Eesti 200 putting brakes on hospital pharmacy medicines import bill
Coalition party Eesti 200 is putting on pause government talks on a bill which would allow pharmacies located inside hospitals to import medicines into Estonia.
Eesti 200 argues that insufficient impact analysis has been conducted, adding further discussions with the minister are needed.
The party denies that the delay would work in favor of the dominant pharmaceutical wholesalers in Estonia.
Health Minister Riina Sikkut (SDE) said the bill to allow hospital pharmacies to import medicines is ready and has gone through the necessary coordination rounds.
Representatives of government and of Riigikogu factions met Wednesday morning ahead of the regular Thursday morning cabinet meeting.
At Eesti 200's request, the bill concerning hospital pharmacies and imports was struck off Thursday's agenda, Sikkut told ERR.
"They want to discuss further the bill, with the minister," she added.
The bill was drafted by the Ministry of Social Affairs.
As to its rationale, Minister Sikkut said that sometimes hospital pharmacies need specialized medicines for specific patients which Estonian wholesalers do not import.
Components in cancer treatments were another example the minister gave.
Joint bulk procurements by hospital pharmacies of such medicines could lead to savings, she added.
The minister said. "If there's an option to involve in a procurement more than just Estonian wholesalers, that could result in savings. But this would be an option, and not an obligation."
As to the question why Eesti 200 is reportedly holding up the discussion on the bill, Sikkut was unable to say. "They have had strong feelings on competition law and various other issues," she said.
At the same time, pharmaceutical wholesalers in Estonia could potentially be affected by hospital pharmacies' ability to purchase medicines from abroad, were the bill to pass into law as is.
Hospital pharmacies annual procurement totals around €130 million, or around a third of the market.
Two major wholesalers operate in Estonia: Tamro, which belongs to the Phoenix Group, and Magnum, owned by reclusive businessman Margus Linnamäe, whose interests also include the Postimees group of newspapers and the Apollo entertainment chain.
Foreign Minister Margus Tsahkna is an Eesti 200 member and was party leader November 2023 to last month. During a sabbatical from politics – Tsahkna previously belonged to Isamaa and was a government minister 2015-2017 – he worked as an export manager for Semetron, a defense sector firm which is Linnamäe-owned.
Tsahkna also held a 20 percent stake in MM Hospital, which supplies military hospitals and was founded in July 2022 in the aftermath of the Russian invasion of Ukraine.
Tsahkna sold his stake in MM Hospital back to Linnamäe after becoming foreign minister, in August last year.
MM Hospital has not submitted any annual reports to the Commercial Register (Äriregister) at the time of writing, though, a submission to merge MM Hospital and Semetron was filed with the register in September 2023, together with MM Hospital's balance sheet as of March 31 of that year.
That statement revealed that MM Hospital held €1.1 million in assets and €1.2 million in liabilities, and had incurred losses of €146,000 in its half-year of operation, to the end of March 2023.
Tsahkna's company, Defendest, issued a 2023 financial report which showed that the sale of the 20 percent stake in MM Hospital brought the company a profit of €350,000, while the company's cash holdings increased by the same sum
As to whether these connections could be behind the hospital pharmacy import bill's hold-up, Minister Sikkut said she could not say.
"I don't have any facts; I can't confirm or deny it, but look, it does sound plausible when you put it that way," she said.
Minister of Education and Research and Eesti 200's new leader Kristina Kallas said neither Linnamäe nor Tsahkna were behind her party's opposition to the bill.
"Margus has nothing to do with this," Kallas said.
"The Social Democrats see Linnamäe behind everything, but he is not that omnipotent," Kallas went on.
The Social Democrats also wrongly suspect Linnamäe's interests are being represented in amendments to competition law changes, Kallas went on.
According to the Eesti 200 leader and minister, the main opposition to granting hospital pharmacies the right to import medicines comes from within her own party; MP Irja Lutsar, who was supposed to agree with Sikkut on a time to discuss the draft law further was named.
Lutsar is a virologist who came to prominence during the Covid pandemic.
Lutsar herself said she primarily wants to meet with Minister Sikkut in order to discuss the bill's future progress, adding that she had sent Sikkut a letter to that effect.
She said: "My wish is to meet with Sikkut and talk, it could be that her arguments are very convincing, and I then change my mind."
"I want simply to understand what these arguments are, how this would make the availability of medicines to Estonian hospitals better," Lutsar continued.
Lutsar said she is also interested in understanding why hospital pharmacies are dissatisfied with the current service provision from pharmaceuticals wholesalers operating in Estonia.
"I certainly see the pharmaceutical market as one where wholesalers bring medicines to the market, and hospital pharmacies can also source from there," Lutsar continued.
At the same time, Lutsar noted, wholesalers are likely able to get better prices from pharma companies than are hospital pharmacies, given the former's larger purchasing volumes.
Lutsar also denied delays on the bill could work in Margus Linnamäe's interests.
"I'm not that person who defends Linnamäe's interests," she said.
"I don't know Linnamäe at all. Naturally I know the name, but I don't even know what he looks like. I've never spoken to him. I'm certainly the last person who would stand up for the interests of wholesalers," Lutsar continued.
"However, I do want us to discuss all these things before we pass this into law. So if I have to wait for our meeting with the minister for one or two weeks, that probably won't influence much," she added.
Eesti 200 as a party is also not convinced that giving hospital pharmacies permission to buy medicines from abroad would bring the claimed savings to hospitals, Kristina Kallas said.
The draft also lacks sufficient analysis of the potential impact on the pharmaceuticals market in Estonia.
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Editor: Andrew Whyte