Three leading pharmacy networks PSP, Aversi and PharmaDepot have considerably lowered prices on several hundreds of most in-demand medications as a result of the strengthened national currency exchange rate.
If the GEL exchange rate growth tendency is maintained, PharmaDepot network will keep lowering medication prices. The PSP management pledges to lower prices too.
“As a result of the strengthened GEL exchange rate, we have lowered prices on about 500 medications. If the GEL exchange rate keeps strengthening, we will lower prices on all medications”, the PSP management said in its March 17 special statement.
Moreover, Aversi network has also reduced tariffs on almost all drugs and medical products.
The last period has recorded the price reduction tendencies in the pharmaceutical market. This tendency will be maintained even if the GEL exchange rate depreciates again. A part of the experts refer to the Humanity Georgia appearance on Georgian market as a main precondition to price decline. As reported, the company supplies high-quality drugs to the retail sector at 30% lower tariffs.
The tariffs diminution tendency will be maintained in the future too despite the GEL exchange rate positions, Nino Popkhadze, head of the Healthcare Platform NGO said. The Georgian Healthcare Group has recently purchased GPC network of pharmacies and this issue should be considered in the light of price reduction, she added.
“This deal has seriously strengthened Georgian Healthcare Group (GHG) that is member of Bank of Georgia Holding. The latter holds large-scale assets in both health insurance and hospital sectors. The GPC valuable pharmacy network has also strengthened Georgian Healthcare Group as Georgian consumers show high-level loyalty to this network. All these factors add complex strength to Georgian Healthcare Group.
Georgia’s major financial institute such as Bank of Georgia is behind the Group. This circumstance signifies that GHG has entered the pharmaceutical market for long-term perspectives and it will sell medications in its own network, cheaper as compared to the existing tariffs.
Similar scenario is inevitable. On the one hand, the government is efficiently applying promotion leverages, and it has fostered an appearance of new major market players. Thanks to these efforts the market is demonstrating price contraction tendencies.
On the other hand, the GHG will not have low prices in its own pharmacies and it will have only its own clinics and insurance beneficiaries and this factor will negatively affect its business and bring negative outcomes in the medium and long-term perspectives. This factor will cause serious discontent among insurance beneficiaries and GHG hospitals clients”, Popkhadze said.
Shota Gulbani, president of the Association of Young Financiers and Businessmen (AYFB), positively appraises the fact GHG has purchased GPC pharmacy network as a good precondition for maintaining the medication prices reduction tendencies. The competition in the Georgian pharmaceutical market will further increase and this tendency will be of irreversible character after Humanity Georgia has appeared in the Georgian reality, Shota Gulbani said. At the same time, the AYFB president asserts that the announced amount of the deal of 14 million USD is inadequately small as compared to the real value of the GPC network and the GPC business and this factor raises certain doubts.
“I believe both parties of this deal should introduce their arguments to the society why they have agreed on such a low price. The pharmaceutical business is a very important sector for public needs and it embraces social stability elements. Therefore, each deal, even more so one of similar scales that fundamentally change the market picture should be fully transparent. On the other hand, the respective regulatory bodies should be genuinely interested in the deal details”, Gulbani said.