Amended rules for pricing pharmaceuticals

Specific regulations for locally manufactured drugs

The Ministry of Public Health amended the rules for setting medicine prices. “The purpose of the amendment is to add pricing conditions specific to generic drugs, and modify the pricing conditions of locally manufactured pharmaceuticals,” said Armand Phares, President of the Lebanese Pharmaceutical Importers Association. “Re-pricing is mandatory every five years,” he said.

Generic drugs are pharmaceuticals that are similar to listed brand/reference drugs (called innovator drugs) in intended use, quality, dosage, strength, and route of administration.

The set price of imported innovator drugs is based on the lowest price among four categories: The Freight on Board (FOB) price recorded on the medicine’s original certificate; the price of the medicine in its country of origin; its price in neighboring countries; and the median price comparing the prices of similar pharmaceuticals produced in Europe. Prices should be in the same currency mentioned on the medicine’s original certificate.

The same mechanism is applied to the prices of generic drugs. However, the price of those pharmaceuticals should be, according to the new rules, 30 percent lower than the first public sale price of an innovator drug in the same category.

Each time an innovator drug’s price is decreased following the re-pricing procedure every five years, the prices of corresponding generic pharmaceuticals should now be decreased by half the percentage of decrease for the innovators.

Prices of locally manufactured pharmaceuticals were also covered by the new rules. They are set by their respective factories, according to their price certificate. Pharmaceuticals that are packed locally under license and submitted to pricing for the first time are set based on factory prices in the country of the licensor or the country of responsibility. Pharmaceuticals that are initially imported and then transferred to local secondary packaging are submitted to the re-pricing rule (every 5 years) as if they were imported, unless the local manufacturer is licensed for complete manufacturing.