The association of young financiers and businessmen (AYFB), jointly with the Healthcare Platform nongovernmental organization, continues monitoring of prices on the pharmaceutical market.
According to the latest research, the index has increased by 17.43% to 13 points. This signifies prices on the pharmaceutical market have considerably risen. Monitoring is carried out on 200 medications and prices have increased on 78 ones and slightly decreased on 6 ones. As a result, the Panaskerteli Index has increased.
Several factors should be emphasized that have preconditioned upturn in medication prices:
First of all, this is related to strategy carried out by pharmaceutical companies for maximizing profits. As a rule, profits are maximized through various marketing campaigns or rising prices. Pharmacies seem to have resorted to this last mechanism and, after 6-month declination, prices have increased again. This signifies pharmaceutical companies effectively manipulate by tariffs.
At the first stage of the research project, when a new strong market player appeared in Georgia in the face of Humanity Georgia, Georgia-based pharmaceutical companies released a joint statement that the market diversification was an important and inspiring fact for them. As reported, Humanity Georgia introduced generics by 30% lower tariffs. The existing companies had to significantly lower prices and launched active PR campaigns. All these tendencies were reflected in the Panaskerteli Index too. However, 5 months have passed and the effect brought by Humanity Georgia has disappeared. Pharmaceutical companies have made a use of this situation and increased prices again.
It is also very important that over the past months the Georgian national currency has been strengthening at high paces in relation to both USD and EUR, while the list of medications that are monitored by AYFB and the Healthcare Platform are mainly imported from the Eurozone Countries. As a rule, the GEL exchange rate appreciation against EUR should have cheapened pharmaceutical products from Europe, but pharmaceutical companies do not follow this logics.
Our supervision on medication prices have drawn the following picture: pharmaceutical companies have resources to decline prices, but the past period has proved that price reduction was an adaptation strategy after the new market player appeared in the country.