The UAE Ministry of Health announced the third round of price cuts under its private-public partnership negotiations scheme, this time affecting 115 generic drugs by 5–45%. In addition the UAE approved Eli Lilly & Co (US)'s type II diabetes treatment Bydureon.
IHS Global Insight Perspective | |
Significance | The UAE Ministry of Health (MoH) has announced price cuts in the range of 5–45% on 115 generic chronic disease treatments taking effect from 1 January 2012, following negotiations instigated by a 2010 study that showed the UAE had the highest drug prices of Gulf Cooperation Council (GCC) states and Arab countries. In other news, US major Eli Lilly & Co and the MoH announced the approval and registration of type 2 diabetes treatment Bydureon (exenatide for prolonged-release suspension for injection). |
Implications | The price cuts are part of the private-public partnerships (PPPs) between the MoH and pharma firms, with the hope of improving access, quality and affordability of treatments for the population. Bydureon's approval is indicative of the UAE MOH's drive to take up new technologies and treatments. |
Outlook | UAE drug prices will, in the medium term, now be among the lowest in the GCC and other Arab countries. The UAE government will continue to use partnerships to effectively combat its rising non-communicable disease levels, while boosting its pharma industry in the immediate-to-medium term. The approval for Bydureon will see Eli Lilly and its partners Amylin (US) and Alkermes (US) enter one of the fastest growing diabetes markets. |
UAE Announces Price Cuts on 115 Generic Drugs
The UAE Ministry of Health (MoH) has announced price cuts in the range of 5–45% on 115 generic drugs, with the price cuts set to take effect from 1 January 2012, Khaleej Times and Gulf Today report. Among the 115 generic drugs, 26 medicines had their prices reduced by 5%, 33 by 10%, 9 by 15%, 23 by 20%, 21 by 25%, and three oncology treatments by 30% or more. The price cuts affect mostly chronic diseases treatments such as anti-diabetics,and cardiovascular disease drugs, antihistamines and anti-asthmatics. A total of 15 international, local and Arab companies will be affected by this round of price cuts. The announcement follows negotiations with pharma firms to reduce prices of their drugs. The negotiations were instigated by a 2010 study across Gulf Cooperation Council (GCC) states and Arab countries that showed prices of drugs were highest in the United Arab Emirates. The study found drug prices in the country were 23 times higher than World Health Organization (WHO) recommended international price levels, and 13.8 times more on generic medicines than average prices. In the UAE, the mark-up between the price at port and at retail outlet is 44%, compared with a mark-up of 15–20% in Europe.
Selected Drugs Affected by Price Cuts | ||||
Drug | Quantity | Current Price | New Price | % Change |
Anzatax (paclitaxel) 300-mg/50-ml injection | 50-ml glass vial | 2,599 | 1,819.50 | 43 |
Abraxane (paclitaxel) 100 mg | 50-ml single-use glass vial | 3,885 | 3,700 | 4.8 |
Medacef (cefaclor) 500-mg capsules | 500s (10s blister x 50) | 1,496 | 1,346.50 | 10 |
Heparin 25,000 IU/5-ml injection | 5ml vial x 50 | 321.50 | 257.00 | 20 |
Fluoxtin (fluoxetine) 20-mg capsules | 30s plastic bottle | 142.50 | 119.00 | 16.5 |
Neopril (lisinopril) 5-mg tablets | 28s (7s blister x 4) | 42.50 | 40.00 | 5.9 |
Source: UAE MoH and Gulf News | ||||
The full list of drugs affected by the price cuts can be accessed here.
Approval of Bydureon
On Sunday (13 November), US major Eli Lilly & Co and the UAE MOH, announced the approval and registration of Bydureon (exenatide for prolonged-release suspension for injection) for the treatment of type 2 diabetes. Bydureon will be available in pharmacies by 23 November priced at 732 UAE dirham (USD199.25).
Outlook and Implications
The price cuts are the third round affecting generics following discounts of 5–60% on over 630 innovative drugs effected in March and September this year, and had been expected following a previous announcement in September in line with government steps to combat rising levels of chronic diseases (see United Arab Emirates: 2 March 2011: Chronic Disease Drug Prices to Drop by 15% in UAE and United Arab Emirates: 28 June 2011: UAE's MoH Cuts Prices of 565 Drugs). This will bring the total number of drugs affected by price cuts to 2,680, making UAE prices some of the lowest in the GCC, in line with those in Saudi Arabia. The deal between the MoH and the pharmaceutical industry will see reduced prices on 30% of the 8,503 medicines registered in the UAE. The price cuts form part of the private-public partnerships (PPPs) between the MoH and major pharma firms, and are in line with government initiatives towards improving access, quality and affordability of treatments for its population without affecting the revenues and budgets of service providers. The increased co-operation between the MoH and local and international pharmaceutical firms will encourage investment and help reduce the penetration of counterfeit drugs as patients gain more access to affordable treatments.
The move by the UAE government to cut drug prices comes as it looks to contain the costs associated with rising incidence of chronic diseases, and as health insurance coverage expands (see United Arab Emirates: 17 December 2010: Diabetes Costs UAE US$500 Mil. Annually As Prevalence Hits 32%). Growing levels of diabetes will be a major driver for the UAE's health and pharmaceutical industry, which is expected to reach a value of USD10.9 billion by 2013 (see United Arab Emirates: 23 November 2010: UAE Health Industry to Reach US$10.9 Bil. by 2013). The price cuts will reduce chronic disease drug co-payments and out-of-pocket expenditure currently incurred by patients, and help to drive generic drug penetration in a brand-driven market.
The announcement of the price cuts shows the MoH's commitment to increased transparency in its decisions, in light of previous criticism of opacity. Going forward, the UAE will continue to adapt its pharmaceutical sector and drug prices in line with GCC and developed markets, enabling competition and increased investment in the sector and further propelling growth. UAE health authorities look set to continue to use collaborations to gain technical know-how on how to combat the rising non-communicable disease burden in the country in the immediate-to-medium term, opening up new opportunities for pharma companies looking to extend their reach in the Middle East. A fourth round of reductions and a unified GCC pricing policy are expected to be announced at the start of next year.
The approval of Eli Lilly & Co's Bydureon makes the UAE the first Arab country to register the once-weekly antidiabetic treatment following its approval in the EU and United Kingdom (see United States: 18 April 2011: Eli Lilly and Amylin's Bydureon Gain EMA Nod and United Kingdom: 18 October 2011: NICE Recommends Reimbursement of Lilly's Bydureon), indicative of the UAE MOH's keenness to take up new technologies and treatments. Exenatide prolonged-release offers the potential for improved glycated haemoglobin (HBA1C) control with the added benefit of weight loss occurring in most patients, and will face competition from Novo Nordisk's Victoza (liraglutide). The approval in the UAE will see Eli Lilly and its partners Amylin (US) and Alkermes (US) enter one of the fastest growing diabetes markets as shown by the data above, easing pressure as far as commercialisation goes.