OREANDA-NEWS. August 14, 2009. In the first six months 2009 retail mark-ups were below maximum mark-ups established for the regions of the Russian Federation. However, in some constituent territories of the Russian Federation the offices of the Federal Antimonopoly Service (FAS Russia) discovered that some pharmacy chains with dominant positions on local markets exceeded the maximum mark-ups. Experts of FAS Russia arrived to this conclusion after they analyzed the findings of quarterly monitoring of retail prices for 100 drugs in most demand by the population, reported the press-centre of FAS Russia.

Currently offices of FAS Russia in 22 regions have initiated proceedings for violating Article 10 of the Federal Law "On Protection of Competition" (violating the established pricing procedures).

The monitoring also showed that in all constituent territories of the Russian Federation the growth of retail prices in the first six months of 2009 exceeded the rate of inflation and dual currency basket. "When prices for drugs are increasing we look first of all if the increase is justified. As 75% of drugs in Russia are imported and the remaining 25% are produced from imported raw materials, the price of drugs depends to a considerable degree on the exchange rate of dollar and euro. Inflation is another factor affecting the price of medicines", said Timofey Nizhegorodtsev, the Head of the FAS Russia's Department for Control over Social Sphere and Commerce.

Price movements for Russian and imported drugs show that the highest price increase was for cheap Russian drugs, made using imported substances.

According to the regional offices of FAS Russia, considerable growth of retail prices for drugs in Q1 2009 in the pharmacies was caused by increased wholesale (purchasing) prices. Suppliers include inflation expectations, risks of considerable increase of currency rate and increased expenses in the drug prices.

FAS Russia will continue investigations in order to find out whether the growth of drug prices is justified and determine the reasons for increasing prices at the level of wholesale sellers (distributors) and producers/ importers.

"At the moment we are finalizing the system for continuous monitoring of prices for the main drugs at retail, distribution and production/ import levels, which will eliminate possibility for unreasonable increase of drug prices", explained Timofey Nizhegorodtsev.

FAS Russia will report about final findings and the monitoring and the measures undertaken by the Antimonopoly service in October 2009.

Reference:
In accordance with the instructions of the Government of the Russian Federation, FAS Russia quarterly monitors retail prices for 100 medicines of most demand by the population. FAS Russia monitors economic entities that control more than 35% of the retail markets of medicines, products of medical purposes and accompanying products in municipal districts and town or have dominant position under Part 3 Article 5 of the Federal Law "On Protection of Competition" (collective dominance).

Currently FAS Russia and its regional offices have included 960 pharmacy chains in the Register of the companies with market share more than 35%.