Prime Minister Yuliya Tymoshenko has underlined the unsatisfying quality of pharmaceuticals considering their high prices. According to her announcement, the considerable growth of prices on drugs for the unprotected social groups in Ukraine has taken place since 2005. For instance, the price of Karvalol (a drug for heart diseases) had doubled in the last three years.
Tymoshenko believes that it’s possible to create a partnership system between government and pharmaceutical businesses to increase the quality of drugs.
The Prime Minister also mentioned that annual drug imports into Ukraine amounts to UAH 9 bln, with local production amounting to UAH 4 bln. At the same time, 70% of the materials required for drugs’ production are imported, while local resources are used for only 5% of production.
Our view: We believe that in front of Yuliya Tymoshenko’s political affairs, the possibility of implementing complicated partner relations and developing a number of drugs that break price records are unlikely to be realized within the short term. Nonetheless, we believe that sooner or later such a system will be created, considering the common European practice. This would not have a significantly negative impact on local producers; however, on the other hand, we view it as POSITIVE in terms of increasing government tenders for purchasing drugs, which would focus only on local producers. Such drugs are mostly in the lower price niche, from which local producers would escape considering GMP standardization, thus allowing them to enter a higher price bracket.