Pharmeca.cz

From January 1, 2025, Slovakia will include medicines and medical devices in the reduced VAT rate of 5%. This move is part of a broader tax reform aimed at improving access to essential goods for the population while reducing the financial burden on patients. The changes are likely a response to the European Commission’s assessment of public finances and an effort to reduce the budget deficit.

This change contrasts with developments in the Czech Republic, where, as of January 1, 2024, the VAT rate on medicines increased from the original 10% to 12%, as we mentioned in our previous article Changes in VAT Rate for Pharmaceuticals.

What Impact Will the Reduced VAT Rate Have in Slovakia?

The lower VAT rate is expected to significantly reduce costs for patients in Slovakia for medical devices and medicines, both in outpatient and hospital care. The direct financial impact on individuals will depend on specific measures and pricing policies. For comparison, Slovakia’s VAT on medicines has dropped from 10% to 5%, which could lead to a more noticeable impact on final prices than in the Czech Republic, where the rate was increased.

Impact on External Price Referencing for Medicines

The reduced VAT rate in Slovakia, however, will not affect the external price referencing (EPR) of medicines, used by some countries to set maximum prices and reimbursement levels in their markets. The VAT change does not reflect in EPR because the reference price is almost universally based on the manufacturer’s price.

At the same time, this change offers an opportunity to compare tax policies across the EU, where VAT rates on medicines and medical devices vary significantly. For example, according to data from EFPIA (European Federation of Pharmaceutical Industries and Associations) as of January 1, 2024, Spain applies a 4% VAT rate on medicines, while Denmark has a standard rate of 25%.

Stay tuned to our website for more updates on legislative changes and their impact on healthcare in the EU.