Insurance, Latvia, Markets and Companies, Medicine

According to a survey carried out this past spring, 87% of residents experienced difficulties with obtaining reimbursed medicines. This, together with other conclusions made by the Competition Council, proves that availability of reimbursed medicines to residents is impaired in Latvia.

According to the Competition Council, four largest wholesalers of medicines control 83% of the market, which poses risks to competition.

The Competition Council has found that pharmaceutical companies have trouble with planning the amounts of medicines they have to supply due to limited information about the actual demand for a medicine in Latvia, as well as due to wholesalers' stocks of medicines and export volumes. As a result, supervisory authorities cannot effectively ensure that pharmacies are supplied medicines and no drugstores are discriminated against.

According to the Competition Council, there are frequent shortages of reimbursed medicines at pharmacies, and the main reason is wholesalers' insufficient stocks. This means that wholesalers have to increase their stocks of reimbursed medicines to ensure that they are available to all consumers.

The Competition Council has also concluded that vertical integration of wholesalers and retailers of medicines give some wholesalers an advantage over other wholesalers as they can sign individual contracts with pharmaceutical companies. As a result, such wholesalers may give preference to their pharmacies when distributing reimbursed drugs among pharmacies.

In addition, some wholesalers are offered discounts on medicines they buy from pharmaceutical companies, but pharmacies sell these medicines at full prices, which means higher profits for wholesalers - at the expense of consumers. The Competition Council believes it is absolutely unacceptable that medicines, which are paid for by the state, are used as a source of profit by some of the wholesalers, and this is a problem that needs to be addressed.

The Competition Council proposes setting up a register of wholesalers and pharmacies through which they would inform the authorities about their stocks of medicines.