Ministry Of Economic Development Proposes Drug Price Rises
BMI View : The Ministry of Economic Development's proposal to enable foreign drugmakers to increase prices of medicines on the VED list is positive, however, domestic companies are being offered far more flexibility. The Russian state will continue to offer concessions to domestic companies as it carries out its strategy of self-sufficiency within the pharmaceutical sector.
The Ministry of Economic Development has proposed to the Russian cabinet that foreign drugmakers with products on the Vital and Essential Drugs (VED) list should be allowed to revise their prices in line with levels of inflation in the market. Currently, this is only extended to local, Russian enterprises. However, this rebooking of prices would only be granted unconditionally in 2014 and then on an ad-hoc basis. Foreign companies have been forced to freeze their drug prices since 2010, but according to the Federal Antimonopoly Service (FAS) and the Ministry of Health, most companies price their products in Russia at a premium to other markets, and are therefore opposed to offering foreign drugmakers any leeway.
Similarly, the health ministry says it would oppose allowing significant price rises for foreign medicines, as they constitute a majority of the VED list. The Ministry of Economic Development however, has counter-argued that it would set limits on wholesale and pharmacy margins to prevent any major price escalation. The economic development ministry hopes to influence the Russian market over the long term and prevent withdrawals of essential products from the market as has happened in countries such as Greece and Hungary.
|Risks Detracting From Market Potential|
|Pharmaceutical Sales, 2010-2023|