A sugar-coated pill
State Drug Administration forces pharmaceutical players to restore earlier prices
Ukraine’s pharmacies are still reeling from the sudden jump in prices on imported medicines, some of which now cost up to 40 percent more. Since more than half of all medicines available in Ukraine’s drugstores are of foreign origin, some people assume that the prices of all medicines have increased. The Ministry of Health, specifically its State Drug Administration (DSLZ), responded to this unprecedented price increase by holding an emergency meeting to draft a resolution aimed at easing the situation.
A number of participants said that medical market operators had conspired to boost prices, although distributors explain the increase by the changing USD/hryvnia exchange rate. Top DSLZ officials have promised to bring the matter to the public prosecutor’s attention if the pharmaceutical players fail to restore the earlier prices - and they have been formally instructed to do just that.
“Drugs have to cost less. If prices are not lowered, I think the Tax Administration and the Prosecutor General’s Office must step in,” said Kostiantyn Kosiachenko, the deputy head of the DSLZ.
Petro BAHRII, president of the Ukrainian Pharmaceutical Association:
I took part in that DSLZ conference. Among the participants were people who represent the controlling authorities, pharmaceutical employers, manufacturers, distributors, and representatives of the pharmacy network. We said that Ukraine’s pharmaceutical companies have not boosted their prices, so there should not have been any jump in prices on domestically manufactured medications. Wholesalers have confirmed that they are being supplied with domestically produced medicines at the old prices: there are no changes there. Drugstore owners told us that there are no changes to the prices of domestic medicines.
What happened was exactly what most of the participants in this discussion had observed: the sudden change in the USD/UAH exchange rate (1:6) last week [the Ukrainian version of this report was published on Oct. 15, 2008], which caused a panic. As a result, almost all distributors handling imported medications altered their prices to adjust them to this exchange rate.
But there was a serious discussion about this, and agreement was reached on lowering prices. Since then, the USD/UAH exchange rate has stabilized. As far as I know, the prices of imported medicines have dropped and are now maintained in keeping with the exchange rate.
I also believe that the DSLZ acted within its right when it issued a statement declaring that it will alert the prosecutor’s office if any distributors fail to lower prices to the previous level. After all, this is a government agency, and its employees are people with a keen sense of responsibility. They are supposed to contact various institutions to verify facts and determine whether the prices for medicines were raised justifiably or not.
Medical preparations are merchandise for the public. Prices, especially of vitally important medicines, are regulated by the state all over the world. Therefore, I see nothing wrong with the authorities checking the legitimacy of this price hike.
It is altogether another issue who will be doing this; who is empowered to do so. In our country the Ministry of the Economy has the right to control prices. There is a special inspectorate, which obviously has the authority to conduct inspections. I believe that everything must be done according to the current laws.
