ABU DHABI // Retail prices of more than 6,600 different medicines will be cut by up to 40 per cent in the next three months.
The cuts will be achieved by a new system to unify the cost of imported medicines in US dollars, to prevent monopolies and to reduce the profit margins of sales agents and pharmacies.
"Food and medicine are of extreme importance. It is essential to make medicine affordable for all," Sheikh Mohammed bin Rashid, the Vice President and Prime Minister and Ruler of Dubai, tweeted yesterday after a Cabinet meeting at which he approved the changes.
The new system will help to ensure medicine is available for all, and investors in the healthcare sector will "also be taken into consideration", Sheikh Mohammed said. The Ministry of Health has been instructed to implement the system within three months and enforce it with pharmacy inspections.
"This is the biggest cut in the whole of the Middle East," said Dr Amin Al Amiri, an assistant undersecretary at the ministry. "And of this speed."
Dr Fayath Al Saad, a general practitioner at Dar Al Shifaa Hospital, said the new system was beneficial to all, particularly expatriates and "even pharmacies - if prices are affordable they will sell more".
"We are very happy with this," he said
A spokesman for Axa Insurance said the company was not aware of any decision to change the pricing system, but any reduction could bring insurance premiums down for customers.
"It should have a positive impact on the premium, meaning that it will decrease, but to what level it's very difficult to say at this stage," he said.
Faisal Abdullah Al Teniji, a Federal National Council health committee member from RAK, applauded the changes but cautioned that it was important to ensure price reductions did not compromise quality.
One pharmacist from Abu Dhabi said most customers were covered by insurance so did not care about the cost of medicines, though some lower-paid workers who were not always insured for all drugs stood to gain from the move.
However, he was concerned by any reduction in the profit margins of pharmacies.
"The current profit margin of pharmacies is 14 to 15 per cent. The expenses of pharmacies are increasing day by day - the salaries and rent and everything - and if they reduce the profit margin again it will affect the pharmacy business in a negative way.
"I would not like to see the pharmacy profit margin reduced any more."
* Additional reporting by Emily Cleland