Reform Index 153: Managed Entry Agreements and Mortgages at 7% Interest Rate | VoxUkraine

Reform Index 153: Managed Entry Agreements and Mortgages at 7% Interest Rate

24 February 2021

In the previous round, the index was +0.5 points.

Chart 1. Reform Index Dynamics

Chart 2. Reform Index and its components in the current round

A decree on managed entry agreements for the medical services provision, +2.0 points

When original (innovative) drugs appear on the pharmaceutical market, the demand for them can significantly exceed the supply. For some time, these drugs remain unique and have no analogs. The cost of such drugs is often high.

To enable patients to receive such drugs, governments in different countries usually cover / partially cover the cost of such drugs or purchase them using the state budget money. At the same time, governments are trying to negotiate discounts with monopolistic producers. For this, they enter into so-called Managed Entry Agreements.

Discounts received by the country from the manufacturer in such an agreement are confidential. Discounts are negotiated by a specially designated negotiating team, and only group members know their size.

By Decree № 61 of January 27, 2021, the Cabinet of Ministers of Ukraine introduced managed entry agreements in Ukraine, determined the content of a standard agreement and the procedure for its conclusion. Thus, citizens of Ukraine will be able to gain access to innovative medicines that would otherwise be inaccessible to them or available at a much higher cost.

A decree on an affordable mortgage at an annual interest rate of 7%, +0.5 points

A decree № 63 of January 27, 2021, allows people to obtain a mortgage loan at an annual interest rate of 7%. The difference between the market rate and the interest rate of 7% is compensated to banks by the Business Development Fund. This program will work as part of the “Available loans at 5-7-9%” program.

It will not be possible to purchase housing built before 2018 within this program.

Chart 3. Value of Reform Index components and number of events

Note: Reform Index aims to provide a comprehensive assessment of reform efforts by Ukraine’s authorities. The Index is based on expert assessments of changes in the regulatory environment in five areas:

  1. Governance
  2. Public Finance
  3. Monetary system
  4. Business Environment
  5. Energy

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