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Jan 22, 2022
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The internet could save the drug market

The internet could save the drug market

In 2022, medicines and medical products may rise sharply in price.

The forecasts of the Ministry of Health are coming true, and the only way to save some money is to use online services.

In pharmacies that operate via the Internet, there are simply no costs for maintaining retail space, their design and maintenance, as well as a large staff. This means that the cost of significant drugs for online orders will be significantly lower. Unfortunately, not all of our fellow citizens, especially the elderly, know how to use the Internet. But this is exactly the case when there are the most direct reasons to literally force yourself to study the computer.

Many network pharmacies offer you medicines online, usually with free shipping. It comes to ridiculous: here you are standing in this pharmacy and you see the drug you need at a specific and very significant price for you. You immediately call this pharmacy and place an online order. And – about a miracle! – the same drug will cost you, say, 30% cheaper. So are we really going to neglect this opportunity?!

Moreover, today prices have skyrocketed primarily for antiviral drugs, which is not surprising: during the pandemic, and even during the cold season, demand increased significantly, so the rise in price was predictable.

More than 50% of raw materials for the Russian pharmaceutical industry are purchased abroad – most often in China and India, which traditionally become leaders in the supply of components. It is in these countries that the pharmaceutical substances on which drugs are based have become twice as expensive. Fuel prices, tariffs for housing and communal services, packaging, transport – all this is reflected in the cost of drugs. At the same time, the ruble is devalued, and most contracts for raw materials are denominated in foreign currency.

“Inflation is becoming global. Russian manufacturers buy the lion’s share of materials abroad, and this cannot but affect the cost of the final product,” says analyst Artem Deev. According to experts, 70-80% of goods on the Russian pharmaceutical market are imported. Finally, the price tag is wound up by sellers and distributors.

Another reason for the drug crisis has nothing to do with the situation on the foreign market and was created directly by Russian officials. Until now, some medicines and medical devices from the EAEU countries were not subject to value added tax, and some were taxed at a reduced rate of 10%. But now it has been decided that from January 1, 2022, medical devices will be subject to VAT at a rate of 20%. For this reason, in May, the Ministry of Health prepared a draft law to extend the preferential tax regime for medical products from European countries. The explanatory note to the document said that failure to amend the Tax Code would lead to an increase in the cost of purchased equipment and, as a result, to a sharp increase in the financial burden on the entire healthcare system. “This is a very important initiative, since especially today we need to ensure the availability and quality of medical care and medical products, and this is directly related to pricing policy,” said Dmitry Morozov, head of the State Duma Committee on Health Protection.

Since 2020, the Ministry of Health has received the right to raise prices if there are applications from manufacturers and the antimonopoly service does not object. Anticancer, ophthalmic, antiepileptic drugs were the first to rise in price, some of them tripled. The Ministry of Health explained this by saying that there is no great demand for these medicines, so it is unprofitable for importers to supply them to the Russian market at a standard price. We have to change the price tag.

In 2022, none of the experts expect the situation to improve. “The future of the pharmaceutical market depends on the recovery of global logistics and when energy resources become cheaper. Difficulties with transportation have been going on for more than a year. Hundreds and thousands of containers are waiting to be unloaded in ports around the world,” expert Nikolai Pereslavsky notes.

As you can see, apparently, in the near future, purchasing medicines via the Internet will indeed be the most rational and correct decision for millions of Russians.

Natalya Purtova.

Photo: ADOBESTOCK

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