Medicines may rise in price due to tightening pharmacy regulation

Deputies and senators from United Russia proposed tightening the regulation of pharmacies: they want to install the threshold of dominance of the pharmacy network and limit the promotion bonuses. Pharmacies believe that this can lead to a jump in prices by 5–7%.

What's happened

The bill submitted to the State Duma (among the authors - the leader of the United Russia faction Sergey Neverov and the deputy head of the State Construction Committee Andrei Isaev) tightens the regulation of the pharmacy market.

• Deputies propose to install the threshold of dominance of the pharmacy network on the market of 20% for municipalities and cities of federal significance.
• Bonuses of pharmacies for promoting goods want to limit 5% (now - up to 60%), and compensation that the distributors pay pharmacies in case of loss or damage to drugs - cancel.
• Pharmacies will be required to provide buyers with information about the availability and minimum price of drugs.
• A register of pharmaceutical workers is created (by analogy with the register of medical workers).

“The retail trade market, despite the still formally low concentration level (the largest pharmacy network in 2018 occupied no more than 6% of the all -Russian market), is quite consolidated to dictate the conditions for manufacturers and suppliers of drugs both domestic and foreign.”

From the explanatory note to the bill

They talk about it

The market participants did not appreciate the initiative of deputies. The general directors of the pharmacy “Neofarm and the Capital” of Evgeny Nifantiev and the Retail unit “36.6” Alexander Kuzin told Vedomosti that almost half of the sales in pharmacies (40%) - and so drugs from the list of vital and most important drugs, the prices of which are controlled by the state.

Restrictions can lead to price growth and to a deficiency of individual drugs: bonuses from manufacturers are laid in the retail prices of drugs, and if their threshold is significantly reduced, this will lead to a jump in medicines by 5–7%, says Nifantiev.

Bonuses from manufacturers give almost a quarter of the revenue of many pharmacies, says Anton Buzdalin, general director of Eapteka.ru. If the restrictions are introduced, the quality of service will decrease, and the prices for a number of drugs will increase.

If any drug, due to new restrictions, will become unprofitable to the manufacturer, distributor and pharmacy, it will leave the market, Kuzin says.

According to analysts, the prices of medicines in the case of the adoption of the bill will increase by 10-15%.