The price of more than 6,600 medicines - or 94 per cent of drugs sold in the UAE - will be cut as part of plans by Ministry of Health.
UAE drug companies agree to cut cost of medicines
DUBAI // A major drug company says plans to lower the cost of medicines sold in the UAE by up to 40 per cent are manageable.
The cuts, agreed to on Sunday, will be in place within three months after drug makers agreed to drop the price of goods sold to local agents.
It will affect 6,632 medicines, or 94 per cent of the 7,053 products registered in the UAE. Prices for the rest will stay the same or increase slightly.
Ayman Mokhtar, general manager for the region at Sanofi, which makes drugs to treat cancer and diabetes drugs, said the changes were manageable.
“There could be an impact but on the reverse side, we will have more patients actually using the drug,” Mr Mokhtar said.
“Even so, the company is just one component. You have the agent mark-up and the pharmacy mark-up. The beauty of this is that the end-user price is being reduced.”
The price reduction comes after two years of talks between the Ministry of Health and pharmaceutical makers.
“They joined this effort and understood that the reduction of the price was not for the ministry, it was for the poor patients,” said Dr Amin Al Amiri, assistant under secretary at the ministry.
“It’s a kind of humanitarian support to the community of the Emirates. They were very supportive and helpful to this initiative.”
Inspections will be carried out by the ministry, and pharmacies that breach the new pricing rules after the three-month introductory period will be fined.
“The prices are now the lowest in the region,” said Dr Al Amiri. “This is a great help for patients.”
The ministry has taken two more steps: fixing the profits of agents at 15 per cent, and increasing the profit margins of private pharmacies.
Most pharmacies sell most products at a profit of about 18 per cent for chronic disease treatments, and 24 per cent for non-chronic.
The ministry will increase the margins in slightly different criteria, whereby medicines priced between Dh1 and Dh250 can be sold for a profit of 28 per cent on the original price from the makers.
Medicines from Dh250 to Dh500 can be sold for a mark-up of 24 per cent, while those priced over Dh500 can only be sold for a 20 per cent profit.
Eighty-three per cent of medicines are priced under Dh250, Dr Al Amiri said.
“This is a great support for private pharmacies,” he added.
Most patients buy medicine using health insurance so the scheme will probably affect only low-income patients.
But Dr Al Amiri said insurance companies should take into account the changes in the cost of medicine.
“This will affect insurance premiums because the price in the market has been decreased,” he said.
“Insurance companies should consider this. There’s a board of trustees for insurance companies, and they will have to study it.”