Pricing of medicines and medical products in Uzbekistan
Pricing medicines and medical products is one of the key issues in today's medical industry. The issues of access to medicines for patients, including the fairness in the prices of medical goods are at the forefront of the public debate. This article will discuss the main aspects of pricing in medicine, including the changes that have occurred in the related legislation of Uzbekistan.
Over the past year, there have been some notable changes in Uzbekistan in connection with the practice of price regulation, which is carried out by the government in accordance with the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan “On measures to further improve the formation and application of prices (tariffs) for goods, prices for which should be regulated by the state” No.722 dated December 29, 2023 (the “Resolution No.722”).
In accordance with the Resolution No.722, the government regulates the prices of goods in the following ways:
- establishment of fixed or limited prices (tariffs) for socially significant and strategically important goods, the prices for which are subject to regulation by the government, the price regulation authority, and local self-government authorities within the framework of their powers;
- regulation of prices (tariffs) for products produced and sold by economic entities of social or strategic importance. Prices for such goods are set by the state using regulated profitability ratios, markups, or limited profitability, which is called “declaration of prices (tariffs) for goods”;
- approval by the price regulator of coefficients, markups, or marginal profitability that regulate prices (tariffs) or their limited levels for goods produced and sold by natural monopoly entities. This process is called "price (tariff) approval";
- coordination with the price regulation authority or establishment of fixed or limited prices (tariffs) and markups for certain goods in accordance with the decisions of the President of the Republic of Uzbekistan.
In addition to the above methods, in accordance with current legislation, other methods of state regulation of prices (tariffs) may be used.
For certain types of goods, state authorities, within their competence provided for by law, in agreement with the price regulation authorities, may establish fixed or maximum prices (tariffs) and markups.
It should be noted that in order to increase the level of provision of the population and medical institutions with affordable, high-quality medical products, introduce a flexible and transparent mechanism for their pricing, suppress unjustified price increases and the practice of prescribing expensive imported drugs in the presence of more affordable and high-quality domestic analogs, Presidential Decree “On measures to improve further the provision of the population with medicines and medical products” No.2647, dated October 31, 2016 (the “Decree No.2647”) was enacted. According to Decree No.2647, social pharmacies were required to sell socially significant medicines and medical products at a 10% markup of the purchase price or wholesale price. However, this requirement is no longer valid.
Following Regulations on the procedure for wholesale sale of medicines and medical products (Appendix No.1 to Resolution of the Cabinet of Ministers No.185 dated April 6, 2017), wholesale and retail sales of medicines and medical devices imported or purchased from domestic manufacturers shall be conducted with the application of maximum trade markups. These markups are determined irrespective of the number of intermediaries involved in supply. For wholesale sales, the maximum trade markup should not exceed 15% of the purchase price, and for retail sales - no more than 20% of the wholesale price.
Territorial health care authorities exercise control over the pricing of medicines in pharmacies, while the Antimonopoly Committee of the Republic of Uzbekistan conducts periodic selective inspections to ensure that wholesale entities supplying these products to pharmacies adhere to the protocols for state regulation of prices for medicines and medical products.
The Ministry of Foreign Trade of the Republic of Uzbekistan is responsible for analyzing global price trends and submitting quarterly proposals to the Republican Commission. These proposals include recommendations for establishing the maximum permissible contract price for medicines and medical products. The Department for Combating Economic Crimes under the General Prosecutor's Office of the Republic of Uzbekistan is responsible for ensuring that wholesale and retail organizations selling medicines and medical products comply with the established procedure for state regulation of prices for them. If violations are identified, the Department is authorized to submit relevant materials to the licensing authority to take measures in accordance with the law.
In accordance with the Resolution “On additional measures to deepen reforms in the pharmaceutical industry of the Republic of Uzbekistan” No.4554 dated December 30, 2019 (the “Decree No.4554”), from July 1, 2020, a system of reference pricing for medicines is gradually introduced in Uzbekistan, the main requirements of which are:
- selection of at least 10 reference countries belonging to the group of countries with high, above-average or below-average income per capita.
The list included:
1. Hungary.
2. Russian Federation.
3. Ukraine.
4. Republic of Poland.
5. Republic of Tajikistan.
6. Republic of Slovenia.
7. Republic of Kazakhstan.
8. Republic of Bulgaria.
9. Republic of Belarus.
10. Kyrgyz Republic.
- submission to the registration authority by the holder of the registration certificate or his authorized representative of the manufacturer's selling price in the country of origin, reference countries and the Uzbekistan of a medicinal product of the same manufacturer with the same active substance, taking into account the dosage form, number of units in the package, dosage, concentration, volume and packaging;
- registration of maximum prices for each trade name of a medicinal product, taking into account the pharmaceutical form, quantity per package, dosage, concentration, volume, and packaging, above which it is supplied to Uzbekistan (for imported medicinal products) and released by domestic manufacturers (for domestic medicinal products) cannot be carried out.
Furthermore, in compliance with Resolution No.4554, the Minister of Health of the Republic of Uzbekistan issued Order No.3242 dated July 10, 2020, “On the Approval of the Regulation on the Procedure for Registering Prices for Medicinal Products in the Reference Pricing System”, according to which the Procedure for Registering Prices for Medicinal Products was approved. This regulation defined the procedure for registering maximum prices, the procedure for determining the purchase cost of imported drugs, including the above mentioned reference list of countries.
Moreover, it should be noted that this provision applies only to medicines authorized for use in medical practice in Uzbekistan. According to the Regulations on the Procedure for Registration of Prices for Medicines, within the framework of the reference pricing system, price registration does not apply to medicines included in the list of medicinal substances, Orphan medicines intended for the treatment of rare diseases, and for medicines certified before the establishment of price limits.
The Pharmaceutical Industry Development Agency has developed an online platform[1] through which manufacturers operating in the Uzbekistan market must provide the Agency with the selling prices of their medicines in 10 reference countries. Their average value is the maximum cost above which medicines cannot be imported or sold to distributors in Uzbekistan.
In addition, one of the main innovations in the legislation is that in accordance with the Presidential Decree of the Republic of Uzbekistan “On additional measures to provide the population with quality medicines and medical devices” No.411 dated October 26, 2022 (the “Decree No.411”), from May 1, 2023, an automatic system will be introduced in Uzbekistan to detect cases of overpriced medicines sales. If, during the analysis process, the system detects overpricing compared to established retail prices, the system will automatically send a message to the state authority responsible for consumer protection to take appropriate action.
After verification based on such notification, if it is determined that the price of the drug on the receipt is actually higher than the retail reference price, a fine will be imposed in accordance with the established rules. In addition, indicating an incomplete amount of purchased medicines and medical products on the purchase receipt will be considered a violation of the laws on trade or the provision of services.
The pricing of medicines and medical products remains a complex issue that requires the attention of governments, manufacturers, and consumers. In order to ensure better health and well-being for all members of society, transparency, fairness, and affordability must be the core principles guiding the healthcare pricing process.
Authors: Olmoskhon Khamidova, Mukarramkhon Abdullaeva.
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