UAE TO PEG DRUG PRICES AGAINST US DOLLAR

In a bid to stabilise prices, the United Arab Emirates (UAE) has announced that beginning in 2006, drug prices in the country will be pegged against the US dollar. Currently, drug prices are set against a basket of currencies, depending on the products' origins, which health officials believe has resulted in severe distortions.

The UAE drug market is heavily dependent on imports, especially for expensive, high-tech medicines, and the new measures are expected to assist drug sector modernisation. The need for price stability could become acute as the country contemplates a free trade agreement with the US.

Industry sources also feel the new policy could result in consolidation in the industry, which features a small number of generics makers. Jordan's adoption of a dollar peg has led its own drug export industry to consolidate, but the sector remains a leading source of competitive exports for Jordan, which lacks significant oil wealth.