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Wednesday 20.09.2017 | Name days: Marianna, Ginters, Guntra
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Lithuania’s Health minister tackles exorbitant drug prices

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Linas Jegelevičius for the BNN

You better stay healthy in Lithuania for a single reason – the medicine costs an arm and leg in Lithuania. In neighboring Poland, they are twice and thrice lower, thence the shopping carts of hundreds and thousands Lithuanians making the trip over the border for cheaper groceries usually often contain pills too.

Salvage for many

«If not cheaper Polish goods, including medicine, which I buy in Poland’s Suwalki, my life here would be a lot more miserable,» Juozas Kašėta, a sexagenarian- something retiree in Varėna, a sleepy town in the southern part of the country, told BNN.

He says he was recently angered by what he says «out of touch» reasoning by a Lithuanian deputy health minister, who pondered that Lithuanians are «themselves» guilty for extraordinarily high prescription and behind-the-counter dug prices.

«If pharmaceutical companies knew that cheaper medicine sells in Lithuania well, they would definitely lower their prices. But majority of Lithuanians do not want cheaper medicine, therefore the manufacturers lack impetus to reduce them,» the words by Kristina Garuolienė, the vice minister, triggered a backlash from remedies buyers.

Mr Juozas is just one of many Lithuanians to whom the trips to Poland have become a routine. Sometimes, he says, picks up other members of his extended family to share gas costs for the 100-kilometer round trip.

Echoing, Agnė Juodžiukynienė, a dweller in the Prienai district, says that she pays visit to Suwalki at least a couple of times over a half year.

«Once my mum needed prescription shots in her joint. I was flabbergasted to hear from the local pharmacist that it will cost me a whopping 87 euros, whereas in Poland we were able to get such three injections for the price,» she remembered.

Border districts cater to Lithuanian buyers

Last winter, Polish drug stores would sell cold medicine Coldrex for 9-16 zloty, the equivalent of 2-4 euros, meanwhile, in Lithuania, the pack cost in average 4-7 euros.

Betaloc ZOK, a prescription drug to prevent high blood pressure, in Poland costs 36 zloty (6-8 euros), but in Lithuania the price hovers above 10 euros.

Some of the medicine tourists claim that the starkest differences, in terms of prices, are for food supplements. For example, fish oil pills rich with Omega- fatty acids cost 14 zloty (around three euros) over the border. However, in Lithuania, the purchase would thin your purse by 18 euros.

That Lithuanians are valued customers in the neighbouring Polish districts of Suwalki, Sejny and Punk purports a solid fact – knowing Lithuanian there is a big bonus when seeking a pharmacist’s job.

So why the medicine of the border is way cheaper?

Size matters

First, the size matters.

With Poland ten times bigger than Lithuania, the neighbour’s pharmaceutical market enjoys a vibrant competition.

Because of the relatively small market in Lithuania, some of the Lithuanian pharmaceutical companies do not want to pay money for expensive licenses for one or another rarely used drug, but the medicaments can be easily obtained in Poland, where the issue does not exist.

«Our manufacturers claim that obtaining such licenses to register one or another medicine is too expensive for them owing to the fact that few people need it. So on the losing end is the patient,» infers Gintautas Kazanavičius, an endocrinologist.

He says he often recommends his less well-off patients to buy required medicine in Poland.

«For example, remedies that are widely used by my patients cost 46 euros in Lithuania and just 8 euros in Poland,» he said.

The other reason for cheaper remedies in Poland is its lower value added tax for medicine, which stands at 8 per cent there and at21 per cent in Lithuania.

Besides, Poland is home to several big pharmaceutical companies, which, vying for domestic market, can offer medicine at affordable prices.

Minister addresses pharmaceutical industry

Addressing the issue of high medicine prices, Lithuania’s Health Minister Aurelijus Veryga has asked this week pharmaceutical manufacturers to voluntarily lower medicine prices. Previously he mentioned that pharmacies in Lithuania will be put under the obligation of issuing a certain amount of cheapest drugs.

Veryga turned last Tuesday to the Innovative Pharmaceutical Industry Association (IFPA), the American Chamber of Commerce’s Local American Working Group (LAWG) and the Association of Pharmaceutical Manufacturers, urging them to reduce the producer prices for Lithuania, so that they were under 95 per cent of the average price of generic drugs in reference countries, the Ministry of Health said in a statement.

In its efforts to draft the price list of compensated drugs for 2017, the Ministry concluded that declared prices of about 90 percent of the drugs were above the average.

«The draft price list shows that the declared prices for pharmaceuticals for Lithuania are much higher than in other reference countries for unknown reasons. Subsequently, patients are again forced to pay large surcharges for the medication. This should not be the case, as our country has definitely not yet used all the potential of bringing down prices for drugs. It is important to pursue the common goal together,» emphasised A. Veryga. «The government will take a more active role in ensuring that pharmacists would offer the most affordable medication.»

Issues were «maliciously ignored»

The Ministry plans a reform that would include implementation of recommendations from the Competition Council to prevent announcing pharmaceutical prices to interested parties.

According to the minister, currently, pharmaceutical suppliers can easily monitor prices and see little reason to offer more affordable medicine.

Furthermore there are plans to change the formation of the Compulsory Health Insurance Council which decides which medication is included into the list of the state’s compensable medicaments.

President Dalia Grybauskaitė recently said that medication compensation issues in the countries have been ignored and emphasised that the issue was a «test of confidence» for the new health minister.

«Problems regarding government-subsidised medicines have been «maliciously ignored» until now and that this issue will be a test of confidence for the new Health Minister, Aurelijus Veryga,» Daiva Ulbinaitė, the president’s spokeswoman, said to reporters after the head-of-state met with the minister and representatives of supervisory authorities in February.

A discussion at the President’s Office in late January ended with a conclusion that the existing scheme of compensating for medication set artificial obstacles for access of cheaper and more efficient drugs to the national market.

«Shelf tax» schemes

Ramūnas Karbauskis,chairman of Lithuania’s ruling Farmers and Greens Party (LVŽS), has also weighed in on the issue of medicine prices, too, claiming that some largest pharmaceutical  companies act as «shelf tax» collectors in order to conceal discounts provided by wholesalers.

The politician alleges that suspicions are strengthened by the remarkable profitability of two pharmaceutical companies in the country. For example, the profitability of one of them, EVRC, surpasses the profitability of Eurovaistinė roughly ten times.

According to Karbauskis,«shelf tax» is paid by the wholesalers, the pharmaceutical producers and distributers in order to have their medicine be sold in the Eurovaistinė and Camelia chains.

«Shelf tax» limits competition in the pharmaceutical market. Only the medicine of those who pay it appears in the pharmacy chains. Furthermore such a tax can lead to premises to distribute more expensive medicines in the chains,» the LVŽS leader said.

According to him, the ruling Coalition plans to create a workgroup and prepare amendments to the Pharmacy Law, which would limit such malpractice by pharmacies.

Price regulations for medicines were in place in Lithuania more than a decade ago, but the law was abolished in 2002.

Ref: 111.111.111.4822


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