Drug prices soar

Source: Drug prices soar | The Financial Gazette February 2, 2017

By Nyasha Chingono

DRUG prices are soaring due to foreign currency shortages in the battered economy, worsening the woes of suffering patients, who are already struggling to afford basic healthcare.
The supply of medicines has been affected by production constraints faced by local drugs manufacturers, who are failing to get foreign currency for raw material imports as well as for imports of critical prescription drugs.
As a result, local manufacturers and pharmacies have pushed prices up because some of them are now sourcing foreign currency outside normal banking channels where they are paying a premium for it. It is this premium which is being passed on to the final consumer through price increases.
Patients with chronic diseases have borne the brunt of the current drugs crisis, which is likely to worsen.
Critical drugs for Eczema and Ranophage — used to treat diabetes — have disappeared from the shelves of most pharmacies, while antibiotics are also in short supply.
Eczema refers to a group of medical conditions that cause the skin to become inflamed or irritated. The most common type of eczema is known as atopic dermatitis, or atopic eczema.
Ranophage is used to treat type two diabetes, obesity in type two diabetes patients and other conditions.
Most suppliers import their drugs from India, South Africa and China. They therefore require foreign currency for the imports.
One pharmacist said he was particularly overwhelmed by patients wanting the high blood pressure drug, Amlodiopine, whose price had risen from US$6 to US$8 for 30 tablets.
Prices for Telmisartan, a hypertension drug, has doubled, from US$12 to US$24 at the start of January, one pharmacist revealed, adding that prices for most prescription drugs have also gone up.
Players in the pharmaceutical industry said there was an acute shortage of critical drugs due to crippling challenges in accessing foreign currency.
Some pharmaceutical companies are buying foreign currency from non-banking sources to avert closure, while wholesalers are also charging a premium for drugs purchased through bank transfers or debit cards.
Cash payments are attracting a discount of between 10 to 25 percent.
Bond notes introduced by the Reserve Bank of Zimbabwe (RBZ) last year to inject liquidity into the economy, are being treated the same as transactions affected through debit cards or bank transfers.
The Retail Pharmacists Association of Zimbabwe (RPA) confirmed this week that drug prices have gone up, arguing that pharmacies had to increase prices to survive.
“The reason for the price increases is the way pharmaceutical companies are getting the foreign currency. They have to wait for a long time to clear their orders and, in some instances, they are buying foreign currency that obviously would lead to a price increase,” RPA chairperson, Barbara Muwanigwa, told the Financial Gazette.
Muwanigwa also confirmed the existence of hefty levies on non-cash payments to wholesalers, saying this would trigger further prices increases in the coming months.

“Wholesalers are imposing a levy on different forms of payment and this is affecting our prices. It results in discord when it comes to pricing,” she said.
Discounted rates for wholesale drugs have stirred demand for cash where retailers stampede to pay using US dollar notes.
RPA, an association established to promote and protect the interests of pharmacists in Zimbabwe, said it was yet to engage the RBZ over a priority list it had put together for foreign currency allocations by banks.
“We would want the pharmaceutical companies to be given priority so that we charge constant prices,” said Muwanigwa.
With most hospitals chronically incapacitated to offer medication to patients due to heavily depleted drug stocks, desperate patients have to rely on local pharmacies that import drugs from countries such as India and South Africa for their monthly medical supplies.
Families that take care of chronically ill relatives are finding the going tough as expensive drugs erode a large chunk of their incomes.
The Financial Gazette understands that medical aid members would soon be denied access to critical drugs, as pharmacists are getting grumpy about delays in payment and unsustainable prices set by medical aid societies.
“We have been accepting (customers) on medical aid up to now, but I do not know for how long because the problem with medical aid societies is that they cap prices. But when our money comes, we will not be able to restock because it comes through bank transfers,” said Muwanigwa.
“If it persists, we will not accept medical aid cards,” she added.
Muwanigwa said the shortage of drugs will persist or even worsen.
“We are slowly seeing a gap between demand and supply, but it’s not too apparent. Drugs for chronic diseases are not available on the market. We are going to see more shortages of drugs as we move forward,” said Muwanigwa.
Association of Health Funders of Zimbabwe, chief executive officer, Shylet Sanyanga, said RPA had not approached her association to discuss challenges affecting their industry.
She, however, said prices of drugs and all health services had global limits and medical aid card holders would be cushioned from external shocks.
“It is common practice that all health services have global limits — not just medical drugs,” said Sanyanga.
A global limit is a minimum price a medical aid cardholder pays for health services.
Sanyanga said the recent price increases are still to be felt by health funders hence no complaints have been received from clients.
The drug manufacturers and retailers have also been affected by the recent increase in the price of fuel, which went up in sympathy with global trends and in response to inadequate supplies of ethanol for the blending of petrol.
Fuel prices rose a fortnight ago from an average US$1,32 to between US$1,36 and US$1,38.
Fuel is a major cost driver to both retail and manufacturing processes.
While good health is the biggest asset of any nation, the prevailing situation is working against the public good and the interests of the economy.
In January the Zimbabwe Medical Association (ZIMA) warned of an impending shortage of critical drugs like insulin (for diabetes), anaesthetics (used to prevent pain during surgery) and psychiatric drugs due to payment delays for imports.
Diabetes is one of the leading killers in Zimbabwe and most patients are in danger, as the disease requires insulin injections that have become scarce on the market.
BP patients are also in danger due to the shortages; the available supplies have become prohibitively expensive for struggling Zimbabweans.
The Consumer Council of Zimbabwe’s executive director, Rosemary Siyachitema, said the consumer protector was unaware of the increases in the price of drugs.
“Generally, we have been dealing with food stuffs. We will have to check and find out the situation on the ground,” said Siyachitema.
The drug supply woes are likely to worsen the burden on Zimbabwe’s health care system, already under threat from the recent outbreak of typhoid, which triggered panic in the health sector as the Ministry of Health and Child Care was not capacitated to deal with the disease which claimed several lives in 2016.
Harare Central Hospital and United Bulawayo Hospitals (UBH) last year suspended elective surgeries after essential anaesthetic drugs ran out.
UBH also cancelled elective surgical operations as a result of lack of a sedative drug, pethidine.
which is used in emergency and post-surgery.
Government spends about US$400 000 on drug supplies for the country’s health institutions every week, but supplies have not been sufficient to cater for the growing health requirements of thousands of Zimbabweans diagnosed with chronic diseases.