Global Insight Perspective | |
Significance | In an attempt to engender equality in drug prices, FYR Macedonia's Ministry of Health is to limit pharmaceutical wholesaler margins to 15% and pharmacy margins to 30%. |
Implications | Drug manufacturers, wholesalers and pharmacy retailers are expected to lose around 17.5 million euro (US$25.74 million). |
Outlook | Pharmacies have been given 30 days to readjust their prices, and hefty penalties of up to 50,000 euro are envisaged for retailers failing to do so. |
In a multi-pronged move the FYR Macedonian Ministry of Health is to tighten pharmaceutical wholesale and pharmacy margins to 15% and 30%, respectively, in effect from 1 February 2008, reports Macedonian daily Vreme. The move is planned to set the scene for a "unified" drug-price environment, but experts warn that many drugs on the market will have their prices slashed as a result.
Around 17.5 million euro (US$25.74 million) will be the toll suffered by the pharmaceutical sector in Macedonia, with 10 million euro in savings made for the patients and around 7.5 million euro of savings for the national health insurance fund. From the list of 20 best-selling drugs, biggest drop is expected in the price of antihypertensive medicines Renapril (enalapril maleate), produced by local Replek Pharm (397%), and generic amlodipin (369%).
The price of anti-acid drug omeprazole is also expected to fall significantly (286%). Ilco Zahariev, Director of Macedonia's Drug Agency, tasked with setting drug prices, said the new margins will allow companies to cover their expenses. But unsurprisingly some wholesalers and domestic drug manufacturers claim that the new drug pricing allow neither wholesalers nor drug manufacturers to make any profit, and constitutes a violation of the financial principles of a market economy
Penalties of up to 50,000 euro will be in place for pharmacies failing to meet the new requirements.
Outlook and Implications
The move is good news for patients, who in the past would have needed to visit several retail outlets in search of a cheaper medicine. In addition to unified drug prices for medicines across pharmacies, a reduction in the price of best-selling drugs, most of which are domestic generic medicines, is also expected.
According to Macedonia's new Law on Medicines, pharmacies may only sell drugs that have a clear price label on their package. The new rules will be most strongly felt by wholesalers and pharmacies, used to much higher margins than the present 30% and may force some players out of the market. Given that one-third of the medicines in the country are "home-made", the changes will hit domestic pharmaceutical manufacturers hardest (Alkaloid, Replek, Jaka), followed by imports from neighbouring countries, such as Serbia, Croatia, Slovenia, and Bosnia and Herzegovina as well as multinational pharmaceutical companies with drugs on the market above 5,000 denar (US$119.5).
The Ministry has given pharmacies a period of 30 days, until 1 February 2008 to sell their old stocks and make re-adjustments, with wholesalers and drug manufacturers already in the process of applying new price labels. January will see a mixture of old and new prices on the market, until pharmacies replenish their stocks of medicines. At the moment, there are no apparent delays in the supply of newly priced medicines. Despite14 complaints against the new measures so far, these have already been put into effect from 1 January 2008.