The Pharmaceutical Market in Mauritius : a Case for Stronger Regulation

1. The Pharmaceutical Market in Mauritius : a Case for Stronger Regulation Mosadeq Sahebdin

2. Introductory remarks • For a population of 1.2 million inhabitants, Mauritius has a high consumption rate of pharmaceutical products. • The Mauritian population is known to be heavy drug users, due to the high rate of self-medication and the a pill for every ill mentality.

3. % on GDP At present, Mauritius spends about 2.8 percent of its GDP on health. Comparable figures for other countries are shown in following table.

4. % of GDP on Health

5. Health services • At The state health services employ over 650 doctors and 17 pharmacists. • primary care level, the state health services have 134 facilities. • There are 5 regional hospitals and three district hospitals. • The private sector absorbs 32% of the total expenditure on health, employs over 400 doctors and provides primary and secondary services with 14 private clinics, 20 private medical laboratories and 275 private pharmacists.

6. Health professionals • At the end of 2001, there were in Mauritius 1,107 doctors, that is one doctor for every 1,089 inhabitants. • 694 (63%) were working in the public sector, and of these, 245 were specialists. • There were 245 pharmacists, that is one for every 4,920 inhabitants. • 17% were working in the public sector.

7. Health Status • According to a WHO report , • 9.3% of adults aged 18 and are diabetics • 7.4% have arthritis • 6.4% suffer from depression • 4.6% have asthma, and • 4.3% have cardiac ailments. • These figures explain the high drug dependency among the population.

8. Expenses on health • 32% of Mauritian households have to borrow or sell personal expenses to meet for medical expenses. • 29.6% spend from their personal savings. • For 9% , the health expenses exceed their affordability by 40%. • 41.8% of expenses on health are used to buy drugs.

9. Price Control • The prices of drugs are controlled by the Ministry of Industry and Commerce. • Government has fixed profit margins for importers and retailers respectively. • Importers are allowed a profit margin of 9%, and 22% goes to retailers.

10. Price fixing method • The prices of drugs used to be fixed on a six months’ basis. The method known as stabilising account allowed operators to recoup losses relative to fluctuations in exchange rate and enabled consumers to benefit from a specific price for at least six months. • Government has now adopted the consignment basis method, enabling prices to be revised on each consignment.

11. Market concentration • The root cause of high prices of drugs in Mauritius is the lack of competition on the market. • Big companies, representing multinationals tend to practice exclusive selling. • They make an abuse of their dominant position. • They can exert an influence on the variety of drugs sold by the pharmacists. • Doctors tend to prescribe exclusively brand names.

12. Over-invoicing • Importers may claim, in invoices submitted to the price fixing unit, expenses which they may not have effected. • Such practice has led to the setting up of so-called black funds within companies.

13. Irrational prescribing • Irrational prescribing is one of the causes of the escalation of pharmaceutical budgets. • Such practice include: • the heavy dependence of some prescribers on drug treatment for minor self-limiting complaints, • over prescribing of certain types of drugs, • prescribing of drugs of limited or no clinical value such as anti-diarrhoeals, • prescribing expensive drugs when comparable but cheaper drugs are available and prescribing expensive brand forms.

14. Anti-competitive behaviour • Companies often influence doctors and pharmacists with huge incentives. • Prescribing brand names and the sale of same are related to unfair promotional practices, such as offering gifts to doctors.

15. Pushing expensive drugs • The profit margins tend to cause pharmacists to push brand names. • Parallel importers also suffer from this preference for brand names. • Pharmacists would not often stock these products on the grounds of sub-standard quality, although what deters them is the low profit.

16. Consumer behaviour • Consumer behaviour tends to encourage this situation. • The high rate of self-medication is related to the high drug dependency. • Another factor is the consumer perception that the more expensive the product the more efficient it is.

17. Unethical practices • These include : • aggressive advertisement on food or vitamin supplements, • the free sale of prescription-only drugs, and • doctors establishing their practice on the premises of pharmacies in violation of the Pharmacy Act. • Such unethical and illegal practices are equivalent to unfair competition.

18. Regulatory framework • Drugs prices are fixed by the Price Fixing Unit of the Ministry of Industry and Commerce. • Enforcement of the Pharmacy Act is the responsibility of the Pharmacy Board. • Import permits are delivered by the Ministry of Industry and Commerce, upon recommendations from the Trade and Therapeutics Committee.

19. Recommendations • There is an urgent need for the formulation of a National Drugs Policy. • The WHO Essential Drugs List should be used as a tool to curtail high drug prices.

20. Recommendation (contd) • A civil society network will contribute to further consumer awareness on rational drug use and bring a change in mentality. • The setting up of a regulatory mechanism is becoming urgent. • Such a regulatory authority would include a mechanism to regulate behaviour of doctors, as well as distributors, including pharmacists at the retail level. • Government’s proposal to set up a Pharmacy Council to regulate the activities of the profession and establish a Code of Ethics is noteworthy.

21. Acknowledgements • Ministry of Health, White Paper for the Health Sector Reform, Government of Mauritius, 2003. • Dr K. Balasubramanian, Health and pharmaceuticals in Developing countries: Towards social justice and Equity, Consumers International, 1996 • Nitya Nanda and Amr Ullah Khan , Competition Policy for the Pharmaceuticals Sector in India, Towards a Functional Competition Policy for India, an overview, edited by Pradeep S. Mehta, CUTS International, • L’express newspaper. • ICP Press releases. * The author is the Coordinator of the Institute for Consumer Protection, Mauritius.

22. Thank you