Drug manufacturers imposing their will in Syria, winning 30% price increase

Drug factory in Syria (SANA)

Drug factory in Syria (SANA)

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Enab Baladi – Jana Issa

Struggling in the throes of multiple financial crises, Syrian citizens were dismayed by the Ministry of Health’s recent increase of drug prices. The raise covered over 11,000 medicines.

The medications’ price hike topped the citizens’ inability to afford their daily needs and their modest wages that stand no chance as the Syrian pound continues to hit new lows in front of the dollar.

The Syrian government left the gap between drug manufacturers, who remain focused on making profits from the medications produced and pumped into the local market or exported abroad, and consumers. The government took no meaningful action to support any of the parties to this dilemma; however, they were tilted towards drug companies.

“Fearing a crisis in the supply of medicines,” the health ministry responded to manufacturers’ price raise demands. The ministry acceded to enforce a price increase after several manufacturers threatened they would halt production should prices stay unaltered, protesting the high prices of raw materials and their transport costs.

Withholding supplies

On the condition of anonymity, a Homs-based pharmacist told Enab Baladi that the shortage of drug supplies that gripped the country over the past two weeks resulted from the manufacturers’ decision to reduce local market shares they were obliged to provide.

He added that manufactures were positive that the government will respond to the price increase demands. To ensure this, they scaled down the supply for certain medicines. However, they distributed the withheld medicines immediately after the price increase decision was announced.

The head of the Syndicate of Pharmacists, Dr. Wafaa Al-Kishi, said that the price adjustment is “accommodating to all”, including manufactures and drug store owners.

She also described Syrian medicine companies as “patriotic, seeking no gains, as much as to supply markets with home-manufactured medicines.”

The latest statistical report by the health ministry, published in 2017, concluded that locally manufactured medicines rose to 83 percent compared to imported medicines.

On 13 June, the Head of the Scientific Council for Pharmaceutical Industries, Rashid al-Faisal, urged the health ministry to intervene and adjust or “slightly” raise drug prices. He added that any increase would be “insignificant compared to several foreign medicine’s prices.”

Al-Faisal attributed the demands to the “high prices of raw materials and the [SYP to USD] exchange rates,” and the two factors’ impact on manufactures.

Some manufactures have even advocated for a 100 percent increase.

After the ministry announced a 30 percent price increase, al-Faisal said that manufactures are content with the adjustment, adding “we hope the ministry would readily address [similar] situations and conduct additional adjustments when necessary.”

Price hikes are old news

A pharmacist based in the countryside of Damascus told Enab Baladi that the drug price increases are not new to  Syrians. This is a semi-periodic measure. However, what was different this time is that the decision covered all types of medicines in Syria.

She added that the recent 30 percent increase would not adversely affect patients, who are used to the huge increases enforced by the ministry earlier.

The pharmacist noted that price raises are often applied to most demanded drugs and are urged by such drugs’ manufactures. Increases are usually sent to separate pharmacies in the form of a circular, without reporting them in official media outlets.

She stressed that usually price increases are random, depending on the concerned drug and are extremely higher than the increase set by the ministry recently. The prices of some vital drugs underwent an over 300 percent increase three months ago.

The pharmacist said that it is making more money that drug manufacturers always seek in Syria, oblivious of the consumers’ humanitarian situation.

By virtue of her work, she said that these manufactures are landing fine numbers, “considering only the profits they make from locally manufactured medicines which they export to most Arab countries,” while often depriving Syrian drug stores of many medicines, such as anti-epileptic drugs (AEDs).

The price raise, is it for fear of a crisis, or additional profits?

Economist Adham Qudaimati told Enab Baladi that two factors influenced the ministry’s decision to answer the manufactures demands.

The ministry feared the potential interruption of certain drug supplies in case drug factories decided to halt production in retaliation to unchanged prices. This would have plunged the country into a new crisis, which they do not wish for in the meantime.

He added that some regime-affiliated figures are partners in drug companies. That is the price increase would boost their returns, even if it comes at the expense of disadvantaged citizens.

Qudaimati noted that Lebanon’s collapsing economy and the shortage of several drug varieties it is suffering have affected Syria’s pharmaceutical standing. He added that the Syrian regime was largely dependent on smuggled drugs from Lebanon.

He added that manufacturers’ potential “profits cannot be limited to a certain rate” because there is not an entity to seriously censor and control the Syrian pharmaceutical industry, pertaining to production or quality.

Furthermore, Qudaimati said that manufacturers are unlikely to commit themselves to the recent price list.

Citing the latest survey of the number of drug manufacturers in Syria, former Minister of Health, Nizar Yazigi, in 2019, told the Russian Sputnik News Agency, that there are 96 factories, working to cover 93% of the local market’s need.

Pricing medicines

The health ministry sets price lists in keeping with the SYP to the USD exchange rates.

In June 2020, the ministry enforced a new price list based on the Central Bank’s decision of March 2020. The decision stabilized SYP to USD exchange rates in all transactions.

Razan Salouta, then-Director of Pharmaceutical Affairs, stated that pricing will be enforced according to the Central Bank’s exchange rate, adding that urgent price adjustment might require manufacturers to write off previous prices, inscribed on the packaging.

She added that the ministry, adhering to the new price list, is currently considering changing prices assigned to separate drug types, which are periodically updated, for some of these drugs are imported, others are manufactured in Syria, the thing that affects their prices.

In June, one USD was exchanged for a relatively stable rate of 3200 pounds, while the Central Bank’s rate remains at the 2512 SYP fixed last April.

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