Wave Of Drug Price Reductions To Be Enacted
BMI View: State intervention in drug pricing is set to become more heavy-handed and frequent as the GCC region attempts to establish unified drug pricing over the next five years. Despite these measures, the region's burden of disease, relative wealth and healthcare infrastructure will make it an attractive region for pharmaceutical companies.
In recent months, the UAE Health Ministry has launched a number of initiatives in conjunction with pharmaceutical companies to institute price reductions after discovering that prices in the UAE are considerably higher than in neighbours Jordan, Oman and Saudi Arabia.
In January 2014, the Ministry of Health ordered the reduction in price of 14 drugs used in diabetes care, which was part of a wave of price cuts on almost 205 medicines. Diabetes medicines saw their prices slashed by almost 83%. The Ministry of Health first announced a reduction in the cost of drugs in June 2011 when it slashed the prices of 565 medicines by 55%.
Further reductions were announced in November 2011 when the prices of 115 generic medicines were cut by 35%.
The UAE's biggest reduction in drug prices took place in June 2013 when health authorities cut prices of 6,632 medicines, including drugs used for the treatment of hypertension and heart failure, anti-depressants, asthma and anti-virals for HIV, by 40%.
In May 2014,the UAE Minister Of Health Abdul Rahman bin Mohammed Al Owais issued two ministerial decisions that curtail drug prices of 11 varieties of medicines. The medicines affected are for the treatment of blood, hormonal and immunological diseases, as well as allergies. The price reductions range from 1% to 56% of the previously registered price.
We believe that heavy intervention on drug pricing is set to become a recurring feature of GCC markets, and that pharmaceutical manufacturers will need to adopt a more flexible strategy when targeting these markets.
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