One third of all imported medicines are counterfeit and their wholesale price is 5 to 6 times higher than the WHO standard, said the Minister of Finance, Ch. Khurelbaatar. Until when are we Mongolians going to keep harming our health using overpriced counterfeit medicine and eating unsafe food?
The Reality
An independent research published in BMC Public Health magazine took samples of 9 type most commonly used medicines from pharmacies in the capital Ulaanbaatar and 4 aimags to examine them. Sixty-nine (17.8%) of 388 samples from the countryside were non-standard and 85 (21.9%) medicines were not registered. In Ulaanbaatar, however, among the 848 samples, 112 (13.2%) were non-standard and 150 (17.7%) were not registered. A similar study in 2017 found that 179 (10%) of the total 1770 samples from 11 types of medicine in 118 pharmacies which were placed in Ulaanbaatar and the countryside were non-compliant with the standards and were not acceptable. Some locally produced medicines were of lower quality compared to the same medicine that was imported. There were 76 unregistered medicines (4.3% of total, 3.8 in UB; 5.8 in the countryside).
The first study on the price of medicine conducted by the Ministry of Health in 2004 found that the state purchases were made with prices 2.4 times higher than international standard price. The pharmacies were purchasing 3.99 times more expensively. The same situation was the case in a research from 2012 and it can be seen from the Finance Minister’s statement that the prices remained unchanged until now. The citizens have no other choice but to buy the overpriced medicine. It is taking a toll on economically vulnerable households that cannot even afford food, not to mention that one in three people live in poverty in this country.
Pharmaceuticals – a lucrative business
The high profitability of health businesses is displayed by every street in Ulaanbaatar having a pharmacy. As of 2019, there are 40 factories and 356 organizations that supply pharmaceuticals in Mongolia. In total, there are 1541 pharmacies nationwide, of which 591 are in the countryside and 950 are in the capital city.
State involvement in Mongolian pharmaceuticals market is relatively low. The prices aren’t set by the state, unlike fuel and petrol. Solely private businesses operate. Foreign companies usually don’t take interest as Mongolia is a small market and the costs are high.
One fourth of all 4696 medicines registered in Mongolia are locally produced and the rest are imported from 58 countries (mainly India 12.4%, South Korea 9%, Russia 6.4% and Germany 5.8%). In 2018, our country imported 362.5 billion tugriks worth of pharmaceuticals and there has been 299 billion tugriks (wholesale price) worth of sales. Also, the import of raw materials for pharmaceuticals has been estimated to be 3.5 billion tugriks, with sales of 2.5 billion tugriks.
Figure 1: Import and sales of pharmaceuticals in billion tugriks, 2013-2018
Source: Эм зүйн салбарын зарим үзүүлэлт 2018
The budget expenditure on health sector has been increasing year by year due to the growth in population. Fourteen percent of 823 billion tugriks spent for the sector from state budget last year was spent on purchasing pharmaceuticals.
One reason for the high price of pharmaceuticals is that state hospitals purchase medicine individually as well as hospitals in aimags and districts. Actually, organizing competitive bidding (tender) can set a fixed standard price in domestic market. Even when there are claims of organizing tender, the procurement procedures aren’t transparent. Also, it is questionable whether any comparisons to international standard prices take place when setting the base price. In fact, state hospitals and government agencies could establish the purchase standard by implementing a unified price index. Instead, the state is giving free rein to the high prices.
What can be done?
The need to change the healthcare system has been the topic of conversation over many years, and yet no noticeable change has occurred. In Mongolia, the entity responsible for inspecting the quality of pharmaceuticals is the State Professional Inspection Agency, not the Ministry of Health. The Agency inspects around 400 pharmacies each year, and a task this important exceeds their capacity. On top of that, Mongolians consume medicine like food during the flu season, partly, because of subliminal and explicit advertisement of medicines and the entanglement of doctors in the business. Even when taking several types of medicines at once, the illnesses recur rather than healing. As the supply diminishes due to the high usage, the prices increase. Domestic producers and supplier companies are allowed to only produce and import pharmaceuticals registered by the state. The fact that unregistered medicines are sold throughout the pharmacies indicates the quality of official inspection and monitoring.
Although there has been a proposal on establishing a Food and Drug administration (FDA) to align with the international standards since the times of Health Minister S. Lambaa, the State Professional Inspection Agency opposed the idea and stopped it. Globally, food and drug administration entities exchange information on issues, standards and reforms related to food and medicines. It is even possible to buy expensive pharmaceuticals and vaccines that are urgently needed for a cheaper price when several countries partner up.
On this day, the “Khurelsukh administration” is founding a new special agency exclusively for monitoring the quality of pharmaceuticals and hospital appliances, and also making all purchases on state level. Moreover, the Parliament has added amendments to the law on administering healthcare, and, to the law on health insurance. It was also decided that hospitals are to be funded based on execution and all reduced-price medicines are to be sold at all pharmacies.
There is a need to establish an independent system of health insurance so as to separate it from the places where healthcare services are administered. In that scenario, the insurance organization becomes an entity that can efficiently perform monitoring to reduce risks.
2020.09.03
Trans. by Riya.T and Munkh-Erdene.D