Medicine companies win €2m compensation

Medicine importers have been awarded some €2m in compensation from the state after mounting a successful legal challenge to a 2005 government decision slashing drug prices.

Last Friday, the Supreme Court ruled in favour of 12 members of the Cyprus Pharmaceutical Association (CPA) who had taken the state to court over the 2005 decision.

The ruling reversed a prior judgment by the Nicosia District Court.

The Supreme Court found that a 2005 decree by the then health minister ordering price cuts constituted confiscation of property.

It ruled that drug importers are therefore entitled to “just and equitable compensation,” which comes to around €2m, plus interest payable since 2005.

The court accepted the drug importers’ main argument, namely that the government had refused to allow a six-month transition period so that the businesses could sell their stock, which they had procured at higher prices.

As a result of the government’s refusal, the businesses suffered losses. The government was fully aware of the drug importers’ warning that this would happen, the court said.

The ruling comes one-and-a-half months before the Supreme Court is set to hear another appeal, again lodged by the CPA, against a government decision on drug prices taken this year.

Back in January, the health ministry cut the price of almost 2,000 medicines by around 15.5 per cent on average, but in some cases the reductions were as high as 80 per cent.

Health minister Phillippos Patsalis said at the time that further reductions of eight to ten per cent would be put in place in March, and even more when the national health scheme came into effect.

Patsalis subsequently announced that the second slated price cut was being temporarily put on ice.

But at the beginning of June, the minister issued a decree, under which the prices of all meds – except those under €10 – were to be slashed by 8.5 per cent as of June 29.

Importers call this policy haphazard and dangerous, adding that it will backfire both on businesses as well as patients.

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.