Health Systems in Transition - Hungary - World Health Organization ...

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Health systems in transition Hungary
in the management of community pharmacies and that the pharmaceutical retail
system would not be dominated by profit-making investment interests alone.
By the end of 1997, all previously state-owned pharmacies serving the general
public had been privatized according to this model (HCSO, 1999).
Act LIV of 1994 also restricted the establishment of new pharmacies by
requiring a minimum of 5000 inhabitants per community pharmacy, and a
minimum distance of 300 metres (and 250 metres for towns with a population
of more than 100 000) between new and existing pharmacies, from which the
Office of the Chief Medical Officer (see section 2.3.3) was allowed to deviate
only with the approval of the Chamber of Pharmacists (see section 2.3.10)
(Article 5). The NPHMOS designated an indicative catchment area as part
of the registration and licensing system, but this did not restrict the choice of
consumers in any way (Article 6). Table 5.1 shows that this model contained
the number of new pharmacies very effectively: between 2000 and 2006 only
a handful of new pharmacies were established. The government in power from
1998 to 2002 strengthened the pharmacist-owned retail system by increasing
the minimum ownership share of pharmacists from 25% to 50% (to be achieved
by 31 December 2006) and excluding pharmaceutical manufacturers and
wholesalers from ownership (2001/10). The plans were not realized, however,
because the government in power from 2006 to 2010 rewrote the respective
regulations based on a liberal model of corporate responsibility, eliminating
most of the restrictions on ownership (no limitations regarding the type of
business entity, no minimum share of pharmacists stipulated, manufacturers
and wholesalers not excluded, pharmacy chains not prohibited), and relaxing
the criteria for establishing new pharmacies (no population and distance
restrictions for new pharmacies undertaking the provision of extra services for
at least three years, such as longer opening hours, night duty, internet-based
ordering and home delivery) (2006/8).
The new regulations entirely changed the dynamics of the pharmaceutical
retail market. Between 2006 and 2010, the share of community pharmacies
increased by more than 20% due to a higher concentration in cities and larger
villages. At the same time, the supply for villages with less than 1000 inhabitants
worsened. Moreover, pharmacy staff were unable to cope with the increased
number of retail units and longer opening hours. As a result of the relaxed
ownership regulations, both horizontal (the establishment of pharmacy chains)
and vertical (acquisition of ownership by manufacturers and wholesalers)
integration took place. It is estimated that in 2010 some 15–20% of pharmacies
operated in chains (Government of the Republic of Hungary, 2010b).