It is planned to launch state regulation of prices for medicines and medical products in pilot mode in Kyrgyzstan.
The Ministry of Health submitted for public discussion a draft decree, approving the provisional rules for pricing and markups. They will apply to only those drugs that are reimbursed under the Additional Medical Insurance Program and the State Guarantee Program at the outpatient level.
How to equalize prices and cut off excess profits
The issue of state regulation was raised repeatedly by patientsб who are forced to purchase medicines abroad, public organizations, and deputies. In particular, the deputy Alfiya Samigullina voiced in parliament that the prices of medicines were driven up 20-100 times.
The Drug Policy Adviser at the Ministry of Health, Zhyldyz Zhumagulova, noted that the government had not regulated the prices of medicines for more than 20 years.
«There was no authority, because they defended business, including pharmaceutical one. The Ministry of Health has developed the laws on Circulation of Medicines and Circulation of Medical Products. The Parliament approved them in 2017. The laws clearly describe regulation of the circulation of medicines for the first time in the history of Kyrgyzstan,» she noted.
It is planned to start regulation with medicines from the program of state guarantees and an additional package.
«A working group of representatives from the Ministry of Health, Drug Supply Department, the Compulsory Medical Insurance Fund, the State Agency for Antimonopoly Regulation, and the Ministry of Economy was formed in 2018. It developed a draft ruling. Round table discussions with representatives of pharmaceutical companies, manufacturers, the Parliament and other ministries were held,» she told.
The specialist noted that the program of state guarantees and additional package included 58 international nonproprietary names of medicines and 3 medical products.
In general, there are about 400 drugs. They will have a single price even in Batken, Bishkek, and in Naryn.
Zhyldyz Zhumagulova
The rules stipulate that pharmaceutical companies engaged in the retail sale of drugs must indicate the actual price on the package.
The Ministry of Health studied the experience of other countries in order to avoid pitfalls and confrontation with pharmaceutical companies. According to Zhyldyz Zhumagulova, there were cases when, after the introduction of state regulation, some companies left the market and stopped delivering drugs.
She told how the mechanism would work.
Suppliers are obliged to indicate prices of manufacturers in the bids. The commission will recheck them, take into account other expenses of suppliers and calculate wholesale and retail markups — 15-20 percent.
«Of course, pharmaceutical companies may lose profits. But everything must be within reasonable limits. We conducted an analysis and found out that many drugs in Kyrgyzstan are overpriced, and the cheaper is the drug, the higher is the markup. We met with all the major suppliers. They treated innovations with understanding,» she said.
Business resists innovation
The head of Partner Network Association Aibar Sultangaziev stresses importance of the proposed document.
We have 3-4 times overpricing for a number of drugs procured for state funds.
Aibar Sultangaziev
«These are, for example, immunosuppressors for people with organ transplants, such as Tacrolimus, Prograf. There is only one supplier of these drugs on the market. It dictates the price. There are drugs for cancer patients and others for which pharmaceutical companies set arbitrary prices, much higher than world ones, due to monopoly. Therefore, it is important to regulate the trade margin,» he said.
According to him, the regulation affects only drugs purchased at the expense of state funds.
This will allow to reduce the price by at least 50-70 percent and almost 2 times increase the volume of purchases of medicines.
Aibar Sultangaziev
«And if we take into account that the state is the main buyer of medicines on the market, acquiring about 30 percent of all delivered drugs, a decline in prices in state procurement will influence their cost in the market,» he said.
Aibar Sultangaziev added that business would actively resist the proposed innovation.
«Entrepreneurs are already doing this, but behind the scenes, delaying the adoption of documents, bureaucratizing the process, finding flaws in the documents. One of the examples is when the parliamentary committee on social policy tried to block amendments to the law on state procurement, which allowed the purchase of drugs through international mechanisms. Someone advised the deputies incorrectly, and they voted against it. We even know who, they are definitely connected with a local pharmaceutical company,» he said.
Ernis Asanov, head of the Union of Pharmacists of Kyrgyzstan, assures that pharmaceutical companies are not going to resist.
«We participated in the discussion of the rules. I think companies are ready for the new rules. This is the choice of those, who pay the money. The Compulsory Medical Insurance Fund can give prices that are beneficial to them,» he noted.
Ernis Asanov added that firms would not refuse to deliver drugs.
There is very tough competition in the local market. Those who offer the most favorable conditions will win.
Ernis Asanov
«Many people call pharmaceutical companies barons, millionaires. But the previous business is no longer there. The country is small, everyone works at the expense of loans,» he noted.
The head of the Union of Pharmacists stressed that many countries had government regulation of prices.
«Some of them introduced, but subsequently abolished it, and the mechanism works successfully somewhere. If it is profitable for the state to save budget funds, it should strive to move in that direction,» he summed up.
