Cyprus Mail

Too many pharmacies driving up cost of medicine

The present government could have taken measures to lower the prices of medicine said former Health Minister Stavros Malas

By Peter Stevenson

Despite the price of medicine in Cyprus being the sixth most expensive in Europe, the amount paid by the private and public sector to buy them is below the EU average, according to former health minister Stavros Malas.

Responding to Auditor-general Chrystalla Yiorkadji’s report for 2012 submitted to parliament on Tuesday, Malas said the private sector has too many suppliers and pharmacies for such a small population, which has led to a rise in the price of medicines.

There are 486 pharmacies on the island which works out at about 1,700 customers per pharmacy. In Denmark, by comparison, there are 17,000 customers per pharmacy, Malas said.

“Pharmacies have very low profit margins due to this over-saturation and that is why they have turned into kiosks, selling a number of products like perfumes and food in order to remain profitable,” he said.

The public sector buys medicines at a reduced rate but the private sector is forced to buy them at a higher cost and Malas believes this has to do with the current method of calculating the price of medicine.

In 2012, the public sector paid €104m for medicine while the private sector purchased medicine for roughly €150m, Malas said.

Under the current pricing system, the maximum wholesale prices are determined by calculating the average prices of medicines in four ‘reference’ countries – Sweden, Austria, France and Greece.

Although Greece carries the ‘inexpensive’ value in that group, since 2009 medicine prices there have shot up. Despite this, Greece continues to be classed as an ‘inexpensive’ market.

Malas said that the current government should have re-evaluated its pricing system and by doing so could have brought down the prices of medicines by 10 and 15 per cent.

“If the government had taken the countries with the cheapest medicine in each reference category it could drastically reduce the price of medicines, but unfortunately that has not happened,” Malas told the Cyprus Mail.

On Tuesday, Yiorkadji told the House Watchdog Committee that she had received a number of threats from pharmaceutical companies after she had criticised them for swindling the public with high prices of medicine.

She said that it was unfathomable that Cyprus, a country which had to be bailed out by international lenders, had the sixth most expensive medicines in Europe.

“My top priority remains the issue of the cost of medicine, as they are expensive and this affects the public. Reducing the price remains one of my main goals,” she said.

Avgoustinos Potamitis, head of the Pharmaceutical Association (CPA), said that Yiorkadji’s claims of threats were vague and unsubstantiated, calling them “unacceptable and irresponsible.”

He said that only once the National Health Plan (NHP) is implemented prices of medicines will start falling.

This view was not shared by Malas who said that if the NHP is implemented prices could rise.

“Currently, the public sector buys a specific medicine from one supplier but once the national health plan comes into effect that same medicine could be purchased from four different suppliers meaning they would all need to receive a fee which would then be burdened on the consumer,” he said.

Constant references to “expensive” medicines and wrongful comparisons between the private sector prices in Cyprus and prices of other countries with comprehensive health systems, paint a distorted picture of the cost of medicine in Cyprus, the Association of Research and Development Pharmaceutical Companies (KEFEA) said.

It denounced attempts to mislead the public and clarified that the pricing policy is defined by the state and there are no margins for profiteering by the pharmaceutical companies, as had been implied.

Commenting on Yiorkadji’s statements, KEFEA called on her to submit specific evidence so as to avoid stigmatising persons and companies.

KEFEA considers it an oxymoron that the Audit Office investigates data regarding medicine prices in the private sector, but never refers to the public sector, which serves 80 per cent of patients and where medicine prices are considered to be among the lowest in Europe.

KEFEA said that it remains a firm supporter of implementing the NHP, as it feels this will set aside inequalities and allow the introduction of innovative medicines at fair prices.

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