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UAE FINALISES RETAIL DRUG PRICE CUT

August 24, 2005

The United Arab Emirates (UAE) has finalised details of its drug price cuts, expected to be effective September 15. The cuts will apply to 7,721 products -- or about two-thirds of all medicines available in the country -- and will impose a maximum price on affected packs of AED50 (US$13.61).

Under the new regulation, some 13% of products will face reductions of AED100, including many arthritis, diabetes and cardiovascular drugs. Anti-hypertensives and antibiotics will be subjected to price cuts of AED150. However, some high-value products used in transplant medicine and the treatment of cancer and liver infections will be priced at over AED1000 (US$272.27) per pack.

The UAE's government is increasingly committed to price restrictions, at least in the lower-cost and lifestyle-related parts of the drug market. Recent initiatives have included moves to lower pharmacy profit margins to between 20% and 50%, from the current 55% level. In February 2005, the Ministry of Health refused to approve 30 new products on the grounds of "excessive pricing," claiming that the products' prices in other Gulf Co-operation Council (GCC) states was lower. Pharmacies have also been threatened with direct distribution by the Health Ministry if they refuse to implement the new price cuts.