Costly cures

For Panamanians, skyrocketing medicine prices are becoming a difficult pill to swallow.

Usually, Panama leads Central American indices in measures of fiscal discipline and fair market competition. In one area however, the country lags – healthcare. Medicine is becoming increasingly unaffordable for Panamanians – almost 8% of households spend more than 10% of their income on health expenses. Healthcare costs are estimated to have driven some 1.7% of the population below the poverty line. The oligopolistic domination of the country’s pharmaceuticals industry will make the possibility of fairer price competition a distant prospect.

An economist and financial analyst said, “The prices of medicines in Panama are six times more expensive than in countries like Colombia, Mexico or Spain. A study by the Latin American Strategic Center for Geopolitics (‘CELAG’) revealed that Panama’s medicinal prices are 25% higher than the regional average.”

“The prices of medicines in Panama are six times more expensive than in countries like Colombia, Mexico or Spain.”

Economist and financial analyst, Panama

For years the sector has been subjected to increasing privatisation and defunding of the national healthcare public system. The country’s pharmaceutical market requires more meticulous surveillance by the government and especially by public policy makers in order to simultaneously ensure that laboratories innovate but also supply enough stock to guarantee access to quality medicines for all Panamanians at affordable prices.

Currently, the issue with the pharmaceutical companies is the logic of the licenses and patents that they negotiated with great advantage at the time and how many multinationals have set up political lobbies that easily co-opt congressmen and health authorities to ensure that no changes are made that may impair commercial privileges.

The economist explained, “The administration cannot easily challenge the prices these companies charge because there is an association of laboratories with hospitals and insurance companies.” However, if there is no effective citizen exercise, it will be difficult to make changes. The pandemic has left a bitter taste among Panamanians who see pharmaceutical companies as unscrupulous exploiters, justifiably so given current medicine prices.

Panama’s former minister of health said, “The first thing to do is to modify the cultural acceptance regarding the use of generic drugs. CELAG’s report on drug prices in Latin America mentions that ‘a 10% increase in the market share of generics could result in a 12% drop in prices.’ Regional purchases are good because you get a better price.”

“CELAG’s report on drug prices in Latin America mentions that ‘a 10% increase in the market share of generics could result in a 12% drop in prices.’”

Former Minister of Health, Panama

The former health minister added, “For now, it is essential to resolve critical knots such as the optimisation of operational processes related to supply chains (which are factored into prices), purchases and logistics in the healthcare sector. In addition, it is necessary to modernise technology systems that allow real demand to be quantified and planned. If the administration gets that in order, the knock-on effect will be a reduction in prices.”

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