The Ministry of Health has unveiled a proposed concept for reforming pharmaceutical market regulations, outlining agreements reached at the VR committee meeting.
The Minister of Health of Ukraine, Viktor Lyashko, presented a concept for reforming the regulation of the pharmaceutical market during a meeting of the Committee on National Health, Medical Care, and Medical Insurance of the Verkhovna Rada. The Ministry's proposals focused on lowering drug prices through electronic trading between manufacturers, limiting the size of discounts, and banning retro bonuses. Not all proposed changes were well received by the members of parliament, reports UNN.
Electronic Trading as a Basis for Price FormationElectronic Trading as a Basis for Price Formation
One of the key proposals from the Ministry of Health was to determine the lowest price for pharmaceuticals based on the active substance through electronic trading on the "Prozorro. Market" platform. According to this concept, manufacturers will offer their prices during the auctions for drugs included in the National List of Medicines. Once the cheapest option is identified, pharmacies will be required to stock it.
According to him, the primary goal of the Ministry of Health is to ensure that the cheapest drug is available in every pharmacy across the country.
Members of the relevant parliamentary committee supported this proposal, believing it should stimulate competition among manufacturers. This is crucial, as they account for up to 70% of the cost of pharmaceuticals.
Overall, the committee positively received the proposal to introduce competition among manufacturers; however, the deputies noted the need to clarify technical details, particularly the frequency of trading and mechanisms for responding to currency fluctuations that impact pricing.
Discounts: Impossible to Remove, Necessary to Keep
Another lively topic discussed at the committee meeting was the Ministry of Health's proposal regarding the regulation of marketing agreements between manufacturers and pharmacy chains. These agreements allow pharmacies to offer discounts to consumers; however, the Ministry proposed that markups under such agreements be regulated by a resolution of the Cabinet of Ministers of Ukraine. The ministry believes this will help reduce price manipulation and ensure the availability of medications.
Despite this, the deputies did not support limiting the size of discounts, citing European experience, where marketing agreements are regulated through proper or improper promotion practices. According to them, there are no clear legislative norms on this issue in the EU, and therefore, parliamentarians believe Ukraine should also adopt a more liberal approach. They referenced EU Directive 83 on regulating the functioning of the pharmaceutical market, which imposes no restrictions on the scale of marketing transactions.
Moreover, the parliamentarians emphasized that when discussing discounts in contracts, it is essential not to overlook small pharmacies in rural and frontline areas, as their restriction could lead to the closure of this vital infrastructure.
The deputies also noted that they do not trust the regulation of this issue through Cabinet resolutions, as often the outcomes are "not what was expected."
Discussions on "Retro Bonuses"
The issue of abolishing reverse price adjustments or "retro bonuses" was also discussed separately—this mechanism allows manufacturers to provide discounts to pharmacies on previously purchased goods.
"Retro bonuses" come into play, for example, when a batch of purchased medicines is nearing its expiration date or is sent for re-registration. The Ministry of Health proposed to abandon this practice; however, the deputies rejected this idea. They argued that "retro bonuses" often help manage situations involving the disposal of expired or substandard medicines, as well as reduce risks for pharmacy chains.
A Comprehensive Law
Committee members agreed that the pharmaceutical market has serious issues and gaps that require systemic solutions. Lyashko noted that implementing transparent electronic trading mechanisms would help avoid artificial price inflation, which often occurs due to a lack of competition. However, during discussions, the deputies stated that addressing these issues cannot be achieved through piecemeal amendments to draft laws. In their view, a thorough approach is needed that considers the interests of all market participants.
As a result of the discussions, the committee decided to develop a separate draft law that will cover all aspects of the pharmaceutical market's functioning. It should take into account the rights and responsibilities of manufacturers, distributors, and pharmacy networks. To this end, a relevant working group will be established based on the committee.
The Ministry of Health's proposals received mixed reactions. Specifically, the idea of introducing indicative prices for drugs was approved, while the proposals to limit discounts and abandon "retro bonuses" were categorically rejected. Ultimately, this discussion laid the groundwork for the beginning of systemic reform of the market. The adoption of a new law will be an important step towards reforming the sector, but its implementation will require effective cooperation among all stakeholders. As committee members noted, the main goal is to create conditions under which Ukrainians can access quality medications at fair prices.