The Pharmaceutical Market in Mauritius : a Case for Stronger Regulation

Mosadeq Sahebdin

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.

% 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.

% of GDP on Health

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

% G

DP

MadagascarMauritiusSingaporeSeychellesUK

New ZealandBelgiumFranceUSA

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.

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.

Health Status

According to a WHO report , 9.3% of adults aged 18 and are diabetics7.4% have arthritis6.4% suffer from depression 4.6% have asthma, and 4.3% have cardiac ailments.These figures explain the high drug dependency

among the population.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

Thank you