The Competition Agency has completed the study of the pharmaceutical market. Interim pharmaceutical market monitoring report published on the Agency’s official website states that:
- “Large companies own clinics and insurance companies, granting them market power, cause significant influence over those responsible for prescribing drugs and, as a result of which, decisions may not be based on the best interests of patients and in line with commercial and business interests of particular holding group(s) and that such integration is prohibited in numerous European countries – including even ownership of chain pharmacies.”
The report describes benefits expected by limiting the holding structure of the market – “The Agency believes that it is important to bring under specific regulation the implementation of non-professional activities by economic agents of the importer/wholesale and retail suppliers of drugs, to exclude possible negative outcomes of such market structure on the customer and general competitiveness of the market.”
We asked Vasil Akhrakhadze, General Director of Insurance Company Unison, to express his position on the given subject.
Mr. Vasil, as the media and the general public is aware, for many years you have been referring to negative effects caused by the activities of such holdings on the market in general and eventually on the consumer. What do you think will change if the Government accepts recommendations?
Indeed, our team has attempted, since the establishment of the company, to deliver a simple message to customers that Unison is an independent insurance company. Unfortunately, we then have to explain in detail as to what do we mean by such statement, that we are not affiliated with the healthcare or pharmaceutical sectors, thus we have no interest in our policyholders being prescribed more drugs than they actually require by healthcare providers and/or endless visits to doctors, and that we are focused on the health of the insured and not on a profit in the healthcare or pharmaceutical sector at the expense of the client attracted by medical insurance policy sold at an unprofitable price for the insurer. To assess the situation with simple statistics, over 10,000 registered pharmacies operate in Georgia, more than in Germany and France together. Does this number mean that we have the most diseased population in the world? of course not! This is the result of an unhealthy market model and lack of control, supplemented by abnormal pricing.
We are happy that our position is in line with the Competition Agency’s report and we agree with the recommendation in full, which definitely serves the competitive environment and the best interests of customers. It is important for the Government to clearly understand that it is vital to ensure healthy competition in the market and avoid greenhouse conditions for holding companies in order to provide affordable pharmaceutical services to the population.
On our part, we appeal to the Insurance State Supervision Service to initiate an amendment to the Law on Insurance, which excludes the ownership of insurance companies by pharmaceutical companies and their founders. Same refers to banks, and it would be good if this issue is brought under a single legislative initiative in time.
Obviously, the ice has started to melt and we should all wait for positive changes in this direction. As a holding, the interrelated principle should limit and exclude the “vengeful relationship” mentioned in the report against the interests of the customer, by which I started my interview, and that in such a conflict of interests, the customer is damaged, whose quick recovery does not fall within the interests of the insurance company, which is directly or indirectly related to the pharmaceutical and healthcare company. Therefore, point 7 of the recommendation is of utmost importance: ensuring highest transparency and publicity of the relationships between the prescriber of drugs/prescription and pharmaceutical companies.
To conclude, I would like to note that despite our repeated statements on all the above negative effects of holding companies and in no vain so far, this time we feel that that the picture will change drastically in the nearest future and, therefore, only the customer – an ordinary citizen will benefit, whose health will, as usual, be protected by Insurance Company Unison.