A maximum retail price (MRP) for medications will be proposed for next year to limit the amount of money spent on Aasandha, the country’s national health insurance system, the finance ministry said.
Medication maximum prices will be set in two stages. The first stage will see an MRP set for 357 generic pharmaceuticals on the Maldives Food and Drug Authority’s (MFDA) essential medicine list starting in January 2022. A maximum price for medications that are not on the list will be determined in mid-2022.
The finance ministry said the plan to impose a maximum price for drugs is intended to reduce the financial burden on the government and individuals while still maintaining the amount spent on Aasandha in a sustainable manner. It is estimated that the change will save MVR 205.9 million per year on the national health insurance system.
According to budget records, the amount spent on Aasandha has been increasing year after year, and the Aasandha expenditures have exceeded the budgeted amount almost every year.
The bulk of the money spent on the health insurance system went toward medications. Over the previous two years, more than half of the money spent on Aasandha went toward prescription expenditures. Furthermore, between 2014 and 2020, the average price of pharmaceuticals increased by roughly 24 percent.
The finance ministry noted the increase in medicine expenditures under Aasandha is due to uncontrollable increases in drug prices, an increase in unused medications, and an increase in rates to acquire medications for importers.
The surge in medicine waste is due to people buying medications under the same prescription many times without recognising how much money they are wasting, according to the finance ministry.
The MFDA determined the maximum price for drugs based on Free on Board (FOB) pricing while enabling companies to profit, and the MRP for medications includes a 100% markup from FOB prices, the finance ministry said.
Before establishing the maximum retail price, the MFDA met with pharmacists, the World Health Organization (WHO), and relevant government agencies. According to the finance ministry, despite the adoption of MRP, medication distribution businesses would be able to produce a profit.