Translated material
Side effect
Limiting drug prices has its downsides
In most developed countries, with the exception of the United States and France, prices for drugs - both prescription and over the counter - are regulated by the state. The methods used are very different, but they are all based on limiting the manufacturer’s price, company income, as well as prices for new drugs, trade markups, etc.Russia was no exception. In 1999, government decree No. 347 “On measures of state control over drug prices” was issued. It provides a mechanism for state registration (it is carried out by the Ministry of Health and the Ministry of Economic Development) of manufacturer's selling prices for medicines included in the list of vital and essential drugs. This list currently contains about 8 thousand items, of which 6.7 thousand medicines from 364 manufacturers are registered (181 of them are foreign). In addition, it says that when setting wholesale and retail prices, wholesalers and pharmacies are obliged to be guided by these same registered prices, and the amounts of wholesale and retail markups are established by the executive authorities of the constituent entities of the federation.
As Elena Tolstova (Department for Organization of Pharmaceutical Activities of the Ministry of Health) reported yesterday at a seminar on pricing in the pharmaceutical market, wholesale markups across the country range on average from 10 to 30%, retail markups from 10 to 60%. Traders do not always charge the maximum. Thus, in the Krasnodar Territory, wholesalers charge an average of 12%, although in this region it is allowed to add 15%, in the Oryol region, 13% and 20%, respectively.
The seminar participants unanimously agree that the state should regulate drug prices. But his intervention does not always lead to the desired consequences. As Elena Finagina, Marketing Director of the Shchelkovo Vitamin Plant--Novosibirskkhimpharm--Kraspharma group of companies, said at the seminar, cheap goods are washed out of the pharmacy chain. She explained why this happens using the example of her own products. The selling price of a package of validol is 2 rubles, pantogam is 120 rubles. From validol, the wholesaler receives 36 kopecks. income from Pantogam is 38 rubles, and the costs of selling both drugs are the same. It is clear which product is preferred by both distributors and pharmacies. And the total trade markups reach 100%, and this also does not please either the manufacturer or the buyer.