Alexandra Feldman: The pharmaceutical market requires especially thorough control

| By | BRICS, FAS Russia, pharmaceutical market
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The Working Group (BRICS+) on Pharmaceutics discussed pricing and state price regulation

The 14th session of the International Working Group on studying competition on the pharmaceutical markets took place on 28 March 2019 in Kazan as part of the workshop “Competition on the pharmaceutical markets”.

As pointed out Head of the International Projects Unit, Deputy Head of FAS Department for International Economic Cooperation, Alexandra Feldman, activity of the Working Group is becoming of special social significance since “the pharmaceutical industry is of strategic importance in any country of the world for current supply of medicines to the population and maintaining the acceptable level of health as well as for long-term economic andpolitical security of the state”.

Alexandra Feldman emphasized that medicine pricing is one of the main issue on the pharmaceutical markets in the world:

The governments of all developed countries take care of reducing prices in the market. The goal is pursued differently but the major, key way is not administrative restrictions but creating conditions for competition, stimulating medicine price reduction by manufacturers, stimulating and accelerating market entry of generics, a transition from the “costs” method of price regulation to the indicative one.

Members of the Working Group presented medicine pricing in their countries and outlined their experiences of medicine price regulation. Representatives of the antimonopoly bodies of Armenia, Austria, Belarus, Bulgaria, Egypt, Honduras, India, Kazakhstan, Kirgizia and Turkey took part in the event.

Darya Starykh, Head of Medicine Price Regulation Unit, Department for Control over Social Sphere and Trade, informed that in 2016, executing the instructions of the President of Russia, FAS carried out an international study of prices for expensive vital and essential medicines to search possibilities to reduce prices for expensive medicines and increase efficiency of budgetary spending for medicine supply. More than 40 countries were covered by the research.

We identified over 200 medicine positions, for which the ceiling ex-works manufacturer prices registered in Russia turned out to be higher than the prices in some countries, including the reference countries for Russia. As a result of the study and the undertaken measures, FAS managed to reduce significantly over 1000 registered ceiling ex-works manufacturer prices for more than 200 trade names of expensive vital and essential medicines. The average reduction was 43 %. The maximum reduction in Rubles was 240 000 RUB per consumer package, – said Darya Starykh.

She concluded: “In view of such positive results, our main task should be to create conditions for maximum openness of information between countries, particularly, global international negotiations for general medicine price reduction”.

Summing up the outcome of the meeting, Alexandra Feldman stated:

A direct dialogue between the authorities considering particular cases, including mergers, helps to improve merger analysis raising it to a different level, obtain information that was not submitted or requested in one of jurisdictions, and exchange opinions and ideas with regard to the effects for competition and the ways to overcome them through structural or behavioural requirements.

“The pharmaceutical market with its high social significance requires especially thorough control”, underlined Alexandra Feldman. 

Head of FAS Department for International Economic Cooperation, Lesya Davydova, pointed out that “our joint efforts enables achieving not only hypothetical but practical results in regulating the pharmaceutical industry, because one of the most important characteristics of the modern economy is its global coverage, which also requires global regulation and coordination. I this context, international cooperation between competition authorities of different jurisdictions becomes of principal importance for enhancing efficiency of national enforcement”.

The next session of the Working Group will take place in September 2019 at the IV BRICS Competition Conference.

Background:

The Working Group is formed upon an initiate of FAS and Italy’s Competition Authority in January 2012.

A broad range of the items under discussion drew attention of the international competition community, including BRICS and the CIS, to the Group activities. As a consequence, a bilateral model has gradually transformed into the International Working Group (BRICS+) on Pharmaceutics.

The Working Group held 13 sessions on medicine pricing, forced licensing and intellectual property protection, increasing accessibility of medicines for the population by reducing ex-works prices, etc.

For comprehensive discussion of the pressing issues, the Group expands the boundaries of discussions and engages not only antimonopoly regulators but also the pharmaceutical business in the dialogue.

SOURCE: FAS Russia
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