Банкеръ Weekly

Briefs

DISTRIBUTORS ASK FOR 7% VAT ON DRUGS

The National Branch Chamber of Drugs Wholesale Dealers asked for reducing the value-added tax on medicines to 7 per cent. The change will optimise the national pharmaceutical market, suppliers explain. The distributors also insist that the state introduce concrete price-making mechanisms. A price war is currently on, they say, while there are no incentives for the competition in the quality of service. In order to make the sales price of medicines equal in all pharmacies, dealers propose a transparent price-making scheme to be introduced.In an open letter to Bulgaria's Prime Minister, the leaders of the Chamber underline that the agreements reached at the May 4, 2004 round table are not being observed. During that meeting the Minister of Finance Milen Velchev promised there would be a benign regime for the drugs import as of June 1. His ministry has sent instructions to the customs, but companies have not received permission to apply the new procedure yet. The Chairman of the Chamber, Vladimir Naidenov, accused the customs, too, of making unexpected checks in the customs warehouses trying to eliminate some of the market dealers. In his opinion the currently operating Customs Act corresponds to the European legislation but impedes the fast distribution of medicines. The reason is that the act requires that imported drugs stay in the customs warehouses until the VAT is paid on them. According to dealers, the medicines should not remain stored there for more than one day and the tax should be paid in the end of the month and not at the moment the drugs are released. Mr. Naidenov announced that he had gathered documents proving that the customs protect some of the companies. Violations worth BGN200MN have been committed thanks to that protection for a three-year period.Roumen Makaveev, Chairman of the Branch Chamber Ethic Commission and Mimex Executive Director, accused the National Healthcare Insurance Fund (NHIF) of trying to eliminate part of the drugs suppliers, too. Over a half of the fund's budget allocated for acquisition of expensive drugs goes to one distributor, he said. The distributor delivers a certain medicine to one region or to the whole country and thus impedes the loyal competition. The monopoly can only be broken and the opportunities for manipulation of the pharmaceutical market abolished if a supervising body is established in order to control the expedience of each order of the fund, Mr. Makaveev said.

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