Medicines stuck in the currency corridor

Pharmaceutical distributors demand revision of trade markups

In just two weeks, Russian regions may experience interruptions in the supply of drugs included in the list of vital drugs (VED), most of which are necessary for emergency medical care and support for the most critically ill patients. Several distribution companies told Vremya Novostey about the likelihood of another drug crisis. The problem arose after the New Year holidays, when almost all wholesale suppliers discovered that they owed manufacturers almost a third more money in rubles than they expected. Three quarters of medicines on the Russian market are imported, and contracts for their supply are concluded in dollars and euros. Of course, the size of obligations in foreign currency has not changed, but the exchange rate difference has made them difficult to fulfill for Russian companies that conduct settlements within the country in rubles.

In the commercial segment, distributors and retail chains immediately shifted part of the exchange rate burden onto ordinary consumers: according to the research company DSM Group, over the past three months, drug prices in pharmacies have increased by almost 7%. But it is obvious that most of the losses fell on the shoulders of entrepreneurs, because since October 2008, the dollar has grown by 28%, the euro has risen in price by 18%, and the bi-currency basket has increased by 23%. DSM Group CEO Alexander Kuzin is confident that by the end of the year the increase in prices will fully reach the end consumer, and prices in pharmacies will increase by about 20%.

In addition, in the very near future, the consumer may experience a shortage of a number of necessary medications. Vital medicines (necessary for resuscitation procedures, anesthesia, treatment of malignant neoplasms and acute mental disorders) cannot become more expensive by law: their selling prices and the size of trade markups are fixed by orders of local health authorities in rubles and are updated no more than once a year. At the same time, drugs should be in the assortment of pharmacies and hospital supplies under any circumstances. But companies are not ready to fulfill such obligations at a loss. “The distribution margin for the supply of vital drugs does not exceed 15%, the pharmacy margin is 20%,” Mr. Kuzin recalled in a conversation with a Vremya Novostei correspondent. “It’s easy to calculate that if the dollar rises in price by almost 30%, wholesalers and retailers will have to work almost for free.”

Without expanding the price corridor, there is no way out of this situation, says David Melik-Guseinov, director of marketing research at the analytical company Pharmexpert. “Health care authorities simply did not have time to react to the changing situation and brought the market to a standstill,” he told Vremya Novostey. “We expect from Roszdravnadzor that the size of trade markups for both the wholesale and pharmacy chains be adjusted automatically depending on the growth of exchange rates,” representatives of one of the largest domestic pharmaceutical distributors clarified their wishes in an interview with a Vremya Novostey correspondent -- CV "Protek".

Other federal distributors - ROSTA companies, SIA International - are also waiting for an immediate change in the rules of work in the vital drugs segment. According to Vremya Novostei, tomorrow the leaders of the Federal Service for Surveillance in Healthcare and Social Development (Roszdravnadzor) intend to gather all the main suppliers of medicines and representatives of pharmacy chains in order to urgently develop an action plan.

Galina PAPERNAYA