Walid Ammar, director general of the Ministry of Public Health, explains that the ministry set out to mitigate spending by first working towards limiting import prices and profit margins. The ex-factory price is the main target, he says, where ex-factory is the price of the product if it were bought at that factory, e.g. without costs of transportation. The ministry determines the local price by looking first to the product’s country of origin for ways to reduce the profit margin, then to those importers and pharmacists in Lebanon. “We have issued several decisions over the years that have reduced the profit margins gradually and the most recent one is to have categories where you have different profit margins depending on the category. The higher ex-factory price gets lower profit margins — this is to encourage the generics mainly,” Ammar adds.
The ministry also compares prices of medicines in other countries’ markets and prior to 2005 based the local price of a given drug on its mean value across markets, though now the government sets the price to the lowest found in a comparison survey of other markets. What has had a big impact, says Ammar, is the ministry’s altering of the profit allowed to the pharmacists — rather than receiving a percentage of the retailing price for a given medicine the pharmacist now can only calculate their profit by a flat rate lump sum. Ammar gives an example of how the ministry has altered the pharmacists’ profit margin for medicines that fall into the highest category on the drug public price list — instead of allowing the pharmacist to mark up the retailing price of a given medicine by a certain percent the ministry has capped expensive drugs with a flat rate lump sum. “We have transformed the profit margin of the pharmacists from a percentage to a lump sum; everything that has an ex-factory above $300 the profit margin of the pharmacist is $86,” Ammar says.
Additional measures to reduce the cost of drugs have focused on the primary healthcare network — local clinics and public hospitals — where generics are dispensed when prescribing medication. But Ammar says that the primary healthcare network has reached capacity, so this is no longer an area that can squeeze profit margins. The alternative has been to shift attention back to the market, where “more than 80 percent of sold drugs are branded, and most are originators [brand name],” says Ammar. A strict registration mechanism validates, among multiple quality controlling factors, the manufacturing conditions and drug bioequivalency, enabling the government to control comparisons of generics to originators and to clearly indicate the equivalence.
In combination, these regulations are meant to reduce the cost of healthcare in Lebanon by controlling profit margins and promoting greater use of generics where those medicines can be appropriately substituted in lieu of the expensive brand name drug. Factoring in the soon to be implemented unified prescription forms might further restructure the share of generics prescribed and the landscape of Lebanon’s pharmaceutical market. deducted from the pharmacist’s profit. An additional fee of 0.25 percent of the import bill is also paid to the Lebanese Order of Physicians.” Executive had requested these data points from the Order of Physicians, which deferred to the Order of Pharmacists; the latter declined to share the statistics.
The new prescription form would seem to be a good development for pharmacists — the forms would integrate the pharmacist into the consultative process with the doctor and the patient. It is, according to Abdalla el Lakany, dean of the faculty of pharmacy at Beirut Arab University, a needed step towards improving the doctor–pharmacist relationship. “This reform benefits the pharmacists to clarify their role as a medication therapy expert.” Traditionally, he says, the role of the pharmacist has been limited to the dispensing of medications rather than a direct role in patient care vis-àvis doctors. In Europe and North America the practice is a patient centered, holistic approach where the pharmacist is a cornerstone in a patient’s treatment regimen, says Lakany, because of their drug expertise. “It is very normal for doctors to ask the advice of the pharmacist,” in Western countries, Lakany says, adding that Lebanon’s new prescription forms might be one step towards changing the culture.
The Order of Pharmacists is backing the implementation of the new prescription forms, Rabih Hassouneh, head of the syndicate, tells Executive, but it is not enthusiastic. “Financially, it is negatively affecting the pharmacists, but we have agreed to abide by it and implement this law because we know this should be a huge benefit to the community,