US embassy cable - 05ZAGREB525

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 
-------------------- 
 
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 
------------------------------------------ 
 
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 
--------------------------------------------- ---- 
 
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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