The Peruvian government is concerned that many of its citizens lack access to affordable essential medicines. Out-of-pocket payments account for nearly half of total expenditure on prescription drugs in Peru. Moreover, 36% of private pharmacies reportedly do not offer patients the option of obtaining generic drugs.
To improve access to affordable medicines, on 31st October, the Peruvian government issued Emergency Decree 007-2019, which declares drugs, biologics and medical devices to be an essential element of the right to health. Under the terms of the decree, the government will compile a list of 40 generic/biosimilar drugs that all public and private pharmacies will be required to keep in stock. The 40 drugs—including analgesics, antibiotics, antihypertensives, antidiabetics and some biologics used in the treatment of cancers and autoimmune diseases—will be selected from the more than 900 medicines in the Petitorio Nacional Único de Medicamentos Esenciales (National List of Essential Medicines).
To ensure availability of the 40 drugs, the Ministry of Health will expand its own network of pharmacies (currently just three) and will open outlets in every public health facility, creating hundreds of new points of sale. Pharmacies that fail to maintain stocks of the 40 drugs could incur fines of up to Sol 8,400 ($2,520). Similarly, physicians who do not prescribe generic/biosimilar versions of the drugs on the list could face fines of the same magnitude. The Centro Nacional de Abastecimiento de Recursos Estratégicos en Salud (Cenares; National Centre for the Supply of Strategic Health Resources) will be the only entity authorised to purchase the 40 drugs.
As an indication of the potential impact of this measure on drug prices, Gustavo Rosell de Almeida, the Deputy Minister of Public Health, recently noted that a pack of 30 tablets of metformin currently costs Sol 50 ($15) for a branded product, Sol 10 ($3) for a generic and Sol 4.50 ($1.35) in a Ministry of Health pharmacy.
Implications for the pharmaceutical industry
The relatively limited penetration of generics and biosimilars in Peru is surprising in some respects. The international pharmaceutical industry has long complained about the country’s weak intellectual property protection environment. For example, Peru grants drugs only 40 months of regulatory data protection on average and affords biologics no regulatory data protection at all. The government has also pursued legislation that would remove patent protections and facilitate compulsory licensing. Yet, the country has been slow to approve biosimilars, and leading pharmacy chains have reportedly done little to promote wider use of generics.
The industry will wait anxiously to see which drugs are included in the list of 40 generics and biosimilars that must be stocked in all pharmacies. The detailed text of the decree should be finalised by 30th November 2019, with a view to implementation in March 2020.
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