bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Friday 17.01.2020 | Name days: Tenis, Dravis
LatviaLatvia

Competition Council: Latvia has the most unfavourable pricing mechanism in Baltic States

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Competition Council, mechanism, prices, medicines, markupLatvia has the most unfavourable pricing mechanism for medicines and market, in which prices of the most often bought state-compensated medicines are compared with other Baltic States, as concluded by Competition Council.

The report mentions that the end prices are compiled from the producer price, wholesale trader’s markup, pharmacy markup and VAT. In Baltic States, the most considerable changes in price structure are created by markups from wholesale traders and pharmacies, as well as VAT, which is 12% in Latvia, 9% in Estonia and 5% in Lithuania. The markup in Latvia is formed by wholesale traders applying growing percentage markup on top of the producer’s price, whereas pharmacies apply the markup to wholesale trader’s price.

In Lithuania and Estonia, both markups are applied with a limit, which prevents prices from growing significantly. The limit on the markup in Latvia is set for pharmacies and only for state-compensated medicines.

By comparing approximately 20 most popular medicines in Baltic States, CC found that in most cases producers in Latvia had set a lower price for Latvian wholesale traders. However, because of the markup, this was not reflected in the end price.

Producers had set prices lower than those in Lithuania and Estonia for approximately 80% of surveyed medicines. Only 40% of them are procured by people at prices lower in comparison to Lithuania and Estonia.

CC surveyed the differences among price-setting mechanisms for medicines in Baltic States and the effect they have on compensated and non-compensated medicines. After comparing medicine price regulations in Latvia, Lithuania and Estonia, CC concluded that Latvia has the least favourable price-setting mechanism.

Latvia’s mechanism provides that as the price increases, markup of wholesale traders and pharmacies is to reduce in percentage. However, it only increases in reality.

Data shows that in Latvia consumers most often pick compensated and non-compensated medicines that cost up to EUR 50.

Estimates also point to the possibility that Latvia’s medicine price-setting mechanism for wholesale traders is favourable, because it allows for setting relatively high maximum price markup.

Similar conclusions have been made for markups of pharmacies in Latvia. For example, pharmacy markup for factory medicine package worth EUR 20 may reach EUR 4.92, whereas the markup in Lithuania is EUR 3.57 and EUR 3.09 in Estonia. As producer prices increase, there is a percentage increase of Latvian pharmacies, whereas markups for non-compensated medicines in Lithuania and Estonia remain unchanged at a certain procurement price threshold.

Read also: Pharmacy owners: compensated medicines should be supplied with reserves

«A comparison of wholesale trader and pharmacy markups in Baltic States, Latvia’s highest markup is not just for the cheapest medicines that cost under EUR 3.5. As the price increases, so does the markup difference in Latvia. Under such a markup system, differences are the most sensitive for non-compensated non-prescribed medicines because wholesale traders and producers have a wide range of freedom. At the same time, there is vertical integration and insufficient independence of pharmacies,» admits the competition supervisor.

As noted by CC, Baltic markets are relatively similar and medicine prices should not differ considerably. CC believes it is necessary to review price-setting mechanism for medicines and look at the levels and reason behind overpaying.


Leave a reply

FKTK lists exceptions in which banks are allowed to service Aivars Lembergs

Latvian Finance and Capital Market Commission has listed cases in which Latvia’s finance market participants will be allowed to service Aivars Lembergs, who is subjected to US OFAC sanctions and accused of serious crimes, and three organizations associated with him – Ventspils Development Agency, Business Development Association and Latvian Transit Business Association.

Appropriate jobs promised for laid-off LDz workers

Latvian State Employment Agency promises to find appropriate jobs for laid-off Latvian Railway workers. If need be, those people will be provided the opportunity for re-qualification, raise their qualification or train for a new profession, as confirmed by the agency’s representative Signe Bierande.

Bordāns selects potential candidates to lead the Supreme Court and Prosecutor General’s office

I can see people who could take the reins over the Office of the Prosecutor General and the Supreme Court and change their work standards, Latvian Justice Minister Jānis Bordāns told TV3 programme 900 seconds when asked about any potential candidates to lead those institutions.

Ukrainian Prime Minister ready quit after leaked voice recording

Ukrainian head of government Oleksiy Honcharuk has offered to resign following the circulation of an audio recording, where criticism of Ukrainian President Volodymyr Zelenskiy and his knowledge in economy is voiced.

Inflation in Latvia reportedly higher than Europe’s and Eurozone’s in December

In December 2019 inflation in Latvia was higher than the average in the European Union and Eurozone, according to information published by Eurostat on Friday, 17 January.

Estonian population growth continues in 2019 due to immigration

Estonia has registered in 2019 population growth for the fifth consecutive year and it can be explained with immigration not with natural growth, according to preliminary data released by Statistics Estonia.

BNN investigation | Raunas street property: quiet assistant with a «secret wallet» for Lembergs

There are suspicions that Aivars Lembergs, subjected to international sanctions, has sold real estate located on Raunas Street 27 in Riga to his sister «on paper only». This may have been done to avoid confiscation of properties in the event of a guilty verdict or a possible arrest over the real estate property. However, it is possible Lembergs maintains full control over this real estate property and, most likely, the property is used to fatten his wallet on a regular basis.

Audit: majority of Latvian housing stock has degraded to a state of a slum

Since the denationalization effective access to housing security in Latvia does not exist and most of the housing stock has degraded up to a state of a slum, as concluded by the Latvian State Audit.

Prime minister affirms possibility of carrying oil supplies for Belarus through Latvia

During his meeting with Belarusian President Aleksandr Lukashenko on Thursday, 16 January, Latvian Prime Minister Krišjānis Kariņš affirmed that oil supplies for Belarus may be possible using Latvia’s ports.

Rain in Australia provides relief to continuing fight against bushfires

In eastern Australia, which has been suffering in prolonged and disastrous bushfires, heavy rain has been falling for the past 24 hours.

Weather to remain warm in Latvia at week’s end

At the end of the week the sky in Latvia will become clear and the sun will shine. No precipitation is expected. However, a low atmospheric pressure area will approach the country from the west during weekends, as reported by Latvian Environment, Geology and Meteorology Centre.

GKR helps overthrow Riga’s vice-mayors and put an end to ruling coalition

Riga City Council vice-chairperson Anna Vladova and deputy Druvis Kleins lost their respective posts at an extraordinary meeting on Thursday, 16 January. This happened because multiple deputies from Honour to Serve Riga voted together with the opposition in favour of dismissing them.

Latvian Railway plans to lay off 1 500 employees

Latvian Railway plans to terminate labour relations with approximately 1 500 employees before the end of 2020, as reported by the company’s representative Ella Pētermane.

Russian State Duma approves Putin’s new Prime Minister

The Russian State Duma has approved on Thursday, January 16, the candidacy of the country’s next Prime Minister appointed by Russian President Vladimir Putin.

Ventspils opposition invites Pūce to act to prevent US sanctions from spreading to city council

Environment Protection and Regional Development Ministry and especially Juris Pūce have to act to resolve the current state of Ventsils City Council. It should be dismissed, as the municipal government does not have moral, ethical or legal foundation to continue managing and implementing the criminal management’s policy, according to Ventspils City Council opposition deputies.

Trade unions urge Latvian government to resolve transit businesses’ blocked bank accounts problem

Multiple trade unions associated with the transit industry have turned to Latvia’s highest ranking officials with a request to resolve the situation with bank accounts of multiple transit companies having been blocked because of US sanctions against Aivars Lembergs. If the government does not act, trade unions promise to organize massive protests.

Anris Leimanis picked as RB Rail council chairman

Anris Leimanis, independent council member from Latvian shareholder, has been picked as Rail Baltica joint Baltic company AS RB Rail council chairman. Ahti Kuningas and Karolis Sankovskis will serve as vice-chairmen, as confirmed by the company.

CSP: number of residents at risk of poverty declines in Latvia

In 2018 a total of 434 thousand persons or 22.9 % of the population of Latvia were at risk of poverty – 0.4 percentage points less than in 2017.

Latvian Saeima to ask Denmark to not extradite Kristīne Misāne to South African Republic

On Thursday, 16 January, Latvian Saeima made the decision to protect the rights of Latvian citizen Kristīnes Misāne, asking the Danish parliament and Danish law enforcers to support their Latvian colleagues and find a solution to avoid extraditing her to the South African Republic, as reported by Saeima’s press-service.

Smiltēns: Riga City Council’s situation can be described – divide, redistribute and plunder

«The situation in at Riga City Council can be described with three words – divide, redistribute, plunder,» said leader of Latvian Association of Regions Edvards Smiltēns in an interview to LTV programme Rīta panorama on Thursday, 16 January.

One single vote left the Lithuanian election system intact

The understanding that Lithuania’s election system needs changes is nearly overwhelming, but the ruling Farmers and Greens’ attempt to lower the Parliament election threshold in parties’ multi-member constituency from current 5 per cent to 3 per cent suffered a setback this week.

Estonian power grid executive detained over bribery suspicion

The Estonian Internal Security Service has detained a board member of the Elektrilevi power grid operator over suspicion of taking a bribe.

Demographer: Latvia has the lowest birth rate level observed the past decade

Birth rates continued to decline in Latvia in 2019. The lowest level of the past decade was reached in the country last year, says demographer Ilmārs Mežs.

Healthcare Ministry proposes single social fees rate for specialized tax regimes

One percentage point social fee rate for healthcare will be applied not only to general tax regime participants but also those working in special tax regime, such as microenterprises, patent payers and royalty recipients, according to a proposal for Latvian Healthcare Ministry.

U.S. and China reach preliminary trade agreement

Easing the U.S.-China trade conflict the governments of the two countries have agreed on the first step of mutual trade reconciliation. Their disagreements have affected the world economy for the past few years.


Do NOT follow this link or you will be banned from the site!