In Bulgaria’s health system, medicines used in hospitals (for inpatient care) reach patients via two distinct funding pathways. These pathways differ in how the National Health Insurance Fund (NHIF) pays for the drugs, which in turn affects procurement and pricing.
Pathway 1 – Direct NHIF Reimbursement
Certain hospital-administered medicines are reimbursed directly by the NHIF as part of covered health services. These include nearly all oncology medications and other designated drugs that are explicitly included in NHIF-funded clinical pathways (the Bulgarian term for diagnosis-related group packages, the DRGs). In practice, if a medicine is on the national Positive Drug List (PDL) under the hospital section (Annex/Part 2 of the PDL), it is eligible for 100% coverage by the NHIF when used for inpatients. The NHIF essentially pays the full cost of these drugs for the hospital, separate from the standard case-rate payment. Hospitals still procure the product, but the NHIF reimburses the cost according to regulated prices or agreements. This ensures patients incur no out-of-pocket cost for these medicines, and hospitals are refunded for their expenses.
Pathway 2 – Hospital Procurement (DRG-Inclusive)
All other medicines used in hospitals (i.e., those not individually reimbursed by NHIF) are funded through the hospital’s budget as part of the clinical pathway (DRG) payment. In other words, the NHIF pays the hospital a fixed amount for the treatment of a patient’s condition (the clinical pathway package, the DRG), and the hospital must cover the costs of routine drugs from this payment. The hospital therefore procures these medicines itself, typically by running tenders or negotiating with suppliers, especially in public hospitalsppri.goeg.atppri.goeg.at. For example, standard antibiotics, anesthetics, and other routine inpatient drugs are generally paid by the hospital out of its NHIF-funded budget lump sum. The Bulgarian Positive Drug List’s Annex 2 sets a reference price (a maximum allowable unit price) for each hospital medicine, which hospitals cannot exceed when purchasing. However, hospitals often obtain prices lower than these caps through competitive tenders or direct negotiations. Real procurement prices are not publicly disclosed.
Oncology drugs and medicines explicitly covered in NHIF clinical pathway contracts are paid directly by NHIF. In contrast, other hospital medications are financed through the hospital’s DRG payment, meaning hospitals bear the upfront cost and manage procurement. Notably, all medicines used in hospitals are provided to patients free of charge at the point of care; the difference lies in whether the NHIF reimburses the drug cost separately or it’s covered under the hospital’s fixed payment.
How it Works in Practice
– NHIF-Reimbursed Hospital Medicines (Pathway 1) +
Funding for certain high-cost hospital drugs is centralized through the National Health Insurance Fund (NHIF). These medicines are listed in Part 2 of the NHIF’s Positive Drug List and treated as insured services. Inclusion on this list is negotiated between the NHIF and the Bulgarian Medical Association under the National Framework Agreement. When a hospital uses one of these listed drugs (e.g., a chemotherapy agent or targeted cancer therapy), it reports the usage to NHIF and is reimbursed for the drug’s cost at the approved price. In effect, this is a fee-for-service add-on: NHIF pays for the drug on top of the standard case payment for the patient’s hospital treatment. To qualify for reimbursement, the drug’s price cannot exceed the nationally approved maximum price (set via external reference pricing and published in the Positive List). In addition, manufacturers often must provide discounts or rebates to the NHIF. Bulgaria now mandates annual rebate negotiations for all NHIF-reimbursed medicines. Pharma companies sign managed-entry agreements with NHIF that guarantee minimum discount levels (typically 10–20% off the list price) and sometimes additional rebates. These agreements help contain the cost of expensive therapies – effectively lowering the price the NHIF ultimately pays for drugs on the reimbursement list.
– Hospital-Procured Medicines (Pathway 2) +
For all other inpatient drugs not separately reimbursed by NHIF, the responsibility falls to the hospital’s own budget (funded through the case payment or clinical pathway tariff from NHIF). Each hospital must acquire these medicines efficiently to stay within the fixed fee. Public hospitals are required by law to conduct public tenders or competitive bidding for their pharmaceutical products. Hospitals issue tenders for the medications they need (e.g., antibiotics, analgesics, surgical drugs), and contracts are awarded to suppliers offering the best price and terms. In practice, hospitals can often obtain prices below the national list price – discounts of ~10% or more are typical in hospital tenders (the lowest prices nationally are usually achieved by public hospitals using bulk tenders). For specific expensive categories like oncology drugs, there have been efforts at centralized procurement. In 2017, the health ministry launched an electronic platform to aggregate demand and negotiate better prices for cancer medicines across public hospitals. When such centralized framework agreements exist, those discounted prices serve as a reference for NHIF reimbursements as well. Under this pathway, NHIF does not pay for each drug directly; instead, the hospital’s lump-sum payment is expected to cover the cost of those drugs. This gives hospitals a strong incentive to procure medicines as cheaply as possible – any savings stretch their budget, while overpaying for drugs would eat into the fixed payment. In theory, this setup encourages efficiency through competitive bidding and bulk purchasing. In practice, however, it also led to significant price variation between hospitals.
Comparison with Other Countries
Bulgaria’s approach is not unique. Many European healthcare systems use a dual system in hospital managing pharmacy: high-cost or innovative medications are funded outside of standard DRG payments, while routine drugs are financed within hospital budgets. However, the specifics and effectiveness of these mechanisms vary by country. Below are a few examples:
| Country | High-Cost Hospital Drugs | Other Hospital Drugs | Price Variation |
|---|---|---|---|
| Bulgaria | NHIF reimburses 100% if drug is on Positive List (oncology, select therapies). Reimbursed at hospital's cost; reforms (2023-25) cap reimbursement at lowest national price. | Funded from hospital's DRG tariff; public hospitals tender, private hospitals (until 2025 reforms) exempt. | Historically extreme: same drug billed up to 14-28 times higher in some hospitals. New rules aim to standardize and save circa EUR 30M/yr. |
| UK | NHS excludes "high-cost drugs" from tariff; reimbursed separately by commissioners at negotiated national prices. | Included in tariff; hospitals procure via NHS Supply Chain or tenders. | Some variation: decentralized contracts can cause differences; insurers pressure alignment. |
| France | Liste en sus: expensive drugs reimbursed on top of DRG. National price cap set by CEPS. | Included in DRG; hospitals pay from tariff. | Moderate: hospitals may negotiate confidential discounts below the national price; state reimburses at cap. |
| Netherlands | Hospitals & insurers negotiate add-on payments for expensive drugs. No single national price. | Included in DBC (DRG); hospitals procure via tenders/group purchasing. | Some variation: decentralized contracts can cause differences; insurers pressure alignment. |
| Poland | NFZ funds "therapeutic programs" and chemotherapy separately from DRG; national negotiated reimbursement prices. | Covered by hospital DRG budgets; procured via tenders. | Low: central NFZ prices uniform for programs; tendering keeps other prices competitive. |
| Germany | Extra payments (NUB, Zusatzentgelt) for expensive drugs outside DRG. | Most drugs included in DRG payments. | Limited: extra payments negotiated; prevents major gaps for high-cost therapies. |
| Italy | Innovative drugs funded via regional budgets; AIFA sets list prices & manages entry agreements. | Routine drugs via regional tenders. | Moderate: discounts confidential; regional tender results vary, but national oversight limits extremes. |
| Spain | Regions sometimes use special funds or joint tenders for very expensive drugs; risk-sharing agreements used. | Hospital drugs mainly procured regionally. | Moderate: some variation across regions, but centralized evaluation/reference pricing moderates gaps. |
Typically, health systems separate the financing of ultra-expensive hospital drugs from regular hospital budgets to ensure patients can get cutting-edge treatments. The extent of price variation that results depends on how centralized the purchasing and price-setting is. Bulgaria’s recent experience, with extreme variations when rules were lax, now being tightened by central policy, underscores this point. Countries with strong central negotiation (UK, France, Poland’s programs) see relatively uniform drug costs, whereas more decentralized systems (historically Bulgaria, or the Netherlands’ insurer model) risk greater disparities. The reforms in Bulgaria are effectively bringing it in line with best practices seen elsewhere: paying separately for high-cost drugs but at controlled, negotiated prices, to combine access to therapy with value for money.
