HIV/AIDS IN CROATIA: GOC FULLY FUNDS DRUG THERAPY

UNCLAS ZAGREB 000525

SIPDIS


PLEASE PASS ESTH OFFICER
DEPARTMENT FOR S/GAC AND EUR/PGI/BRETT POMAINVILLE
BUDAPEST FOR KARYN POSNER-MULLEN

E.O. 12958: N/A
TAGS: KHIV PHUM PGOV HR
SUBJECT: HIV/AIDS IN CROATIA: GOC FULLY FUNDS DRUG THERAPY
DESPITE HIGH COSTS

REF: (A) 04 ZAGREB 2171 (B) ZAGREB 0036

SUMMARY AND COMMENT
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1. The GoC currently spends approximately $2 million per
year to provide anti-retroviral drug (ARV) therapy to 218
individuals known to be living with AIDS in Croatia. Funding
drug therapy is the GoC's primary contribution to the fight
against HIV/AIDS; fortunately, the Global Fund has covered
budget shortfalls for education and outreach. Only top-end
designer ARV drugs are available on the Croatian market; as a
result, prices are high both by local and EU standards.
Nonetheless, the national health insurance system thus far
has been able to provide drug therapy whenever necessary. So
long as the number of cases remains small, two possible
cost-saving measures -- importing generics or building a
regional drug market -- have been slow to attract GoC
attention.


2. This is the last in a series of three cables looking at
HIV/AIDS in Croatia. A snapshot of the current situation and
Croatia's National Action Plan on HIV/AIDS (ref A) and a
report on Global Fund efforts to expand free, anonymous
testing (ref B) were reported reftel. END SUMMARY AND
COMMENT.

DRUG TREATMENT TOPS THE LIST OF PRIORITIES
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3. Ensuring continuity of care for the 218 individuals in
Croatia known to be living with AIDS is a top priority of the
2003-5 National Action Plan on HIV/AIDS. ARV drug therapy
costs approximately 5,000 kuna per patient per month
(approximately $10,000 per year) depending on the drug
combination used. The national health insurance system
treats ARV drugs just like any others with no separate budget
for HIV/AIDS treatment. The total cost of ARV treatment is
approximately $2 million per year. All drugs are prescribed
and delivered through the Zagreb Clinic for Infectious
Diseases -- patients have no co-financing requirement and are
only required to appear in person in Zagreb to receive drugs.
The Clinic has special programs to provide drugs to
prisoners and asylum seekers who are unable to appear in
person at the Clinic. In addition to providing drug therapy,
the insurance system also finances counseling services and
long-term case management. The Ministry of Health maintains
a far smaller budget (less than 5% of total HIV/AIDS
expenditure) for prevention programs.

REGISTRATION HARDLY COST EFFECTIVE FOR DEVELOPERS
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4. New antiretroviral drug treatments -- like all new drugs
-- must be licensed by the Ministry of Health before they can
be prescribed. Fourteen ARV drugs (produced by GSK, MSD,
Abbot, Roche, Boehringer, and Bristol Myers Squibb) have
already been licensed. The national health insurance system
maintains a separate list of drugs approved for tax
exemption; thirteen ARV drugs are already tax-exempt, while
the insurance system is in negotiations directly with the
manufacturer on offering the last licensed drug tax-free.
Croatia's leading immunologist and Vice President of the
National HIV/AIDS Committee Dr. Josip Begovac criticized the
slow procedure for registering new drugs and expressed hope
that the GoC would eventually accept EU licensing rather than
requiring a separate national procedure. Ministry of Health
officials conceded that developers have little financial
incentive to register new ARVs on the Croatian market -- the
registration process is cumbersome and expensive and the
potential payoff is small given the small domestic market for
ARV drug therapy. Croatian law also allows for case-by-case
approval of unlicensed drugs in certain emergency situations;
forty AIDS patients are currently received drug treatment
under this provision.

LITTLE INTEREST IN COST-CUTTING PROSPECTS
--------------


5. Two proposals -- importing generic ARV drugs or
collaborating with BiH and SaM on a regional drug market --
might have the potential to depress high drug prices, but so
long as the health insurance system can afford care the GoC
has little interest in pursuing either option. Importing
generics has never been seriously considered by health
professionals, since the GoC has never complained about high
drug costs. Begovac also noted WHO concerns about the safety
of certain ARV generics from India as well as concern by
national pharmaceutical giant Pliva about establishing a
precedent of importing cheaper generics. Regarding a


regional drug market, the small size of the Bosnian ARV
market means SaM is the only possible partner for Croatia to
join with to negotiate down drug prices. GoC health
officials are skeptical that even an expanded market of 1,000
cases would translate into enough savings to justify dealing
with the "hectic" health situation in Belgrade. According to
Begovac, "Croatians are used to a high quality of health care
-- it is an accepted right that is not going to change
easily."


6. This cable was coordinated with U.S. Embassies Sarajevo
and Belgrade.
DELAWIE


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