ECONOMIC BRIEFS

Drug distributor to continue supplying pharmacies

The largest private distributor of drugs and medical supplies in Slovakia, Fides, halted imports of foreign drugs as of June 1 after cabinet slapped a 7% surcharge on most imports. However, Fides will continue to distribute drugs not affected by the surcharge, as well as drugs for which it has already paid import duty, the company said in a statement on June 7.

"Fides does not think patients are to blame for the implementation of the import surcharge. Thus, we will continue to supply pharmacies," the statement said. "Our company will restart supplies of imported drugs hit by the import surcharge after the cabinet finds a solution that will enable the effective import of drugs. Fides will consult its steps with the Health Ministry so as to prevent a total collapse in drug distribution."

In late May, the government approved raising the import surcharge from zero to seven percent as of June 1 as part of a package of austerity measures designed to bring the country's trade and fiscal deficits under control. The import surcharge applies to approximately 75% of Slovak imports, and originally included drugs and medical materials.

Fides officials complained of being blacklisted by the Association of Drug Distributors (ADL), who accused the firm of breaking ranks. The ADL threatened on June 7 that it would stop delivering drugs to all pharmacies from June 8 to 11 unless cabinet approved a compensation package for drugs importers, and said it would extend the ban until June 18 if no compensation was forthcoming by the end of the week.

This latest health care crisis follows on the heels of fears that the sector would collapse from low funding in 1999. Slovakia plans to allocate 44.5 billion crowns, or 6.2% of GDP, for health care this year. This sum represents 8,250 crowns per capita, which is 48% less than in the neighboring Czech Republic. The annual consumption of drugs in western European countries per capita is $220, while in Slovakia it is only $57 USD.

The Association of Pharmaceutical Companies says that there is no more room for savings within the sector without seriously affecting the quality of provided medical services.

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