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.