Azerbaijan to improve mechanism regulating medicine prices

By: Nigar Orujova

Azerbaijan, which recently began regulating medicine prices, plans to continue improving the process for regulating prices for medicines.

Up until now, the Tariff Council approved prices for 3,010 medicines, of which 1,151 are already being sold under the approved prices. So far, the price regulation policy has led to a reduction in prices of 50 percent of these medicines, and prices of 26 percent of the nation’s medicines have fallen by more than three times.

“Improving the mechanisms for price regulations of medicines is a normal process for all countries, and Azerbaijan is no exception,” Secretary of the Tariff Council Ilkin Majidov said in an interview published in the official press. “The regulatory process takes into account proposals based not only on the commercial and marketing interests of firms, but also the balanced interests of all subjects regarding pharmaceuticals, as well as consumers. These proposals are evaluated and implemented using a regulatory mechanism by forming a unified approach.”

Constant discussions with pharmaceutical agents are held during the regulatory process, he said, noting that these discussions began in December last year – immediately after the change in the law – and continues to this day.

Majidov considers that the regulatory models applied in different countries are not advisable to introduce in Azerbaijan, without amendments, and therefore the country has used a different model.

“We have considered as unreasonable the models used in France, Spain, Italy, Greece and post-Soviet countries. As a result, we have studied the model and experience of these and other countries and formed a completely new model of regulation that is acceptable for Azerbaijan,” he said.

The model is called the reference price approach, and the price controls using this method effects the base prices.

“To ensure optimal base prices, we decided to focus on 10 countries. These included Turkey, France, Italy, Spain, Portugal, Greece, Poland, Hungary, Bulgaria and Slovenia. While determining the cost of medicines, the Tariff Council selects the lowest price applied in these countries. Wholesale and retail medicine prices are determined on this basis,” he added.

At present, 57 percent of medicines registered in Azerbaijan are produced in Europe, 26 percent in the CIS countries, including 12 percent made in Russia. A small share of medicines is produced in Asian countries.

Moreover, Russia and Iran have offered to manufacture medicines in Azerbaijan.

The country has registered over 4,500 brands from more than 20,000 types of medicines, and the number of cost-controlled pharmaceuticals is expected to increase in the future.

All medicines imported to Azerbaijan are examined before reaching pharmacies and hospitals. The country bans the import of medicines into the country without a license, permission, or other documents.

The process of price regulation on essential medicines will end before the end of 2015.

SOURCE: AZER NEWS

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