DOHA: The Supreme Council of Health (SCH) is considering a proposal to impose a ceiling on prices of medicines to curb the unprecedented price rise the market has been witnessing for the past few months.
The prices of most medicines have gone up by 20 percent to 40 percent after the government lifted its control over the pricing.
According to sources at the SCH, a discussion is going on among senior officials at the SCH on how to tackle this phenomenon. One of the proposals being considered is putting a ceiling on the prices to prevent wholesalers and retailers from hiking the prices indiscriminately.
"The SCH can no longer fix the prices of medicines as per the new laws, but the laws do not prevent it from putting a ceiling on the prices," said an official.
A set of new laws implemented recently allowed dealers to fix the prices of medicines. The laws also ended exclusive dealerships in the pharmaceutical sector and liberalised imports in a bid to open the market to competition. Leading distributors seized the opportunity to hike prices in a manner the market had not witnessed in the past. The prices of some medicines have risen by more than 50 percent, leading to a public outcry calling on the government to intervene.
"Expectations were that the prices would come down as the market opens to competition and more importers enter the fray. The ideal situation is to leave the prices to be determined by the market itself. But the authorities would be forced to intervene if some greedy dealers try to exploit the situation," said the official.
He indicated that a price cap might become necessary to check the price rise since it would take time for new importers to enter the sector. However, no decision had been taken so far, he said.
Although in theory the law has ended exclusive dealerships, the existing dealers will continue to enjoy that status if the manufacturers are not willing to award agency rights to new importers.
The current dealers would continue to dominate the market if a regulatory mechanism is not put in place, it has been pointed out.
Importers have now been allowed to bring in medicines not only from the country of origin but also from certified agents in other countries.
This can boost supply depending on whether the source countries permit re-export of medicines.
Since the market is not yet ready for competition, prices of medicines are not likely to come down in the immediate future in the absence of effective government intervention, say industry sources.
© The Peninsula 2011
