Opposition MPs hail Riigikogu vote down of EKRE pharmacy bill

SDE MP and former health minister Riina Sikkut (left) and Reform Party chair Kaja Kallas.
SDE MP and former health minister Riina Sikkut (left) and Reform Party chair Kaja Kallas. Source: ERR

Opposition MPs have welcomed a Riigikogu vote which dismissed a bill from the Conservative People's Party of Estonia (EKRE), which aimed to amend government reforms to the pharmacy sector.

EKRE's bill would have amended the Medicinal Products Act to make it less restrictive to pharmacists in terms of ownership and structure, as well as permitting hospitals to run their own retail pharmacies and not be tied to domestic Estonian wholesalers.

Reform Party leader: Not feasible to carry out last-minute u-turn

Reform Party chair said that the state preparing for a reform for five years, then changing its mind at the eleventh hour, was not feasible.

"This is sort of a self-fulfilling prophecy: The wholesalers are not taking steps in the hope that the law will be changed, and are threatening the Riigikogu, on the basis that steps by them have not been taken, with the closure of pharmacies," Kallas said, via spokespersons.

The five-year period Kallas referred to relates to the Medicinal Products Act, passed around five years ago, which required the reforms as on the table for April 1 – whereby pharmacy majority ownership would be held by dispensing pharmacists themselves.

In the cases of pharmacies owned by wholesalers – notably some of the larger chains like Apotheka, owned by Magnum Medical, and Benu, owned by Tamro - this would require a transfer of ownership, to give the dispensing pharmacists a minimum 51 percent stake in the outlets they work in.

Kaja Kallas said that the point of the pharmacy reform was higher retail drugs prices in Estonia than should be the case.

"And the reason for this is that pharmacies belong mostly to two large wholesalers, meaning there is vertical integration, so to speak. The requirement for pharmacist ownership was written into the law, namely with the purpose of creating greater competition specifically within the retail market, and ensuring the affordability of medicines for all people of Estonia," Kallas continued, according to BNS.

The Reform Party leader added that if the law were to be changed before the end of the transitional period (i.e. before April 1), claims for damages against the state can be filed both by the pharmacists who have made investments in the establishment of pharmacies, as well as by the wholesalers who have had to sell their retail pharmacies as required by the law – in other words, one way or another, damages are likely to be claimed.

"The Riigikogu should allow the pharmacy reform to take effect, then look at how the transition is taking place, and interfere if necessary when problems really arise, and taking into consideration the actual situation, problems and substantive needs, not lobbyists' horror stories. The current pharmacy reform is not ideal. There are definitely several aspects to it that are problematic, but canceling the whole reform does not make sense," Kallas said.

Businessman Margus Linnamäe has already said that he would accede to the transfer of ownership but would seek (as yet unstated) claims for damages from the state. The option of pharmacists becoming franchisees of the existing chains has also been touted.

Critics of the reforms have said that they would lead to the widespread closures of pharmacies, particularly in smaller population centers, as fewer than 200 of Estonia's near 600 pharmacies currently comply with the reforms, with the larger chains even calling a half-day strike, more correctly a lock-out, in December, to highlight what they say would be the negative effects. They also say that the reforms will force those who do not have a business background, i.e. the dispensing pharmacists, to become businesspeople in effect, overnight.

A bill aimed at reversing the course of the reform back in favor of the wholesalers was voted down just before Christmas in one of the last Riigikogu actions of 2019.

Those in support of the reforms point towards the five years which the sector has had to get ready for the transition; the Social Democratic Party (SDE) proposed softening the blow by phasing in the transition through to year end rather than in one fell swoop on April 1, though this bill, to go before the Riigikogu on Wednesday, is unlikely to pass.

Former health minister: EKRE bill an example of how not to do it

SDE MP and former health minister Riina Sikkut said Tuesday that she was glad that more MPs find that pharmacies should serve the interests of patients than those who think they should be based on business interests, BNS reports.

Sikkut said the EKRE bill was a striking example of how things should not be done in Estonia, BNS reports.

"Suddenly a U-turn gets made, where those who filed the bill are not informed about its content, making even the problem that is attempted to be solved not clear to those proposing the change. In addition, the minister responsible for the area does not accept the solution that is being offered," Sikkut said, according to BNS.

Sikkut added that three months ago, the same bill would have given rise to a different discussion. 

"Back then we were threatened with the closure of over 300 pharmacies from April 1, and doubts were expressed over whether the patient was paying too much. As of now it is clear that pharmacies will not be closed from April 1 - one of the major owners (i.e. Linnamäe-ed.) has confirmed this. Furthermore, the media has done a very good job comparing prices, and the Association of Pharmacists (EAÜ, representing the wholesalers-ed.) has assessed excessive operating costs. The conclusion is the same. Buyers of medicines, who are often aged patients with chronic illnesses, plus all payers of social tax, are paying for these excessive profits and operating costs," Sikkut said.

Sikkut said it was understandable that people representing different interests and wishes within the pharmacy market tend to regard their own knowledge and experiences as most relevant.

"As lawmakers, we have a different duty. We must put aside our own interests and side with the patient, to protect their health," Sikkut said.

The Riigikogu on Tuesday by votes 46 to 42 approved a proposal by SDE to turn down a bill of amendments filed by EKRE, that would have effectively canceled the pharmacy reform, meaning that the government reforms are back on track and likely to come into effect on April 1.

It is possible that the soon-to-be-former owners of chain pharmacies, the wholesale companies, will hold on to control literally until the eleventh hour, in other words a minute before midnight on March 31, meaning the first day of business at pharmacies under the new regime could potentially see some chaos.

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Editor: Andrew Whyte

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