Medicine prices: fact and fiction

The use of medicine is not a luxury but a necessity, and such products should be affordable to all and sundry. It is a fact that up until a few years ago, the price of a number of medicines in Malta was higher than that in other European countries. It is also true, however, that in less than two years this government has managed to redress the situation.

Our effective handling of the medicine price issue is a cause for concern for the opposition- Chris Said

The commitment to curb medicine prices was listed in the 2008 electoral manifesto. Over the months our commitment was systematically ridiculed by the opposition as some sort of vote-catching lip service.

Time has proven otherwise and the government has demonstrated that it does not limit itself to simply talk the talk. We take difficult decisions which ultimately benefit our families and the elderly.

Our effective handling of the matter is a cause for concern for the opposition. I was therefore not at all surprised by the contents of the letter to the editor from Labour MP Anthony Agius Decelis and published inthe December 5 edition of The Sunday Times under the title ‘Medicine prices still higher than in the rest of EU’.

True to form, the arguments and calculations in the letter are wide of the mark, and go a long way to show that the opposition is either misinformed about the whole medicine prices issue, or is simply reverting to its time-honoured tactic of repeating sweeping statements ad nauseam until they become ‘fact’.

In his contribution, Agius Decelis mentions that 3,900 different types of medicines are imported in Malta. To set the record straight, at present, there are about 4,000 authorisations for medicinal products to be placed on the market in Malta (excluding the centrally authorised products for marketing in all EU states).

Notwithstanding, it is misleading to construe the number of marketing authorisations, be they local or centralised, as being equivalent to the number of different products that are imported for retail in community pharmacies. In actual fact, this number stands at around 1,200 products even when taking into account different pack sizes for the same product.

The underpinning of the medicine pricing negotiations that take place between the government and the various relevant stakeholders is provided by an external price-referencing mechanism detailed in a voluntary agreement between the members of the Working Committee on the Pricing of Medicinal Products in February 2007. This committee, composed of both government and non-government stakeholders, was established with the specific remit to suggest methods to ensure verifiable, fair and just prices to the end consumer.

The government has been using this mechanism on a regular basis to compare prices of medicinal products in Malta with those in other European countries. Essentially the mechanism entails the comparison of local prices with European average prices.

Using this methodology, 288 (24 per cent) of the medicinal products on the market were found to be priced above the European average. In such instances, discussions are held with the relevant importers so that prices are reduced accordingly.

Therefore, it is a feather in the government’s cap that in the past 18 months, such negotiations have secured the reduced price of 176 medicines (as opposed to the 130 mentioned in Agius Decelis’s letter). Furthermore, the government is in the process of concluding negotiations with the stakeholders on the price of other products priced above the derived average.

These results assume greater significance when considering that they are achieved exclusively through discussion and as a direct result of the strong sense of cooperation that has been fostered between the two parties.

It is also of note that government is adopting a multi-faceted ap­proach in its drive to ensure the prices of medicines are fair and reasonable. To this end, I entrust­ed the members of a working committee with the revision of the existing price-referencing mechanism.

The revising exercise, which is at an advanced stage, tries to address deficiencies. This process provides for a more accurate reflection of the current pharmaceutical market so that better and more indicative reference price averages are used for comparison.

Additionally the re-categorisation is robust enough to allow a degree of flexibility in the methodological criteria employ­ed. This, in turn, significantly widens the scope of the mechanism, resulting in a 53 per cent increase in the number of medicine prices, which can be compared to a European average, and therefore potentially revised.

While acknowledging this exercise as a significant step forward, the government is committed to continually improve and optimise the price-referencing mechanism in the best interests of the consumer.

A word of thanks goes to the officials of the Malta Competition and Consumer Affairs Authority for its hard work, and to most of the stakeholders: medicine manufacturers, importers and pharmacists alike, for their co-operation.

Dr Said is Parliamentary Secretary for Consumer Affairs.