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Kazakhstan faces medicine shortages after forcing price cuts

Published: Updated:

Kazakhstan faces shortages of essential medicines such as aspirin after the Central Asian nation’s government tried to pressure drug makers and distributors into cutting prices, industry sources say.

The cabinet attempted to ensure drugs used to treat COVID-19 are sold with minimal mark-up, but producers say the effort has backfired and is also affecting medicines used to treat other ailments.

The former Soviet republic has been regulating drug prices since 2019, imposing limits on logistics and marketing expenses and mark-ups as a proportion of ex-works prices.

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In January, the government published a list of what it described as “anti-COVID” drugs on which it further tightened margins, resulting in the permitted retail sale price falling by 40 percent on average.

But the list included a number of medicines unrelated to COVID-19 treatment and the move gave importers and distributors no time to sell off inventory purchased at higher prices, says Arminas Macevicius, CIS director at pharmaceutical company Stada.

“The market usually has 2-3 months worth of inventories, meaning that drugstores and distributors had large stocks which had to be sold at lower prices, incurring losses,” he said.

The “anti-COVID” list was so broad that it included medicines such as eye drops, aspirin and Cardiomagnyl, a popular drug used for the prevention of cardiovascular diseases.

As a result, Cardiomagnyl has already disappeared from most pharmacies. And while producers have helped distributors offset losses on their purchases, they are not willing to provide further supplies at a loss, said another pharmaceuticals executive, who spoke on condition of anonymity.

Meanwhile, Kazakhstan’s healthcare ministry has moved to extend the price cuts to all medicines registered locally by sharply reducing marketing allowances.

Drugmakers have appealed to the government, saying the new regulations are counterproductive, but have so far failed to have them reviewed.

A spokeswoman for the ministry said it was working on the matter and would announce new measures soon.

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