OBJECTIVES: Bosnia and Herzegovina (B&H) introduced medicines price regulation based on international reference pricing (IRP) setting maximal allowed wholesaler prices (MWP). Referent countries are Slovenia, Croatia and Serbia. Even this resulted in price decrease, still there are discussions that medicines prices are higher than in neighboring countries. Due to country organization there are differences in retail or reimbursed prices across the country. Prices of medicines are formed by adding distribution and retail margin, and value added tax (VAT). We have conducted analysis on factors affecting prices and suggested possible action to reduce prices.

METHODS: Available legislation covering this topic was analyzed by internet search and direct contacts with relevantstakeholders.

RESULTS: We identified that MWP are equal on the country level but retail and reimbursement prices are different in different parts of the country. The wholesale margin in Federation of B&H is regulated and set as 8% while in Republic of Srpska (RS) it is 6%. Retail pharmacy margin in FB&H is defined up to 25% while in RS it is 18%. For reimbursed medicines price is defined by Health Insurance Funds (HIF) and retail margin is not calculated but HIF covers pharmacy remuneration which differs among cantons in FB&H ranging from 0,60 to 0,97 EUR including VAT except one canton where margin of 13% is applied. In RS it is 0,73 EUR with VAT. VAT rate in B&H is 17% and it is applicable for all goods and services including medicines. Comparing VAT rate applicable on medicines in B&H and neighboring countries it is the highest rate since in Serbia it is 8%, Montenegro 7%, Slovenia and Croatia 5%.

CONCLUSIONS: Different medicines prices across B&H are result of different regulations and applicable margins. Due to highly decentralized country the simplest wat to impact on price decrease is to introduce lower VAT rate for medicines.