Reference Pricing for Pharmaceuticals in Georgia

Under the Law of Georgia on Medicines and Pharmaceutical Activities (the Law) the Government of Georgia (GoG) defined the methodology, rules and conditions for the state regulation of prices for relevant pharmaceutical products approved by its Ordinance #593 from 27 December 2020.  The Ministry of Internally Displaced Persons from the Occupied Territories, Labor, Health and Social Affairs of Georgia (the Ministry) maintains the reference retail and wholesale prices’ catalog and ensures its publicity.  

Under the Law the reference retail or wholesale price is defined as the maximum limited retail sale price of a pharmaceutical product in GEL, including pharmacy's charges.

Under the Ordinance #593 of GoG The reference price is set at two levels: for the original pharmaceutical product (including the original biological medicinal product) and for the generic and remanufactured pharmaceutical product (including the biosimilar medicinal product).  Reference prices do not represent actual prices, they determine the upper limit of the maximum allowable price, at which the sale or issuance of the product at a higher price will lead to the imposition of liability established by the Law.  

Regarding the reference price, an exception can be allowed only for a pharmaceutical product that does not have a substitute therapeutic alternative on the market of Georgia.

For patent-protected expensive original pharmaceutical products, where external reference pricing methodology is not relevant, the state uses the mechanism of Managed Entry Agreement (MEA).

For international price comparison in order to determine the reference prices, the reference prices of four reference countries are used. Those countries are Latvia, Montenegro, Bulgaria and North Macedonia.  The reference wholesale price of a pharmaceutical product is determined by the arithmetic average of the average wholesale prices (without VAT) of comparable products in the reference countries.

Planned revision of reference prices is carried out once a year and is published in November by the Ministry.

Information on reference wholesale and reference retail prices is public and is published in the form of a price catalog on the official website of the Ministry https://www.moh.gov.ge/. The prices published in the price catalog take effect 1 month after publication.

The most recent catalog of the reference prices include pharmaceutical substances under 2079 International Nonproprietary Names.

The penalty for failure to comply with the reference prices defined for pharmaceutical products varies from GEL 5 000 to GEL 30 000.