By Constantinos Psillides
Health Minister Philippos Patsalis announced on Wednesday that an 8.5 per cent price reduction on drugs will be put into effect on June 29, stressing that the price cut will go ahead as planned regardless of the manufacturers’ protests.
“A London School of Economics study clearly showed that when it comes to the private sector Cypriots are amongst the EU citizens that buy drugs at a very high price. Based on that study we decided to cut prices on all drugs over €10 by 15 per cent and a further 8.5 percent effective on June 29. Obviously that would cause reactions by importers and manufacturers,” said Patsalis, clarifying that he would not recall his decision.
“We consider this measure as a step to the right direction. We didn’t consider a more drastic cut, like Greece where drug prices were cut by 60 per cent, but opted for a price reduction that would benefit the people and hurt businesses as little as possible.
You have to realise that is impossible to cut prices to help people and not have the interests of businesses affected in some way,” he explained.
The minister was asked to comment on a Monday statement by the Cyprus Pharmaceutical Association (CPA), saying that they will be taking the government to the Supreme Court over the planned 8.5 per cent price cut.
The CPA claims that the minister is acting arbitrarily, without first consulting any of the stakeholders. The association claims that the price cut will hurt the industry – that employs 2,000 people – and will deprive Cypriot patients of any new drugs.
If prices fall too steeply the cut in profit margins, the CPA argued, means drugs companies would have no incentive to export to Cyprus, creating shortages of some drugs. The World Health Organisation (WHO) has expressed similar concerns.
The CPA, which represents about 50 medicine importers, has written to the House ethics committee to complain about the health minister’s arbitrary actions.
Medicine prices – including for the private sector – are updated once every year based on a formula devised by the government.
Last year’s WHO report on medicine prices in Cyprus said they were among the most expensive in the world.
But the WHO also cautioned that a high price decline “may have adverse consequences… in terms of availability, and therefore needs to be studied carefully before being implemented”.
“The price cut should not be too substantial in order to ensure the continued supply of product on the Cypriot market and/or the discounts received in the public sector for these products,” the report said.