The FINANCIAL — “Price increase of medicines from the customs house to places of realization is 1,500%,” Merab Janiashvili, President of the Association of Young Financiers and Businessmen told the FINANCIAL. The NGO is preparing a report on it. Last year, AYFB complained that the medicines produced by Aversi exported to Armenia cost 10-15% cheaper there than in Georgia.
The FINANCIAL — “Price increase of medicines from the customs house to places of realization is 1,500%,” Merab Janiashvili, President of the Association of Young Financiers and Businessmen told the FINANCIAL. The NGO is preparing a report on it. Last year, AYFB complained that the medicines produced by Aversi exported to Armenia cost 10-15% cheaper there than in Georgia.
“In many EU countries it’s estimated that price increase from the customs house to realization can’t exceed 45% of the prime cost. In Georgia nobody controls that,” said Janiashvili. “We compared 500 medicines’ prices in the chemists PSP, Aversi and GPC. The price increase there is much more than 45%. 16 pills of Erythromycin cost at customs 2.10 GEL, but in the drugstore – 5.35 GEL. The price increase is therefore 155%. Dermokline Crème price increase is from 0.5 GEL to 9 GEL, about 1,600%.”
Janiashvili also added that all medicines they have chosen for comparison are those most in demand. He estimates that the price formation and increase of medicines in Georgia depend only on the market and demand itself. The more in demand a medicine is, the more it costs in the pharmacy. In addition to all this, the three companies have very similar prices. GPC may differ a little bit, from 0.01-0.10 GEL. Besides, discounts or price increases start in pharmacies at the same time. As Janiashvili said, the explanation he got from the pharmacy companies is that customs houses supply them with the wrong price information.
“I’ve checked several times, but there is no mistake from the customs houses. The argument about similar prices from pharmacy companies is that customers shouldn’t walk from one drugstore to another looking for optimal prices. I say however that it should be so. If prices were different I’m sure that people would look for the cheapest pharmacy. If there isn’t a difference in prices, there will never be competition and the prices will always remain artificially high,” said Janiashvili.
“These companies have existed for 15 years and since then people have complained about the high prices. If the companies didn’t get big support from the Government, they wouldn’t last so long as the main shareholders of the pharmacy market.”
Tea Javakhishvili, PR Manager of GPC Pharmacy Company, doesn’t agree with this report and says that GPC doesn’t have such high prices of medicines.
“We have a 5% or maybe 20% price increase, on some medicines only 1% for example. We aren’t exporters of all medicines. We buy Erythromycin on the local market. The price of it is adequate to other pharmacies. Price increase depends on the expenses of import. If we sell a smaller quantity of the medicines sometimes the prices become a little bit higher to cover the costs of import,” said Javakhishvili.
“If PSP or Aversi lower the prices on their medicines we have to compete with them so as to be adequate for the market. We have absolutely different discount projects than others though, like the discount after 20 GEL and 5 medicines project,” noted Javakhishvili.
Statistics show that the number of persons who visited ambulatory-clinics grew from 5,000 to 7,000 by 2009. But the indexes of the prices of medicines and health affairs inflated from 100,4 to 100,2 in 2010-2011. Yet, by the beginning of 2010 the Minister of Labour, Health and Social Affairs of Georgia stated that the extremely high prices of medicines were the most painful issue in Georgia. There was one Ukrainian pharmacy company which was allowed to import about 20 varieties of medicines. That’s why the prices of medicines were 20-30% more expensive than usual. In order to maintain the competition and lower the prices the Ministry of Labour, Health and Social Affairs of Georgia gave exclusive rights to several companies to import 50-100 medicines. Now we have in Georgia about 6,000 different medicines but as Janiashvili says the prices are still as high as before.
After publishing a midterm investigation of pharmacy companies last year, AYFB complained that the medicines produced by Aversi exported to Yerevan cost 10-15% cheaper there than in Georgia.
Today the pharmacy markets of Yerevan, Baku and Tbilisi still differ vastly from each other. One and the same medicine – 10 pills of Omeprazol for example – cost about 0.80 GEL in Georgia, in Baku – 1.5 GEL and in Yerevan – almost 2.00 GEL. At the same time the price of Festal in Georgia is 1.45 GEL, in Baku and Yerevan – 1.00 GEL. Vitamin complex Polijen costs 23.15 GEL in Georgia, in Baku – 14.60, but in Yerevan – 20.00.
The pharmacy company explained that the price distinction depends on the supplier country and the company. “The medicines imported from different countries have subsequently different prices. What’s more we don’t know what prices our neighbour countries purchase the same products for,” Javakhishvili noted.
Not only prices but also the control and quality of the medicines are the subject of discussion at the moment. Most of the medicines are imported from India and China.
“The World Health Organization estimated that India is the capital of medicine falsification. We can’t prove that medicines imported in Georgia are counterfeit, but there is a threat of it. The only responsible organization to check the validity of the medicines is the Agency for State Regulation of Medical Activities, who conducts only three months research. The rest of the time nobody cares whether the medicines we consume are valid or not,” said Janiashvili.
The results of the random sampling survey in 2010 of the Centre of Sociological and Marketing Survey show that about 85% of the surveyed 320 respondent in Tbilisi think that medicines aren’t accessible for the majority of people. Only 6% said that they are accessible. Again more than half – 55% consider that the validity of medicine is crucially important. 20% pay great attention to the prices and a few more check which country is the producer. Almost half of the 320 respondents – 46% think that locally produced medicines with producing technology and medical traits fall behind imported ones.
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