Healthcare, Regulatory and Reimbursement Landscape - The Netherlands, New Report Launched

Although the Netherlands’ increasing elderly population and its associated disease burden will continue to drive its pharmaceutical market in the future, price cuts, a reimbursement policy aimed at reducing healthcare expenditure, and the increased prescription of generics will restrict the growth of the market.

The value of the pharmaceutical market in the Netherlands was estimated at $6.7 billion in 2013. Specific therapeutic segments, such as cardiovascular, anticancer and gastrointestinal drugs, dominate the market. In order to reduce the healthcare deficit, the government is focusing on the use of generics as a cost-containment tool. The increasingly elderly population and the corresponding increase in the incidence of chronic diseases will help to boost the growth in the pharmaceutical market. It is expected to grow at a steady Compound Annual Growth Rate (CAGR) of 0.9% from $6.7 billion in 2014 to $7.2 billion in 2020.

The 2008–2012 period saw an increase in expenditure on expensive medicines (medicines priced at more than €500 ($670.4)), and in 2011, the revenue generated from their sale increased by €107m ($143.4m) to €1.11 billion ($1.49 billion) (SFK, 2012). However, expenditure on expensive medicines within pharmaceutical care declined in 2012 due to the transfer of the financing of drugs such as Tumor Necrosis Factor (TNF)-alfa inhibitors and associated medicines to the reimbursement list of medicines, as lay out by that year’s hospital budget and based on the cost of the drugs alone. From 2013, other drugs such as oncology drugs and growth hormones may also be transferred to the hospitals’ budget from community pharmacies.

The Ministry of Health, Welfare and Sport (MoHWS) sets the prices for medicines twice a year (in April and October). The Drug Price Act (Wet Geneesmiddelenprijzen, WGP) has played an important role in pricing since its introduction in 1996. Continual price cuts have seen drug prices decline by an average of 3–4% per year, and from 1996 to 2012, prices declined by 50% (SFK, 2012). The price regulations aimed at cost-containment have had a negative impact on the pharmaceutical market.

Since 2003, health insurance providers have adopted an extensive preference policy that restricts the claims of insured patients to one medicine per active ingredient. From June 2008, this policy has resulted in a decline in the prices of generic medicines. The introduction of preference policies by health insurers has played a significant role in the increase in the share of prescriptions dispensed as generic medicines. The share of prescriptions dispensed as generic drugs increased from 56.2% in 2008 to 63.3% in 2012 (SFK, 2010; SFK, 2012). This will mitigate the growth of the pharmaceutical market.

In 2013, the medical device market in the Netherlands was valued at $3.2 billion, having grown at a CAGR of 4.4% from $2.6 billion in 2008. In 2013, the major segments were cardiovascular devices (13.1%), ophthalmic devices (12.1%), In Vitro Diagnostics (IVD) (11.9%), orthopedic devices (11.3%), and hospital supplies (6.0%). The market is driven by factors such as increasing awareness regarding the early detection and diagnosis of disease, advancements in medical technology, and an increase in the elderly population.

As a member of the European Union (EU), the Netherlands shares a common regulatory platform with other member states, thereby offering a strong and transparent regulatory system to facilitate the approval of pharmaceutical products and medical devices.

In the Netherlands, the Medicines Evaluation Board (MEB) is the main regulatory authority for pharmaceutical products and medical devices, and works under the MoHWS.

The MEB authorizes the approval of products under a national or community procedure through the European Medicines Agency (EMA). The national process of Market Authorization (MA) takes 210 days. Approval for new drugs or medical devices requires the execution of Good Laboratory Practice (GLP) and compliance reviews by the Healthcare Inspectorate (Inspectie voor de Gezondheidszorg, IGZ). A license for the manufacturing of drugs, cosmetics, or medical devices is obtained from Farmatec. The Dutch Medicines Act (DMA) of 2007 provides the basis for the various regulatory activities. The Intellectual Property (IP) laws in the Netherlands are strong and aligned with international standards. The MEB plays a crucial role in the assessment of the benefits and risks associated with the safe use of health products. In order to broaden its scope of regulation and efficiency, the MEB also publishes a strategic business plan every five years.

The Netherlands is a mature healthcare market due to universal access to healthcare facilities and insurance.

The healthcare system in the Netherlands is well developed and efficient. Everyone contributes to the public health insurance scheme in accordance with their income, and all receive care according to their needs. Public health insurance is provided by private health insurers, which manages competition and makes it essential for providers to offer high-quality and efficient healthcare service to subscribers. All subscribers have the right to switch health insurance providers at the time of annual open enrollment, and insurers are obliged to accept all applications.

In the Netherlands, the income-related contribution for health insurance coverage is set at 6.9% for workers if the annual taxable income is more than €32,369 ($45,077) (Thomson et al., 2011). This contribution is reimbursed by employers, and employees are required to pay an income tax on this reimbursement. In 2013, 99.8% of the population was covered under public health insurance (Westert and Wammes, 2013). The government pays the premium for children up to the age of 18 years. The market for private Voluntary Health Insurance (VHI) is also well developed and mainly covers charges that are not eligible for reimbursement by the public health insurance system, such as dentistry, plastic surgery, and extra visits by a physiotherapist.

Government healthcare policies, aided by periodic performance reviews, contribute to the efficiency of the healthcare system in the Netherlands

The MoHWS implemented an anti-smoking policy in 2008 and the National Immunization Programme (NIP) in 2009. The main target of the program is to prevent diseases such as mumps, measles, poliomyelitis, diphtheria, and hepatitis B, through vaccination. In 2010, the government introduced a health promotion and disease prevention program, of which the focus is to create a comprehensive framework that covers all aspects of disease prevention and health promotion. In February 2014, the government approved a new national prevention program entitled ‘Health Matters’. The key feature of this program is to consider the importance of healthcare at workplaces, schools, and at home.

In order to review the quality and efficiency of the healthcare system and to build effective strategic policies, the government publishes periodic performance reports, which includes the details of around 125 healthcare indicators.

Political stability and economic reforms hold the key to continual economic growth

The September 2012 elections were won by the People's Party for Freedom and Democracy (Volkspartij voor Vrijheid en Democratie, VVD) and Labour Party (Partij van de Arbeid, PvdA), which formed a coalition government under multiple agreements and promises to implement austerity measures and improve economic conditions.

The government failed in controlling the external debts as the total central government debt increased to 73.5% in 2013. The fiscal deficit in 2014 was recorded at a 3.3% of Gross Domestic Product (GDP), which is still above the permitted deficit threshold of 3% of GDP for EU countries. As a result, in November 2013 the Netherlands lost its sovereign credit rating of AAA to AA+ (S&P Ratings, 2013). Foreign Direct Investment (FDI) decreased from $6.4 billion in 2012 to $5.9 billion in 2013 and the unemployment rate reached a high mark of 9.1% in February 2014. Various initiatives and policies are being introduced to reduce the budget deficit. In June 2013, the government has announced price cuts of €6 billion ($8.1 billion) to bring down the fiscal deficit to meet the requirements of the EU. The government proposed total savings of €16 billion ($21.4 billion) over the 2013–2017 period. These savings relate primarily to the healthcare sector, social security and the public sector. Besides making savings, the government is making initiatives to invest in the education, business finance and sustainable energy sector.

Two of the government’s current major challenges are controlling the unemployment rate, which has risen substantially in recent years, and controlling the gross national debt, which has increased steeply year-on-year and threatens the country’s sovereign credibility.

The Netherlands is working closely with the EU legislature to successfully execute the earlier discussed economic reforms (Government of the Netherlands, 2014b). With the implementation of such reforms, the GDP growth is forecast to reach 1% in 2014 and 1.6% in 2015.

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