By a Staff Reporter
MEDICINES prices will be slashed as of May, but the issue is open to dialogue, the newly instated government said yesterday.
With pharmaceutical companies and pharmacies threatening action in protest against the price cuts, the Health Ministry has promised to look into the matter and consult with the companies before reaching a decision.
The decision to make medicines cheaper by 26 per cent was taken by outgoing Health Minister Frixos Savvides just a day before stepping down; yesterday, the new administration sought to rebut claims it was caving in to pressure from large pharmaceutical companies and at the same time stress it would implement its own policies with regard to the pharmaceutical market.
Andis Tryfonides, the Health Ministry’s general director, conceded that medicine prices in Cyprus were significantly higher compared to other countries, including Greece, from which the island imports large quantities.
He said that Savvides’ decision was broadly in line with the current administration’s policy of cutting prices, but added the decision was open to amendment.
Tryfonides explained that the market price of medicines was the sum of the factory price charged by the manufacturer to wholesalers, plus a string of surcharges imposed by vendors on the island. For example, retailers slap an additional 13 per cent on the price tag to cover shipping costs, another 6.5 per cent for storage costs and around 30 per cent for profits. In addition, pharmaceutical companies are allowed a 12 per cent surcharge for providing free samples to customers. But under the new regime introduced by Savvides, shipping surcharges would be slashed to six per cent, profit margins to 25 per cent and storage charges would be abolished altogether.
As a first step, the new Health Ministry will be commissioning a study on alternative pricing schemes; the study will be carried out by an expert from the London School of Economics.
Tryfonides dismissed claims that the new administration was vulnerable to pressure groups: “We’re confident that dialogue will solve any problems. Any changes made will be based on objective criteria and arguments from all parties involved, and not on vested interests.”
This was echoed by government spokesman Kypros Chrysostomides, who noted that Savvides’ decision happened to coincide with the government’s election-campaign commitment to cut medicine prices. Chrysostomides added that the Health Ministry would “soon” be announcing its decision on the matter.
Pharmaceutical companies say that the planned reductions will dramatically hurt their finances and diminish their profits. The Association of Cypriot Pharmaceutical Companies (SFEK) has told the Health Ministry it will take action against the decision, although strikes were not mentioned.
The association slammed Savvides for not consulting with them, accusing the former minister of outdated practices that were not in line with the “EU spirit”.
Under Cyprus law, the Medicine Council controls the marketing of medicines, but it is essentially an advisory body to the Health Minister, who has the final say. EU directives require the setting up of an independent committee to control medicine prices. So far, Cypriot consumers have been on the wrong end of the deal.
The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.
