The “regressive mark-up” mechanism will be introduced for eight of the 11 classes of pharmaceutical products. This decision of the Council of Ministers is not unanimous among pharmacists. On the other hand, Xavier-Luc Duval is delighted that his PNQ has borne fruit.
There is consternation among pharmacists. They fear the closure of many pharmacies with the upcoming introduction of the “regressive mark-up”. Decision resulting from the deliberations of the Council of Ministers on Friday March 3. Pharmacists deplore the lack of communication and consultations.
“It’s a shot in the dark,” says Siddique Khodabocus, president of the Union of Pharmacists. He wonders about the quantum of this “mark-up” and wonders how much the margin can be reduced, when the purchase price of drugs is already high.
He also draws a parallel with the depreciation of the rupee against the US dollar, which continues to climb, which affects imports. He is of the opinion that the complete withdrawal of the profit margin on drugs will not have a significant impact on the selling price.
“Regressive mark-up should be introduced on reference pharmaceutical products (branded products) which are sold at a higher price than other products, such as generic drugs,” says Siddique Khodabocus. For him, we should not touch generic products, but leave the possibility to pharmacists to offer this type of medicine. These, he points out, are sold at a more affordable price than the reference drugs, for which local importers hold a marketing and representation license in Mauritius.
Siddique Khodabocus thinks that it is necessary to review the health system because the welfare state will not be able to function indefinitely. “A system of contribution and participation must be introduced so that patients benefit from insurance coverage for the reimbursement of the purchase of their medicines. This should improve patient care and management. »
He wonders what the government’s objective is in establishing the “regressive mark-up” for private health services, when these same services are free in the public sector. “The private health service has costs that must be paid. What does the government seek through this interference in the selling price of pharmaceutical products? he says.
The authorities should have offered this system in all sectors, because prices have increased on all commodities. “Why only touch the price of drugs, when food prices have also increased? he asks.
A pharmacist, who did not wish to be quoted, also considers that the government made a very bad decision and that he should have consulted the pharmacists. He pleads for dialogue and points out that many pharmacies will be in difficulty with the introduction of this “regressive mark-up”. Some of them might even put the key under the doormat.
Pharmacist Arshad Saroar says he waits to know the exact amount of the “mark-up” before giving his opinion. However, he fears that this measure will only aggravate the difficult financial situation of pharmacies. “In Mauritius, the profit margin for pharmacies is already very low, and any further reduction could have serious consequences. Preliminary studies on mark-up have shown that any change in the profit margin of pharmaceutical products could cause problems in the sector, he says.
More than 550 products concerned
It is the office of the Attorney General who will draft the regulations for the introduction of the mechanism of the “regressive mark-up”, announced the Council of Ministers. This approach stems from a proposal by the Ministry of Commerce. It concerns eight of the 11 classes of pharmaceutical products: biological, anti-cancer, anti-diabetic, anti-hypertensive, cardiovascular, inhaler, vaccine and antacid. More than 550 pharmaceutical products are concerned.
Fear of fraudulent practices
The imposition of any price regulation that would further reduce operating margins will only hasten the creation of new social problems. This was written by the Pharmaceutical Association of Mauritius (PAM) in a document sent to the Competition Commission in October 2020.
And to add that small pharmacies will close their doors, resulting in job losses. There is also likely to be a significant increase in abuse, including the sale of illegal or dangerous drugs.
For PAM, the fragility of the retail pharmacy business model, due to margin regulation, may be the catalyst for some unscrupulous practices. The situation is likely to get worse as pharmacy owners struggle to make ends meet.
The association also pointed out that pharmacies operate with a net margin of 1 to 5%. “The industry is already burdened by the current low profit margin. Any further reduction in the current drug margin will lead to the collapse of the pharmaceutical sector,” the document reads.
Xavier-Luc Duval: “A decision that stems directly from my PNQ”
“I am happy to see that the government has finally decided to introduce the regressive mark-up. This decision stems directly from my Private Notice Question (PNQ) put to the Minister of Trade and Consumer Protection on April 19, 2022. ” This is what opposition leader Xavier-Luc Duval maintains on his Facebook page.
He also points out that one of the axes of his question directly related to the importance of the introduction of a “regressive mark-up” on the sale of drugs. Thus, pharmacists will benefit from a larger profit margin on drugs that are less expensive and a smaller margin on more expensive products. This decision will encourage them to market drugs for the benefit of consumers, he said.
“The PNQ had its effect. The result is visible and I know that the public will appreciate, once the measure is formally introduced”, indicates the leader of the opposition.
