La ministre du Commerce à répondu lors de la séance parlementaire du 21 mai 2024 à la Private Notice Question du Leader de l’Opposition sur la hausse du prix des médicaments à Maurice.
To ask the Hon Dr. Mrs Chukowry, the Minister of Commerce and Consumer Protection –
Whether in regards to the constant increase in the price of Pharmaceutical Products in Mauritius, in spite of the Consumer Protection (Pharmaceutical Products) (Maximum Mark-Up) Regulations of 2023, she will state whether government will introduce new urgent measures to alleviate the burden of consumers.
Mr Speaker Sir,
The health of the population is high on the agenda of this Government.Let me remind the House that the budget allocated for the pharmaceutical products is not less than Rs1.5 billion.
A patient may choose to either be treated free of charge in Government hospitals or in private. Hence, essentially the consumers will be affected by prices on the market if they choose to go to the private medical practitioners. I am informed that approximately 75% of the population attend public health institutions and the remaining 25% have recourse to services in the private sector.
Mr Speaker Sir,
At source of pharmaceutical products are affected by the availability of active pharmaceutical ingredients, the cost of production and pricing strategies of manufacturers. I am informed by the Ministry of Health that since the Covid-19 pandemic, there has been a constant shortage of active ingredients for the manufacture of medicines at the international level. This shortage directly impact on the final price of medicines.The prices are also affected by –
• longer shipping routes for sea-freight consignments
• the demand emanating from certain countries prepared to pay higher prices than MauritiusIt is to be noted that retail prices of pharmaceutical products are impacted by three most significant components: the percentage mark up, import cost such as freight and insurance and supplier prices.
The purpose of the mark-up system is to help importers/wholesalers and retailers to cover cost such as administration, distribution, storage, transport and also includes an element of profit, while proposing a fair price to consumers. The import cost of the pharmaceutical products includes the cost, freight and insurance.
In May 2023, the Regressive Maximum Mark Up mechanism was implemented with the objective to ensure that the retail prices of pharmaceuticals products are more affordable to consumers. If the pharmaceutical product is a categorised product as per the established classes, then the product is segregated into the appropriate band value and the corresponding maximum mark-up applies.
This new mechanism replaced the previous one of 1977, wherein a special allowance of 2% for landed costs and a markup of 35% was applied on all pharmaceutical products.Mr Speaker Sir
The new Mark-up mechanism applies a gradual reduced mark up along with an increasing imported cost of pharmaceutical products so as those medicines which are more costly carries a lower maximum mark up. Regressive maximum mark up on eight (8) classes of pharmaceutical products, namely, Anticancer, Antidiabetic, Antihypertensives, Cardiovascular, Inhalers, Biologicals, Vaccines and Antacids.
The new mechanism categorizes medicines based on their price brackets with a corresponding markup percentage.
Medicines priced at Rs 500 or less constitute 67% of the total of medicines imported are given a maximum markup of 35%. Those priced between Rs 500 and Rs 5,000, which account for 27% of imports, have a maximum markup of 32%. Medicines falling in the Rs 5,000 to Rs 15,000 range and which make up 3% of imports and have a maximum markup of 29%. Finally, medicines priced above Rs 15,000, also representing 3% of the total imports, have a markup of 26%.The remaining three classes of medicines (Analgesic, Anthelmintic and Anti-fungal) of pharmaceutical products have a fixed percentage mark-up of 30% and account for approximately 21% of all pharmaceutical products.
Mr Speaker Sir
I am informed that following the introduction of the new Mark-up mechanism last year, my Ministry conducted an analysis of its impact over a period of one year as compared to evolution of price under the previous markup mechanism.The analysis has been carried out on 8,300 medicines across the classified medicines and non-classified medicines. The classified medicines comprised of eight (8) classes: Anticancer, Antidiabetic, Antihypertensives, Cardiovascular, Inhalers, Biologicals, Vaccines and Antacid. The non-classified medicines comprise of Analgesic, Anthelmintic and Anti-Fungal medicines.
From the analysis conducted, it has been observed that the new markup mechanism had an immediate effective impact on the overall classes of classified medicines with a general fall of 4.6% in the retail prices of medicines which is due to reduced mark-up percentages, an average fall of 1.2% in the international prices of medicines and an average fall of 2.4% in the import cost of the medicines under those classes. Six (6) classes of medicines have been effectively impacted, namely, Anti-Hypertensive, Cardiovascular, Anti-Diabetics, Anti-Cancer, Inhalers and Biologicals.
The details of the analysis are as follow-
For Anti-Hypertensive medicines which are the most consumed medicines and accounts for 30.4% of the import of medicines. Despite an increase of 1.5% in the international prices of Anti- hypertensive medicines, the average maximum prices of Anti-Hypertensives have decreased by an average of 1.9% which is due to an average fall of 1.1% in the import cost and -0.8% in the prevailing exchange rates.For Cardiovascular medicines which accounts for 17% of the import of medicines. Despite an increase of 4.6% in the international prices of Cardiovascular medicines and an average increase of 4.9% in the prevailing foreign currencies and a stable freight cost (import cost), the Maximum prices of cardiovascular had been reduced by 3.0% due to a reduced applicable mark-up percentage.
For Anti-Diabetics medicines which accounts for 13.2% of the consumption of medicines. The maximum prices of medicines has witnessed a reduction of 2.8% which is attributed to an average fall in the import cost of the medicines of 1.6%, an average fall of 0.5% in the supplier prices and an average fall in value of the prevailing foreign currencies of 0.6%.
For Anti-Acid medicines which accounts for 8.0% of the consumption of medicines. The maximum prices of medicines have not been impacted by the introduction of the new mechanism. Despite an average fall of 1.9% in value of foreign currencies, the maximum retail prices of anti-acids have continued to increase by an average of 6.6%. This is due to an average increase of 12.1% in the international prices of anti-acids and 6.5% increase in the import cost.
For Anti-Cancer medecines which accounts for 5.5% of the consumption of medicines. The maximum prices of medicines has witnessed a reduction of 14.1% which is attributed to an average fall in the import cost of the medicines of 10.4%, an average fall of 10.7% in the supplier prices and an average fall in value of the prevailing foreign currencies of 0.1%.
For Biologicals products which accounts for 3.3% of the consumption of medicines. Despite an average gain in value of 2.9% in the prevailing foreign currencies, the maximum prices of medicines has witnessed a reduction of 4.6% which is attributed to an average fall in the import cost of the medicines of 2.5% and an average fall of 3.0% in the supplier prices.
For Inhalers which accounts for 3.3% of the consumption of medicines. Despite an average increase in the cost of imports of inhalers of 0.9% and increase in the average international prices of inhalers of 1.1%, the Maximum prices of inhalers has witnessed a fall of 0.9% which is mainly attributed to a reduced applicable mark-up percentage.
For Vaccines which accounts for 0.5% of the consumption of medicines. Despite an average increase in the cost of imports of inhalers of 1.8% and increase in the average international prices of inhalers of 5.5%, the Maximum prices of inhalers has been stable due to the reduced applicable mark-up percentage and a fall in the prevailing foreign currencies of 0.2%.
For the non-classified medicines, all the three (3) classes (Analgesic, Anti-fungal and Anthelmintics) had witnessed a significant immediate fall in their retail prices of 6.1% which is mainly attributed to a general fall in their import cost of 4% and international supplier prices of 1.6%.
Furthermore, after the implementation of the new mechanism, a continuous effective price decrease impact has observed on the classified medicines pertaining to five (5) classes: namely, Cardiovascular, Anti-Diabetic, Anti-Acid, Anti- Cancer and Biologicals. The retail prices of medicines under these five (5) classes have been witnessing constant average fall of 1.0% on each consignment basis. This is mainly attributed to an average fall in the import cost and reduced maximum mark-up percentages. In addition, the continuous positive effects of the new mechanism have been observed on the non-classified medicines with a general fall of 1% on each consignment.
In sum, the implementation of the new mechanism has been a value added to the consumers as the mechanism has been effective in protecting the consumers against higher prices of pharmaceutical products.
With the new mechanism, more than 80 percent medicines have witnessed a fall in their retail prices as compared to the old mechanism of markup which was being practised since more than four decades. The mechanism is proving its sustainable effectiveness with a continuous fall in their prices on consignment basis which are being transmitted to the consumers to ensure the welfare of consumers.
Mr Speaker Sir
It is to be highlighted that the Ministry of Health and Wellness is playing a major role in ensuring that essential medicines are affordable and accessible to all citizens.To address the high prices of drugs in Mauritius, the Ministry of Health and Wellness has embarked on several strategic initiatives aimed at reducing public healthcare costs and enhancing procurement efficiency.
One of the key strategies involves participating in the Small Island Developing States (SIDS) Pooled Procurement mechanism. By collaborating with other SIDS, the said Ministry is able to leverage collective bargaining power to negotiate better prices for essential medicines. This pooled procurement system enables Government to purchase drugs in larger quantities at reduced costs, which significantly alleviates the financial burden on our healthcare system and, ultimately, on patients.
I am informed that this agreement allows Government to access high-quality medicines at lower prices through direct negotiations, bypassing intermediaries and ensuring that cost savings are passed on to our citizens.
Mr Speaker Sir
Affordability is of utmost importance to this Government. We are all striving to make healthcare services and essential medicines affordable for every citizen, regardless of their financial situation.By implementing these measures to control healthcare costs, adopting more efficient and transparent procurement systems, and exploring innovative funding models, Government aim to alleviate the burden on individuals and families. Ensuring that healthcare remains within their reach is a top priority for the Ministry of Health and Wellness, and we will continue to explore and implement strategies that support this mission.
