How government regulation brought about to a medications collapse

How government regulation brought about to a medications collapse
The range of medicines available in the country is steadily declining. According to experts, between 700 and 900 drug names have disappeared from the market over the past few years. The problem escalated to a full blown crisis this last summer, when pharmacies and hospitals experienced shortages of most needed drugs.

Moreover, suppliers don’t have them either.

Among the missing medicines were such vital drugs as prednisone, rabies vaccine and tick-borne encephalitis, anti-tetanus serum, insulin, a number of drugs for oncology and HIV patients and anticonvulsant drugs for children with epilepsy. Even Sodium Chloride 10%, used as a solution for injection, is not on sale.

The consequences of drug collapse will not be long in coming. According to the country's leading oncologists, the number of cancer patients in Russia has already grown by 23.7% over the past decade. And if the drug supply situation does not change, the cancer mortality rate might increase by 20-30% in the next two years.

Not only oncologists are sounding the alarm. Every day, doctors of different specialties face major patient treatment problems due to a lack of necessary medicines. They don’t keep silence, posting their stories in social networks, appealing to the mass media and professional communities and trying to understand the causes to find a way out.

“There will be more and more problems with the availability of drugs in Russia. And the reasons are the following: a) ridiculous rules enforced by the Health Ministry and other regulators, b) attempts to regulate the prices of vital and essential drugs and the heavily overloaded vital and essential drugs lists, c) lack of a medical community and strong professional communities that can influence the Ministry Of Health, and secure the supply of medicines in the country; d) the fact that medicines are not covered by compulsory medical insurance funds. Medical care is insured, but we don’t’ have medicines! Nonsense! It’s like paying a travel tax in addition to the fare when you use public transport.” Alexey Erlikh, a cardiologist at Bauman State Clinical Hospital №29 told Wek in comments on the current situation.

Vadim Shcherbinin, a senior doctor at the State Budgetary Healthcare Institution “Rzhevskaya Emergency Aid,” posted indignant remarks on social media as professional communities addressed the topic: "It is not the attending physician who selects the necessary drugs but Health Ministry employees and other officials. They have nothing to do with the management of patients. They never rely on the opinions of practitioners. Even anapriline has disappeared! What if a patient urgently needs it right now to relieve a tachycardia attack? It’s OK if we have such a drug, and the questions about whether or not we have a whole range of them and their effectiveness are not that important... The decision has been made."

At last, the problem was noticed at the top level. “Drug provision is one of the sensitive issues that particularly concerns our citizens. Difficulties arise in the regions every year. Vital drugs periodically disappear from drugstores. This problem is especially acute for residents of small towns and villages”, said Valentina Matviyenko, as she opened the autumn session of the Federation Council upper house of the Russian parliament on September 25. According to Matviyenko, quoted by RIA Novosti, senators will investigate the causes behind this situation: whether they are procurement planning faults, unfair competition, logistics, financing, or inadequate legal regulation.

In the attempt to understand the problem, the senators are unlikely to consult with doctors, pharmacists, representatives of the pharmacy business, that is, with those professionals who have got to the roots of the problem. They would rather issue another decree or a law which will aggravate the crisis.

Meanwhile, the cause is easily seen and it has been repeatedly written and talked about by authoritative doctors, heads of medical institutions, representatives of the pharmaceutical industry, pharmacy chains, etc.

The pharmaceutical market in Russia and the circulation of medicines are over-regulated by the state with prohibitive measures that never contribute to development. It is not the quality or even the availability of medicines that is regulated by the state, but the purchase and selling prices. They decrease steadily making the production and sale of medicines unprofitable in Russia. It is done allegedly in the interests of the population, to provide it with cheap medicines. The result was exactly the opposite. After all, no business can operate at a loss. Therefore, cheap drugs disappear from pharmacies and hospitals.

Another problem is the import substitution policy based on the carrot and stick approach. On the one hand, Russia has been scaling down the imports of quality medicines, and on the other, it has granted preferences to domestic drugs and medications from the Eurasian Economic Union member-states (Belarus, Kazakhstan, Kyrgyzstan, Armenia). Here’s one of the latest "brilliant" proposals our legislators brought forward: domestic drugs have to make up 50% of a pharmacy drug list. At the same time, most of domestic medicines are manufactured on imported equipment with precursor materials purchased from India or China.

Alexey Zhivov, chief physician at the Ilyinskaya hospital, told Wek about the consequences of such "import substitution": "High-quality, original medicines are disappearing from the Russian market. For example, 75% to 80% of urological patients take antibiotics. And what should they prescribe? There has been no high-quality ciprofloxacin on the market for two years now, only Indian generics. Imipenem-cilastatin (Tienam) has also disappeared from the market ... And here we see that there are India, China, Belarus and little-known Russian producers in the pharmaceutical market. I have no desire to offend anyone, but I often find that the products of all these manufacturers are as effective as crushed chalk. And, yes, there are plenty of different side effects. "

Here we come close to the issue of generics. Why are Russian pharmacies and hospitals increasingly plagued by shortages of original drugs and quality generics, while more and more drugs whose side effects exceed the therapeutic ones? Perhaps, it is not only a matter of price regulation, but the Health Ministry’s directive to replace the trade names of medicines in procurements with INN (International Non-proprietary Names)? Both the original drug and all its generics have the same INN. To calculate the cost of generics for public procurements, the Health Ministry ordered the use of a reduction factor. And since government purchases are made at the lowest price, only generics can enter the Russian market, and the cheapest ones are mainly made of imported low-quality raw materials by domestic factories. As a result, these drugs disappear, too, as their production and sale in Russia become unprofitable.

Let us showcase this mechanism with the drug diazepam (INN). It is a tranquilizer from the group of benzodiazepine derivatives. Diazepam was created by the pharmaceutical company Hoffmann-La Roche, founded in 1896 in Switzerland. It appeared on the market in 1963 under the trade name Valium and became one of the most successful developments of the company. The drug is very widely used in medical practice, in particular, for the treatment of anxiety, insomnia, epileptic seizures, muscle spasms, alcohol dependence, in anesthetic practice for preoperative preparation of patients, in dermatology for itching dermatosis. It has an antiarrhythmic effect, reduces the nighttime secretion of gastric juice and so on.

Diazepam is on the WHO list of essential medicines needed by the healthcare system. Diazepam generics are produced in many countries. In the USSR and the Russian Federation, this drug was most popular under the trade names Relanium (Poland), Seduxen (Hungary), Valium (Switzerland) and Sibazon (Russia).

Since August 1, 2013, diazepam has been included in List III of psychotropic substances, and its turnover is limited in the Russian Federation. Soon, imported drugs with this active substance began to disappear from sale. As of now, Russian pharmacies do not have domestic Sibazon.

Alexey Maschan, Director of Dmitry Rogachev National Medical Research Center Of Pediatric Hematology, Oncology and Immunology, believes that “the problem of the lack of medicines in pharmacies can be solved only on the conceptual level by repealing all laws and regulations that block access to conscientious reputable western manufacturers to the Russian market. This is the precise reason behind the shortage of vital drugs, especially in the low-cost segment.”

Of course, the state has to regulate the circulation of medicines, but not in this manner. The aim of state regulation is to provide citizens with an extensive range of affordable quality medicines. In treating a patient, it is the attending physician who chooses the drug, not a Health Ministry official. The availability of medicines is achieved not by the government-ordered cuts in manufacturing prices, but by budget subsidies or insurance covering the difference between the market price and the cost of the medicine for the consumer.

But so far it has not been possible to reach out to government officials and lawmakers. Therefore, the drug problem is turning into a collapse before our eyes. On January 1, 2020, Russia will introduce mandatory labeling of medicines which will cost manufacturers 50 kopecks for each package of medicine. VAT will further increase it to 60 kopecks. As a result, the average pharmaceutical company, producing about 40 million packages of medicines per year, will have to pay more than 20 million rubles for the labeling service. (It is noteworthy that the Center for the Development of Advanced Technologies, which belongs to billionaire Alisher Usmanov and the Rostec State Corporation, according to the RBK news agency, has the labeling monopoly in Russia by the government’s order).

But there is more to it. Following the launch of the labeling system, amendments were made to Russia’s Tax Code, according to which pharmacies can no longer use the simplified tax systems with a fixed tax such as Single Tax On Imputed Income and Patent System Of Taxation. This will lead to the closure of most pharmacies in small and medium-sized business, especially those in rural areas, while surviving pharmacies will hike prices.

Russian Deputy Health Minister Oleg Salagai did not reply to Wek’s questions about why medicines were disappearing in the country, who was responsible for this and what measures the Ministry of Health was taking to remedy the situation.