"Excessive regulation has never led to positive results": Oleg Klimov on the reform of the pharmaceutical market (VIDEO)

Ukraine is preparing changes in the regulation of the pharmaceutical market. The Ministry of Health has proposed to limit marketing agreements, ban retroactive bonuses and introduce electronic trading between manufacturers.

However, these initiatives have raised many questions - members of parliament and representatives of the pharmaceutical business have emphasized that any changes must take into account the interests of all market participants and comply with European norms.

To find a compromise solution, the Verkhovna Rada decided to develop a separate bill. For this purpose, on January 30, a constituent meeting was held in the subcommittee of the Verkhovna Rada Committee on Public Health, where members of parliament, manufacturers, pharmacy chains and pharmaceutical organizations discussed further steps.

The Chairman of the Board of the "All-Ukrainian Pharmaceutical Chamber", a member of the Council of the International Pharmaceutical Federation, a member of the American Pharmaceutical Association, Oleg Klimov, in an interview with UNN told how the regulation of the pharmaceutical market works in the EU, why it is important to avoid excessive state intervention in pricing processes and what mechanisms should be borrowed from European practice.

- Currently, a working group has been created at the Verkhovna Rada Committee on Public Health, which is to develop a comprehensive bill on the regulation of the pharmaceutical market. In your opinion, how justified is this initiative?

This bill on the regulation of the pharmaceutical market has long been overdue. Because if we take the experience of European countries, countries with an effective economy - such laws were adopted many years ago as fundamental, on the basis of which the healthcare system was built, based on investment attractiveness. Therefore, it is impossible to consider the development of this bill as a fragment of some healthcare system that we have in Ukraine. In our deep conviction, it must be part of the general healthcare system and primarily meet the interests of patients.

Regarding the initiatives, the fact is that we have been debating with members of parliament, with the Ministry of Health for more than one year that in Ukraine in the healthcare system there is an urgent need for not fragmented, but systemic reforms. The problem is that one of the biggest problems in Ukraine is that all the reforms that have taken place in the healthcare system throughout the period of Ukraine's independence have been exclusively fragmented in nature. A unified system has not been built, because each minister had one term. We know that the minister is a political figure, and the reforms that began - were forgotten with the arrival of the next one, no one reported on them, and they started from scratch again, and then we say: why does it work in that country, and in Ukraine it doesn't work. Because certain fragments are pulled out of one or another system, and every system has the main fragments thanks to which it works.

Therefore, as we, all participants in the pharmaceutical market, feel today - all these changes that are currently being initiated by various political forces, members of parliament - are related solely to one thing: so that the cost of medicines in the pharmacy is affordable for the patient, so that the patient does not grab his heart when he sees this cost.

- How important is it for regulation to include all links in the pharmaceutical market - from manufacturers to pharmacies? Is there a risk that overly strict regulation of one part of the market can simply shift the financial burden to another?

It is no secret to anyone, and Ukraine is no exception, that the cost of prices for medicines, for any goods is formed at the manufacturing plant, whatever it produces. We take the European model as an example, because Ukraine has undertaken to adapt all current legislation by 2025 to comply with European standards, the requirements of European Union directives. In the EU, these approaches have a dual character.

Currently, the changes and proposals we see are far from the truth. Therefore, if we talk about price regulation, the patient is only interested in what he paid.

I will give you a simple example of the German model, according to which our lawmakers propose to develop a number of regulations, laws that would regulate the pharmaceutical market. For example, in Germany, a drug costs 100 euros at the factory plus various markups (distributors, pharmacies, pharmaceutical services, medical technology assessment), and on the pharmacy shelf this drug costs 137 euros 37 cents, but the patient pays no more than 10%. Because in Germany and in the countries of the European Union there is such a concept as compulsory insurance. In our case, the entire financial burden falls on the patient, and therefore our patient, who comes and sees this price, gets sick. This is the first question.

The second question - we started with it - price formation. The price is not formed at the link of any one market participant - it needs to be a systematic approach from the manufacturer, from the importer, the distributor and to the pharmacy. In the European Union, the state approves the prices to the manufacturer. In one country - twice a year, in another - once a year. But the manufacturer who approves the price in the state, opens its structure: what is the cost of production, what is the investment component, how much marketing costs are invested in the price. That is, the state has approved the entire price structure, then the pharmacy legally receives all marketing agreements, the manufacturer legally pays them. And all participants in the pharmaceutical market are on equal terms, because there is a transparent system for everyone. We don't have any of this.

Our proposal is that we analyze the analytical materials of the legislation of the European Union, where we show on the example of each country how it works. But we need to decide which country's model we are taking. After all, it is impossible to pull out one fragment from different systems, then it will definitely not work, because the system works.

- How do you assess the changes proposed by the Ministry of Health at the meeting of the Verkhovna Rada Committee on Health regarding marketing agreements and retroactive bonuses? Should they be banned, or is a more balanced approach still needed?

These two proposals have a right to life. But in the format in which they were brought to the public, they work completely differently in the European Union. In the EU, the system of retroactive bonuses is widespread, all the rules are regulated. There is no such thing as "no - it is not allowed, we do not like it", all the elements work, but as a component of a certain system.

- You have repeatedly emphasized that Ukraine should build a system of regulation of the pharmaceutical market according to European norms. What European practices do you think should be taken as a basis?

Any house is built on a foundation. The foundation of what we are talking about is the existence of a law on self-government, pharmaceutical professions, medical professions. Further - about pharmaceutical activity. Further - the law on medicines, it is with us, but has certain distortions in the part that they try to include missions that are not inherent in this type of law. This law cannot regulate economic activity, it is spelled out by the relevant laws on pharmaceutical activity.

Further, if we talk about the opening of pharmacies: we see pharmacies somewhere every half a meter, and somewhere there is none. Therefore, the role of local self-government is very large there, and local self-government makes a local request to business: in this region, a compounding pharmacy or a sales pharmacy is needed. We still lack such an approach that works in Europe - the classification of pharmacies by type of activity. We generally lack such a type of pharmaceutical activity as a pharmaceutical broker.

In comparison, for example, with Germany, we do not have pharmacy cooperatives. In the EU, the hospital pharmacy has a special status. So, there are very many issues, and the most important thing is that we have a lot of opportunities if we introduce European standards, and we are now working on proposals for the Verkhovna Rada, for the ministries - if this is taken into account, then in 4-5 years our pharmacy will be unrecognizable. This will be a pharmacy with a different face and a different list of services that can be obtained in the pharmacy. This is what we dream of and work on.

- Is there a risk that excessive intervention in the regulation of drug prices will lead to a shortage of certain drugs?

Excessive one-sided regulation and the lack of a financial model to cover what the regulator regulates has never led to positive results. We remember the regulatory systems that existed earlier - this is a 100% deficit, because you can regulate what you financially influence. If you do not financially influence this type of business, then there must be clearly written norms of its conduct, and regulation there is not relevant.

- Will you participate in the further work of the working group at the profile committee of the Verkhovna Rada to ensure the adoption of truly effective legislation?

We, as a public organization, have been invited to participate in such a group at the Verkhovna Rada Committee on Public Health. We have not been involved in the Ministry of Health. But we work with everyone in terms of familiarizing them with the experience of regulating European countries.

- How do you assess the prospects for the adoption of a new bill? Is there a risk that the law will be passed hastily, without taking into account all the nuances? Is there a possibility to find a compromise solution that will satisfy all market participants and at the same time not worsen the availability of medicines for Ukrainians?

I'll start with the end, because Vanga won't answer the first question for you. We cherish the hope that this bill should be adopted taking into account all the proposals that really reflect the European regulatory framework. Ukraine does not have to adopt the experience of any particular country. But we must achieve that our legislation corresponds to one or another directive in terms of regulating pharmaceutical activity. This is the first.

Regarding whether they will adopt it or not - this is not my mission, I cannot comment on this, this is the mission of our members of parliament. Therefore, we, like our entire society, cherish the hope that we have to adopt comprehensive, holistic laws. Our task is to convince our officials, members of parliament, that this approach precisely corresponds to the norms of the European Union in terms of regulating pharmaceutical activity.