During 2018, medicines have increased in price by almost 19%. This year, experts of the pharmaceutical market assert, the prices will not stop at what has already been “achieved” since suppliers in their contracts with pharmacies laid down additional 4-20%. At the same time, pharmacists are on strike ‒ representatives of small and medium businesses, who claim that they are being destroyed by large pharmacy chains. And the overwhelming majority of citizens, who do not have super incomes, but do not fall under the program Affordable Medicines, gradually lose the opportunity to be treated, because it is expensive for them. Opinion decided to find out if there is a way out of this dead end.
The Affordable Medicines program, for the implementation of which a billion UAH was allocated this year, is a drop in the sea, which does not solve anything, given the amount of money that Ukrainians spend every year to buy medicines. Experts estimate this amount to 89-90 billion UAH. Subtracting from this amount what is purchased at the expense of the state budget, we will see how many Ukrainians pay for their treatment from their own pockets.
Moreover, the approach to Affordable Medicines, when the Ministry of Healthcare believes that the program should include only the cheapest medicines, can hardly be considered correct. If we are talking about real concern for the health of the citizens of a country, then it is important to give these citizens the opportunity to purchase the most effective medicines. The only serious plus, experts say, is at least some kind of reimbursement, that is, a refund of a certain part of the cost of the medicines. And this program does not cover all those, who need systematic treatment and do not have the money for it. If we consider that medicines are becoming more expensive all the time, the situation looks extremely sad. According to the founder of the Ukrainian medical expert community, Dmytro Podturkin, since 2016, the price of medicines in Ukraine has risen by 54%. And last year, medicine prices twice outstripped the inflation, adding up to 18.6% over the course of the year. What is behind it ‒ objective reasons or, as often happens in our realities, the whims of monopolists, nobody cares.
The pills are not getting cheaper from close attention
True, in December last year, Prime Minister Volodymyr Groysman, noting the rise in prices for individual medicines, talked about the monopoly collusion that provokes this process. He said that large chains merge, raise prices, and small chains cannot compete with them since they do not have direct contracts. He returned to the issue of medicines also at one of the meetings of the Cabinet of Ministers this year ‒ at the end of February, noting that people find it difficult today, especially those, “who have low incomes and chronic diseases”, because in that case “a person needs to constantly receive medicines in order to live.”
And once again boasted the program Affordable Medicines, which will soon be transferred to electronic prescriptions, the numbers of which will be sent to the patients’ mobile phones. But he was silent about the fact that medicines continue to rise in price, as well as about monopoly collusion, or even some other reasons.
True, the problem was perceived by the presidential candidates, which indicates perhaps its sharpness. Without naming them, I will only say that one promises to establish state regulation of medicine prices ‒ so that Ukrainians do not go to pharmacies, as to museum. Another states that last year the cost of heart disease pills, painkillers and antipyretic medicines increased by more than 20%, and the authority “wants the people either to die, or give all the money for medicines or to be treated with psyllium.” By the way, according to the State Statistics Service, in the last month alone, prices for medicines increased in Ukraine by 2%, and it was antipyretic and anesthetic that rose the most.
Moreover, the resuming of state control over the quality and price of medicines is an issue that attracts more than one candidate, as well as intentions to destroy corruption schemes in the pharmaceutical industry, which, in the opinion of another politician, will reduce the cost of medicines by half. In order to finally resolve the medical issue, it would also be good to “criminalize the counterfeiting of medicines”.
Is gas the one to blame for all the troubles?
In the expert environment, several reasons are now noted that have led to an increase in prices for pharmaceuticals. Among them, there are already familiar to the Ukrainian price increase of natural gas and electricity, and fluctuations in the hryvnia exchange rate, to which we are accustomed to writing off all the problems. For example, Ruslan Svitlyi, CEO of “Farmacia” chain considers that energy carriers (which are one of the weighty components of the cost of medicines), the dynamics of wages and the instability of hryvnia are to blame. According to him, a large number of pharmacies work in the market, so they cannot agree on something, and this is the key to high competition between them.
The Pharmacy Professional Association of Ukraine explains that the upward fluctuations in the prices of medicines are primarily affected by the fact that manufacturers of medical preparations constantly change their selling prices. And not only domestic, which will nod at the same energy and expensive raw materials that they buy abroad, but also the foreign. Pharmacies, as it seems, are not to blame, because the mark-up remains stable. By the way, according to the Pharmacy Professional Association of Ukraine Director Volodymyr Rudenko, there is another factor that makes medicines prices grow. We are talking about the impact of the government program Affordable Medicines: since the medicines that are included in this program are getting cheaper, the market raises the prices of other medicines, which makes them inaccessible for those patients who cannot take advantage of the Affordable Medicines.
About the monopolization of the pharmaceutical industry, only individual deputies talk. Thus, according to Iryna Sysoyenko, the Deputy Chairman of the Parliamentary Healthcare Committee, the problem is that several domestic companies have a large number of pharmacies in the country, so nobody talks about the fair competition. According to her, further strengthening of the role of the chain medicine trade in our country creates the basis for large chains to absorb their weak competitors, and having real leverage in the market, such chains can easily set the terms to the consumer, both by limiting one’s choice and by adjusting the price, guided by own appetites.
Help small entrepreneurs-owners of pharmacies
It turns out that not only those, who have to regularly buy medicines suffer from such a situation in the market but also small entrepreneurs, who are trying to defend their right to exist. It was they who, at the end of February, came under the walls of the Verkhovna Rada, demanding to urgently consider and adopt the draft law № 9495 “On Amendments to the Tax Code of Ukraine and some other legislative acts of Ukraine to improve state support for the development of small business in the pharmaceutical retail market”.
“We are not asking anyone for anything, just want to rectify the unfair situation that was the result of the adoption of the law on amending the Tax Code, including improving administration and viewing certain taxes and fees (№ 2628-VIII), with which the Amendments were made to another law on the use of registers of settlement operations (cash registers ‒ E.D) in the sphere of trade, services and public catering,” the chairman of the board of the All-Ukrainian Public Association “Mykolayiv pharmaceutical association “FarmRada” Olena Prudnikova said. “This law № 2628-VIII, after it was signed by the President in December last year, came into force on January 1 this year, but a transitional period for individual entrepreneurs-owners of pharmacies so that they can bring their activities in line with new requirements was not provided. Therefore, on the verge of closing, first of all, those small entrepreneurs, who work in the villages, as well as cash registers and their maintenance, are expensive for them.”
It is also difficult for small entrepreneurs in cities, Olena Prudnikova notes, because they also do not have the ability to compensate for the costs, associated with the establishment and maintenance of cash registers, “because the increase in retail mark-ups will lead to the loss of competitiveness of a small pharmacy company”.
If nothing is changed, they believe in FarmRada, a small business that works in the pharmaceutical market will be completely destroyed.
“At the same time, the law № 2628-VIII will allow large pharmacy chains, of which we have three and one of them, according to the Antimonopoly Committee, releases 76% of medicines, monopolize the market and lead to further rapid increases in the prices of medicines for the population, and the access to medicines in villages may, in general, be excluded”, explains the head of this organization. “Today we have 4,000 individual entrepreneurs in Ukraine, maintaining 6,000 pharmacies, and half of the entrepreneurs and these are 3,000 pharmacies belonging to our association, so I know exactly what I’m talking about. Previously, the only thing that gave us the opportunity to somehow compete with large chains was the fact that we wrote a sales receipt without spending money on the acquisition and maintenance of cash registers. Now a lot of pharmacies are closing because they are not able, firstly, to buy a cash register, secondly, the software is very expensive, and thirdly, you also need to have an accountant, whom you must pay salary. Yes, and we have imperfect legislation on Registers of Payment Processing: if, by chance, you put a full stop or comma ‒ and that’s all ‒ you’ll get a fine. Therefore, this is another mechanism that the monopolists will use in order to destroy us completely through taxes. Inspections of those business entities that the large pharmacy chains were interested in before have already begun.”
That is why Olena Prudnikova is convinced, it is urgent to pay attention to the processes of monopolization of the domestic market of retail sales of medicines, adopting the relevant law on its de-monopolization, as well as “to legally prohibit marketing agreements in the retail sale of medicines as such that lead to higher prices for medicines and are the basis for unfair competition from pharmacy chains”.
In the country, there is a passive euthanasia
But in the All-Ukrainian Council for the Protection of the Rights and Safety of Patients, they consider that the solution to the problem requires a completely different approach at the state level when the patient should not be bothered at all about the cost of these or those medicines. “What about us? You have a billion hryvnias for affordable medications and rejoice,” the president of this public organization, Viktor Serdyuk resented when he heard the topic of conversation. He has been engaged in the fate of seriously ill Ukrainians for more than a dozen years, but what about the fact that we buy medicines for our money. And these are still 80 billion? That is, 90% of all expenses for medicines go out of our pocket. So what affordable medicines are we talking about? Who are these medicines affordable for?”
While in Ukraine, Viktor Serdyuk said, they dispute whether the medicines are affordable or not, expensive or cheap, in countries, where they care about the health of their citizens rather than the size of their own wallets, 90% of all expenses for medicines are compensated by the state. The mechanisms may be different ‒ either by the state directly, or through insurance companies, or somehow, but the result is the same: local people are not shocked by the prices in pharmacies. The executive director of the Association of
International Pharmaceutical Manufacturers, Volodymyr Ihnatov also points this out. According to him, the price of prescription medicines in European countries is of no interest to anyone, because the reimbursement system works well there, therefore, only two participants of this system are engaged in these problems: the state and the organization (most often some kind of foundation) that pays for these medicines.
“Patients in Poland, Bulgaria or, let’s say, in Romania,” continues Viktor Serdyuk, “do not argue with anyone about the cost of medicines, because there are two officials, discussing this: the Minister of Finance and the Minister of Healthcare. There are discussions with manufacturers or suppliers. Let’s say, I remember how in one of the countries there was a scandal when the ambassador of the other country had claims that medicines of their manufacture, and it was a question of very expensive medicines for the treatment of cancer, did not fall under the compensation program. The argument was simple: people have the right to access medicines that save their lives, no matter how much they cost.”
In addition, in the EU countries, pharmacies not only provide medications according to the prescriptions of doctors but also provide certain services to their visitors on the spot (blood pressure measurement, blood test for cholesterol, sugar, hemoglobin, etc.). They also help the Ukrainians ‒ if they have a health insurance policy, if they need such help when traveling abroad. “The only problem, if you don’t know Polish, I personally faced it when I had to go to doctors and pharmacies in this country,” Olena Ustenko from Kyiv told to Opinion, “is to find a pharmacist, who speaks English. And it is not so easy.”
In Ukraine, for now, the expert explains, people often are left alone with their problems, not having the money to solve them. The All-Ukrainian Council for the Protection of the Rights and Safety of Patients is often asked about this. “A few days ago, the woman with oncology reported that for the third month, because of various bureaucratic nuances, she was not given the right medicines,” Serdyuk continued. “What is happening is nothing more than passive euthanasia. You see, there are two types of euthanasia: a full syringe and an empty one when a person is killed by not being treated. Do they, excuse my sharpness, but it is painful for me, “heal” the nation?! To change the situation, you need to make the life and health of our citizens a real priority for the state, and not a declarative one, as it is now.”
And knowing our realities, it is difficult to rely on this, so for now, the Ukrainian will have to take care of the cost of treatment on their own. In order to make this process even a little cheaper, several important factors should be taken into account: to buy non-advertised medicines (the price of such products usually don’t include advertising costs), the generics, which are based on the same active ingredient. And find a balanced approach to the appointments of the doctor, verifying them with evidence-based medicine, so as not to buy and drink extra pills.
Text by Larysa Vyshynska