The sphere of state regulation does not cover the prices of unregistered medicinal products, which has led to sellers charging mark-ups of up to 2000% of the manufacturer's price.
This was stated at a meeting on the results of an audit of the effectiveness of the Ministry of Health and its subordinate organisations regarding the provision of medicines to citizens by the Chairman of the Supreme Audit Chamber (SAC) Alikhan Smailov.
According to the press service of the department, SAC member Tlegen Kaskin reported that the audit identified 36 shortcomings in the sphere of pharmaceutical product circulation. These concern state support measures for domestic producers, pricing, procurement and logistics processes, as well as the conduct of inspections and the assessment of drug safety.
“Support measures are provided without consideration of priority areas for the development of domestic pharmaceutical production and regardless of the level of localisation. Kazakhstani raw materials are practically not used in the production of medicines, and quality requirements for imported components have not been established,” the statement said.
It has become known that the share of domestic medicines and medical devices on the Kazakhstani market does not exceed 20%. Based on 2023 sales results, this share is even lower – 18%.
At the same time, it is noted that state price regulation in the country is not carried out adequately, which allows the cost of drugs to be increased to 172% of the manufacturer's price.
“The methodology for setting maximum prices has been developed by the Ministry of Health in such a way that prices can be raised by hundreds of per cent. The pricing is fundamentally wrong. Why isn't an analysis of prices in comparable countries being carried out? It turns out that currently all pricing is based on data from the manufacturing plant. This is the wrong approach,” said Alikhan Smailov.
In turn, Minister of Health Akmaral Alnazarova noted that, taking into account the recommendations, appropriate work will be carried out in this area.
“There are more than enough questions regarding pricing. About its transparency and objectivity. Pricing for the wholesale and retail segment also raises questions, as does the part concerning procurement under the GGVMF (Guaranteed Government Volume of Medical Free care) and CSHI. Regarding the results of the SAC, more than 6,500 drugs will be checked today based on all prices. A working group has been established. There are also questions about their selection. I think that by the end of the year we will generally review the entire range of prices that have been set, both within the framework of GGVMF and CSHI, and in the wholesale and retail segment,” said Akmaral Alnazarova.
Among other things, the audit established that LLP “SK-Pharmacy” purchased some medicines and medical devices at an inflated price of 40%-365%, amounting to more than 8 billion tenge.
Furthermore, during procurement procedures, the company purchased medicines when registered analogues were available for 3 billion tenge, as well as without confirmed certificates for more than 182 billion tenge.
According to the SAC, the monopolisation of the drug storage market and the lack of its own logistics infrastructure at “SK-Pharmacy” contributed to a 1.5-fold increase in logistics costs: from 2022 to 2024 – from 6.8 billion tenge to 10.2 billion tenge.
At the same time, the SAC noted that the lack of operational warehouses for storing medicines and medical devices for healthcare organisations in the Akmola, Atyrau, Kyzylorda and Mangystau regions also increases logistics costs and could negatively impact the availability of medicines during emergency situations.
Overall, auditors established violations totalling 3.7 billion tenge, of which:
- financial violations – 538 million tenge;
- ineffective planning – 2.8 billion tenge;
- inefficient use of assets – 385 million tenge;
- possible budget losses – 21.7 billion tenge.
In conclusion, it is reported that the head of the Committee for Medical and Pharmaceutical Control was held administratively liable for obstructing the conduct of the audit. The materials have been forwarded to law enforcement authorities.