| Drug prices are increasing regardless of the wishes of officials Major players in the pharmaceutical market are not giving up the idea of lobbying for the abolition of value added tax on medicines and medical equipment on the eve of the Duma elections. The Union of Pharmaceutical Industry Professionals (SPFO), which unites leading companies, recently issued another appeal calling on Russian politicians to become more actively involved in the fight for the abolition of VAT, introduced on January 1, 2002. “The past year and a half has shown the detrimental nature of the introduction of this tax for the health of the population,” the appeal says. -- The cost of medicines has increased, their consumption has decreased, and the range of medicines sold in pharmacies has narrowed. The volume of counterfeit products, as well as medicines sold through the shadow economy, has increased. The level of morbidity and mortality among the population has increased.” The leaders of the SPFO, the heads of the two largest distribution companies in Russia, Protek Implementation Center Vadim Yakunin and SIA International Igor Rudinsky, assure that the abolition of VAT will not only reduce prices for medicines, but will also make them more affordable for low-income groups of the population. And they have already managed to convince many legislators of this. In any case, the head of the Duma Committee on Health and Sports Nikolai Gerasimenko said that during the autumn session he intends to put on the agenda of the lower house a bill on returning to the practice that existed before the end of 2001. Mr. Gerasimenko hopes to raise this issue before deputies begin intensive discussions on the 2005 budget.
However, many experts consider the hopes of market leaders for the abolition of VAT to be utopian. The state, represented by the Ministry of Finance and the Ministry of Economic Development, has repeatedly stated that it intends to continue to seek the abolition of all benefits, including for companies involved in the production and sale of such vital products as medicines. Despite the fact that officials were unable to calculate additional budget revenues from the pharmaceutical market, they consider the policy of “equidistance” more justified than the allocation of “sacred cows” in the business community.
In addition, recently the arguments of opponents of the tax look less and less convincing. Let us recall that it was the introduction of VAT that distributors explained the jump in prices in pharmacies last year. A new rise in prices was expected at the beginning of this year - after the introduction of new rules for the certification of drugs, which required distributors to spend more than before on processing all permitting documentation. But there was no sudden change in price tags in pharmacies. But monitoring of the pharmaceutical market conducted by Remedium in the 10 largest regions of the country shows that adjustments in price tags have become a permanent phenomenon in Russian pharmacies. Moreover, apparently, it is not associated with strengthening or decreasing bureaucratic control over market participants. Most likely, pricing is largely influenced not by officials, but by changes in exchange rates and other purely market circumstances. In any case, the malicious intent of bureaucrats alone cannot explain the fact that the leader of Russian pharmacy sales, No-shpa tablets, increased in price by an average of 19% from December last year to June of this year for no apparent reason. And in general, according to observers, the increase in retail prices for the top ten most popular drugs over the past six months has been steady and amounted to 8%. Oleg VOLKOV |
|
