Latvia: Striving to Catch Up to its Neighbours on Innovation Access

Dr Valters Bolevics, director general of the Association of International Research-based Pharmaceuticals Manufacturers of Latvia (SIFFA), outlines the progress made on market access for innovative pharmaceuticals in Latvia in recent years and the hurdles still to be overcome to catch up with its Baltic neighbours.


Stable pharmaceutical product market growth, the biggest state funding for reimbursable medicinal products ever, a targeted increase in the state budget for innovative medicinal products, especially for cancer treatments and personalized medicines, heated tobacco tax amendments to divert the increase of excise tax towards new innovative pharmaceutical products and biomarkers for oncology patients – these are Latvia’s most notable achievements in 2020. What has been accomplished and what challenges need to be overcome to reach the level of neighbouring Baltic countries?


The pharmaceutical product market has grown by four percent in 2020

Overall, during the past year the pharmaceutical market in Latvia maintained the targeted growth of previous years, reaching its highest ever level. According to data compiled by the State Agency of Medicines (SAM) regarding the operations of wholesalers, in 2020 the total turnover of pharmaceutical wholesalers in Latvia and abroad amounted to EUR 1.057 billion (VAT excluded), which, compared to the previous year, rose by 6 percent. The volume of medicinal products sold not only in Latvia, but also abroad by pharmaceutical wholesalers continued to grow. As a result, the volume of medicinal products sold in Latvia last year rose by 4 percent to EUR 545.39 million (VAT excluded). The volume of medicinal products sold outside Latvia rose by 5 percent, reaching EUR 299.9 million (VAT excluded).

The most widely used drugs in the Baltic States are for the treatment of cardiovascular diseases, the consumption of which is treble the consumption of the next most widely used drug group between 2016 and 2018, according to the “Baltic Statistics on Medicinal Products 2016–2018”, which was published in January this year. In Latvia and Estonia, the second most consumed group of medicinal products were medicines used to treat gastrointestinal and metabolic diseases. In contrast, in Lithuania, it is medicinal products for the nervous system.

Of the Baltic States, in 2018 the biggest medicinal product consumption was in Estonia – 1,148.72 defined daily doses per 1,000 inhabitants a day (DID). In Lithuania 1,106.11 DID were consumed, while in Latvia the figure was: 953.92 DID. Since 2015, total medicinal product consumption in Estonia and Lithuania has increased by 8 percent, and by 4 percent in Latvia.


The reimbursable medicinal product budget needs to grow fast

With the active involvement of SIFFA, last year was a milestone year for reimbursable drugs, reaching EUR 192 million with the manufacturers’ co-payments, the highest expenditure ever, and is due to reach EUR 198 million this year, meanwhile this certainly does not satisfy the growing demand from society for modern and high quality products.

Last year was a milestone year for reimbursable drugs [in Latvia], reaching EUR 192 million with the manufacturers’ co-payments, the highest expenditure ever, and is due to reach EUR 198 million this year

By way of comparison, the Lithuanian government this year raised the budget for reimbursable medicinal products by EUR 91.6 million reaching EUR 451.1 million, which will allow 100 percent coverage of medicinal products included in the list of reimbursable medicinal products (RMPL). It is planned that all assessed cost-effective latest generation pharmaceutical products will be included. This budget is 2.77 times larger than Latvia’s, which means that the Lithuanian population has not only greater, but also real opportunities to receive state-reimbursed pharmaceutical products for new diagnoses, along with new products created by scientists. In turn, in Estonia, the budget for reimbursable medicinal products has risen by 8.2 percent this year, reaching EUR 188.9 million, which is 16.1 percent more than in Latvia. Moreover, this budget does not include hospital purchases, hence higher planned public spending.

Analysing the budget of reimbursable medicinal products per capita in Baltics[i], EUR 85.28 a year has been allocated for this purpose in Latvia, whereas in Estonia and Lithuania – it is nearly twice as much: EUR 142.20 in Estonia and EUR 161.45 in Lithuania. For Latvia to attain the average per capita budget of reimbursable medicinal products elsewhere in the Baltic States, Latvia will have to increase its existing budget by an average of EUR 80.38 million, with the total RMPL budget reaching EUR 243.06 million. This would allow Latvia to reach EUR 127.42 a year per capita for reimbursement of pharmaceutical products paid for by the state, an increase of 49.41 percent on the current figure. Next year’s budget needs to be discussed well in advance. In my opinion, a solution must be urgently found to increase the budget of state reimbursable pharmaceutical products by EUR 80.38 million in order to meet the current needs of patients and to equalize patients’ opportunities in the Baltic States.


More funds allocated to innovative medicinal products

A noteworthy and extremely positive accomplishment in improving the availability of new pharmaceutical products in Latvia is the initiative by pharmaceuticals manufacturers to divert the increase revenue collected in the state budget from 2021 onwards from the excise tax on heated tobacco to innovative oncological pharmaceutical products and biomarkers. This initiative, once launched, had the backing of leading doctors’ organizations and patients, underlining the high public importance of this idea.

It is worth noting that in recent years public funding for innovative pharmaceutical products has increased and their number in the RMPL has more than doubled. Patients with melanoma, breast cancer, lung cancer and other diseases are already benefiting from new pharmaceutical products. Data compiled by SIFFA in September 2020 shows that the RMPL in Latvia has been augmented with three new generation medicinal products within six months, reaching a total of 67, up by 37 products from march, 2017. Comparing the situation in Latvia to that of its neighbours, the number of innovative pharmaceutical products in Lithuania on September of 2020 is 32 percent higher, totalling 99, whereas in Estonia it is 16 percent higher, with a total of 80 innovative pharmaceutical products in the list of state reimbursable medicinal products. Accordingly Latvia cannot afford to rest on its laurels and must continue to implement targeted measures with a view to bring options for patients onto an equal footing within the Baltic States and to move faster in its progress than the European Union average.


A breakthrough in payment for biomarkers

Positively, I would like to highlight the progress made in Latvia in the payment of biomarkers from the state budget, which will facilitate more extensive implementation of the principles of personalized medicine in cancer treatment. Under the auspices of the reimbursable medicinal product system for personalized medicine, in Latvia funding has more than doubled in recent years: in 2018, it was EUR 7.98 million, in 2019 EUR 13.64 million, in 2020 EUR 18.77 million, according to National Health Service (NHS) data. As we know, modern cancer treatments are based on the detection of biomarkers and the application of specific targeted therapies around the world, which can significantly improve treatment outcomes and survival rates for a number of years, including in patients with metastatic cancer. At present patients with lung cancer, breast cancer, colorectal cancer, ovarian cancer, malignant skin melanoma and certain oncohematological diseases receive personalized medicinal products via Latvia’s medicinal product reimbursement system.

On the plus side, in response to calls from oncologists, patients and SIFFA to increase state budget funding for biomarkers, from 1st of April this year the NHS plans to add two new oncology services to the list of publicly funded healthcare services: mutation detection with next generation sequencing (NGS) as well as all-encompassing genome profiling utilising liquid biopsy. The biomarker is initially planned at the molecular level for patients diagnosed with lung cancer (C34), but as funding grows, diagnostics will be provided for other localizations as well. To date, next generation sequencing in oncology has not been a state-funded service, therefore this is a very positive trend and shows systems ability to evolve towards recognized standards in the world.


New plan for better cancer treatment

More extensive availability of innovative pharmaceutical products and improved treatment for cancer patients in the near future is planned under the new plan for the improvement of health care services in the realm of oncology during the period from 2022-2025, led by the Ministry of Health. It has been drawn up in accordance with the measures specified in the European Commission’s Cancer Plan, the recommendations of the Cancer Mission Council, feedback from doctors, patients, scientists and the pharmaceuticals industry. The draft plan specifies a targeted, adequately funded approach to the use of new technologies and pharmaceutical products in cancer treatment, significantly improving options for cancer patients in Latvia. Beyond the planning process, the next step will be to link the plan with the medium-term state budget so that ideas from the document format are converted into reality.

It is vital to foster discussion in Latvian society and among decision-makers about the future which is already here: advanced therapy medicinal products (ATMPs) and the introduction of these unique products in Latvia

Besides the daily challenges described above, it is vital to foster discussion in Latvian society and among decision-makers about the future which is already here: advanced therapy medicinal products (ATMPs) and the introduction of these unique products in Latvia. Naturally, within the pharmaceutical industry it is just a matter of time before targeted and uniquely tailored made therapies become mass consumer products to meet the growing demand from society for better healthcare and longer healthier life.

[i] This estimate is based on the population of the Baltic States at the start of 2020.