The government will control the currency component of the price of medicines

The government intends to allow drug importers to include part of the currency risk in the price of goods that are subject to government regulation. The retail price of medicines will be correlated with the values of the official NBU exchange rate and the weighted average on the interbank market. Market participants believe that their losses can only be covered by a full accounting of the market exchange rate of the hryvnia to foreign currencies and a reduction in the list of drugs for which the trade markup is limited.

On October 17, 2008, the government adopted Resolution #995 “On measures to stabilize prices for medicines and medical products,” according to which drugs included in the “National List of Essential Medicines and Medical Products” can be sold with a maximum wholesale markup of 15 % and retail - 35%. Wholesale and retail markups on medicines sold by state and municipal pharmacies should not exceed 10%. On December 5, 2008, the decree was suspended by presidential decree #1139/2008, and on February 11, 2009, it was restored by the Constitutional Court. According to the State Inspectorate for Price Control, from October 17, 2008 to January 30, 2009, wholesale prices for medicines increased by 35-115%, retail prices by 8-132%. According to the State Statistics Committee, in January of this year the cost of medicines and medical goods increased by 16.3%, in February - by 7.3%.

On Friday, the Ministry of Economy published draft amendments to Resolution #955, which provides for taking into account exchange rate revaluation in the cost of imported drugs that are subject to state price regulation. To recalculate the price of imported medicines, it is proposed to use a formula that includes the official rate of the National Bank and the average rate of the interbank foreign exchange market.

According to Deputy Minister of Economy Viktor Panteleenko, the ministry decided to meet importers halfway. “Sales in Ukraine take place exclusively in hryvnia, and the import price is recalculated at the official NBU rate. But due to the fact that the NBU rate is significantly lower than the average rate on the interbank market, where drug importers buy currency, this leads to their losses,” says he. “This could even lead to a shortage of necessary drugs on the domestic market, which will cause an even greater rise in prices.” Therefore, according to the official, the Ministry of Economy suggested that importers recalculate the cost of medicines at a “specially adjusted rate”, which is “the average between the interbank rate and the NBU rate” at the time of purchase of the goods. The official NBU exchange rate is 7.7 UAH/$, while the weighted average hryvnia exchange rate on the interbank market, for example, on March 13 at 15.00 was 7.99 UAH/$.

Drug market participants note that changing the formula will only partially solve the industry’s problems. “Of course, such a step will reduce our losses, but we purchase currency for the purchase of medicines at the interbank exchange rate, and we are offered to carry out recalculations at a certain average rate,” says Elena Shumaeva, development director of Pharmacy Holding. “This will partially unblock our work. To finally stabilize it, it is necessary to reduce the list of drugs that are subject to state regulation, as the government previously promised,” says Natalya Shutyak, commercial director of the Hormonal Drug Pharmacy.

Yuriy Kommersant-Panchenko

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