Competition, Estonia, Markets and Companies, Medicine, Retail

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Estonian competition watchdog: Markup system for medicines inadequate

BC, Tallinn, 02.09.2020.Print version
The current system of markups for pharmaceuticals in Estonia is inadequate and supervision thereof fragmented, according to the Estonian Competition Authority, writes LETA/BNS.

The competition watchdog has carried out an analysis of the competitive situation in the field of retail and wholesale of medicinal products with a view to assessing the efficiency of the regulation of markup threshold values. Results of the analysis show that the risk of non-compliance with rules is considerable.

"The lack of an economic regulator with clear authorization in the pharmaceutical sector and dysfunctional price regulation have an adverse effect on competition, consumers and appropriate use of health insurance instruments," Director General of the Competition Authority Mart Ots said.

Even though threshold values have been established for markups in the wholesale and retail of pharmaceuticals, the Competition Authority's analysis shows that the purchase price for wholesalers can be manipulated.

In reality, drug manufacturers often repay wholesalers a part of the purchase price in the form of so-called kickbacks -- bonuses or fees for extra services. Markups, however, are calculated on the basis of the higher price marked on the purchase invoice, making the final retail price higher than it should be.

For the purpose of bringing some clarity into purchase prices, the Competition Authority deems it necessary to subject pricing to a set of rules without loopholes and establish clear oversight competence and supervisory rights. The objective is to ensure the economic availability of pharmaceuticals to patients and a fair price of medicinal products based on their actual purchase price.

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