‘Premature’ cut in medicine prices

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It should have been part and parcel with the NHS

The government’s forced reduction in the prices of some 920 medicines was premature, as it was not introduced within a greater plan of starting the national health service (NHS), according to a leading pharmaceuticals representative.

Katia Polycarpou Gritzali, General Manager of the GlaxoSmithKline operations in Cyprus, says that the whole method of cutting prices should have been done in such a way so as not to have shortages in the market.

“The opinion given to the public is also misleading, as there are vaccines that are cheaper in Cyprus than in the rest of Europe, but nobody believes it,” she said.

There are a further 2,000 medications that will not see any change in their prices.

Gritzali told the Financial Mirror in a recent interview that other critical issues are not dealt with using the same zeal, such as allowing the quick registration of new drugs that come to the market.

The issue that will now arise will be the choice between generic drugs and those licensed products imported by the pharmaceutical companies.

“It is not always the same product,” Gritzali said.

State supply contracts are won through public tenders every two years, while the government has a preference for generic drugs due to lower costs.

The ‘saving’ of CYP 7 mln from the consumers’ household budget will mean that companies will be obliged to freeze employment and cut costs. This could result in the loss of medicines from the market altogether

In all, CYP 28 mln in the sale of medicines was generated by the retail sector and CYP 28 mln is bought by the government each year. As the first figure is expected to be reduced to CYP 21 mln, this may increase the volume of public purchasing, as the lack of supply in the market will force more people to rush to the state for help, becoming a strain on the government purse.

“The volume of available medicines will only increase with the introduction of the NHS,” Gritzali said, adding that “if the NHS is introduced soon and if consumers will have a choice between generic and original medicines, then this is good.”

Drop in prices, cut in costs

The first impact from the loss of CYP 7 mln from the market is the restructuring of the pharmaceutical companies in Cyprus.

GSK employs 29 people in its head offices in Nicosia and Limassol, as well as a sales and marketing team through distributors Kapakiotis and Papaellinas Ltd. that visit doctors regularly and brief them on new drugs.

“We have a presence in 117 countries, with a 7% market share of global pharmaceutical sales, 23% of world vaccines, and up to 80% in vaccine sales in Cyprus.

“Our company is a leader in respiratory medicines, anti viral, vaccines and with a market share in Cyprus that has grown from 10% in the 1950s to 25% today.”

“You can only do this by investing 18% of your earnings in research and development, while only 4% is reinvested by the motorcar industry and 8% for R&D in the electronics sector.

“Any new medication costs USD 897 mln in research, with only three out of 10 recovering the initial investment. Only 10% of clinical trials reach the market, while new medicines need 10-12 years to get to the consumer.”

Gritzali said the pharmaceutical companies are providing a community service by eradicating many diseases with award winning drugs developed in multi-million dollar labs that are operated by Nobel prize winners.

In Cyprus, GSK is already in Phase III of clinical testing to be concluded at the Bank of Cyprus Oncology Centre, while it is also in close cooperation with the Association of Cancer Patients and Friends.