President of Russia Dmitry Medvedev: I would like to ask you two questions in the presence of the media, which are of particular public interest right now. One of them is quite pressing. I gave several executive orders on regulating and monitoring pharmaceuticals prices, depending on their category and whether or not they are included in the additional pharmacological support programme. I gave you and our governors these instructions because the pharmacy networks are under the ownership of the regions. I would like you to tell me what has been done and update me on the current situation.
The second issue is more general, but nevertheless very important. It concerns our demographic policy, the demographic programme that we passed several years ago, and the results that we can see today. Please report.
Minister of Public Health and Social Development Tatyana Golikova: In accordance with your instructions, we have organised work on a governmental level to monitor the prices and assortment of drugs at pharmacies.
This is the first such monitoring, so we do not yet have a basis for comparison, but nevertheless, we were able to notice certain results and trends. The situation between January and May of this year is as follows: there has been an average price increase of 11.5 percent throughout the country. At the same time, there are many territories where prices increased significantly. This includes the Stavropol Territory (37 percent), the Krasnoyarsk Territory (32.7 percent), the Trans-Baikal Territory (28 percent), and the Tambov Region (23.6 percent).
Dmitry Medvedev: Which medicines are affected, and what is the reason for this?
Tatyana Golikova: We are only monitoring the effect on medicines listed as essential pharmaceuticals. And the medicines we select from this list – which, as you know, is quite long – are the ones in greatest demand.
Dmitry Medvedev: Do the statistics you listed refer to domestic [Russian] or imported medicines?
Tatyana Golikova: On average, prices for imported medicines increased by 13 percent. However, prices grew most steeply in the same Russian federal territories. For example, prices on imported medicines in the Stavropol Territory grew by 44 percent.
(The Minister went on to brief the President on the results of monitoring mark-ups by pharmacies, another area of concern.)
Now, the Federal Tariff Service will deal with this issue, because trade mark-ups are within its jurisdiction. We are seeing a significant difference between the minimum and maximum mark-ups within the same region. In the Krasnoyarsk Territory, for example, they go as high as 90 percent; in the Republic of Sakha (Yakutia), they reach 50 percent. Furthermore, we see the same medicines sold at very different prices in the regions.
Dmitry Medvedev: Why do the mark-ups range so widely? I would like to understand why these regions stand in such sharp contrast to the others.
When you say (as you just did) that there is a 13 percent increase, this is understandable; this is, in fact, the inflation rate that we had planned for, and there is nothing we can do to fight it. However, when 13 percent turns into 50 percent, while the trade mark-up is 90 percent, this is entirely unclear. What is causing this?
Tatyana Golikova: I must say that, unfortunately, not a single government body was authorised to control prices or mark-ups before the economic crisis. As far as the mark-ups were concerned, the Federal constituent entities simply reported information to the Federal Tariff Service, but neither we nor the Tariff Service had any authority to take administrative or other measures. Now, we are making changes regarding the authority of the Federal Service for the Supervision of Public Health and Social Development (Roszdravnadzor) and the Federal Customs Service, in order to at least give them administrative authority in monitoring this situation.
Furthermore, to fulfil the instruction given to the Government, we are currently working on a method for establishing a price limit on medicine, and the Federal Customs Service is working accordingly on a method for limiting mark-ups. I think that by creating this mechanism, we will be able to improve the situation somewhat for pharmaceuticals prices.
Dmitry Medvedev: You named several regions, including the Stavropol Territory and the Krasnoyarsk Territory. These are pretty different territories; one is in Siberia, which has its own difficulties, while the other is in the south. So what causes such extreme results in these regions?
Tatyana Golikova: We are currently analysing this situation, because we have just received these results. I think that part of the problem lies with logistics, meaning, the delivery of these medicines to distant regions, but another part lies with the way that auctions and the bidding are organised, and the obviously high cost of participation in this process.
(Tatyana Golikova went on to tell the President about auctions for additional pharmacological support, particularly the medicines for illnesses that are very costly to treat.)
Dmitry Medvedev: In any case, we all know what life is like in the regions; I have worked in regional government offices. I am absolutely certain that any leader or governor, including those of the Stavropol and Krasnoyarsk territories, have ample opportunities to summon the businessmen who are responsible and ask them why their mark-ups are so high. Clearly, we have a market that is regulated in a certain way, but this is a situation where we simply must intervene.
The fact that you are now changing the competence, the authority is good, and you should absolutely engage the anti-monopoly authorities for this purpose.
But in my view, it may be sufficient to just have several talks like this in a few places, to ensure that the businessmen who are making these mark-ups consider whether they should be doing this. Although I will not mention any specifics, regional leaders have various methods of persuasion at their disposal. I am referring, of course, to legal methods. Thus, let’s consider this as another request to the governors to bring this matter to order. It is good that we are taking this situation under control, because the crisis is not yet over, and we need to understand what is happening in one of the most sensitive price segments – pharmaceuticals prices. I would like you to work on this with other government authorities, and regularly report back to me on this matter.
Tatyana Golikova: Very well. I would also like to inform you that this monitoring has given us a basis for comparison. I have sent letters to 21 Federal constituent entities regarding the need to take measures to control prices of pharmaceuticals overall, as well as prices in the wholesale and retain segments, and the need to monitor the situation with mark-ups. You and I have noted many times that this falls under the authority of federal constituent territories.
Dmitry Medvedev: This is not something we can regulate out of Moscow. But the federal territories need to keep their finger on the pulse, making this a major priority: they need to communicate with pharmacies and the businessmen buying these medicines. After all, this isn’t the job of the Ministry of Public Health. We will return to this topic a little later.
Now, let’s talk about a more fundamental, important issue.
Tatyana Golikova: But a very pleasant one, since we have some very positive results.
Dmitry Medvdev: Is that so?
Tatyana Golikova: I can report that just yesterday, we received five months’ worth of data. 135 thousand babies were born in May: this is two percent higher than during the same period last year. Over five months, we saw the birth of 699.9 thousand babies: this is three percent higher than last year, so that’s positive. And this is a trend that has been observed over the course of the last several months. We have had a 28.3 percent decrease in mortality compared to the same period last year. The key factor causing this decrease in mortality was a 13 percent drop in deaths caused by road accidents. There was also a decrease, observed just recently, in the number of cardiovascular deaths, although it is only a 5 percent decrease. Nonetheless, this is a positive trend.
I would also like to draw your attention to the fact that the projects we began last year in 12 territories, aimed at decreasing cardiovascular and traffic accident mortality rates, are actually working. I must say that these two programmes, as well as the oncological programme we are starting this year, are quite needed in the regions, since they involve not only financial investments and medical equipment upgrades, but also relevant personnel re-training and a totally different organisation of providing medical assistance, which is very important. This is the reorganisation that yields the results that I have just reported to you.
I must also tell you about another indicator that I find to be good: during those five months, there was an increase in the number of marriages in Russia.
Dmitry Medvedev: That is indeed a good indicator.
Tatyana Golikova: We had 6.1 percent more marriages than during the same period last year. The number of divorces decreased by eleven thousand, or 3.7 percent. Thus, despite our difficult financial and economic circumstances, we expect to see the continuation of a positive trend in birth rates. Still, this is a matter of great concern to everyone, and we are monitoring it very carefully.
Dmitry Medvedev: But this is very good news. It means that even from a psychological standpoint, our people, in getting married, feel that crises come and go, but families need to be created. This is very good information and good data.
Overall, what you are telling me proves that the direction we chose several years ago, namely the National Project on Health, is yielding favourable, positive results.
Tomorrow, we will have a meeting of the Council for National Projects. We will continue discussing this issue: we will talk about the demographics and the factors you’ve mentioned. I feel that we need to begin talking about the other factors, which we have been discussing less. In particular, I am referring to the bad habits of which we have many: smoking, drug addiction, and especially alcohol, as the detrimental effects of alcohol in our country are colossal. I was quite surprised to learn that as a nation, we are drinking more now than we did in the 1990s, despite the fact that those were very difficult years. This is another matter that should be discussed and addressed through corresponding programmes, and perhaps, certain measures.
Tatyana Golikova: Very well. We have already launched this process. And now, we have announced tenders for programmes to encourage a healthy way of life. We are working on this project in close cooperation with the Ministry of Sports and Tourism and the Ministry of Education and Science, relying on the particular areas of expertise that each ministry brings to the table.
Dmitry Medvedev: This work needs to be done, and later, we will hold a substantial meeting on this issue at a presidential level to make decisions.