Customers have been recently complaining on high prices on medicine, especially on those which are on demanded.
Its winter now and demand on medicine prescribed while having cold, flue, high temperature is great. From time to time, while visiting drugstores, people find changed prices on medicine. It is believed to be related to a 25 GEL voucher issued to pensioners during the pre election period. ‘I can’t see the reason why we should pay a double price for medicine. Pensioners were granted a 25 Gel vouchers and other population has to pay for it. They probably try to compensate the amount they have granted during the pre election period’, – this is what people living in Tbilisi state. People from different regions of Georgia face the same problems as well. They find it quite difficult to understand the reason of increasing prices for medicine.
According to the opposition the above mentioned circumstances have a political background – government has not transferred necessary amount for supporting vouchers to Pharmaceutical companies Aversi and PSP Group, therefore the companies have increased prices on medicine to cover the loss. Though pharmaceutical companies reject the above accusation and state that the government has already transferred corresponding amount. Rising prices on medicine is a constant process. According to PSP, it is related to different taxes and the process began in December, not in January.
What is the situation like on Georgian pharmaceutical market? What caused rising prices? What is the quality of medicine produced and imported to Georgia? This issue is of special importance, as medicine is one of the largest import goods and it occupier the fifth place in import (table 1)
First of all let us draw our attention on how a medicine appears in a drugstore, what are the international standards of medicine approbation and Georgian reality. We have discussed the above mentioned issues with Mr. Zurab Paghava, Tbilisi State University associated professor, head of department of cardiology at medical centre ‘Tsito’.
Zurab Paghava: A medicine goes through a long and difficult way till it gets to a drugstore. This hard way begins with 10 000 molecules that may have some medical action. The first stage covers the registration of one molecule that has some medical affect. Then the molecule is well studied and first researches on animals and laboratory researches are made. Toxicity of medicine, its affect on fetal is stated at this stage. It is made on animals as well as in test-tubes. As soon as researches complete their work on animals and are assured that everything is fine, they begin clinical researches. The first clinical research is made on healthy volunteers, who conclude corresponding agreements. This stage is followed by researches on patients – these are so called second phase researches and then three phase multi central, international, randomized researches. And finally placer-controlling stage, when a medicine is compared to an imitation or other medicine and no one knows whether it’s a medicine or imitation. It is an important stage for having objective outcomes. Producer pays about 300-600 USD for the whole way of a medicine – from molecule to the end of third stage. Sometimes even such a big one research is not enough. Effectiveness and side effects of a medicine are fixed as a result of several researches and only after this long way, it is registered and enters a market. Its worth noting that the U.S. Food and Drug Administration (FDA), and The European Medicines Agency (EMEA) will not register a medicine on it market unless it has gone through the above mentioned way.
Unfortunately requirements are not so strict everywhere. The medicines produced in the third countries are registered locally. All companies producing original medicine try to get the spent USD 300-600 million; therefore it should be well protected from making copies. Protection period lasts for 20 years according to law. It’s worth noting that time begins from the day molecule is registered and if we consider the fact that a medicine approbation period lasts for 12 years, it will turn out that a company has only 7-8 years for operating on market. There are certain cases with violations followed by court dispute and discussion. After the Protection time limit, a medicine may be legally copied. Generic market is even larger. About 2/3 of drugs are generic. This type of drug should also go through a long and hard way. The copy of medicine is taken to the same agency that checks the quality, requires researches on chemical and biological equivalence. Therefore European and the US markets will not let at least a bit suspicious drugs on their market. This is the way and reality related to drug on civilized market.
– What is the situation like on Georgian pharmaceutical market – what is the quality of production made by two large companies ‘Aversi – Rational’ and PSP Group?
– It is certainly a noteworthy fact that plants meeting certain standards are established in countries like Georgia. Although these enterprises should pass the development way requested by the US and European agencies.
– Do you mean that medicine produced in Georgia can not enter the US and European markets?
– Well, it can not yet. We don’t produce original brands. We only produce generic drugs. Their research on bioequivalence will soon begin. In case the researches are managed correctly, observing corresponding standards, then Georgian generic drugs will enter big markets.
– Does Georgia possess the inventory and possibility of it?
– It is not my specialty but in my opinion, the drug production method itself is quite well organized. Still, produced medicine should pass corresponding test on chemical and biological equivalence. Besides, a drug should be accurately produces from hygienic point of view and should correspond to international standards. Georgian market is peculiar, population is not too demanding. As for export, not a single pill will enter civilized market unless all the above mentioned conditions are observed.
This is the expert’s point of view. Let’s look at Georgian pharmaceutical market development stages, achievements and further plans, let’s take PSP Group as an example: The Company PSP has been working on Georgian pharmaceutical market since May 3, 1995. First the distributional company same PSP implementing center was established, which became the first official distributor of European medicaments in Georgia. In 1996-1997 the agreements were made with the most famous foreign pharmaceutical companies in CIS area, such as “Gedeon Richter”, “Egis”, “Krka”, “Lek”, “Bioga”, “Khioin”, “Avede”, “Orion”. During the following period the agreements were made with World’s 100 leading pharmaceutical factories. Its worth noting, that PSP imports from all over the world: the US, Germany, France, England, Italy, Czech republic, Slovenia, Croatia, Switzerland, Sweden, Belgium, Ukraine etc., Import was implemented from Russia as well, but due to imposed embargo the process has stopped. Materials are mainly imported from Austria, Switzerland and Spain
The PSP group has been carrying out the distribution of the medicaments on Georgian market successfully since 1995. The working process of the company is being carried out with relevant standard of distributional firm (GDP – Good Distribution Practice). The PSP group has its own pharmacy chain, which by the year of 2007 will occupy more than 90 pharmacy shops. In 1999 the first Georgian pharmaceutical enterprise “GMP” was established by PSP, which is oriented on international pharmaceutical standard.
The company passed certification stage in 2004 and it is certified with ISO 9001:2000 Certificate. The company owns 5 storehouses in Tbilisi and in regions. Three of them are oriented on large orders the other 2 serve customers. The storehouses are fully equipped with modern technologies of freezing, air ventilation, conditioning, special rooms for medicine under special control. Reception department receives storehouse production, provides detailed inspection, and checks the quantity, dates and series of goods, sees if there are any defected products. PSP also owns delivery service serving not only PSP group but independent drugstores as well. Products are delivered from storehouse to the customer by means of transport that meets all required standards.
Mr.Vazha Okriashvili, Director of PSP Pharmacy, spoke about the above mentioned problems as well as the company history with us.
– Let’s begin with quality and management control. What is your position regarding the personnel qualification at the company?
– There is a permanent training centre at out company that may be divided into two parts: the first one deals with training of pharmacists at PSP Pharmacy chain and the second one in GMP learning department. Both of them maintain tests and the rise of qualification level. Tests are necessarily held at least one a year, sometimes even more.
– Do you send your staff abroad to raise the qualification level?
– Of course we do. We have specialists that have completed learning course at corresponding international organizations.
– What about laboratories, relevant base, conditions of buildings and tools?
– The enterprise owns laboratory meeting international standards with drugs quality control equipment. The laboratory is equipped with updated technologies. GMP is a unique case in TransCaucasus working with the newest technologies.
– What is the correlation between imported and local drugs at your chain?
– 95% of drugs are imported. We hope that local production drugs will replace t least 80% of import. We also hope that Georgian customers will choose Georgian production and not demand foreign one. Unfortunately Georgian people do not trust Georgian production, that is absolutely wrong attitude. We have been fighting this tendency since the day GMP was established. We prove every day that Georgian production is the best means of treatment. The above mentioned approach may have been caused by our doctors as well, who do not prescribe and do not trust local medicines. We have invited them to our plant, presented drug production conditions and they saw that it is a serious production. It is not like the following situation: I visited India, bought a sack of drugs, brought it to Georgia and sold it. Of course it is not so. We are provided with materials that undergo the whole technological process. The plant is responsible for this product and for its quality.
– Although experts remark, that despite pharmaceutical production development, Georgian medicines are not ready to meet the US or European market demands, accordingly drugs of local production can not enter these markets.
– I can tell you one thing: GMP medicine produced in Georgia is registered nowadays and is exported to Middle East, its registered in Russia as well, but due to imposed embargo import and export is stopped. Registration of our products is being implemented in Czech Republic, Slovenia and France. Its only matter of time now. Drug registration process is 3, 6,7 month in some countries, 2 years in some other countries. In Czech Republic, for instance, it takes 2 years. We started registration of our medicine about a year and six moths ago. Its important that we register several products at certain markets and that they are approved. We’ll be able to enter those markets with all other products. We are directd to international GMP standards. GMP and ISO experts often visit us and we improve our work together.
– And finally, I can’t leave a question regarding prices. What caused recent sharp rise on medicines’ prices?
– It is a complex process. As Georgia is a small country it is depended on big markets. The world market prices are reflected on Georgian market. The same is true regarding EURO – its exchange rate changeability against USD causes price differences. Everything is related to each other. Product price rises together with the rise on materials price. It happens automatically – the world’s different companies re-value their goods annually in accordance with inflation indicator. It’s an ordinary case. Although, increased prices in Georgia are not so much depended on inflation. They are mainly depended on foreign factors. Georgia is a small country. We don’t have large and diverse enterprises that would spread their own rules of game. AVERSI, PSP or GPC can not rise prices here. The fact is that a New Year began with its new prices, new imports etc. Prices in Georgia change in accordance with the world’s economic development.
We tried to hear answers on the above mentioned questions from company ‘Aversi’ as well; attempts were made but all in vain. I didn’t even get a relevant answer regarding an interview. It seemed to me that head of PR service or department tried to block the information. Well, it was a wrong decision. I am sure Mr. Paata Kurtanidze would not like to make this significant business a bit suspicious. The company arranged Press-lunch instead. Director General of Aversi would necessarily emphasize the importance of relationship with press. They say, the presentation was all about Aversi’s charity activities and success. The company ‘with the number prizes and certificates for high social responsibility’ that has been four times awarded for ‘charity and effective management’ by Georgian Times Business Rating.