The proposed ban on discounts to pharmacies from manufacturers and distributors could lead to a significant increase in the price of medicines and monopolization of the pharmaceutical market. According to experts and small domestic producers of medicines, this amendment from Darnitsa is aimed primarily against them, as it will limit the ability to offer discounted products cheaper than pharmaceutical giants. In turn, this will lead to monopolization of the market, excessive profits for pharmaceutical giants and a significant increase in prices for medicines for consumers.
Why is Darnitsa lobbying for the ban on discounts?
The main purpose of the plant's lobbying for the abolition of the possibility for manufacturers to provide discounts to pharmacy chains is likely to create favorable conditions for the expansion of its own pharmacy chain and the gradual takeover of smaller market players.
This approach will not only limit the opportunities for small producers, but will also create conditions for the dominance of large companies that can dictate their prices and rules of the game.
It is worth noting that Darnitsa has already started preparing for the monopolization of the market and creation of its own pharmacy chain. These intentions were confirmed by Kateryna Zagoriy, Director of the Board of Directors of Darnitsa Pharmaceutical Company. According to her, the pharmaceutical giant plans to combine classical pharmacies with a doctor's office.
“The idea to create a one-minute clinic arose when our team came to help people with medicines in the de-occupied territories of Kyiv and Kharkiv regions,” she told Forbes in an interview .
Darnitsa plans to open its first pharmacy in two months. In other words, the pharmaceutical giant has planned to take over the market just in time for the adoption of legislative changes that will allow it to strengthen its position in the market and definitely allow it to make excessive profits.
How will this affect consumers?
Experts predict that the abolition of discounts will increase drug prices for the end consumer by at least 15%. This is confirmed by the experience of 2022, when due to the suspension of marketing agreements (when manufacturers and distributors were temporarily deprived of the opportunity to provide discounts to pharmacies), the margins of pharmacy chains increased sharply from 14% to 22%.
According to analytical company Proxima Research International, it is the manufacturers who form almost 75% of the final cost of a drug, and amendments that limit competition will increase pressure on pricing. In other words, ultimately, drug prices will increase for Ukrainians, including the socially vulnerable - pensioners, people with disabilities and chronically ill. And pharmaceutical giants like Darnitsa will make excessive profits by taking the last of Ukrainians' money out of their pockets.
Experience of European countries
Studies show that in 78% of cases, prescription drug prices in Ukraine are now lower than in the EU. In the OTC segment, prices in Ukraine were lower in 84% of cases. This is due to the lower involvement of the state in financing the costs of medicines in Ukraine, which reduces their final cost for the consumer.
However, in EU countries, the reimbursement system allows patients to receive a significant part of medicines at a reduced price or free of charge. For example, in Poland, more than 4.2 thousand medicines are subject to reimbursement, while in Ukraine, only 544 items are covered. This approach helps to reduce the financial burden on patients and ensure greater accessibility of medicines.
Experts emphasize that instead of introducing restrictions that weaken competition, the state should expand reimbursement programs. This will make medicines more affordable for the population, while ensuring stability for the pharmaceutical market.
The proposed amendments lobbied by Darnitsa could radically change the structure of the pharmaceutical market of Ukraine, raising the prices of medicines and making it more difficult for millions of Ukrainians to access them.