drug prescription fee

The fee that was temporarily charged on each drug prescription in Catalonia between June 2012 and January 2013 has started to be refunded by the Catalan Government, after the Constitutional Court definitively banned it in May 2014. The decision came after an appeal from the Spanish Government, despite the People Party (PP) initially having supported the measure in spring 2012. However, after the Catalan Government started to back independence from Spain in autumn 2012, the PP decided to oppose the drug prescription fee. The measure had been adopted to reduce pharmaceutical spending, with the final goal being to reduce public deficit. In the short period the fee was in place, €45.7 million was directly earned but much more was saved, since drug spending dropped by around 23%. According to the Catalan Government's calculations, so far 100,000 euros has already been returned to approximately 5,000 people and about €6 million will be returned in total. So far, 300,000 people have filed the request, with an average of €20 per person.

Following an appeal from the Spanish Government, the Constitutional Court has confirmed the cautionary halt adopted in January 2013 and it has now definitively banned the Catalan Executive's drug prescription fee. The measure had been adopted to reduce pharmaceutical spending by limiting superfluous drug demand in order to reduce the overall public spending. It was one of the austerity measures adopted by the Catalan Government in 2012 to reduce public deficit, in order to meet the strict deficit targets imposed by the Spanish Executive. The measure meant that Catalans had to pay a one-euro fee for each drug prescription, with a maximum of 60 euros per year and with many exceptions for people with chronic diseases, on low incomes and pensioners. On the same day, the Constitutional Court has backed the Catalan Executive's judicial fees, also appealed by Madrid.

The Spanish Constitutional Court has lifted the temporary suspension of the Catalan Government’s tax on total bank deposits while it is waiting to issue a sentence on the measure. The Spanish Government took Catalonia’s tax on bank deposits, the drug prescription fee and the new judicial taxes to the Court. The Constitutional Court accepted Madrid’s appeal in January and temporarily suspended the implementation of the three measures for five months. After the period is over, the Court believes that, taking into account the need to reduce public deficit, the Catalan Government can now implement the tax on banks, while the magistrates agree on a definitive sentence. However, the Court has extended the suspension on the judicial and drug prescription fees.

If the Spanish Government had honoured its legal commitments and did not “centrifuge the deficit” towards the Autonomous Communities, the Catalan Government would have ended 2012 with a deficit of 1.53%, according to the Catalan Finance Minister, Andreu Mas-Colell. Instead, the Catalan Government had a deficit of 2.3%, 0.8 percentage points higher than the 1.5% deficit target. In any case, Catalonia’s deficit still decreased from 3.99% in 2011 to 2.3% last year, a reduction representing €3.48 billion, despite the recession, the consequent drop in tax collection and paying €1.72 billion in debt interest. In the last 2 years, the Catalan Government has reduced its expenditure by €4.2 billion, representing a daily reduction of €5.7 million.

The Spanish Government is keeping most of the 4.5% public deficit allowed to the entire Spanish public sector in 2013 for itself, despite managing only 50% of the total public spending. It has allowed itself a 3.8% deficit while it has imposed a 0.7% target on the regional governments, which manage almost 40% of the public spending including basic services such as healthcare and education. The European Parliament report indirectly asks Madrid to relax the Autonomous Communities’ deficit targets according to the basic services they provide. In addition, it also states that regional governments should have greater fiscal capacities and depend less on central government transfers. Furthermore, the report asks “some member states” to eliminate the ministries whose powers have been devolved and to “reduce unnecessary defence expenditures”.

The Constitutional Court has accepted the Spanish Government’s appeal against three measures adopted by the Catalan Executive to reduce its deficit, some of them negotiated last spring with the People’s Party (PP). The Spanish Government, which is run by the PP, now believes that these measures invade its own powers, “break market unity” and go against the principle of “equality for all Spaniards”. While accepting the appeal, the Court has temporarily suspended the application of the fees and taxes for a five-month period, which could be extended. The Catalan Government will appeal the decision as it believes the measures to be in line with the Constitution and within its jurisdiction. The drug prescription fee brought in €46 million in its first 6 months and it reduced public spending on medicines.

Catalonia is the second Autonomous Community, behind Galicia, where drug expenditure decreased the most in November. The austerity measures approved by the Catalan and the Spanish Governments to reduce drug expenditure are behind the significant drops in spending in Catalonia and the rest of Spain over the last few months. Pharmaceutical expenditure dropped by 13.11% over the first 11 months of 2012. Besides, the number of drug prescriptions issued in November in Catalonia decreased by 21.27% compared to a year ago.

Holding the self-determination referendum before 2015 and certain aspects of the fiscal policy are the final obstacles to a definitive agreement between the Centre-Right Catalan Nationalist Coalition (CiU) – which won the elections but lost support – and the Left-Wing Catalan Independence Party (ERC) – which is the second largest party now, having doubled its support. After two and half weeks of negotiations, the ERC will vote for the CiU leader, Artur Mas, to be re-elected as President of the Catalan Government. However, the ERC’s stable parliamentary support – since it will not directly be part of the Cabinet – is not granted yet. Party leaders met on Friday to seal the agreement, but differences persist and the date for the re-election debate is approaching.

The Catalan Finance Minister, Andreu Mas-Colell, sees the appeal as “a sabotage of Catalonia’s public finances” with the objective of making the deficit targets harder to reach and then greater control mechanisms can be enforced from Madrid. If the Constitutional Court accepts the Spanish Government’s appeal, the drug prescription and judicial fees approved by the Catalan Executive will be stopped. Mas-Colell explained that this would represent a loss of €140 million per year. The Spanish Executive justifies the appeal because Catalan citizens would have to pay more than those in other parts of Spain. For Mas-Colell, this justification is “sarcastic” and “populist” as it is decided by the same government that “has not increased pensions”.

Compared to a year ago, the Catalan Healthcare System spent 24.6% less last July than in the same month of 2011. In July 2011, Catalonia spent €143.52 million on pharmaceutical products while it spent €108.10 million last month, when the drug prescription fee began and citizens started to pay a greater share of the cost of prescription drugs. Furthermore, drug prescriptions fell by 20%. In the whole of Spain, pharmaceutical spending also decreased by 24% last July, compared to a year ago.

The Spanish Social Security has published the list with the 417 drugs that from September will no longer be subsidised in order to reduce public spending and meet deficit targets. Most of them are some of the most consumed medicines for minor symptoms, such as heartburn, muscle pain, or diarrhoea. Since the measure is not popular among doctors, the Catalan Health Minister, Boi Ruiz, said that more expensive drugs with similar effects but not included in the list may now be prescribed, which would increase pubic healthcare spending instead of reducing it.

The ruling Centre-Right Catalan Nationalist Coalition, Convergència i Unió (CiU) and the People’s Party (PP) have agreed to evaluate the drug prescription fee in 2013. The implementation in 2013 of the 1 euro fee will be on the condition of meeting the deficit targets and the effects of other financial measures regarding medicines. The PP has abstained in the Catalan Parliament’s vote and the plan finally has the green light to be implemented.

Catalan citizens will have to pay €1 for every medical prescription, with a maximum of €61 per year. 127,000 people will not have to pay the tax for social reasons. This measure approved by the Catalan Government aims to reduce healthcare spending by moderating the purchase of medicines, the final goal being reducing the public deficit.