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Drug price cut to boost local consumption

Asma Ali Zain / 7 February 2013

The recently announced price cuts in medicines will encourage patients, especially Asians, to buy drugs locally rather than from their home countries, drug makers and experts have said.

The UAE on Sunday announced a reduction of prices of over 6,632 chronic and essential medicines, some of which will be available for up to 40 per cent less than the previous prices. 

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MoH hails decision 

The Ministry of Health (MoH) has welcomed the Council of Ministers’ resolution to unify the prices of imported medicines in US dollars for the private sector.

It added that the decision comes in line with the keenness of the prudent UAE leadership on providing integrated healthcare for citizens and residents.

The MoH reiterated that the provision of all medicines for chronic and non-chronic diseases to the population will be preceded by completion of registration and check-up procedures to ensure that the medicines are endorsed by the competent international agencies. The remarks were made on Wednesday at a press conference in Dubai by Abdul Rahman Mohammed Al-Owais, Minister of Culture, Youth and Community Development and Acting Minister of Health.  

The resolution was passed in the Cabinet session chaired by His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. — Wam

Price adjustments have been achieved by pegging the import price to the US dollar and unifying it across the GCC.  A total of 7,053 medicines are currently registered with the health ministry. The application of the new system, expected to be completed within the next three months, will bring the UAE from the highest priced country (in medicines) to the lowest in the GCC region.

Experts said that the price difference will especially influence Asians who prefer to buy cheaper drugs from their home countries.

The lower prices, in turn, will boost local consumption and benefit manufacturers indirectly. According to Frost & Sullivan, the move will also be beneficial for the local pharmaceutical drug manufacturing industry as there will be generic options available for both, chronic and acute diseases.

“However, the real beneficiary will be the patients both local citizens as well as the expats,” opined Dr Ajay Kumar Sharma, Associate Director, Pharma and Life Sciences Practice, Frost & Sullivan.

“This price reduction will encourage Asian expats to purchase medicines locally rather than buying it from their home country as there will be marginal price differences. Additionally, this will boost the local consumption, the off shoot of which will be a decrease in prices due to the increased volumes for the manufacturers,” he added.

A representative of Sanofi Pharmaceuticals said that reliable and quality medicines will be available at affordable prices.

“The focus has to be on the delivery of quality medicines and their ease of access to patients,” said Ayman Mokhtar, general manager, Gulf Region at Sanofi.

“There could be an impact due to price reduction but then we will have more patients using our drugs,” he said, adding that it was too early to give details on the types of medicines and the new prices that would be applicable.

Dr Amin Al Amiri, Assistant Undersecretary for Medical Practices and Licencing at the health ministry, also said that people should now prefer buying medicines locally: “The UAE now has the lowest priced quality medicines in the region so why should people buy from somewhere else?”

Until recently, a number of medicines in the UAE were among the highest priced in the region with differences ranging up to 100 per cent from its strongest competitor, Saudi Arabia.

The ministry’s proposal will cut customs insurance freight (CIF) charges instead of levying further cuts on agents and pharmacies. Since 2010, pharmacies are earning only six per cent profit after losing out 10 per cent commission to insurance companies.

Dr Amiri said that the system will also support small private pharmacies and prevent smuggling of drugs among GCC countries.


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