Drug Information Center Department of Drug Provision and

Drug Information Center Department of Drug Provision and Medical Equipment Ministry of Health of the Kyrgyz Republic THE INFLUENSE OF VAT ELIMINATION ON DRUG ACCESS IN KYRGYSTAN Saliya Karymbaeva International Conference on Improving Use of Medicines Thailand, March-April 2004

Department of Drug Provision and Medical Equipment Background • 4% of drugs in the pharmaceutical market are locally produced • High drug prices • Law access to medicines • Illegal pharmaceutical market • Usage of ineffective drugs, poor quality and counterfeited drugs • No VAT in neighboring countries • VAT (20%) abolished in early 2003

Department of Drug Provision & Medical Equipment • Regular monitoring of indicators, including – drug imports – quality checks of imported, registered drugs – number of registered drugs 3

Objective: Department of Drug Provision & Medical Equipment • To assess the effect of VAT elimination on the retail price of selected drugs 4

Survey Method Department of Drug Provision & Medical Equipment • Observational time-series design with comparison (June 2003, October 2003, January 2004) • 30 private pharmacies • 6 regions of the Kyrgyz Republic • 35 medicines from National Essential Drug List (all generics for each medicine) • Average price was used

Department of Drug Provision and Medical Equipment Drug Prices 1997 - 01. 04 (som - national currency) 1997 Indomethacinu m 25 mg #30 1998 1999 2000 2001 2002 01. 04. 03. 01. 10. 03. 01. 04. 18. 04 23. 30 24. 1 23. 7 18 16 13 13. 5 Paracetamolum 0. 2 #10 2. 63 3. 48 3. 94 5. 0 5. 5 5. 0 4. 0 3. 5 metamiz ol 5. 0 #10 3. 87 4. 10 4. 97 6. 0 5. 9 5. 5 5 5 4 polyvido ne 200. 0 40. 50 45. 48 57. 29 58. 6 69. 6 77 58. 73 46 45 Combin analgesi c #6 2. 84 3. 18 3. 62 4. 1 3. 5 3 2 2. 12

Department of Drug Provision and Medical Equipment Drug Prices 1997 - 01. 04 (som - national currency) cotrimax azole 480 #20 drotaveri ne #100 27. 15 25. 96 38. 21 62. 9 70. 9 75. 0 63. 0 60. 0 49. 70 76. 86 101. 5 193. 1 191. 64 200. 0 198. 0 165. 0 170. 0 3. 81 3. 84 5. 43 8. 9 8. 54 8. 0 6. 5 6. 0 4. 0 3. 97 3. 96 4. 02 6. 4 6. 75 5. 0 4. 0 11. 25 16. 69 24. 35 26. 5 27. 0 25. 0 14. 0 Curinge 5. 0 2. 18 2. 26 2. 42 3. 6 3. 8 3. 7 3. 0 2. 5 2. 9 Blood transfusion set 8. 53 11. 12 17. 53 20. 4 21. 0 18. 0 17. 5 Reserpi ne #10 Diphenh ydramin tab 0. 5 #10 Diphenhy dramin Inj 1% 1 ml #10 7

Survey Results Department of Drug Provision & Medical Equipment • Retail drug pruces decreased 18 -30% following the elimination of VAT Regular monitoring showed: From Dec 2002 -April 2003: • Wholesale turnover increased 12 -15% • Retail drug sale increased approx. 60% In 2003: • Wholesale turnover increased approx. 300% 8

Department of Drug Provision and Medical Equipment National Pharmaceutical Market

Department of Drug Provision & Medical Equipment Drug imports to Kyrgyzstan 2001 -2003

Department of Drug Provision & Medical Equipment Drug Quality Control for imported registered drugs, 2000 -2003

Department of Drug Provision and Medical Equipment Conclusions Elimination of VAT lead to: • Lower retail drug prices • Increased number of imported drugs

Methodology and organisational problems • Due to financial and time constrains data was collected by phone and fax from some regions • Average price was chosen rather than median price or the price of the most sold generic • In some areas the drugs were not found (salbutamol, beclometasone, ketotifen)

Methodology and organization problems • Illegal drugs and counterfeited/substandard drugs (which are very cheap) were not excluded from the survey and influenced the results • Medicine pack size varied between generics

Department of Drug Provision and Medical Equipment Next steps • Price monitoring, especially in rural areas, to examine availability and prices of selected medicines - using WHO/HAI methodology