The AMC was found to have significant market power of the three pharmaceutical distributors and signs of monopoly in retail

АМКУ обнаружил значительную рыночную власть трех фармдистрибьюторов и признаки монополизма в рознице

The main suppliers of medicines in pharmacies of Ukraine are mostly LLC “BaDM”, LLC “Venta.Ltd” and JV “Optima-Pharm, LTD”, the total share in this market exceeds 80%. This is stated in the report of the Antimonopoly Committee of Ukraine (AMCU), the results of studies of pharmaceutical markets in 2014-the first half of 2016.

“The condition of the three largest domestic distributors with a combined share of over 80% in the market of providing services for supply of bulk medicines and medical devices in shirokoformatnoy set showed the presence of these entities with significant market power compared to other available competitors due to the relatively small size of the market share owned by the competitors”, – the document says.

The AMC emphasise that at the beginning of 2014, the largest pharmaceutical distributor was also included CJSC “Alba Ukraine”, and their combined share amounted to 87%.

Department to prevent violations of the legislation on protection of economic competition in early March 2015, provided these companies are required to consider the recommendations, in particular to refrain from imposing unreasonable cost of wholesale prices for medicinal products and Pharma distributors reported on the basis of these recommendations.

In relation to retail, the AMC stated that this market is divided into regional, where the majority of the participants organize their activities in the format of “pharmacy network”.

“The study found signs of monopoly (dominant) position (collective or monopoly) on most of the regional markets of services for the retailing of medicines”, – the document says.

Also office installed nepatinka cases of non-compliance with pharmacy networks, state discipline of the prices. In particular, it is noted that the existing in Ukraine system of stabilization of prices for medicines by the state regulation of the wholesale selling retail price of individual drugs in practice unable to ensure their affordability for the population.

“The functioning of the markets of pharmaceuticals allows all branches of a promotion to pass on to the final consumer who buys drugs at the pharmacy, all of your financial risks from the influence of objective and subjective factors,” – said in the report.

AMC contends that in the Ukrainian legislation there are no documents that would define the scope of methods/of ways/rules of promotion of medicines. In addition, the activities of both domestic and foreign manufacturers in terms of pricing on medicines in fact, is not subject to regulation by the state.

“Created at the legislative level a system that currently sets the rules and conditions of functioning of pharmaceutical markets, it does not ensure effective competition on the relevant commodity markets and creates conditions for its development, and thus needs to be improved”, – summarized in the AMC.

The Department also noted the lack of effective self-regulation of pharmaceutical markets.

To remedy the situation, the AMC recommended to the government to introduce reference pricing of essential medicines with the aim of improving their availability and gradually move to reference pricing for all medications with open registers in their prices and the introduction of a reimbursement system and to introduce electronic registers of patients by types of diseases that are treated by the state (local) budgets.

Among other recommendations, changes to the model of medical care through the introduction of obligatory social medical insurance with the introduction of the regulatory framework the term “medical service”; the establishment of transparent relations in the field of promotion and marketing of medicines in the light of European experience; a review of the requirements for storerooms throughout the supply chain, etc.

The Agency also made a proposal to the participants of the pharmaceutical market to take measures for the implementation of effective mechanisms of self-regulation of commodity markets with the introduction of the General for all participants of the rules of professional ethics.

As reported, not long ago, the Cabinet approved a decree on the introduction of reference prices for selected drugs from January 1, 2017. These prices will be extended to 21 preparation for the three programs. According to acting health Minister Uliana Suprun, reference pricing will not apply to the procurement of medicines at the expense of the state budget, which are conducted through international organizations.

Today, the health Ministry signed with international organisations, contracts for the purchase of medicines for the state budget funds 2016 to 30 of the 33 programs.