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May 7, 1996
. Vreme News Digest Agency No 239
Medicine Shortage and Price Rises

The Government Recipe

by Jelena Grujic

Soon after the breakup of the former Yugoslavia, especially after the sanctions were imposed, the federal and republican governments exerted huge pressure on the pharmaceutical industry to start producing those medicines which were supplied by the other former Yugoslav republics. That covered over 70 products, mainly the most consumed medicines.

In March this year, the state owed the biggest pharmaceutical producers over 110 million DEM. At a meeting with the republican health care fund which owes the money, Serbia's seven largest producers warned the government that a shortage of medication is looming unless something changes quickly. A week later, the Serbian government took 200 million dinars out of the fund to pay for the pension funds of the biggest medicine producers. Prominent health experts said they hope that is a trend that will be repeated but still is better than printing money. The pharmaceutical industry wanted their debt covered through loans from the national and commercial banks but that government ruled against that and promised to abide by a 45 day deadline to pay for medication. The producers are still waiting 3-4 months for payments. The greatest debtors are hospitals including the Belgrade clinical center which recently became sponsor to FRY athletes at the coming Olympics in Atlanta.

A serious shortage of medication has been ongoing for two months across the republic. Last summer an identical problem was resolved through imports from the former Yugoslav republics. Local producers stopped production because the money they needed for raw materials was in the state treasury and people paid up to three times the price for the their medication.

After three months of complaints from local producers, the government approved a 30% price rise which the producers said was not much but would help ease the situation. Serbian health minister Leposava Milicevic said the higher prices would secure regular supplies.

The middle men in deals between producers and pharmacies aren't happy either. Vetprom financial director Vitomir Brankovic said the price rise can't solve the problem and added that the market is hungry.

Like last year, imports were increased and imported medicine costs 4-12 times as much as locally produced ones. The money used for imports could have been used to buy raw goods to increase domestic production up to 10 times Vetprom sources said and added that the supplies would be more than adequate.

The problem obviously hasn't been solved this time either. The pharmaceutical industry got another promise from the government: an intervention of 120 million dinars to partly cover the health care debt. Hemofarm sources said they learned unofficially that the total amount will be just 15 million and a new crisis could be on its way.

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