The Georgian national currency started to depreciate in 2014. The exchange rate of GEL with regard to USD reached its maximum by 25-26 February 2015, amounting to 2.26. The national currency depreciated by about 27% with regard to USD in this period. The depreciation of the national currency was followed by the increase in the prices of groceries and medications.

On 25 February 2015, the Minister of Health, Labour and Social Affairs of Georgia, Davit Sergeenko, commented upon the depreciation of GEL and stated: “Prices of about 500 types of medications out of an overall 15,000 have increased from 15% to 20%.” Later, on 12 March 2015, the Minister stated that the growth of the prices of medications had stopped.

FactCheckattempted to analyse the changes in the prices of medications based upon various sources.

The National Statistics Office of Georgia observes the price changes of widely used medications. These include: antibiotics, vitamins and painkillers as well as cardiovascular, anti-inflammatory and gastrointestinal medications. According to the information provided by the National Statistics Office, the prices of widely used medications increased significantly from November 2014 as compared to the same period of the previous year. In December, January and February the prices of medications increased not only as compared to the same months of the previous year but to the previous months of the same year as well.

Table 1:Growth of Prices of Medications (%)

The growth of the prices of medications started before the depreciation of GEL, from February 2014. We wrote about this issue earlier as well (see ourarticle).

According to the data of the National Statistics Office of Georgia, the prices of widely used medications increased by an average of 7.1% in 2014. In contrast to that, the prices of medications decreased every year during the previous several years.

Chart 1:Changes in the Prices of Medications from 2011 to 2014 (%)

We requested data about the price changes of medications from the Ministry of Health, Labour and Social Affairs of Georgia as well; however, the Ministry did not provide this information. The official answer letter sent to us by the Ministry states: “The distributors of pharmaceutical production have no obligation to provide the Ministry of Health, Labour and Social Affairs of Georgia with the distribution prices of these products.”

Despite the fact that the Ministry did not provide us with data about the prices of medications, a representative of the Ministry told us in an interview: “The Ministry of Health, Labour and Social Affairs of Georgia monitors the prices of medications every month. The Ministry gets information from several large pharmaceutical networks and checks the dynamics of growth or decrease on its own.”

We attempted to obtain information about the prices of medications from the LEPL State Regulation Agency for Medical Activities, subordinate to the Ministry of Health, Labour and Social Affairs of Georgia. In his interview with us, the Deputy Head of the Pharmaceutical Affairs Department of the Agency, Davit Macharashvili, stated: “The prices of up to 500 medications did indeed increase by 15% to 20% in February; however, according to recent data, the growth of prices has stopped.”

The State Regulation Agency for Medical Activities providedFactCheckwith certain statistics as well. It reflects the monthly prices of pharmaceutical companies for about 78 medications. We obviously could not calculate the average indicator based upon such incomplete data; however, in order to determine certain trends, we compared the prices of 20 of the most widely used medications from this list and noted how the prices changed from November 2014 to March 2015.

Table 2:Changes in the Prices of Widely Used Medications

As the table above reflects, there is a significant increase in the prices of the majority of these medications.

The Association of Pharmaceutical Companies also observes the price changes of medications. We spoke with the Executive Director of the Association, Ilona Kokiashvili, who stated: “The majority of the medications are imported. Resources for local production are also imported. Hence, the changes in the exchange rate of GEL with regard to USD and EUR affect the prices of medications directly. The prices of medications grew by an average of 10%-12% from December to February. There was no sharp decrease in the prices in November and December as the pharmaceutical companies managed to maintain the prices due to existing reserves.” She also said that the pharmaceutical companies are trying to keep the prices from increasing further by negotiating with the producers, reducing profit margins and through other ways as well. Ms Kokiashvili also pointed out: “According to recent data, the trend of an increase of prices has stopped and provided there are no significant changes in the exchange rate of the national currency, the prices of medications should not increase.”

Conclusion

According to the data of the National Statistics Office of Georgia, the prices of widely used medications increased by an average of 16.1% in January 2015 as compared to the same period of the previous year whilst in February the increase was 11.4%. The prices of widely used medications increased by an average of 7.1% in 2014. The prices of medications had a trend of decrease in 2011, 2012 and 2013.

The Ministry of Health, Labour and Social Affairs of Georgia did not provide us with information about the price changes of medications. However, the Ministry confirms that the prices of up to 500 medications did indeed increase from 15% to 20% in February. It also clarified that, according to recent data, the trend of an increase of prices has stopped. This is confirmed by the Association of Pharmaceutical Companies as well.

FactCheckconcludes that Davit Sergeenko’s statement about the prices of medications isTRUE.