PILLS UNDER CONTROL

The government of Azerbaijan has adopted an important decision regarding the regulation of the prices of medicines. Thus the Cabinet of Ministers has included registered medications and services related to their commissioning "On the list of goods (works, services), the prices of which are regulated by the state". After this, the prices of medicines will be regulated by the state. 

It has to be said that this decision was only to be expected, taking into consideration the sufficiently clear instructions by President Ilham Aliyev after a group of businessmen had taken advantage of the devaluation of the manat to jack up the prices of medicines. The percentage of the rise in this case was often higher that the level of devaluation. But the medicine market is a sufficiently sensitive one and any changes to it are the most noticeable. The consumers on this market are pensioners and the sick who are forced to take a certain amount of medications regularly and so forth. They could not just quietly overlook such a price hike, and indignation was heard at the highest level.

Speaking at the session of the Cabinet of Ministers devoted to the results of social and economic development in the first quarter of 2015, President Ilham Aliyev stated that, on his instructions, strict control will be organised in all chemists to prevent the raising of prices. "In some cases, the prices of medicines are being inflated several fold, at times tenfold. This means that complete arbitrariness and anarchy were prevailing here. Everyone sold medicines at the prices they chose. People were forced to buy them, shelling out considerable amounts, in particular pensioners who are most in need of medicines," the head of state noted.

Added to this, in some cases very poor quality medicines are being imported into the country. All this has become the last straw for our patience so the president has ordered the ministries of health and economic development to take the situation in this sphere completely under their control. "At the same time, I have charged the government with exercising strict control and at the present time a new mechanism is being developed. I hope that in a few months' time, we shall be able to apply this mechanism, and people should see this in everyday life. The prices should not rise. I believe that there will a sharp fall in the cost of some medicines," the head of state added.

It should be noted that the government's attempts to improve the situation on the medicine market could already be observed at the beginning of March when it submitted to parliament for consideration a package of amendments and additions to the law "On medical preparations".  In accordance with amendments proposed, a form of control stamps, registration of them, rules for their use and access, as well as payment for them will be specified by the relevant body of executive power. It will also be responsible for the manufacture of these control stamps and  payments for their purchase will be paid into the state budget.

On the basis of the amendments adopted by the deputies and then approved by the country's president, the Tariff (price) Council has been charged with ensuring the state regulation of the price of medications on the country's territory within three months. Thus, it should specify five to 10 countries from which medicines can be imported, and the basic price of these medications in Azerbaijan will be established based on the producers' prices. 

The wholesale price of medicine will be formed as a result of an extra charge on the basic price, and the retail price by an extra charge on the wholesale price. Medicines made available on prescription will be marketed at the lowest prices established in the producer countries, but the prices of medicines sold over the counter will be higher. As medicine prices go up on the world market, the added coefficients on wholesale and retail prices in Azerbaijan will be reduced. Correspondingly all the approved prices will indicated on the medicine's packaging.

According to the data of the president of the Centre of Economic and Social Development (CESR), Vuqar Bayramov, the prices of similar or the same medicines in Baku cost double the price charged in Turkey on average, and are 2.5 times higher than those charged in Iran. The prices charged in the capital of the Azerbaijan Republic are also higher than those in other capitals. These factors are evidence yet again that the pharmaceutical market in Azerbaijan is in need of strict control and regulation," the expert noted.

In his view, the decision to regulate medicine prices on the part of the Tariff Council will allow an upper limit to be established on the prices of the various medications. This practice is widely used in many countries, including those with a developed market economy like the USA. The economist said that a positive element of administrative regulation is the prevention of price hikes and simultaneously the facilitation of price reductions. "To achieve this, transparency is needed in revealing the cost price of each medication. But all these manipulations need to be conducted in such a way that the profits of the entrepreneur importing the pharmaceutical products are not unduly harmed," V. Bayramov added. 

At the same time, the experts fear that in the attempt to retain high profits, the entrepreneurs may resort to another loophole, namely buying medicines of dubious quality with a low cost price. As the head of the Inspectorate for Medicines' Quality Control of the centre for analytical evaluation of medications at the Health Ministry, Parviz Azizbayov, reported earlier, unsuitable medicines are being imported into Azerbaijan from different countries.

He said that these medicines do not undergo state registration in Azerbaijan. "It can happen that medicines produced for the domestic market in some country are illegally imported into Azerbaijan and they do not undergo state registration. These medicines are imported from Turkey, Russia, Poland and Romania. When such medicines are discovered, they are removed from sale," As far as the medications from India that are filling the market are concerned, which are markedly cheaper than European ones, according to P. Azizbayov, they are produced in factories meeting World Health Organisation standards.

"Several years ago the bulk of the medications on the market were Indian. But, as a result of the measures adopted, only imports of certified medicines are now permitted, and today their share in the overall volume is 4 per cent." We would like to note that in the Cabinet of Ministers' report for 2014 it says that 4563 nominations of medications had undergone state registration in Azerbaijan.

At the same time, the experts and deputies and the government are of the opinion that the best way to reduce medicine prices on the domestic market would be to boost the production of medicines in Azerbaijan. Thus, the chairman of the Milli Maclis (parliament) Committee for Social Policy, Hadi Racabli, stated that measures needed to be adopted to provide an incentive to production inside the country. By way of a simple example of this issue, the deputy referred to iodine, which is also imported, while Neftcala can produce it since it has the necessary basis. 

Precisely local medicines with a low cost price, but of high quality could create a healthy competition environment on the market and reduce prices as well dependence on imports. In other words, besides strict regulatory measures, the government needs to think about mechanisms to stimulate the reorientation of the medications market on local production, but, we reiterate, only after ensuring that these medicines are produced to meet international requirements and standards.