The total expenditures of the leading domestic manufacturers of top-100 medicines on compensation of balances to distributors after the reduction of selling prices from March 1 exceeded UAH 601.7 million, according to the data obtained byInterfax-Ukraine from the participants of the pharmaceutical market.
In particular, Pharmak has paid UAH 150.7 mln for the balance of goods, which at the time of price reduction had already been delivered to pharmaceutical distributors and pharmacies, Darnitsa – UAH 107 mln, Kyiv Vitamin Plant (KVZ) – UAH 83 mln, Arteruim – UAH 78.08 mln, Kusum-Pharm – UAH 58.87 mln, Yuria-Pharm – UAH 43.6 mln, Interhim – UAH 28.45 mln, Borschagovsky Khimpharmzavod (BKhPZ) – UAH 26.04 mln, pharma firm Viola – UAH 2.46 mln.
The total net loss of the companies from price reduction exceeded UAH 1.741 bln.
According to participants of the pharmaceutical market, most of the rise in drug prices over the three military years was created by the pharmacy link. Thus, the manufacturer’s prices during the three years of war increased by 18-45%, while retail prices – by 79%, pharmacy markups in monetary terms increased by 125-340%.
At the same time, the market participants note that after the introduction of restrictions on marketing payments, a tendency to increase retail mark-ups by a number of pharmacy chains against the background of lower purchase prices started to be registered on the market. Thus, pharmacies raise mark-ups to the maximum allowed level without any objective reasons.
At the same time, commenting on the impact of price reductions on the development of the pharmacy network, pharmacy market operators note that the national health policy should take into account the optimal number of pharmacies, as well as population density, demand and geographical location. At the same time, the increase in the number of pharmacies in cities with a simultaneous shortage of staff is a systemic problem. Therefore, a certain optimization of networks, taking into account consumption and demand, can help to solve the staff shortage, reduce costs and improve efficiency.
However, pharma market participants expect regulators to update the mechanisms of transparent pricing and continue the reform. In particular, they are discussing mechanisms for price referral, rules for transparent marketing and regulatory price adjustments.
As reported, in February, Ukrainian President Volodymyr Zelensky enacted the decision of the National Security and Defense Council of Ukraine of February 12 on additional measures to ensure accessibility of medicines for Ukrainians. According to this decision, the government, manufacturers and pharmacy chains will determine a list of 100 drugs for which prices will be reduced by 30% from March 1. It also provides for the establishment of a ban on marketing and promotion services related to the sale of medicines to the end consumer from March 1 until the Cabinet of Ministers introduces a separate abstracting of wholesale prices for all medicines.
Fulfilling the decision of the National Security and Defense Council, domestic manufacturers of the most popular drugs signed a declaration to reduce prices for the 100 most popular drugs by 30% from March 1. Among the signatories, in particular, are the Association of Producers of Medicines of Ukraine (APLU) and the pharmaceutical companies Pharmak, Borschagovsky Chemical Pharmzavod, Darnitsa, Arterium Corporation, Kiev Vitamin Plant, Yuriya-Pharm, Interhim, Kusum Pharm, and Viola Pharmaceuticals.
Later, in March, the Ministry of Health received additional proposals to reduce the prices of 273 drugs from 26 manufacturers, represented in the top-100 most popular drugs, the prices of which have been reduced since March 1. The proposals for 273 drugs were submitted by Pharma Start (Acipo company), Valartin Pharma, Astrafarm, Biopharma Plasma, and Infusion, “Pharmaceutical Firm “Zdorovye”, Pharmfirm “Viola”, JSC “Lekhim”, PJSC “Tekhnolog”, NPF “Microkhim” LLC, “Novopharm-Biosintez”, “Ternopharm”, “Lubnypharm”, “Pharmatrade”.
Appendix: Financial performance of nine manufacturers: balance of costs and expectations (in UAH mln)
Source: Interfax-Ukraine
