Medicine prices out of control: Council

18/10/2010 09:18

A recent survey conducted by the Consumer Council of Fiji on the prices of most commonly used medicines in the country has shown that some of them have increased significantly by 100 to 180 % from 2007 to 2009, further burdening the consumers. And the Council believes that the consumers will continue to fork out excessive costs for essential medication unless there is fair play and true competition in the pharmaceutical industry in Fiji.

In November last year, the Council was compelled to conduct a price survey on the drugs related to common diseases suffered by most people in Fiji such as diabetes, hypertension and heart diseases, after being inundated with complaints from consumers of being charged exorbitant prices for these medication. The findings from the survey were disturbing. For example Metformin a widely used prescription generic drug for diabetes sold for 3 cents a tablet in 2007, now is available for 8 cents per tablet, an increase of 167%. Propano, also a popular generic prescription for hyper tension was normally sold at 5 cents per tablet, but now retails at 14 cents, an increase of 180%.

The survey indicated various reasons for the price hike and one of the most significant contributors is the cartel type operation in the sector with little diversity in ownership and lack of competitive pricing. For example there are some individuals or families who own and operate five pharmacies or more in Fiji.

What’s more is that these pharmacies are mostly located in the same vicinity, just a few meters away from each other and any expectation of brisk competition is quickly lost with very little or no price difference in the medication sold here.

In Labasa, there are two pharmacies which are located just a few meters away from each other and operated by the same person. The prices of medication here are same like Minidiab which is a brand medication for diabetes is sold at $0.10 cents a tablet in both these pharmacies and Ternomin, also a brand hypertension medication, is sold at $0.69 cents each. Similar trends was also be seen in pharmacies owned by the same family or individual in Suva and in Western Division where prices of medication are same or had a miserly difference of one or two cent.

These operators conduct their businesses in a very clever way taking advantage of the current loopholes in the existing laws governing them. It is this type of cartel operation that subdues any efforts or chances of fair or true competition in the pharmaceutical market which could see a reduction in price. How can there be competition in this sector with such limited diversity in ownership?

Most of the medications in the survey were prescription medicines where the consumer has nochoice but to buy because these are needed for illnesses or serious medical conditions. Thesemedications are also on the percentage price control list of the Prices and Incomes Board. Ourfindings revealed that most pharmacies were charging the maximum retail price for thesemedications set by PIB. We cannot ignore the fact that even with price control in place thepharmacies are charging the maximum mark-up of 35% allowed on their medication. Thequestion that needs to be asked is what would happen after price control is removed onessential medication?'

The Council was also very much disturbed by the reluctance of the pharmacies to provideinformation on the prices of their medication. Out of the 20 pharmacies approached by theCouncil only 14 agreed to give their prices and this to after repeated requests by the Counciland finally through the intervention of Fiji Pharmaceutical Association. It was interesting thatsingle-owner pharmacies responded promptly with information while multiple- pharmacyowners needed a push from the Association. One pharmacy told the Council that they chargeda separate $5 fee for all requests for prices for prescribed medicine. This sort behaviour alsoimpinges on consumer’s right to choice and making an informed decision because they cannoteasily access information to help them choose the best deal.

In its 2010 Budget, the Government has announced that it will tighten its enforcement onanti-competitive practices in the country and the Council supports this view. We believe thatbetter price control, changes to pharmaceutical ownership/licensing laws and other reformscan help bring a more just market for consumers in Fiji.