MEDICINE BUSINESS

By Kate Mikeladze

There is no probability of producing any kind of medicine in Georgia. Some may be surprised with that, some – delighted in and the rest – indifferent.

The above apathy could be the outcome of variety of medicines from another country or that of aged stereotype “We and Good?” Registered nowadays brands of medicaments reach 3500 including approximately 200 of local production that is about 2-3% of total medicine market.
Unfortunately, Georgian population is not familiar with the history of medical affairs in country. Industrial production in pharmacy takes start at the beginning of the 20th Century. Getting in touch with the above field, not only a speech about century is enough, as it involves historical, scientific and economical matters.
The first steps in Georgian medicine were taken 15 hundred years ago. Several glass retorts had been found during the archeological excavations in Urbnisi (In Ureki – measuring-glass). These exhibits are of I-V centuries. Moreover, in Uflistsikhe and Vardzia were discovered the ruins of drug stores.
As a proof of medical aid and care, serves the construction of hospital by David the Great in Gelati Complex in the 12th Century. So does the document of the 14th Century “State Court Agreement” by unknown author, which arranges the functions by state officials. The 8th article of document involves the question of medical care and aid. Written in the 15th Century, book by Zaza Panaskerteli-Tsitsishvili “Karabadin – The Book of Cures” appears perfect then the ancestor.
During the Czarism period, Georgia has given a birth to first steps of pharmacy-chemical industry. The beginning of the 19th Century was the time for first cure plants in Georgia. Then appeared the first spirit-producing factory in Zugdidi (1903). In 1912, Brothers Kalinskies have created the oil, soap producing factories first, and carbonic acid one later in Borjomi.
There were attempts for employing all of the resources in Georgia, right for which before revolution government has established the Committee for Mobilization of the above affairs. Thus, some “tiny” reasons obstructed development as purposed including nonexistence of research institutions, nonprofessionalism etc.
Anyway, Soviets admired field of pharmacy in Georgia. It looked to be included within Stalin’s accelerated industrialization draft. There even were the deals, when foreigners were buying row materials in USSR and then, after manufacturing, selling back expensively. For example, only in 1913 Germany has bought from Russia 3 million pounds of cure plants, manufactured them, and then sold back dear. In 20’s, GDP of Soviet republics was 5-10 times less, then that of developed countries per head. Stalin has closed the border to Europe and set about to work on overtaking west standards. As to pharmaceutical field, in 1923-36 Georgia was working hard on building the factories concerning the matter. The 1932 was the year of establishing the generator of this field – The Institute of Pharmacy and Chemistry that lately founded “Batumi Pharmaceutical: and “Sakbiopharmpreparati” in Tbilisi. Besides these, there were operating the centers such “Bacteriophag”, Bio-chemical factory in Akhmeta etc.
State paid solid amounts on purchasing modern machinery from German companies such as “Zanan”, “Shtrungk”, and “Hepligerkark”. Equipment could be effective for advancing the industry much however they were not installed because of inability or unwillingness.
In the book “What was it?” authors Gordon and Klopov acknowledge that more then 75% of technologies used by Soviet Union were external. Another is the question: at the expense of whom, were the above technologies brought in? Hard industry arrangement shaded all the rest of social, soft industry, agrarian, education and other fields.
It’s difficult to say that standards of medical production, supervision, and distribution in SU were high then European. Each factory possessed own laboratories, after passing which medicines were examined through the central laboratory of pharmaceutical control. For that period, Soviet Union has been importing more then 2000 brands of external medicaments of trademarks such as “Polfa” (Poland), “Spofa” (Czech), “Gedeon Richter”, “Khinioin” (Hungary), “KRK”, “Pliva” (Yugoslavia), “Maizelbach” (Germany) etc.
As the founder of pharmaceutical industry development in Georgia, was Iovel Kutateladze. Therefore, large works on that set up: vegetable materials were proceeded in Kobuleti, Khobi and Shiraki; organic ones in – Racha, Guria, Borjomi, Svare etc. Institute invented the technology of receiving oil up from Japan cinnamon with the property of cacao oil. Unfortunately, because of rare savings of the above plant as well as the expensiveness of process, discovery was not introduced in practice. Enumerating produced for that period medicaments would take us far away. As to modern developments, thirty-eight new pharmaceutical enterprise had been founded since 1991, last years.
Today’s producers manufacture only the medicaments those are cheap to produce. “Pharmimpex” produces 12 brands of medicine. However, is capable to do more. Today, entrepreneurs keep working encouraged with the act in August 1997 reducing 34% taxation on imported medicaments down to 5%. Old version had been advancing medicine price by 25% stifling the will and enthusiasm of business at all. Still does exist the Institute of Pharmacy and Chemistry that is successful in export business with Russia. As to Czech-Georgian joint venture “Lechiva-Geo”, since 1997, it produces eight brands of medicament and is going to advance the number up to 250 in ten coming years.
Should also be mentioned that developed countries pay special attention to advertisement, because of essential meaning. At ours, it is vice versa. Despite the expensiveness of advertisement, even the cheap polygraph printing is required. According to remarks by Georgian medics, foreign companies run wide campaign on establishing new brands of medicaments on the market.
To register innovation in Georgia costs 350 GEL and introduction from another country – 1500. That indicates to encouraging the domestic production. However, we have already “exceeded” the CIS countries. None of them imposes profit in pharmacy with 20%. According to information by Ministry of Industry, illegal share of imported medicaments comprises 30% of total. Thereof, antipathy of “Tbilkimpharmi” executive T. Skhulukhia to inspectors and journalists does not surprise much. Producer more then seventy brands of medicine, is now in big trouble, so the attempt by journalist to define the ups and downs of problem gives no result as the director discards interviewing.
Should also be mentioned the question of falsification that is too hard for customer for differing it from the original product. Pharmacy Inspection of Georgia has already extracted the number of false medicaments since 1998.
The strange debates on distance between took place among drug stores when discussing the Law on Pharmacy in 1997. Committee of Pharmacopoeia established the minimal distance between stores 0,5 km, which astonished the most of linked with pharmacy businesspersons. Today’ s distance is equal to zero. Do the owners profit of that? Why are the Parliamentarians against establishing the fixed distance? Lobby talks say Parliamentarians have own interest in that. Despite this question is still at the heart of hot allegations, businesspersons do prove that drug stores do not disturb each other even if they are situated too close. Besides, none of them prefer to be far from main wholesaling bases “Aversi” and “PSP”. Pharmaceutical producers settled in different parts of city are prohibited to sell medicaments to drugstores and private persons and are allowed for trades only with wholesale bases. If producer decides to sell the medicine, it has to open the own store, which is related to solid expenses.
The CIS countries do not harry with entering the WTO. Russia plans that for 2008. Georgia became a member of trade organization in 2000. This will involve the pharmacy of course. Registration costs for domestic and external medicaments should be equalized. On the other side, this, expectably in five coming years, will crash Georgian pharmacy once again. Neither producers nor the Ministry of HealthCare does hide that. Depending on ministry bodies have number of times expressed their positive appeal to domestic production however because of pressure from upper forces namely the Parliament of Georgia, they can not do anything.
Besides that, WTO is going to put on the agenda the question of introducing new standards in Georgian pharmacy. It is now clear that each of holding investments will soon accept new standards and acquire the occasion to trade with Europe. Thus, shrewd Europe knows that financing like that does not exist in Georgia and even if so, will finally fail, as is less capable to settle all of the liabilities including registration, taxes, production costs, advertisement etc.
Georgians disappoint, when failing to find French perfumery or Dutch sweets in Germany and finally face an antagonism of salesperson in most cases. Legislators of Germany as well as those of others aspire to provide the closed cycle for producers not to allow them purchasing the certain product in monopolistically high prices. It is the norm for German and not the nationalism produced by Hitler period. It is an economic consideration inspired by nationalism free of, which neither German nor French or anyone else is able to imagine own wellbeing. They do not debate the things those have not happened yet: country does not care about enrichment of another nations.
The term – Integration creates the association of approaching European civilization. In English, Integration means entire unification. Europe had no intention of our wellbeing within “unification”, it is a global monopolization and not cooperation between countries of equal capabilities.