UAE DRUGMAKERS CONTINUE TO OPPOSE PRICE CONTROLS

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ndustry observers have criticised price controls in the drug market of the United Arab Emirates (UAE), claiming that if such actions are valid for medicines than they should also be used for other areas, such as rent.

Drug prices are on average around twice as expensive in the UAE compared to the rest of the Middle East. However, with growing consumer opposition to high drug prices the government has recently shown a willingness to address the issue. Maximum profit margins have been reduced to 45%, a move that is expected to reduce average prices by 7%. The new measures will also include a price cap of AED50 (US$13.61) per pack for approximately two-thirds of medicines.

Drug manufacturers in the UAE have fiercely opposed these moves, claiming that they contravene the country's free market principles. In February 2005, 30 new products were refused approval on the grounds of "excessive pricing."

Meanwhile, the government has threatened to impose direct distribution if pharmacies fail to observe price cuts. Pharmacists claim that the price controls will cause supply shortages and are having a negative impact on profits, with many smaller pharmacies fearful of going out of business.