THE GOVERNMENT’S reform of pharmaceutical pricing was announced with great fanfare by the President earlier this year, with a list of set medicine prices, many of which were 50 per cent lower than those under the previous regime. It was even presented as the farewell gift to the people of former Health Minister Dina Akkelidou, forced to step down following her entanglement with the law.
For months before, pharmaceutical importers had warned that the policy would be a catastrophe, complaining that they had been ignored in the drafting of the reform and completely frozen out from consultations on the plan.
Now it appears the situation has come to the crunch. Pharmacies are complaining of shortages of medicines, with some products having altogether disappeared from the market. On Wednesday, the Medical Association joined the fray, seeking an urgent review of the policy and warning that lives were being put at risk.
Unfortunately, the policy appears to have been characterised by the kind of short-term populism only too typical of successive governments in Cyprus. Who was going to complain about cheaper medicines? No one, except the pharmaceutical importers, widely seen as making loads of money on the back of the sick and vulnerable. Here was the government putting the interests of the people first.
Yet how did the government expect to transform private sector companies, whose very raison d’être is to make money, into philanthropic public service benefactors who would be happy to import at a loss? Why should they?
For months, importers had been warning that their suppliers would not be willing to sell at such prices to a market so tiny. Yet their warnings were ignored. Who can now blame them for looking elsewhere to make their profits?
The government is trying to patch up its policy by turning into a wholesale importer to plug the gaps. But for how long will the European Union turn a blind eye to such a blatant breach of the most basic rules of economic liberalism?
This was a crisis long foretold, so depressingly predictable that it defies belief the government so blithely walked into it. We are not a control economy where prices can arbitrarily be set for political purposes. We are a market economy where prices are driven by supply and demand. The government has tried to square the circle, but it just won’t fit.
Now it must urgently get us out of this mess; it must bring together all interested parties to see what is feasible to allow our demand for medicines to be met in a way that allows importers to make a reasonable profit. This is crisis entirely of its own making. It has a duty to get us out.
