Healthy Skepticism Library item: 282

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Publication type: news

Bibbo B.
Changes in medicines prices in the UAE
The Gulf News 2004 Mar 28

Full text:

The prices of some 1,500 over-the-counter food supplements, vitamins, minerals and medicines sold by pharmacies are likely to be reduced by up to 15 per cent.

The Ministry of Health is studying whether the prices of these items should be regulated.

Humaid Mohammed Al Amri, Assistant Secretary for Pharmacy and Supplies at the ministry, said the ministry’s plan is to further regulate the market in the UAE, one of the most expensive in the region, and bring it in line with other markets.

Last week the ministry regulated the prices of around 1,200 pharmaceutical products. The new prices are to come into effect from mid-June.

In a bid to curb the prices of drugs sold at pharmacies, Hamad Abdul Rahman Al Madfa, Minister of Health, last week issued a ministerial decree that said the profit margin on these products must be reduced from 70 per cent to 55 per cent.

The decree that will become effective on June 15 says 25 per cent of the profit will go to the agents and 30 per cent to the pharmacies.

Earlier, the profit margin for agents was 27.5 per cent and pharmacies 42.5 per cent. He said in Saudi Arabia the profit margin for pharmacies is 20 per cent. In other Gulf countries it ranges between 30 and 32 per cent.

Al Amri said Gulf countries are working towards unifying drug prices and an agreement could be reached as soon as September.

The 70 per cent profit margin had been fixed in 1984 and needed to be reviewed.

“Our market has changed a lot since 1984. It has become bigger because of the increase in population and a lot of new drugs have been introduced. The market will continue to grow and agents and pharmacies will not have to worry about their profits.

“The decision has been taken after talks with the sector and our neighbouring countries. In addition, studies and analysis of the market trends indicated that we should reduce prices.”

Al Amri said after the ministerial decree comes into effect the UAE market will become the second cheapest in the region after Saudi Arabia.

“People were suffering – we received many complaints from the public regarding the cost of medicines. Many realised drugs were cheaper in other countries. We also got information from post offices that an increasing number of drugs were being purchased or smuggled through the post.”

A list of the drugs, whose prices are being regulated, is being prepared by the Department of Drug Control and will be distributed soon to all pharmacies. Many of these drugs are used in the treatment of diabetes, blood pressure and other chronic conditions.

“We also took into consideration the fact chronic conditions are affecting an increasing number of patients who need life-long treatment. This results, in most cases, in huge expenditure.”

Profit margins become deflated

• The Minister of Health last week issued a ministerial decree reducing the profit margin on pharmaceutical products from 70 per cent to 55 per cent.

• The decree says 25 per cent of the profit will go to the agents and 30 per cent to the pharmacies.

• Earlier, the profit margin for agents was 27.5 per cent and pharmacies 42.5 per cent.

• The new prices will become effective from June 15.

• At the moment prices of medicines in the UAE are among the highest in the region.

• Medicines are cheapest in Saudi Arabia where the profit margin for pharmacies is 20 per cent.

• In other Gulf countries the profit margin of pharmacies ranges between 30 and 32 per cent.

• A list of the drugs, whose prices are being regulated, is being prepared by the Department of Drug Control and will be distributed soon to all pharmacies.