The market decides everything: cheap generic drugs are displacing expensive medications

In wartime conditions, when people’s incomes are falling, Ukrainian consumers are increasingly abandoning expensive medicines in favor of cheaper alternatives. This is also facilitated by new rules for pharmacies, which are now obliged to have the cheapest analogue on the market in their assortment and offer it to the patient. As it turned out, such innovations are not to the liking of manufacturers who refuse to lower their selling prices, writes UNN.

The pharmaceutical company “Darnitsa”, whose drugs were in demand among Ukrainians, became the leader in raising prices for medicines. In one of her interviews, the head of the Board of Directors of the pharmaceutical company “Darnitsa”, Kateryna Zahoriy, stated that the company had raised prices for medicines by 120%.

This situation could not but affect consumer demand. As evidenced by a sociological study by Gradus Research, conducted in April this year, Ukrainians were very concerned about the rise in prices for medicines – 90% of the target audience consider the rise in prices for medicines a significant problem. At the same time, most respondents (79%) noted that they were forced to save money to buy the necessary medicines.  

So it is clear that most Ukrainians began to abandon expensive drugs and switch to cheaper alternatives. In addition, new regulations for pharmacies came into force, according to which they are obliged to have the cheapest analogue of the drug on the market in their assortment, and pharmacists must offer it to the patient first. 

Not all manufacturers wanted to adapt to the new rules and lower their selling prices, which account for up to 72% of the drug’s cost. Some, instead of supporting people in difficult times, decided to continue making superprofits.

High prices for drugs from one of the pharmaceutical giants and demand for cheaper analogues led to a reorientation of the market and a decrease in sales of expensive drugs.

For example, the company “Darnitsa” has already stated that they were forced to suspend drug production several times due to overcrowded warehouses. According to Zahoriy, pharmacies began to buy fewer drugs of their production.

In this context, the company’s behavior looks at least strange. After all, there are enough domestic manufacturers on the market that offer the same active ingredients, but at a much more affordable price. Obviously, the company still does not understand that people choose with their wallets – and this is a natural process, because consumer demand determines whose products will remain in demand.

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Public statements often emphasize that other market players are to blame, while the plant’s own pricing policy plays a key role in reducing demand. Some manufacturers should review their own price tags and draw conclusions instead of looking for a black cat in a dark room. After all, it is the price tags that now determine whether the patient, with a limited budget, is ready to choose one drug or another.

Despite all the changes in regulation, the Ukrainian pharmaceutical market remains today a field of real price competition, not loud statements. And it is the consumer, not the pursuit of superprofits, who determines the market leaders.