A pharmaceutical drugs cartel, comprising mainly of
businesspeople with links to India, is holding the country to ransom, amid
revelations that only a few wholesalers have permission to distribute most “fast-moving”
and cheaper drugs from India to the local market.
Investigations carried out by The Herald revealed that one
of the wholesalers, who is also of Indian origin, has exclusive rights from
most Indian manufacturers to provide at least 85 percent of these cheaper drugs
to both the private and public health sectors.
Any other wholesaler wishing to bring in the same products
from the same manufacturers is barred from doing so, giving the few with
exclusive dealership monopoly to charge prices they deem fit.
Investigations revealed that some of those with exclusive
dealership were making profit margins of over 300 percent because of relaxed
pricing regulations for medicines in Zimbabwe.
This is despite the fact that importation of medicines is
duty and VAT-free. For example, the maximum price of a rabies vaccine is pegged
at $3,65 in Indian retail pharmacies.
In Zimbabwe the drug costs between US$25 and US$30. Another
drug, Enoxaparin, used in the treatment of blood clots, costs at most US$5.38
for an injection in Indian retail pharmacies, but in Zimbabwe costs US$12 at
wholesale.
Nifedipine (20mg), a hypertensive drug commonly used in
Zimbabwe costs 0,22 cents in retail pharmacies in India. The same drug is sold
for US$0,50 cents by wholesalers in Zimbabwe.
Clotrimazole — a fungal cream — costs US$0,62 for 30g in
India and US$7 in Zimbabwe. Salbutamol — asthma inhaler — costs US$1,08 in
India and US$6 in Zimbabwe.
The Herald also learnt that because of lack of competition
on the market, the wholesalers can unjustly increase prices of the products
they have exclusive dealership over, taking advantage of desperate Zimbabwean
patients.
For example, tetracycline eye-drops used for newborn babies
were pegged at $1 in 2008 up to 2016, but the price was unjustifiably doubled
to $2 lately.
While most retailers are accepting all forms of payment,
those paying using RTGS are charged based on prevailing parallel market rate, disadvantaging
access to health by a majority of patients who have no access to foreign
currency.
Investigations further revealed that local retail
pharmacies also cannot import the same medicines from other cheaper wholesalers
in the region.
“At some point, I tried to get these cheaper generics from
a South African wholesaler whose prices were much lower than those that were
being charged by our local wholesalers but the South African wholesaler was
reported to the principal in India (the manufacturer) and was threatened with
cancellation of dealership if he continues supplying medicines to the
Zimbabwean market.
“Eventually I was left with no option than to get the
medicines from our local wholesalers and simply pass on the burden of paying
such huge amounts to patients,” said one of the sources in the pharmaceutical
industry who spoke on condition of anonymity.
The Herald also established that locally, current
regulation does not permit any other wholesaler to bring in medicines that have
already been registered by another wholesaler unless that particular wholesaler
with initial registration confirms that they do not have stock.
“The bottom line is that our pharmaceutical industry lacks
competition and we know that competition plays a huge part in bringing down
costs of commodities. In addition, the regulation is very relaxed as no one
controls or monitors pricing of pharmaceuticals in the country. This leaves so
much room for price distortions in the market,” said another source.
According to the Ministry of Health and Child Care,
regulation of medicines is done by the Medicines Control Authority of Zimbabwe
(MCAZ) but its sole mandate is to register new drugs and control sale of
counterfeit drugs.
The Authority does not have a mandate to control or monitor
prices of each dealers’ products once registration has been approved.
In an interview with The Herald yesterday, acting secretary
in the Ministry of Health and Child Care Dr Gibson Mhlanga said there was need
for the country to come up with ways of increasing competition in distribution
of pharmaceutical products.
“We do not regulate the pricing of pharmaceutical products.
What we regulate is what the wholesaler or anyone who want to deal in medicines
can bring into the country and our regulatory arm is the MCAZ. So no one is
allowed to bring in medicines that is not registered with MCAZ but
unfortunately we cannot influence how they charge their products,” said Dr
Mhlanga.
He said given such a scenario, it was possible that someone
with exclusive rights to a particular drug from a particular manufacturer can
overprice their products because of lack of alternatives.
However, market monopolies are one of the key functions the
Competitions and Tariffs Commission was created for. Section 5 of the
Competition Act (Chapter 14:28) mandates the CTC to investigate, discourage and
prevent restrictive practices in industry. It also empowers the CTC to study
trends towards monopoly situations and prevention of such situations, where
they are contrary to the public interest.
Prohibitive costs of pharmaceutical products in Zimbabwe
are pushing many individuals to source their medications from neighbouring
countries such as South Africa and Zambia where prices are cheaper. Herald
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