"State regulation of medicine prices will make the black market more active "

access_time2019-09-18 15:06:31

State regulation of medicine prices poses serious risks, Executive Director of the Association of Pharmaceutical Companies Irakli Margvelashvili says  commenting on the Health Ministry’s intention to  introduce partial regulation of drug prices.


According to Irakli Margvelashvili, there is no information about how the state is going  to regulate the pharmaceutical market, but if the topic is still on the agenda, there are several different ways to regulate prices.

“For example, supplier price fixing as  80-85% of drugs are imported and their cost largely depends on the exchange rate of the national currency. There is also a model that limits the profit margins of pharmaceutical companies as well as possible  price hikes. Georgia’s pharmaceutical market is free, but after the drug expenditures increased significantly, the issue has become urgent,” Executive Director of the Association notes.

In Margvelashvili’s words,  many countries regulate prices for medicines, but we should adopt a model of the countries with similar development.

 “You can’t compare Georgia with Germany or the Czech Republic as they are very different   from it, namely  the market structure, medical and insurance systems, not to mention the level of economic development and population income. We should be compared with neighboring countries. For example, drug price regulation was introduced in Russia and Azerbaijan and led to disastrous results as many vital drugs became scarce and disappeared from the market. The regulations were adopted without consultation with  the private sector. Their example shows that price regulation is very risky, ” Irakli Margvelashvili explains.

 According to him, the Georgian legislation was adopted in 2009 and the situation in the country is unique in this regard. Before taking  price regulations, everything should be very accurately and thoroughly analyzed, primarily possible  consequences and risks.

 “Some  drugs will disappear from the market and will be replaced  by cheaper, but lower-quality products. These factors can cause harm to the health of patients.  To avoid risks, everything should be very accurately analyzed before deciding on state regulation of drug prices, ” Margvelashvili notes.


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