To stabilise prices of medicines, Latvia’s Ministry of Health has started looking for ways to reduce taxes for all prescribed medicines, said the ministry’s parliamentary secretary Ilze Ortveina during a meeting of the Saeima’s Social and Employment Matters Committee on Wednesday, the 22nd of February.
As participants of the meeting were informed by the ministry’s deputy secretary for financial affairs Boriss Kņigins, the ministry’s budget for 2023 included an increase for funding for the payment of compensated medicines and materials to EUR 219.34 million. Last year the funding was EUR 191.866 million.
The Ministry of Health also plans to review and improve the principles that govern the order under which medicines and medical equipment are compensated.
The chairperson of the committee Inga Bērziņa stressed the existing prices of medicines in Latvia are higher when compared to developed countries. She said one of her colleagues purchases medicines for his children in Poland, where they are four times cheaper than in Latvia. Medicines like paracetamol cost 40 to 50 cents in countries like Britain or the Netherlands. In Latvia, however, it costs approximately two euros. Additionally, certain medicines in these countries can be freely purchased in supermarkets, not just pharmacies.
Kņigins mentioned that expansion of sales of medicines to, say, supermarkets, depends on the effect it could have on people’s health. According to him, the pharmaceutical industry has had multiple discussions about expansion of the network of pharmacies to make them more accessible and or expand them with other resources. This, however, could be dangerous for people’s health. The President of Latvian Society of Physicians Ilze Aizsilniece agreed with this general assessment, adding that British and German health literacy is completely different from that of Latvian residents. For example, in these countries significantly more people end up hospitalised because of side-effects from medicines when compared with Latvia. This, according to her, is a positive difference.
Ortveina also reports that the report regarding the medicines price reform has been on the table in the Cabinet of Ministers since last year. However, it still has not been picked up, as its potential influence on the state budget is EUR 26 million.
This is why one of the solutions is reducing taxes for all medicines – compensated and non-compensated medicines.
For other non-prescribed medicines, including supplements, wholesale traders will be allowed to add whatever markup they see fit.
She added that talks with wholesale traders and the pharmaceutical industry are not easy. Ortveina hopes it will be possible to stabilise the medicines market at least in regards to prescribed medicines. Talks are currently progressing forward with small steps.
She also said that Latvia’s neighbours have a different approach when it comes to taxing medicines. In Estonia, for example, a VAT of 9% is applied to compensated medicines. In Lithuania VAT is 5% for all medicines. Latvia is currently looking for a middle-ground to adopt.
Also read: Latvian government rejects Skulte LNG project developer’s and investor’s proposed conditions