Dinar devaluation, one of key factors behind drug shortages in Tunisia

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Tunisia - The devaluation of the dinar is one of the main factors responsible for the shortage of medicines and the financial imbalance of the Central Pharmacy of Tunisia (PCT), in addition to the deficit of the social security funds (CNAM and CNSS) which prevents the reimbursements on which the PCT depends, according to the Tunisian Observatory of the Economy.

In a note published on Wednesday, entitled "The shortage of medicines is a crisis exacerbated by the devaluation of the dinar and the dependence of the Tunisian pharmaceutical sector on imports", the OTE pointed out that the devaluation of the dinar has increased the amount that the PCT has to pay to buy the same medicines abroad, even though it continues to sell them at the same prices as before, in order to guarantee the affordability of medicines.

In fact, almost 46% of national drug requirements are covered by imports, which increases the cost of this devaluation.

The devaluation of the dinar has therefore caused a 62% loss in PCT's net result for 2018 compared with 2017, from 144.8 million dinars to -234.6 million dinars.

OTE adds that the much-criticised "inefficiency" of the PCT is not directly due to the compensation mechanism, whose social impact is undeniably positive, but to the phenomenon upstream of compensation, that of the sharp devaluation of the dinar since 2016, which has had a negative impact on the PCT's ability to guarantee the supply of medicines in Tunisia.

The devaluation has also had a direct impact on local drug production, with most of the machinery and raw materials used to produce generic medicines being imported from abroad in foreign currency.

A stabilisation of the exchange rate and public funding for health and social security could help to restore balance within the pharmaceutical sector in the short to medium term. In the longer term, the end of shortages also depends on alternatives that would reduce the sector's dependence on imports by supporting local production.