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Regulation of medicine prices positive for medical insurance

19 June 2015 16:00 (UTC+04:00)
Regulation of medicine prices positive for medical insurance

By Nigar Orujova

The state regulation of prices for medicines in Azerbaijan will not contribute to a decline in profits for health insurance companies.

The statement was made by Orkhan Bayramov, the head of Azerbaijan Insurers Association, at a press conference on June 17 focused on the activities of Azerbaijani insurance companies from January until May.

"State regulation of drug prices will definitely have a positive impact on the health insurance because the insurance payment depends on the prices of medicines. If prices rise, then, consequently, the volume of payments rise also. Now artificially inflated prices will be prevented, which at least will not allow the health insurance to be unprofitable," he stressed.

Earlier, the Tariff Council of Azerbaijan adopted a mechanism for calculating the price of medicines. Using this new model, the Council determines wholesale and retail prices for medicines that are licensed by the state.

From January until May, charges on voluntary medical insurance in Azerbaijan amounted to 40 million manats (about $38 million), or 26.6 percent of total fees of the non-life insurance, the payments amounted to 20.6 million manats (about $19.6 million) which is 41.7 percent.

There are 26 insurance and reinsurance companies in Azerbaijan.

The Tariff Council reported that medicine prices will be standard in all pharmacies, eliminating the need for consumers to browse through a number of stores to find the lowest costs.

New regulation will lead to a reduction in health care costs as well. Currently, some 4,500 medicines have been granted Ministry of Health approval in Azerbaijan.

All medicines imported into Azerbaijan are inspected before reaching pharmacies and hospitals. The country bans the import of drugs to the country without a license, permission, or other relevant documents.

In the case of a new license application, the ministry will conduct an investigation of the drug. Those drugs that pass state registration will be included in a list of approved drugs for import.

Pharmaceutical importers should direct inquiries to the Health Ministry and the Tariff Council for pricing approval.

Drug pricing regulation is based on a standard price, set by the Council, which will consider domestic drug prices in 10 importing countries: Turkey, France, Italy, Spain, Portugal, Greece, Poland, Hungary, Bulgaria and Slovenia. The Council selects the lowest domestic price for the drug being sold in these countries.

The Council will reevaluate drug prices once every quarter.

Those pharmacies that choose to inflate the cost of medicines should expect a fine up to 50,000 manats (about $47.600).

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Nigar Orujova is AzerNews’s staff journalist, follow her on Twitter: @o_nigar

Follow us on Twitter @AzerNewsAz

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