On July 19, 2018, the Parliament took a resolution instructing the Competition Agency to study the pharmaceutical market, which was related to the rising prices of pharmaceutical products and medicines. The preliminary results of the report are already published on the official website of the Agency.
Irakli Lekvinadze, head of the Competition Agency, declared in April that he would publish "a highly qualified analysis by the end of the year" to the public. However, the interim report does not give a clear answer to the main question of how "greedy" the pharmaceutical sector is and what is average profit margin in Georgia.
According to the financial statements of the pharmaceutical companies, the profit margin for the medicines totals to 30% -35%. However, the pharmaceutical business is often criticized by politicians for a 100%-200% profit margin.
The preliminary report of the Competition Agency does not explain this issue, as it merely compares the price of certain types of medicines that are sold on the market in both branded and generic forms.
According to the agency, if consumers buys generic alternatives instead of branded ones, then consumers will spend GEL 16 million less on drugs of similar composition.
The document assesses the organizational structure of pharmaceutical companies as problematic - the Competition Agency calls on the government to limit the secondary segments of the pharmaceutical sector.
