Affordable medications at the cost of their disappearance? What awaits Ukrainians after March 1st?

Starting March 1, 2025, authorities promise to reduce drug prices in Ukraine. This applies to 100 medications, for which patients will pay 30% less. This is the implementation of the NSDC decision from February 12, 2024, "On Additional Measures to Ensure the Availability of Medicines for Ukrainians," which has been enacted by Presidential Decree No. 82/2025.

The goal is to change the regulation of the pharmaceutical market to ensure transparent pricing for medicines.

The Ministry of Health published a list of the most popular medications that will see a price reduction of one-third in the spring. However, how much will patients actually pay for cheaper corvalol and ascorbic acid? Patient organizations warn that it could be very expensive. Manual price regulation could lead to shortages, the disappearance of quality medications, the cessation of support programs, and the closure of pharmacies in villages and rural communities.

What does the government propose?

In caring for citizens' health, the government declares the noble goal of lowering drug prices and making them accessible to the population segments in need. The largest consumers of medications in Ukraine — are pensioners, whose low income necessitates providing them with essential drugs. But the question is how to achieve this.

On February 13, 2025, President Volodymyr Zelensky enacted the NSDC decision on additional measures to ensure the availability of medicines for Ukrainians. On February 14, Ukraine's Health Minister Viktor Lyashko announced that the government had made the corresponding decisions, which will take effect on March 1.

The Cabinet's resolution on stabilizing drug prices includes, in particular:

• limiting markups (retail and from suppliers) for all medications (not just for a specific category of drugs, as is currently the case);
• regulating maximum markups: for suppliers - 8%, for pharmacies — 35% on over-the-counter medications, and from 10% to 25% for prescription medications and those included in the National List of Essential Medicines;
• prohibiting the provision of marketing services and drug promotion services;
• restoring inspections by the State Consumer Protection Service of distributors and pharmacies to monitor pricing.

At the same time, the Verkhovna Rada adopted changes to the law "On Medicines" (Bill No. 11493), which was signed by the President yesterday. This document, among other things, provides for:

• a National Price Catalog. This means a unified database of wholesale prices for all medications in Ukraine;
• a price referencing mechanism. This refers to the method of determining the maximum price of medications by comparing it with costs in reference countries.
• simplifying the registration of medications for centralized procurement.

All these measures, according to parliament, the government, and the president, are expected to make medicines more accessible to citizens. But will the initiative actually work as intended? Patient organizations have their doubts.

What can patients expect?

Immediately after the announcement of intentions to manually regulate drug prices, patient organizations raised alarms. In particular, they see significant threats to the market in the NSDC decision, and consequently — to the end consumer.

The charity fund "Patients of Ukraine" in their address noted that there are positive aspects in the government's decision: the expansion of the list of medications in the "Affordable Medicines" program, monitoring the use of drugs in hospitals, the introduction of the Bolar rule, and enhanced control by the Antimonopoly Committee of Ukraine. However, artificial regulation of the drug distribution market, the establishment of reference prices, uncertainty in markup regulation, inspections, and promises to reduce drug prices by 30% will simply lead to an unprecedented shortage of medications.

"A significant part of the initiatives seems rushed and could harm the market, creating a shortage of medicines and administrative chaos. The best way to lower prices — is to increase competition and expand reimbursement, rather than impose strict government regulation", — say representatives of "Patients of Ukraine."

The All-Ukrainian Council for Patient Rights warns of catastrophic risks associated with new government and legislative initiatives. Their forecast is that all these "good intentions" will primarily impact patients, followed by pharmacies and manufacturers.

"Both initiatives are declared as aiming to make medicines accessible to the population. However, their adoption may lead to catastrophic consequences for the health of Ukrainians, posing the following risks:

• a significant reduction in the import of foreign medicines into Ukraine, which are indeed expensive but of high quality.
• general shortages of medications and a sharp reduction in assortment: pharmacies will only sell a limited number of cheap drugs, meaning those they can guarantee to sell.
• the destruction of domestic pharmaceutical production,
• rural areas and frontline settlements will be left without access to medicines," — states the organization's statement.

They aimed to ensure the availability of medicines but ended up depriving a significant portion of the population of access to them, while those who still have the opportunity will only be able to purchase a limited number of cheap drugs. It is hardly possible to consider this as caring for people and a successful reform.

Pharmacies we surveyed claim that the imposed restrictions will lead to the closure of unprofitable (primarily rural pharmacies) and a sharp reduction in the delivery of medicines (from currently once a day to perhaps once a week). Of course, this will not affect Kyiv - the largest drug market in Ukraine, but Kyiv — is not all of Ukraine. Forget about foreign medicines altogether. Such "care" in neighboring Moldova reduced the assortment of imported drugs by 40%, and the rest are delivered irregularly.

How will this affect the market?

The promised availability of medicines by officials relies on a developed industry. This includes manufacturing plants, distributors, and pharmacies. All of them are not thrilled about the proposed changes and predict radical reductions, stagnation, or even bankruptcy.

Business and representatives of the pharmaceutical community appealed to President Volodymyr Zelensky with a request to veto the document.

"The norms do not correspond to European and market standards for regulating the pharmaceutical market and practices in EU countries; they pose significant risks of reduced assortment and physical availability of medicines for the population, and will directly affect the attractiveness of Ukraine's healthcare sector for international investors. Therefore, support and investment in the sector will not be obvious moving forward", — states the appeal.

What concerns the industry. Strangely enough, the authors of the "reform" have not left any part of the market unattended.

Contrary to common sense and global practice, local producers will be limited in pricing their products. They will now be required to sell medicines at the lowest price available in neighboring (reference) countries. In practice, they will be competing with Asian manufacturers, who operate under significantly better conditions (in terms of taxes, considering cheap labor, and accounting for lenient or even absent environmental regulation, and this is not an exhaustive list).

Therefore, it is unlikely that the Ukrainian pharmaceutical business will have enough revenue for even basic production modernization, research, and the implementation of new technologies. The goal here will just be to avoid bankruptcy.

Distributors are assigned quotas (like in the old Soviet days - no more than 20% to one party). Any quotas — are never about competition, because no matter what you do, you cannot exceed the quota. However, in our case, such an approach is clearly meaningless, as there are currently two distributors who historically serve 90% of the market, while the remaining distributors collectively operate on 10% of the market. It is clear that warehouses, logistics, and resources are distributed accordingly. Now, distributors with 90% of the market will only be able to service 40% of orders. Who and how will deliver the remaining 60% — is a question with an asterisk.

Worse still, distributors with the most warehouses and transportation are unlikely to want to use their already limited quota to deliver minimal batches to unprofitable routes. Smaller distributors certainly will not do this either. So, farewell to remote villages and small towns with low populations. At best, you will now receive medicines once a week, when a full truckload can be gathered. (Currently, deliveries are made daily.) Such shortages will further impact already barely profitable distant pharmacies. And their numbers will significantly decrease. Well, that’s an improvement already today.

But the ones who will suffer will be the very patients that the reformers supposedly care about. And if you think it can't get worse, just wait, as the most interesting part is yet to come!

Establishing a