World Markets Research Centre
Global Insight
August 10, 2009
Double-Digit Growth Reported on Pharmaceutical Prices in Armenia
BYLINE: Mitra Thompson
Prices of medicines sold in Armenian pharmacies are reported to be
growing at an unsustainable rate, prompting a report to the Ministry
of Health. The report, prepared by the State Commission for the
Protection of Economic Competition, found that two of the six biggest
pharmaceutical companies by market share had applied so-called
excessive price increases on their products during a survey period
from 28 February to 5 March 2009. According to AMI Novosti-Armenia,
the two firms in question were local players Amikus and Vaga Farm,
whose treatments saw average price gains of 12-18% and 5.8-16.8%,
respectively. The Commission said that prices of a given drug often
varied heavily from one pharmacy to the next, and accused drug makers
of questionable accounting practices in order to maximise profits.
Significance: The Commission has warned that Amikus and Vaga Farm are
unlikely to be the only companies to be steadily increasing the price
of their drugs, but financial limitations have prevented the
Commission from verifying further sales data. Fluctuations in the
value of Armenia’s currency will have played a role in affecting the
price of imported medicines, and wholesalers and retailers are likely
to have raised their mark-ups on medicines to stay profitable as
well. If the Ministry of Health decides to regulate the sector, it may
follow Ukraine’s example of imposing maximum wholesale and retail
margins on all pharmaceuticals.