OREANDA-NEWS. March 09, 2010. The Federal Antimonopoly Service (FAS Russia) reported on the "Findings of the monitoring of medicine prices set by pharmacies dominating the markets of retail sale of medicines, medical products and accompanying goods in municipalities and town districts". The report was presented to the Working Group on social insurance, social security, and social sector at the National Tripartite Commission for Regulation of Social and Labour Relations, reported the press-centre of FAS Russia.

FAS Russia reported on its findings of the monitoring of medicine prices in 2009, carried out to execute the instructions of the Government of the Russian Federation.

The monitoring took place in all constituent territories of the Russian Federation, and covered 945 pharmacies dominating the markets of retail sale of medicines, medical products and accompanying goods in municipalities and town districts. FAS Russia analyzed retail priced for the 100 most sought-after medicines, including 24 from the List of Essential Medicines. Most of the drugs covered in the monitoring are produced in Russia (58).

In course of the monitoring regional offices (OFAS Russia) initiated and (or) considered 381 case and fined the violators more than 11 million Rubles. The cases were initiated:

1) for the signs of violating pricing procedures - 367 cases; of which163 for the signs of violating Clause 10 Part 1 Article 10 of the Federal Law "On Protection of Competition" and 204 cases for the signs of violating Article 14.6 of the Code of the Russian Federation on Administrative Violations.

2) for the signs of violating Article 11 of the Federal Law "On Protection of Competition" (agreements and concerted actions) - 12 cases;

3) for the signs of violating Clauses 3 and 6 Part 1 Article 10 of the Federal Law "On Protection of Competition" (imposing disadvantageous conditions upon counteragents; fixing different prices for the same goods) - 2 cases.

The monitoring showed that Рaverage retail prices for the monitored medicines differed by more than two times throughout Russian regions. The highest average price was registered in the Chukotka Autonomous District (161.76 Rubles), and the lowest - in the Kabardino - Balkaria Republic (70.41 Rubles).

In 2009 prices for drug were growing faster that the inflation rate and trend value of bi-currency basket. In 2009 retail prices increased by 18.8%, while the inflation rate was 8.8% and bi-currency basket increased by 3.9%. The highest growth was registered in 1Q 2009.

Retail prices of pharmacies (18.8%) increased slightly less than wholesale prices of suppliers (20.8%) and ex-works prices of pharmaceutical companies.

In 2009 the growth of prices for Russian-made drugs was much lower than for foreign-made medicines: 8.6% for Russian drugs in comparison with 23.4% for imported drugs.

The monitoring showed that the rate of growth of retail prices for essential drugs is lower than for other medicines. In 2009 prices for essential medicines covered by the monitoring increased on average in Russia by 10.9%, while prices for other drugs grew up by 21.2%.

In 2009 actual retail mark-ups decreased due to tightening of government regulation of drug prices in most of constituent territories of the Russian Federation. Overall reduction was 1.1% (from 32.43% to 31.34%). In 2009 mark-ups for the drugs included in the List of Essential Medicines decreased by 2%, in comparison with only 0.8% for other medicines.

Among all constituent territories of the Russian Federation the highest retail mark-ups for purchasing (wholesale) prices were registered in the Chukotka Autonomous District - 102.6%. At the same time mark-ups for essential drugs were nearly two times lower than for other drugs.

As selling cheap medicines generates lower profit, retailers set higher mark-ups than for expensive drugs. On average by 1st January 2010 mark-ups for cheap medicines (prices below 100 Rubles) were 32.3%, while for more expensive drugs (from 100 to 1000 Rubles) - 28.4%.

FAS Russia will continue monitoring retail prices for medicines in 2010.

Reference:
Article 14.6 of the Code of the Russian Federation on Administrative Violations forbids exceeding the authorized ark-ups for medicines.