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Ministry bans discount on medicines to pharmacies

DUBAI - Medicine suppliers have been barred from offering a direct discount to pharmacies on the purchase value of drug prices fixed by the health ministry, according to a circular issued by the UAE Ministry of Health.

The discount — also referred to as a ‘bonus’ for private pharmacies — works like any other business on the simple equation of ‘buy one, get one free’.

A senior official from the ministry said the practice was against medical ethics and did not help poor patients in any way. He said the ministry was already offering a profit of between 16-20 per cent for chronic/non-chronic medicines to pharmacies.

Owners of private pharmacies, however, have said that the move means ‘double recession’ for them. They said that loss of this business means a struggle to pay rents, salaries and cover other related costs. They have also accused the ministry of interfering in business matters of pharmacies instead of streamlining the profession.

“The reason why we issued the circular is that the law and system of the country does not allow 50-100 per cent profits on medicines,” said Dr Amin Al Amiri, Assistant Undersecretary for Medical Practices and Licensing at the ministry. “This is illegal.”

He said agents or factories could reduce the prices of medicines instead. “Patients need this support,” he added.

The circular issued on November 15 to agents of medicine companies, owners and in-charges of private pharmacies, pharmaceutical establishments and warehouses states that all medicine suppliers should abide by prices fixed by the ministry which already include a profit margin for both the pharmacies and importer.

Dr Amiri ruled out that the move would affect businesses. “We, as a ministry, have to keep in mind the benefit of patients.” The move could also mean availability of high standard innovative drugs instead of generics. “The bonus is mostly offered by a few factories, including those from the local market that manufacture generic drugs,” said Dr Amiri.

A manager of a private pharmacy, on the condition of anonymity, said the circular was controversial. “It’s like telling a big hypermarket not to sell products at promotional prices,” he said, adding that no business could survive on a profit margin of 15 per cent. “There are loses due to expired medicines which

Ministry bans discount on medicines to pharmacies the agent refuse to compensate, and besides, rents for the outlets are not controlled by the ministry,” he added.

He said there were no other benefits to pharmacist since there is no legislation allowing a pharmacy to charge professional fees to the customer. “Pharmacists do not charge consultation fees and there is no appreciation and compensation given to the pharmacy trade for providing 24-hour services to the society,” he added.

Nabeel Samara, sales manager of drug distribution company Alphamed said the new ruling would give actual figures of the business. “Though I support the move, I think the profit margin of pharmacies should be increased,” he said.

He added that the market would become more competitive. “We will now have a crystal clear picture of the movement of the medicine market.”

Industry experts said the move could also have negative impacts and encourage illegal business. “It’s a matter of survival and people will soon come up with alternatives,” said an owner of a pharmacy in Dubai. However, the ministry warns that violations will be submitted to the Pharmaceutical Licensing Committee that can impose disciplinary penalty. The circular adds that the matter will also be put to the Higher Committee of Medicine Registration.

asmaalizain@khaleejtimes.com