The introduction of major changes to drug pricing in Kazakhstan will lead to increased treatment opportunities and wider choices for customers.
Since 2019, medicine prices have been regulated, with maximum pricing introduced for a list of drugs, including some from big pharma and also some innovative drugs. The regulations also imposed limits on logistics, marketing expenses and markups as a proportion of ex-works prices.
LOOKING BACK SINCE THEN, OVERALL
2020 was positive for the Kazakh pharmaceutical industry. According to In Vivo Pharma Intelligence, the market size for finished pharmaceutical products grew 22% year on year. And according to the international analytical company IQVIA, the value volume of the Kazakhstan pharmaceutical market increased by 22% year-on-year and the volume of sales of pharmaceutical products in the retail segment increased by 18%.
The COVID-19 pandemic, however, saw the start of problems caused by price regulation. A flood of new medicines arrived on the market and the cabinet attempted to ensure drugs used to treat COVID-19 were sold with minimal markup. In January 2021, the government published a list of — what it described as — ‘anti-COVID’ drugs, on which it tightened margins, resulting in the permitted retail sale price falling by, on average, 40%. The list, however, included a number of medicines unrelated to COVID-19, including eye drops and aspirin, for example, and importers and distributors found themselves with no time to sell off existing inventory which had been purchased at higher prices. The cost ceiling reduced the profitability margins for foreign manufacturers considerably.
As a result, many left the Kazakh market — a huge concern in a country where the industry, health and foreign affairs ministries have been directed to attract the top 50 multinational pharmaceutical manufacturers in an effort to localize drug production.
BY 2022, FURTHER PROBLEMS BESET THE MARKET.
Fluctuations on the exchange rate and logistical difficulties caused by geopolitical unrest caused medicine costs to soar. Prices in Kazakhstan usually only rise every six months; however, the unrest in the region caused supply chain disruption, an increase in logistical costs along with a rise in the cost of medicines and medical raw materials.
The decision was taken to gradually deregulate drug prices for the retail sector in order to ensure availability and choice in the market.
TO DO THIS, THE LAW OF THE REPUBLIC OF KAZAKHSTAN
dated January 3, 2022 No. 101-VII ZRK "On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on the Development of Competition" amended the Code of the Republic of Kazakhstan dated July 7, 2020 "On the health of the people and the healthcare system" in part of drug price deregulation.
In June 2022, further amendments were made to the rules for regulation, formation of marginal prices and mark-ups for medicines and medical devices under the state health care and health insurance systems. This determined the selection criteria for medicines subject to price regulation, kickstarting the withdrawal of certain over-the-counter drugs from price regulation.
An initial list of 7,230 medicines subject to price regulation was approved in 2022. In December 2022, 376 items were withdrawn from price regulation, and about 100 more items are expected to be withdrawn in the next draft list. In accordance with a draft posted for discussion at the beginning of 2023, it’s planned that the list will be reduced to 7,166 items — in line with current legislation, the list must be approved every six months in agreement with the antimonopoly authority. Examples of items included for discussion are medicinal products containing INN "Acyclovir", "Diclofenac" and "Terbinafine" as an active substance.
The changes are warmly welcomed by COREX Logistics Country Head in Kazakhstan, Natalia Andreyevskaya, who says, “These changes open things wide in Kazakhstan. This will enable the growth of innovative, international pharmaceutical drugs. The population will have more access to medicines and clinics will be able to tackle a wider range of diseases as they’ll have access to a much bigger range of treatments”.
Natalia points out that COREX Logistics’ already established position in the market puts the company in a prime position to serve the region as the healthcare sector undergoes these radical changes. “We already know all the ways to easily and quickly obtain and transport the necessary medicines”, she says. “We are ready and waiting to serve the region as a whole, bringing help and hope to people all throughout Kazakhstan and beyond”.
COREX Logistics is a supply and logistics company with headquarters in Ireland, working with pharma and patients to facilitate improved healthcare worldwide.
Our expert international team works across an 80-country network, specialising in the EMEA region, providing the latest in clinical trial logistics technology and systems, cold-chain delivery, temperature-controlled transportation and storage services. From sourcing, procurement and customs clearance, to labelling, returns and destruction, we cover every link in the supply chain. We also run an established Named Patient Programme and provide Patient-Oriented services. With extensive knowledge and on-the-ground insight into our markets, we create innovative solutions with the ultimate goal of improving the lives of patients.