FOR IMMEDIATE RELEASE

Tbilisi, 22 June 2012 – Transparency International Georgia has released its new report about The Georgian Pharmaceutical Market. A number of key issues are highlighted in the report:

• The legislative changes adopted in 2009 were designed to promote competition and have had a positive effect, especially in terms of expanded import opportunities
• However, the pharmaceutical market is still dominated by a few very large companies that control the import/distribution, retail and manufacturing sectors
• While these companies have played an important role in the pharmaceutical sector’s development in Georgia, their market dominance leads to high markups for medicines which explains the high expenditures on pharmaceuticals. The markup for medicines in Georgia is far above the average markup for medicines than in European countries
• The prescription behaviour of doctors appears to be influenced significantly by financial or other incentives offered by large pharmaceutical companies. The largest pharmaceutical chains reportedly promote their own medicines in their stores to an unacceptable extent as their employees are instructed to sell and promote the medicines manufactured by respective companies
• The Agency for State Regulation of Medical Activities responsible for examining the quality of medicines appears to lack the resources to perform its role effectively. Moreover, due to a loophole in the registration procedure, there is a possibility that counterfeits or “bad medicines” will enter the market.

A number of steps need to be taken in order to address the problems highlighted in the report. Specifically:
The newly-established Competition and State Procurement Agency must review the activities of the companies that dominate the pharmaceutical market, while Geostat need to collect and release comprehensive data about this sector. Introduction of a list of essential medicines, promotion of generics, and enforcement of prescription guidelines could all help reduce the population’s spending on pharmaceuticals. At the same time, it is necessary to build the capacity of the Agency for State Regulation of Medical Activities in order to ensure that proper quality control is exercised. Further, more detailed, recommendations are provided in the report.    

The report was prepared in the framework of a project funded by The Embassy of the Kingdom of the Netherlands. In the coming weeks, TI Georgia will release two other reports that explore the hospital sector and the insurance industry respectively.