The Ministry of Health has presented the concept of changes in the regulation of the pharmaceutical market: what was agreed upon at the Verkhovna Rada Committee

The Ministry of Health has presented the concept of changes in the regulation of the pharmaceutical market: what was agreed upon at the Verkhovna Rada Committee

Kyiv  •  UNN

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The Ministry of Health presented the concept of reforming the pharmaceutical market with electronic bidding and regulation of drug prices. The Verkhovna Rada Committee supported the idea of e-trading, but rejected the restriction of discounts and the ban on retro bonuses.

At a meeting of the Verkhovna Rada Committee on National Health, Medical Assistance and Medical Insurance, Minister of Health of Ukraine Viktor Lyashko presented a concept for reforming the regulation of the pharmaceutical market. The Ministry of Health's proposals included reducing the price of medicines through electronic trading between manufacturers, limiting the amount of discounts and banning retro bonuses. Not all of the proposed changes were to the liking of MPs, UNN reports.

Electronic trading as a basis for price formation

One of the key proposals of the Ministry of Health was to determine the lowest price for medicines by active ingredient through electronic bidding on the Prozorro. Market platform. According to this concept, manufacturers will offer their prices for medicines included in the National List of Medicines during the bidding process. After determining the cheapest option, pharmacies will be obliged to have it in stock.

Once a year, Prozorro. Market determines the indicative price once a year. That is, all manufacturers of medicinal products with a certain active substance included in the national list, and there are 455 of them today, we are ready to consider and potentially expand the list to increase the number of medicinal products that we regulate. These drug manufacturers come to Prozorro. Market once a year and bargain for the selling price of their medicines. The manufacturer who showed the lowest price for this active substance at the auction wins in this particular case, and then every pharmacy that has a license to retail medicines is obliged to have this drug in its assortment for sale at this price, which was traded on Prozorro. Market, taking into account the markups applicable to the distributor and the pharmacy chain

- Viktor Lyashko explained.

According to him, the key task of the Ministry of Health is to make the cheapest drug available in every pharmacy in the country.

And the second issue is that it should be offered to people when they make a request. They (the pharmacy - ed.) should say that, according to state regulation, there is such a drug at the lowest price with such an active ingredient. In the future, a person has the right to choose any other drug, but this one must be offered. In our opinion, this will lead to the fact that people will understand about the cheapest medicines that are in that drug

- Viktor Lyashko explained the position of the Ministry of Health.

Members of the relevant parliamentary committee supported this proposal, as it should encourage manufacturers to compete. This is important because they account for up to 70% of the cost of medicines.

Now this (the Ministry of Health's proposal - ed.) applies more to pharmacy chains and distributors. And from what we have been provided, I see that the player who forms 70% of the price (the manufacturer - ed.) is not regulated at all so far. This is what I see at the moment,

- said committee member Victoria Wagner.

Overall, the committee approved the proposal to introduce competition between producers, but MPs noted the need to clarify technical details, including the frequency of bidding and mechanisms for responding to currency fluctuations that affect pricing.

Discounts cannot be withdrawn

Another topic of lively discussion at the meeting of the Verkhovna Rada Committee on National Health was the Ministry of Health's proposal to regulate marketing agreements between manufacturers and pharmacy chains. These agreements allow pharmacies to provide discounts to consumers, but, according to the Ministry of Health, markups under such agreements should be regulated by a resolution of the Cabinet of Ministers of Ukraine. This, according to the Ministry, will help reduce price manipulation and ensure the availability of medicines.

We are talking about marketing and clear rules for this marketing, which should include EU industry standards,

- said the Minister of Health.

Nevertheless, the MPs did not support limiting the size of discounts, citing European experience, where marketing agreements are regulated by the practice of proper or improper promotion. According to them, the EU does not have clear legislative norms on this issue, so the MPs believe that Ukraine should also follow a more liberal approach. In their arguments, they referred to the 83rd EU Directive on the regulation of the pharmaceutical market, which does not impose any restrictions on the scope of marketing agreements.

Moreover, the MPs emphasized that small pharmacies in villages and frontline areas should not be forgotten in the issue of contractual discounts. Restricting them could lead to the closure of such vital infrastructure.

Has the impact on small pharmacies in villages and remote regions, especially those near the frontline, been taken into account? I mean, there are pharmacies there with very minimal profitability. How will we deal with this situation? Or who will take responsibility if there is no delivery of medicines to these regions? Because, firstly, there is a shortage of personnel and, secondly, as I understand it, if pharmacy chains do it at the expense of marketing payments, who will do it?

- said Victoria Wagner.

The MPs also noted that they do not trust the regulation of this issue by the Cabinet of Ministers, as they often get "not what they expected.

Discussions on "retro bonuses"

The issue of abolishing reverse price adjustments or "retro bonuses" - a mechanism that allows manufacturers to provide pharmacies with discounts on previously purchased goods - was also considered.

"Retro bonuses work, for example, if a batch of purchased medicines expires or is sent for re-registration. The Ministry of Health proposed to abandon this practice, but MPs rejected the idea. According to them, "retro bonuses" often help to resolve situations with the disposal of expired or low-quality medicines, and also reduce risks for pharmacy chains.

Full-fledged law

The committee members agreed that the pharmaceutical market has serious problems and gaps that need to be addressed systematically. Mr. Lyashko emphasized that the introduction of transparent electronic trading mechanisms will help to avoid artificially inflated prices, which is often the case due to the lack of competition. However, during the discussion, the MPs noted that these issues cannot be resolved by making point changes to the draft laws. In their opinion, a thorough approach is needed that takes into account the interests of all market participants.

We have an excellent law on medicines that has already been adopted, which complies with all EU directives, which regulates in detail the issue of circulation of medicines and defines the rights and obligations of legal entities and individuals, authorized public authorities and officials in the relevant field. However, the issue of selling medicinal products as a pharmaceutical service and actually providing them to the end user - patients - remains outside the legal regulation of this law... I also heard many comments from our colleagues from the committee today and I have the following proposal - in this regard, we can instruct the subcommittee on pharmacy, pharmaceutical activities within two weeks, if we are making reforms, they must be fast, to develop a draft law on the regulation of the pharmacy and pharmaceutical industry of Ukraine, taking into account all European standards of the EU

- suggested the Chairman of the Subcommittee on Pharmacy and Pharmaceutical Activities, Serhiy Kuzminykh.

As a result of the discussion, the committee decided to develop a separate draft law that will cover all aspects of the pharmaceutical market. It should take into account the rights and obligations of manufacturers, distributors and pharmacy chains. To this end, a working group will be set up on the basis of the Committee.

The Ministry of Health's proposals received a mixed reaction. In particular, the idea of introducing indicative prices for medicines was approved, but the ideas of limiting discounts and abolishing retro bonuses were categorically rejected. Ultimately, this discussion laid the groundwork for the start of systemic market reform. Adoption of the new law will be an important step towards reforming the industry, but its implementation will require effective cooperation of all stakeholders. According to the committee members, the main task is to create conditions under which Ukrainians will be able to receive quality medicines at fair prices.