Fall in euro rates likely to bring down medicine prices

Unexpected developments in the foreign exchange market and the sharp weakening of euro against dollar and dirham will bring down medicine prices in the UAE.

This may also force the UAE health authorities to rethink about a plan to increase price of medicines sourced from European firms by more than 30 per cent.

"The exchange rate situation will bring down price of medicines in the UAE market imported from the European Union countries. As the euro is depreciating against dollar and dihram, there may be a revision of the plan to increase medicine prices from October 15," said a source from a leading pharmacy chain in the UAE.

"Everybody in the pharma trade was expecting the price hike, but now it may not come through," the source added.

Since 2005 the ministry has kept the exchange rate between the dirham and euro in pharmaceutical transactions fixed at Dh4.3 per euro. When the decision was announced, the exchange rate of euro and dirham stood at about Dh5.8 per euro.

Under a ministerial decree issued by Humaid Al Qutami, Health Minister, the revised exchange rate was to be effective from October 15. The current dirham-euro exchange is 5.408 and the pharmaceutical industry is keenly watching the euro movement.

Sources in the pharmaceutical industry revealed to Emirates Business that the Ministry of Health had advised all pharmacies, drug producers and medicine importers to submit detailed reports about the prices of medicines sourced from European companies before implementing a medicine price hike.

The Ministry of Health has been working with others in the healthcare industry on a plan to increase medicine prices by more than 20 per cent by the end of this year because of currency fluctuations. The plan was to increase prices of non-chronic conditions by 21.4 per cent and 5.58 per cent for those used to treat chronic diseases coming from Europe.

As the euro started weakening, pharmaceutical industry sources expect a reversal of the price revision for medicines priced in euros.

Out of the 3,665 medicines registered to treat chronic illnesses such as cancer, diabetes and epilepsy, the price change was expected to affect 530. Of the 3,267 non-chronic medicines, 599 were to be affected.