Pharmaceutical Market in Georgia

13 February, 2017

 

TI Georgia published its first report on the pharmaceutical market in 2012. The report included an overview of the general trends, problems and solutions. The following findings are important from the previous report:

  • The pharmaceutical market power is not distinctively concentrated. According to import statistics of 2015, approximately 70% of the market is distributed amongst five large companies. These are ltd. PSP Pharma with 22.32%, ltd. A-B-C Pharmacy with 14.91%, ltd. Aversi-Pharma with 14.54%, JSC GPC with 10.20% and ltd. Globalpharmi with 7.02%. Due to this, the pharmaceutical market can be characterized as a weak oligopoly. However, there are increased risks of diminishing competition and abuse of dominating positions with the recently announced merger of A-B-C Pharmacy and JSC GPC. Moreover, the positive sides of the merger should be noted, such as the unifying of resources, optimization of expenses and increase of effectiveness;
  • Georgia still hasn’t managed to adopt the international GMP standards. This negatively affects the export of drugs produced within the country and raises questions about the quality of drugs used within the country. The government planned to adopt the standards in 2016, but according to the new decision of the government, it has been postponed till 2018;
  • The LEPL State Regulation Agency for Medical Activities, which is responsible for testing the quality of drugs, apparently does not have sufficient resources/budget for effectively fulfilling its purpose. Moreover, the current legislation does not allow for the effective and complete fulfillment of these functions;
  • The rule for the “Recognition Regime’’ of pharmaceutical products creates moderate risks for the supply of low-grade drugs to the market;
  • The positive sides for the prescription system is not high due to the existing administrative hurdles. Pharmaceutical networks are not always fined for issuing medication without prescription. The fines are not big enough to serve as a preventive measure for issuing drugs without prescription;
  • Polypragmasy (the administration of many different remedies at the same time) and the non-existence of pharmacovigilance remain a problem in the country;
  • The legislative amendments carried out in 2013-2016 generally concern the adoption of prescriptions (electronic prescriptions) and its related processes. In the same period, there the fines were made stricter for illegal pharmaceutical activities and for violation of rules of pharmaceutical activity. The fine for the violation of rules doubled;
  • In 2014, especially after the month of April, the prices for all pharmaceutical products significantly increased. The peak in price surges was in the second quarter of 2015. The prices started to decline from November 2015 and by May 2016 the prices decreased for a certain category of drugs. The tendency of the price going down is still visible by December 2016;
  • According to import statistics, Aversi-Rational and GMP play a significant role in the development of the pharmaceutical industry sector in Georgia. They hold a total of 97% of the market. As of now, 11,168 drugs are allowed on the market (including the form, dose and packaging of the drug), out of which 1,367 (a total of 12,25%) is produced in Georgia. 259 of the drugs are produced by Aversi-Rational, while 237 is produced by GMP. Due to this, it is clear that there are producers in Georgia that produce pharmaceutical drugs from locally obtained raw materials;
  • Individuals associated with the pharmaceutical companies donated a total of 415,000 GEL to the United National Movement in 2012. No such donations were observed after 2012.

Pharmaceutical Market in Georgia