Monday, 16th November 2009 - 08:59CET
Medicine importers 'will not accept' imposed price cuts
Medicine importers are adamant that they will not accept an imposed reduction in prices, a measure proposed by Finance Minister Tonio Fenech in his Budget speech last week.
"We never accepted price control in the past and neither will we accept it in the present or in the future," Reginald Fava, who chairs the Chamber of Commerce's healthcare business section told The Times.
Last Monday, Finance Minister Tonio Fenech admitted that the voluntary mechanism put in place to bring down medicine prices found to be higher than the EU average was not working and pledged to turn it into a mandatory one unless an alternative was found.
But Mr Fava argued that doing this would be a form of price control. "It is a different terminology to mean the introduction of price control and we are completely against it," he said.
The voluntary mechanism was introduced in 2006 by the Working Committee on the Pricing of Medicinal Products, which asks importers to reduce the prices of medicines found to be higher than the EU average unless they are able justify the existing price level.
A ministry spokesman said the new consumer agency would have the legal power to order a price change if an importer, without justification, refused to voluntarily cut the price of a particular medicine found to be selling at a higher price than the EU average.
Recently two readers complained in letters to the Editor that they had bought medicines from abroad for a much cheaper price than they had purchased them in Malta. One said he bought 30 fungal infection pills for €104 from Malta but found them at less than a third of the price in London, while another said he bought a particular medicine that costs less than €13.08 in Malta for €5.23 from Lisbon
But Mr Fava said that the exercise held to compare local medicinal prices to the EU average revealed only a few products, of the 2,500 to 3,000 currently on sale locally, marked higher than that average.
"We always do our best to keep the price of medicines as low as possible," he said. Although he admitted there were some "cowboys", he said the chamber only represented honest businessmen.
The prices of 61 medicines have been dropped as a result of the voluntary system over the past three years but Mr Fenech complained during his presentation of the Budget that the scheme did not have the desired results.
Mr Fava disagreed, saying it was the committee that was not functioning "for reasons that the government knows about" but which he would not disclose.
He said the chamber did not have any problems with price monitoring and was willing to help the authorities on this aspect.
Chamber for Small and Medium Enterprises general director Vince Farrugia has also voiced disagreement with the government's proposal, telling another newspaper that the chamber would direct its members to withdraw the products affected by price control until forced pricing was removed.
Mr Fava welcomed the announcement by Mr Fenech that the government will be reducing the credit days for medicine importers from 150 to 120.
"Thank you and it's about time," he said, adding that this promise had been made five years ago.
Medicine importers have long complained that they are owed a lot of money by the government. Last month Mr Fenech admitted that the figure was in the region of €20 million - some of which fell outside the 150-day time window.
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Comments
Besides, given that
-pharmacies do not import drugs
-the importers are supplying all pharmacies
-pharmacies cannot give discounts on medicines
-pharmacists are a scarce resource
I must say, x'ghandu x'jaqsam !!
There is a limit to the amount the price of branded drugs can be reduced since the revenue generated is pumped into the millions to develop new drugs.
A price regulation system will ensure that the % increase over the cost of making the drug is regulated and fair. The final price with this system will always be high, for innovative/branded drugs.
Generic drugs, are distributed by the government for major conditions for free. Serious and chronic conditions are covered by the yellow card and pink card scheme. The point is that many maltese people refuse to use such a system to obtain free medicine then want the branded product for free. In this case, I think the only solution is to have addon insurance for drugs.
@IGALEA:Please read all my posts i am talking about a SUSTAINABLE system. What's your solution?
What makes you think that the majority of Maltese citizens who are not making ends meet can pay medicine insurance? Pay more tax? Are you out of your mind? Does any of those who similarly keep suggesting an insurance for this and insurance for that think that the vast majority of Maltese citizens have some magic wand to transform their wages/salaries/pensions into sackfuls of money?
Mario De Bono Is this an early April 1 joke?
Francis Bellizzi Totally agree with you. People cannot be left at the mercy of the medicine importers.
John Falzon Vince Farrugia has already been given his lesson at the MEPs election. Need one say more?
Ivan Visanich So quotas are illegal and have to be removed according to the EU but pharmacies are subject to quota? Where is the free market competition? Or do you believe in free market where you are not concerned? Prices are the same wherever you buy. SO where is the competition? Isn't this a CARTEL? How about the EU Representation investigating this CARTEL? Re prices how come they are several times their overseas prices?
g. scerri How about their wages?
AJ Anastasi Agree
We are comparing private market medicine prices to reimbursed prices in EU. (ie comparing apples with oranges). Reimbursement means that the gov will pay for all or part of your medicine. Almost any medicine that your doctor prescribes, in the richer countries, the patient pays only a dispensing fee i.e. practically free. Of course everybody is angry!
Of course - I forgot - there are the free medicines given by gov. - and plenty of them. So we do have free medicines too.
"Also in other countries you see lots more pharmacies then you see in Malta,they have no quota,but in order to do so the mark up on medicines is much,much higher than it is here in Malta."
So how come the prices for the same medicines is invariably higher in Malta? And, yes, I do know very well what the typical mark-up is in local pharmacies.
The point of the price increases, especially the increases after EU accession are related to Malta's market size (or so the importers say, this is a valid argument at least). Like for other EU contries, companies need to make a product specific for Malta. This is costly given the quantities and drives up price.(You might realise we do not have products packaged in arabic language anymore)
No one is wrong really, the main problem is the lack of a sustainable system. Its pointless just putting a threshold on prices, you need a system to calculate fair prices, ensure patients have access to medicines and probably introduce some form of drug insurance. Real prices of drugs are indeed even higher then Malta in some countries (Germany) but the insurance system covers. The citizen must also be ready to pay more tax for such a benefit.
The EU system requires a drug to be also registered in Malta. When a company decides where to market its drug, it must present a procedure to all the countries concerned. If it does not do so, the drug cannot be on the local market. (ie you need to apply to the maltese authorities to register a drug in malta, and only registered drugs can be sold).. There is indeed a so called centralised procedure, but this applies to a handful of selected drugs.
To import a generic product from a company that has not had its product registered in Malta, the company must present an application to the Local Authorities. Since generally no company produced product only for Malta, it usually does this simultaneously or after it has approval in another EU member state. Thus registering a product also in Malta can be considered usually viable for a large company. Registering only for Malta (if all other countries are already approved) makes no $ense. cont...
The system to be followed is the same in all EU countries, and also the requirement to stick to the local requirements (language, registration number, local representation etc..).
And who will suffer in such a case ? The Government or the citizen ? Hello ???!! Quo Vadis responsibility ?
Pharmacies are no sweet or shoe shops,you have to be a pharmacist to run a pharmacy,so it's pointless removing quotas as not everyone can open a pharmacy.The mark up is the same in each pharmacy,if you buy the same medicine from Mellieha or Marsaxlokk you'll pay the same price and the mark up on medicines is not what everyone imagines.To be an importer of medicines you have to pay a hefty registration fee which could be the case that medicines are expensive over here.Unfortunately in Malta whatever you do the government would want a big slice of your cake that's why items are more expensive here .Also in other countries you see lots more pharmacies then you see in Malta,they have no quota,but in order to do so the mark up on medicines is much,much higher than it is here in Malta.
Please everyone leaving comments here do so if you know all the facts.What's the point of having qualified pharmacists and doctors and then buy medicines over the internet.When a pharmacists sells medicine over the counter he/she is responsible for the patient.
HE CAN BE, AT LEAST, AS ADAMANT AS THE IMPORTERS IN SAYING NO TO INCREASES AS THEY ARE SAYING NO TO DECREASES.
Unfortunately, as far as I understand it, Malta has or indeed is shooting itself in the foot. I believe that small states such as Malta are allowed to import medicine already cleared and licenced in another EU Country without having to go through the complete registration and licencing process themselves. If this is true then we have set up our own bureaucratic block denying the public to a wide variety of items and considerably increasing costs for not accepting the registration and licencing of other competent and trustworthy Countries.
Perhaps a review of the rules should be undertaken and hopefully the market opened up to more alternatives, increased opportunities to the importers and costs to the individual thus reduced significantly
"Milking the nation for all it's worth on an imported
item that is vital for people's lives comes to mind 1st"
however this applies not just to medicinals - anybody who has been to the UK lately can tell you the price differences are incredible and this is not just the exchange rate-- the base prices for food, clothing, footwear, electronics are fractional compared to local prices,
no wonder london is expecting a deluge of around 10M foreign tourists over the christmas period, look at the travel adverts-shopping trips to london are a regular feature at present
The Government should
1) ABOLISH immediately the QUOTA of the number of pharmacies and let the free market take its course
2) EDUCATE the people that GENERIC medicines are as good as the patent ones
3) ENCOURAGE the concept of “Parallel Trading” and DISCOURAGE the “Sole and Exclusivity” agencies
4) CONTROL the mark-ups that are made from a) the importer to the wholesaler, b) the wholesaler to the distributor, c) the distributor to the retailer and d) retailer to the consumer!
5) DISCOURAGE the possibility of the importing companies forming a CARTEL, whereby all the prices are easily MANIPULATED.
If all the above measures are in place, then the prices of all the medicines would be a FRACTION of the costs that they are today.
However, the Government must not be afraid to tackle this huge problem, but must take the bull by its horns and face all these “Chambers” head-on and not to be discouraged.
If this is achieved, then the Government would have really won the war!
AJA.
It is shameful that our medicine prices are amongst highest in the EU. Shameful. Yes and there are quite a few cowboys amongst us and not only in this sector either.
The people are fed up with all this and if we have to go back to the old days, then why does not the government itself import the medicines it gives out . If this works, then so be it. As I have been hearing, our government can make an agreement with another government so that this is bought in bulk and therefore prices are lower.
Well, the people are adamant too. Let us get on with it and the sooner the better.
The choice of OTC (over the counter) items in Malta is already very restricted and this combined with quite significant higher prices for items available is in fact very much like shooting themselves in the foot.
Just to give you an idea. Before accession to the EU, when there was little drug regulation, there were over 5000 products registered in Malta. the increased regulation introduced as a result of Eu accession, does have an impact since it is costly to get approval and maintain a drug on the market.
Having said that, regulation ensures the Quality, Safety and Efficacy of drugs which is the most important thing. So in summary its a hard thing to handle and not as simple as it seems. The different stakeholders, Govt, patient and drug company have similar but at the same time conflicting interests. The only way to solve this is to do like other EU countries and make a sustainable system based on facts and science. Ther will always be conflict, but this will ensure that patient interest is safeguarded.
@John Inguanez
You CANNOT just import generics. Because of the way it works in EU, a drug must be licensed and to do this a company that makes it (or representative) must present detailed obtain a license from the medicines authority. An idea is to create incentives to stimulate companeis to import generics. (Ps Please note that the price of repackaging a product to meet the local requirments, on a small scale (Malta) could really cause a drastic increase in price)
The problem is however the small market and the Malta specific requirements (packaging etc) which make importing a product not always viable, especially price is controlled. On the otherhand good incentives would work with price control.
Shame on all concern.
Not accepting any form of price control is anarchy, and as long as the system is done correctly there is no reason why it should not exist. Reducing cost of drugs is an EU wide initiative.
In the same way as a pharmaceutical company creates a pricing model for a new drug to be placed on the market, it should be possible for the govt to predict realistic pricing figures, based on market size, ex-manuf price/prices across europe, supply, consumption stats etc... There are several databases such as IMS that give all this information and its just a question of building a model then.
Its true that the prices in Malta can never be the same as say Greece, or Spain due to market size and specific local requirements in MT which drive up costs, but for example UK has little price regulation and prices are driven down by competition & cost/benefit principles . Its not a question of reducing price only, its about streamlining the price structure to achieve control.
Yes Tonio do you part, I am sure that importers will continue to import; if the don't someone else willdo the job instead. I had asked for an explanation why a products had risen by more than 33%; you know what was the answer - the new packaging. Go and tell it to the marines!
While at it, Govt. must also control the excessive waste of money when issuing free medicines. It is an open secret that a good percentage of these free-handout medicines stay put, in some box or drawer in many homes, to be thrown away at will.
Savings can go to pay up what is owned to the importers.
We've had a free market mechanism for the past five years, since 1st May 2004. The result is certain medicines selling in Malta at three times the price in the EU. What the Chamber of Commerce should be doing is investigating why this is happening. Start with the anti-fungal pills. Any Chamber of Coimmerce worth its salt would find out in no time. It's about time the "cowboys" (Mr Fava's word) were rounded up themselves!
However, why are you opposing so hard of the Price Control System, when according to yourself, the members in the Chamber of Commerce are `honest businessmen`, but some `Cowboys` are not.....!!!!!!!
Otherwise, you have absolutely nothing to worry about ..!!??!!?? Because if that is the case, then these so called `Cowboys` are going to be in trouble and NOT your Chamber`s Members Mr. Fava...!!!!!! CORRECT.......?!?!
ALL of us poor consumers know for sure is that the prices of almost ALL kinds of medicines, ALWAYS and HAPHAZARDLY goes up and uP and UP and RARELY otherwise...
SOMETHING IS VERY WRONG SOMEWHERE........!!!!!!!!
In this case the free market is not working (as usually happens here). As if such a necessity market can be completely free and unregulated. The consumer does not care what is going on between the government and the importers. all he knows is the pre-electoral promise of some intervention is not materialising.
If the free market is to be God, then it has to be perfect. Perhaps if not direct price control, the government should take PL's suggestion and become a major importer himself, with the 'profit' only to cover the administrative costs.
The auth. could also free the market where licences for pharmacies are controlled, WHY? why are they protected? These same importers are the ones who own most of the pharmacies and yet again they are protected.
I understand that there is some sort of agreement between the government and the organisation which represents pharmacists that no no permits for new pharmacies will be issued.
Failing cooperation from those involved, the gov should immediately abrogate this agreement and issue permits to those who are ready to bind themselves to give the consumer a fair deal.
If only the 'cowboys' are abusing, then he and his Chamber should not be afraid of such a mechanism, as this won't affect them.
I really wonder how 'cowboys' who steal money from sick people manage to sleep at night, knowing the hardship they're creating to sick people, such as elderly and children!
Pero', kif jghid il-Malti, id-dinja rota.... illum jien u ghada Int!
Even in medicine importation, the government should opt for a free market mechanism in order to leave the free market and fair competition without any government intervention set the price. As in every sector, the market always set its price!
Should the government opt for such price control, quite fairly, the importers would eventually opt not to import a kind of medicine which is not economically profitable for their businesses. this will only result in a shortage of important medicines.
As Mr Fava rightly said, the most important thing the government should do to solve this problem is simply to pay his due!