Bulgaria’s proposed law for the 2026 National Health Insurance Fund (NHIF) has once again sparked debate surrounding the underfunding of health insurance payments for medicinal products included in the Positive Drug List (PDL) and paid for by the NHIF.
During the political turmoil over the proposed budget bills in December 2025, the initial NHIF Budget Bill was withdrawn. On December 8, 2025, the Council of Ministers submitted a new NHIF Budget Bill to the National Assembly. On December 11, 2025, the government resigned following nationwide protests. On December 17, 2025, Parliament adopted a bill extending the effect of the 2025 State Budget and the 2025 NHIF budget until the State Budget Law for 2026, the State Social Security Budget Law for 2026, and the NHIF Budget Law for 2026 are adopted. At the NHIF budget debates, both the Bulgarian Generic Pharmaceutical Association and the Association of Research-Based Pharmaceutical Manufacturers in Bulgaria raised concerns about the significant imbalance between public funding for medicinal products and actual demand.
NHIF Reimbursement Mechanism According to SAC Rulings
The Bulgarian Health Insurance Act stipulates that a mechanism ensuring the predictability and sustainability of the NHIF budget is to be applied to medicinal products included in the PDL. This mechanism is adopted annually by the NHIF Supervisory Board, in accordance with the health insurance payment funds for medicinal products specified in the NHIF budget. In practice, the mechanism is a financial compensation measure that shifts the burden of underfunding of health insurance payments for medicinal products to the marketing authorization holders (MAHs) and their authorized representatives.
In April 2024, the Supreme Administrative Court upheld the first instance court ruling to abolish the mechanism ensuring the predictability and sustainability of the NHIF budget for 2021 (2021 Mechanism), confirming that, as a statutory administrative act, it violates the principle of Article 19 of the Constitution of the Republic of Bulgaria. The provision states that the Bulgarian economy is based on the freedom to conduct a business, and that the law guarantees uniform legal conditions for economic activity to all citizens and legal entities. Following the implementation of the 2021 Mechanism, the court ruled that MAHs were obliged to cover 100% or more of the NHIF’s annual excess expenses, resulting in MAHs making no profit from their commercial activities.
A serious burden is placed on MAHs of medicinal products with a new international non-proprietary name (INN), which are paid for by the NHIF from the relevant year onward. For all such medicinal products, the entire expenditure is considered excessive, and the MAHs are therefore obliged to compensate for more than 100% of the NHIF expenditure.
Compared to other market players, these MAHs are disadvantaged and deprived of revenue. The 2021 Mechanism does not provide clear data on how the correction coefficients are formed, nor does it guarantee the value of the medicinal product paid by the NHIF that could be seized as a result of applying the mechanism.
The Supreme Administrative Court also established that while the NHIF budget appears balanced on paper, it actually conceals a deficit transferred to private entities importing medicinal products in Bulgaria. This hidden NHIF deficit is intended to be transferred to pharmaceutical companies through the repealed 2021 Mechanism. According to the applicable provisions, the administrative authority must exercise its powers reasonably, in good faith and fairly, and in compliance with the Bulgarian Constitution and the purpose of the law, which is to ensure the payment of the full value of medicinal products included in the PDL.
NHIF Reimbursement Mechanism Under Review
Subsequent mechanisms adopted by the NHIF largely reproduce the same irregularities. The landmark rulings of the Supreme Administrative Court led to discussions within the NHIF. At the end of September and beginning of October 2025, the Ministry of Health published for consultations a draft proposal for amendment of the relevant Regulation No. 10 of 2009 on the conditions, procedure, mechanism, and criteria for payment by the NHIF. The proposal aimed to increase mandatory discounts and introduce new mandatory discounts for MAHs of medicinal products with new INNs. This would result in further revenue being seized from these MAHs. While this would not overcome the unlawfulness of the mechanism, the revision could result in the regulation itself being deemed illegal, subject to judicial review. The outcome of the public consultation has not yet been made public.
The NHIF Reimbursement Mechanism needs careful consideration to comply with the freedom to conduct a business and to avoid discrimination against groups of medicinal products. The MAHs of medicinal products with new INNs can enter Bulgaria only if they sign an agreement with the NHIF and under the applicable mandatory discounts under Regulation No. 10 of 2009 and the NHIF Reimbursement Mechanism. National legislative measures must not create unjustified restrictions on the import of innovative medicinal products and must ensure access to affordable medicines for patients in line with the Pharmaceutical Strategy for Europe.
By Anna Tanova, Head of IT and Media Practice, CMS
This article was originally published in Issue 12.11 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
