The FINANCIAL — Georgia has some of the highest medicine and healthcare expenses considering its status as a low income country.
The general annual healthcare expense per person is 134.1 GEL and pharmaceutical products’ expense – 80.6 GEL, in Georgia according to the National Statistics Office of Georgia. The situation is being made more complicated due to the high number of medicines from Asian countries available on the market.
Medicines imported from India are sometimes marketed as Georgian products. Such medicines have eye catching Georgian stamps and only very small text saying that the medicine is actually produced in India. The FINANCIAL recently observed that consultants at GPC, one of the leading pharmacy networks in the country, were offering Indian medicines branded with the “Red A” stamp, denoting a Georgian product. The seller offered Indian medicine instead of the Georgian product requested by the customer.
According to GPC’s website “Red A is a sign of quality and is assigned to drugstores complying with the stipulated requirements”.
“We have outsourcing manufacturing in different countries all over the world, including Switzerland, France, Spain, Turkey, Italy, the USA, India, Canada and etc,” George Gordadze, Manager of Planning and Monitoring at GPC said. “We strictly control the whole process of manufacturing. Later the quality of manufactured medicines is check at independent laboratories in different countries.”
“We have never said that these medicines are produced in Georgia. This is not profitable for us as image of Georgian medicines isn’t high enough. But in some countries including Germany, foreign outsourcing manufacturing is considered as local. For example, medicines manufactured in other country especially for a German company are sold as Made in Germany,” he stated.
The import of medical facilities took fourth place in the total import of Georgia in 2011. The total value of bulk and packaged medicines amounted to 167,860,000 USD in the 10 months of 2011, their total weight – 4,442.2 tons. The biggest countries Georgia imports from are: Armenia, with 611.7 tons of bulk and packaged medicines worth 1,924,600 USD; India with 587.2 tons worth 5,572,900 USD; Belgium with 345.6 tons worth 5,765,400 USD; Turkey with 339.1 tons worth 28,283,900 USD; and the Ukraine with ¬333.5 tons worth 7,898,500 USD. As well as them there are some other big importers, including Germany, Bulgaria and Russia.
In regards to the import of medicines, consumers’ rights are somehow protected as they know the importer countries and have the possibility to choose the medicine according to its quality and price. Because of the import of bulk medical products and local packaging situation however, it is more complicated.
In total 281.2 tons of bulk pharmaceutical products were imported to Georgia with 114.5 tons from India and 100.3 tons from China in the first 10 months of 2011, according to the National Statistics Office of Georgia.
There are currently three large pharmaceutical companies in Georgia: Aversi, which imports bulk pharmaceutical products and packages them; GMP which has the whole manufacturing circle completed locally; and Red A which has outsourcing, meaning the company has its medicines manufactured by foreign companies.
The National Statistics Office of Georgia doesn’t publicize the shares of Georgian pharmaceutical companies in the total import. According to the research of the Association of Young Financers and Businessmen (AFBA) done in 2009 however, Aversi holds the largest share – 66.3 percent – of the whole import of bulk pharmaceutical products, while GMP holds 20 percent.
Aversi imported 71.9 percent of its bulk pharmaceutical products from India according to the same source.
The representative of Aversi in talks with The FINANCIAL said that the term “bulk pharmaceutical product” doesn’t exist at their company at all and that they manufacture the products themselves. The PR Manager of the company later refused to give any kind of information including about importer countries in spite of being asked several times.
According to the data of AFBA, Aversi held 59.4 percent of local production, and GMP – 28.8 percent. Products of Aversi have the label “Made in Georgia”. Georgian law doesn’t require for the name of the country where the bulk pharmaceutical product or substances were produced to be printed on the packaging.
“We have strict quality control during the whole manufacturing process,” Giorgi Antadze, General Director of GMP, told The FINANCIAL. “We are the only factory in the Caucasus region which is working with the standard of Good Manufacturing Practice. We are responsible for each pill. We are exporting 40 percent of our products to a total of nine countries. We are planning to expand our export to EU countries. We are actually currently working on registering our medicines in France.”
“The controlling of quality is easy for us as we manage the whole manufacturing process. We import substances, which are active pharmaceutical ingredients. They are chemical products and not medical. Manufacturing these substances causes huge ecological problems. Therefore having such a factory in Georgia isn’t at all desirable.”
GMP manufactures up to 160 medicines. The company imports about 3,000 types of substances from hundreds of companies. The main importer countries are Spain, Switzerland, Austria and the USA.
“We import substances from India as well,” Antadze said. “India produces low quality medicines as well as high quality ones. Its medicines are registered in EU countries and the USA, which have the highest quality requirements. Therefore the quality of Indian medicines is not questionable. Especially in our case as we don’t import bulk product medicines.”
“The margin of profit is quite high as we have the whole manufacturing process and we can afford the highest quality substances. In the case of importing bulk products and packaging them, income is quite low. This encourages the producer to buy the cheapest bulk products, which are made in India and China. The main problem is that these medicines packaged in Georgia are sold as manufactured in Georgia,” he added.
Merab Janiashvili, former President of AFBA, who did research in the field of import of medicines, says that India can’t control the quality of medicines and asks other countries to check it before importing. “I can’t say for definite that Georgia is importing low quality medicines but the situation certainly seems questionable,” Janiashvili said.
“The quality of Indian medicines imported in Georgia is not clear,” Ia Demurishvili, neurologist, told The FINANCIAL. “We almost never prescribe Indian medicines. I advise everyone not to try to economise when it comes to their health, and therefore not to use Indian medicines. They don’t work in most cases and sometimes they can even negatively affect a person’s health.”
According to WHO, India accounts for nearly 35 percent of the world’s spurious drugs market. It is estimated that 40 percent of the pharma market in India, i.e. Rs 8000 crore, is under the grip of spurious and black marketed drugs. The pharmacy industry, including those manufacturing counterfeit drugs, is growing at the rate of 20 percent annually, which means that every year the chances of buying a medicine that can do more harm than good is also rising proportionately.
One recent pilot study of Essential Drug Quality in Two Major Cities in India funded by Africa Fighting Malaria and the American Enterprise Institute says: “India is a leading supplier of high quality generic drugs throughout the world, but it is also a leading source of counterfeit drugs. In total, 541 samples were collected from pharmacies in Delhi and Chennai, with 8.5% (46/541) of tested samples failing TLC and/or disintegration tests.”
Washington Post: “Over the past seven years, amid explosive growth in imports from India and China, the Food and Drug Administration conducted only about 200 inspections of plants in those countries, and a few were the kind that U.S. firms face regularly to ensure that the drugs they make are of high quality. FDA officials say they are not aware of any health problems caused by drugs imported from India or China, and that the American companies that import them usually do their own quality and safety testing. But the Agency acknowledges that it is virtually impossible to know whether poor-quality or contaminated drugs from lightly regulated Asian plants have caused patients to get sicker or remain ill, especially because patients or doctors are unlikely to suspect poorly manufactured drugs as a problem.”