How do the prices of imported medicines behave in the conditions of a declining dollar rate? Should prices respond to the strengthening of the national currency by decreasing? The President of the AIPM Ukraine Association, Anatoly Revin, gave an interview to the Ukrinform correspondent and answered these questions.

“If oil and oil products in Ukraine are mostly imported, then more than 70% of medicines, according to experts, are domestic. But the large percentage of domestic drugs is not the only factor due to which the drop in prices for imported medical drugs is not felt. Anatoly Revin, president of the Association of International Pharmaceutical Manufacturers in Ukraine, believes that it depends not only on drug manufacturers, but also on distribution channels. “Theoretically, when the exchange rate rises, prices rise, when the exchange rate falls, prices should decrease. But in the conditions of the market, in which both domestic and foreign manufacturers work, they cannot be brought under the same denominator, since their pricing and sources of supply are different. A distributor who buys goods directly for foreign currency and sells them for hryvnia, of course, takes a risk and tries to protect himself from these risks by setting an appropriate markup on the goods during the rise in the exchange rate,” the expert believes.

Link to the full article by Ukrinform 

When will fluctuations in the exchange rate become noticeable to the buyer of medical equipment? “It depends not only on manufacturers, but also on distributors and pharmacies – Anatoliy Revin believes. – When the exchange rate fluctuates, the distributor can change his price list based on the currency in which he purchased the product. If the distributor purchased the product for currency, for example, in January, when the exchange rate was the same, and sells it now, when the exchange rate is already different, then he must include all incurred expenses in the price of the product. But we are talking about large batches of goods that are not sold in a day or a week. Therefore, it takes a lot of time. For example, pharmacies today sell what was produced, perhaps last summer or autumn. And the price for it is set based on the price at which the distributor bought the product at that time. If the exchange rate is stable for a long time, then the price of goods bought with foreign currency decreases, as there are no risks. But during unexpected fluctuations, prices can rise. And this applies not only to imported medicines, but to the absolute majority of both imported and domestic goods.”

But in general, according to experts, there is a noticeable trend: more and more drugs are being produced in Ukraine. “Therefore, the question of price reduction should also be asked of domestic manufacturers – they also increase the price of their products, based on the fact that imported components of drugs become more expensive along with the exchange rate change. According to the analytical company “Proxima Research”, the share of sales of domestic drug packages in pharmacies over the last decade has increased from 65% in 2008 to 76% in 2017,” says Anatoly Revin.