(MENAFN- AzerNews)
Qabil Ashirov Read more Azerbaijan continues its reforms in the social sector. The care
of the state for its citizens increases day by day. The decision
adopted by the Tarif Council on September 15, 2023, regarding the
amendments to the Law "On Medicines" is one of the steps taken in
this direction.
According to the new law, from now on the Tariff Council will
set the maximum prices for medicines, and the companies are allowed
to sell their products at any price on a condition that the price
should not exceed the price set by the Council. However, prior to
the adoption of the new law, prices of medicine had been set by the
Tariff Council and the pharmacies had sold the medicines only at
these prices, which was contrary to the requirements of the market
economy.
The previous law could be seen as plausible for the population
in the short run, but it is doomed to fail in the long run. In
other words, the previous type of regulation reminds us of the
socialist type of regulation and since it suffocates the
competition after a certain time the prices hike. It has been
proven for a long that no administrative measure cannot control the
price but only competition. Because there are too many unpredicted
expenditures in periods of the research and production of any
science-based products, including pharmaceutics, and governments
usually do not consider these expenditures when they set prices. In
this case, as the pharmaceutical companies cannot make money, they
stop manufacturing products which paves the way for a deficit of
products.
The less products means more increase in prices. On the
contrary, if companies can sell their products at the prices that
please them, they will make more products. In this case, since the
number of companies and products increases, there will be
competitive conditions and the prices will be stabilized at a
convenient amount. Let us not forget that, no company can survive
if it sells any products below than producing cost.
That is why, the modern economy requires governments interfere
to the businesses not too much such as setting prices and so on,
but to create competitive conditions through invisible hands as
described by Adam Smith.
Besides, currently, the registration process takes more than 9
months, which means that it takes more than 1 year for a new
medicine to enter the Azerbaijani market. In the corresponding law,
the registration of medicinal products was determined within a
maximum of 4 months. This includes both the reduction of the
standard registration process and the recognition of foreign
(international) registration. Simplification will stimulate the
import of drugs to Azerbaijan and improve the supply of drugs to
the population. Thus, it will ensure that the period of
registration of drugs is 1-4 months.
Moreover, the amendment includes the introduction of electronic
prescriptions which require not the name of the medicine but the
active substance (international non-patented name). This will have
a positive effect on the strengthening of the control of prescribed
medicines and will reduce the population's unnecessary dependence
on various trade names and increase the opportunity to choose a
drug at a more appropriate price. More precisely, electronic
prescriptions will enable the patient to buy the medicine that
suits his/her wishes and budget among many drugs with the same
composition.
In a nutshell, with the help of this amendment, medicines will
be more available, the number of varieties will be increased,
create a more favorable competitive environment in this field, and
it will pave the way for decreasing of the prices.