have been assigned boxes with different colour codes:

  • The RED BOX includes newly launched pharmaceuticals (products remain in this box for a maximum of 24 months after EU average price is set or 36 months if no EU average price could be set) and all pharmaceuticals applying for reimbursement. The latter group stay in this box for 90 days and - if reimbursement is granted - are then are either transferred to the YELLOW or GREEN BOX.
  • The YELLOW BOXES include drugs that have to fulfil certain criteria to be reimbursed e.g. use in specific disease or age groups. Prescribing physicians will need to get reimbursement approval from the "head physician" (Chefarzt) of the sickness fund for all drugs categorized in the RED and YELLOW BOXES.
    • The LIGHT YELLOW BOX allows prescribers to prescribe automatically for defined indications or a certain volume of a drug once it has been initially approved by the head physician of the patient's sickness fund.
    • Drugs in the DARK YELLOW BOX are only reimbursed under certain conditions (disease or age groups/prescribed by a specialist) or if it has been initially approved by the head physician.
  • Drugs in the GREEN BOX will be automatically reimbursed. They are defined as first choice drugs and thus can be prescribed by any contract physician. Inclusion is based on certain criteria of drug usage such as disease group or mode of application.

Austria also has a negative list, which includes drugs not eligible for reimbursement. This list includes hospital only drugs, lifestyle drugs, and dietary supplements)

When reimbursement is granted pharmaceuticals are fully reimbursed. In this case patients will have to pay out of pocket a fixed prescription fee of 4.90 € (in 2009). These typed of co-payments are capped at 2% of the annual income of the insured patient.

Drugs used for inpatient care are included into the DRG remuneration system of hospitals and thus there is neither separate reimbursement nor patient copayment. However there is copayment for hospital inpatient care.

Pricing Approval Process and Time Frame

The Price Act builds is the overall framework for pricing in Austria. Pricing decisions on pharmaceuticals are taken by the BMGFJ which is advised by the Pricing Committee (PK). Furthermore there is a price notification agreement in place between the Federal Chamber of Labour (Bundesarbeiterkammer) and the Federal Chamber of Commerce (Wirtschaftskammer).

In general non reimbursable pharmaceuticals fall under the price notification system (at the ex factory level) and pharmaceuticals applying for reimbursement fall under the statutory price system where BMGFJ - advised by the PK - sets the EU average price.

Prices for pharmaceuticals included into the Reimbursement Code (EKO) may further be negotiated with the HVB.

Furthermore, regressive mark up schemes for wholesalers as well as pharmaceutical companies is applicable for all pharmaceuticals.

Internal and external price referencing plays an important role for reimbursement:

The holder of the Marketing Authorization applying for the inclusion of the pharmaceutical into EKO has to provide information on whether the pharmaceutical is on the market in other EU member states and if so has to submit the manufacturer price and wholesale price of the pharmaceutical in each of these markets (external reference pricing). The Austrian Health Institute (Österreichisches Bundesinstitut im Gesundheitswesen, ÖBIG) is reponsible for checking the prices submitted by the industry; the EU average price is then calculated by the PK and set by the BMGFJ. A price can only be set if the product is marketed in at least half of the EU25. If this is not the case, the PK will re-evaluate pricing data every 6 months. If a price cannot be set at the second re-evaluation, an average EU ex factory price is calculated based on available EU pricing data. Until a final price can be set, the ex factory price submitted by the manufacturer is temporarily applied for reimbursement purposes. If this price is subsequently found to be above the EU average, the manufacturer has to pay back the difference to the sickness funds.

Once the ex-factory price has been established products are placed into the red box of the reimbursement code, where the permitted maximum price is the EU average price. Once drugs are move into the green box, prices must be below the EU average price. If drugs are in the yellow box, manufacturers may charge a price up the EU average price.

The price notification system is in place for all drugs not seeking reimbursement. The PK within the BMGFJ is responsible for verifying the ex factory price notified by the manufacturer. If the BMGFJ does not oppose this price within 6 weeks the price automatically takes effect. If the price is deemed too high, the BMGFJ has the option to assign a price, a very rare practice.

Generics follow the same pricing procedure. Since 2006 the first generic must be priced at least 48% below the off patent original. The second generic must be priced 15% below the first. The third must be priced 10% below the price of the second generic. Once a generic is reimbursed the off patent drug price must be cut by at least 30% within 3 months.

Ex factory prices for hospital only drugs are determined by the BMGFJ and such prices are the maximum at which the product may be sold. In practice hospitals negotiate prices directly with manufacturers usually at a large discount. Many regions (Länder) have established purchasing committees to buy hospital drugs via tender systems or negotiations with manufacturers. Hospitals draw up their own formularies on advice of their respective pharmaceutical commissions

A reference price system is not in place at this moment.

A summary of the procedure to obtain access to reimbursement (and pricing approval) is given in the following figure:

*               If no average EU price (EU 25) can be initially determined
**             The head physician (Chefarzt) of the patient's sickness fund
***            Only reimbursed under certain conditions (e.g. specific disease group or age group, if prescribed by a specialist doctors or in limited quantities)

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DATA REQUIREMENTS

Pharmaceuticals are granted reimbursement based on the following data submitted in the application:

  1. pharmacological analysis (comparison with therapeutic alternatives and perceived degree of innovation),
  2. medical-therapeutic evaluation (target patient group, effectiveness, expected duration and treatment frequency)
  3. Economic considerations (this includes budget impact and PE evidence).

Additionally manufacturers must submit pricing comparisons (at ex-factory level) with the same or similar products in Austria as well as all available EU prices of their own drug. They are also required to generate a 3 year sales volume forecast and submit current sales data.

As described above the HEK assesses therapeutic benefit based on pharmacological, medical-therapeutic and economic considerations. In practical terms, price comparisons with therapeutic alternatives are usually the determining factor in reimbursement decisions.

Although there are no official HE guidelines in place, rules and criteria for the HE evaluation were set by the Institute for Pharmaceutical Research (Institut für Pharmazeutische Forschung, IPF) and the Association of Pharmaceutical Manufacturers (Verband der pharmazeutischen Industrie Österreichs, Pharmig) in 2006. They are used within the Procedural Rules for the Reimbursement Code (VO-EKO) and are thus relevant for drugs applying for reimbursement.

Within the consensus paper guidelines have been formulated broadly, indicating that international state-of-the-art HE techniques should be employed.  Study design and method of analysis should be clearly indicated and the method chosen justified by the research question asked. Analyses of cost-minimization, cost-effectiveness, cost-utility or cost-benefit are all considered viable options to choose from. The perspective of the analysis needs to be clearly indicated. Comparator should ideally be the current standard therapy. If this is not possible, the most frequent or most effect therapy should be chosen as comparison. All relevant costs must be included in the analysis. For indirect costs the human capital approach is preferred, the friction cost approach would need to be justified. Outcome parameters must be meaningful and justified. If HRQoL parameters are introduced measurement scales should be sensitive, valid and consistent. The internationally accepted ranking for evidence requirements is applicable for clinical data. For economic data official sources are indicated within the consensus paper. Epidemiology data should be preferably from Austria or neighbouring EU countries.

Results should be presented in a transparent way similar to a peer reviewed journal submission.

The pricing application form required for drugs applying for reimbursed status can be found at (in German):http://www.bmgfj.gv.at/cms/site/attachments/0/7/8/CH0723/CMS1078931881119/preismeldung-roter-bereich1.pdf

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ACRONYMS

ASVG (Allgemeines Sozialversicherungsgesetz): General Social Insurance Law.

BASG (Bundesamt für Sicherheit im Gesundheitswesen): Federal Agency for Safety in Healthcare. The BASG, which is within the AGES, is responsible for drug and medical devices registration (with support from AGES PharmMed), classification, pharmacovigilance and inspection.

BMGFJ (Bundesministerium für Gesundheit, Familie und Jugend): Federal Ministry for Health, Family and Youth. The BMGFJ was previously known as the Federal Ministry of Health and Women (Bundesministerium für Gesundheit und Frauen [BMGF]).

Chefarzt: Head physician of the patient’s health insurance fund. Physicians are required to seek approval from the Chefarzt for the reimbursement of certain medicines.
EKO (Erstattungskodex): The reimbursement system fully effective from 1st January 2005, also known as the ‘box system’. Drug prices and patient access are dependent upon which ‘box’ (red, yellow, or green) a drug is assigned to.

Hauptverband, HVB (Hauptverband der österreichischen Sozialversicherungsträger): Association of Austrian Social Security Institutions. Groups together all 22 independent social insurance institutions, of which 19 offer health insurance. The Hauptverband decides on reimbursement status from a pharmacological, medical-therapeutic and economic perspective, based on recommendations from the Drugs Evaluation Commission (HEK).

Hausapothekenführende Ärzte: Dispensing doctors.

HEK (Heilmittel-Evaluierungs-Kommission): Drugs Evaluation Commission. Provides the Hauptverband with reimbursement status recommendations.

IPF (Institut für Pharmaökonomische Forschung): Institute for Pharmaceutical Research.

LKF (Leistungsorientierte Krankenanstaltenfinanzierung): The Austrian DRG (Diagnosis Related Groups) system of hospital financing, in place since 1st January 1997.

ÖBIG (Österreichisches Bundesinstitut für Gesundheitswesen): Austrian Health Institute, which among other things conducts random checks of pricing data submitted by manufactures.

Pharmig: Verband der pharmazeutischen Industrie Österreichs. Association of Pharmaceutical Manufacturers.

PK (Preiskommission): Pricing Commission within the BMGFJ.

RöV (Richtlinien über die ökonomische Verschreibweise von Heilmitteln und Heibehelfen): Guidelines on economical prescribing, stating that prescribers have to select the most cost-effective drug for their patients. These guidelines are defined in the General Social Insurance Law (ASVG) and are issued by the Hauptverband. Adherence to the guidelines is monitored by the health insurance funds.

UHK (Unabhängige Heilmittel-Kommission): Independent drug commission within the Federal Ministry for Health, Family and Youth (BMGFJ) charged with monitoring the Hauptverband and the HEK. The UHK acts as an appeal board for manufacturers and has the power to veto (but not overrule) any decisions taken in relation to reimbursement applications.

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SUGGESTED READING AND USEFUL LINKS

Pricing

Reimbursement

Reimbursement application process:

Pharmacoeconomics

  • Pharmacoeconomics guidelines published in 2006 by the Institute for Pharmacoeconomics Research (Institut für Pharmaökonomishe Forschung, IPF) in conjunction with the Pharmaceutical Industry Association (Pharmig), can be accessed (in German and English) @:http://www.ipf-ac.at
  • Walter E, Zehetmayr S: Guidelines zur gesundheitsökonomischen Evaluation – Konsenspapier. Wien Med Wochenschrift 2006; 156/23-24: 628-632.

Cost Containment

Prescribing Guidelines

REFERENCE

  1. PPRI (Pharmaceutical Pricing and Reimbursement Information) Report: Austria Pharmaprofile issued by the Austrian Health Institute ÖBIG (Österreichisches Bundesinstitut für Gesundheitswesen), September 2008
  2. PPRI Report commissioned by the European Commission, Directorate-Generale Health and Consumer Protection and Austrian Federal Ministry of Health, Family and Youth, Vienna, June 2008
  3. Austrian Guidelines on Health Economics, Consensus Paper April 2006, Institut für Pharmaökonomische Forschung IPF

AUTHORS & CONTRIBUTORS


Patricia Buchholz, RPh, PhD, PBC Patricia Buchholz Consulting, Germany

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