Porsche to Pharma – Price Harmonization across GCC

Just as Porsche standardized price levels across the GCC (Gulf Central Committee) a few years ago, Pharma is now following suite.

In July 2005, the health ministers from the six GCC member states, (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE), approved the Price Harmonization Process, a mechanism to align pharmaceutical prices across the region. The process, initiated in 2013, aimed to align the Cost, Insurance and Freight (CIF) price of all presentations marketed in the GCC countries.

What are the Possible Repercussions of the Price Harmonization Process?

At present, there are significant differences in medicine prices across the GCC countries and the likely impact of the harmonization process is predicted to effect the majority of products with substantial price reductions expected across therapy areas. If we look at the potential impact on Glivec 100mg as an example, the probable effect of price harmonization could mean reductions of 5% in UAE and 34.65% in Kuwait.¹

Could the Price Harmonization Process Impact other Non-GCC Countries?

The Price Harmonization Process could potentially have an effect on other countries which take into reference the GCC countries when International Price Referencing.

Each of the GCC countries has a different regulatory timeline and process; if the registration process therefore were to start at the same time in all the GCC countries, the new product would have a different launch date in each market and the launch price in the 1st market may be reduced if one of the other GCC markets launches at a lower price.

In summary, the Price Harmonization Process is expected to result in significant price reductions for medicines across GCC countries. The importance of optimal product launch sequencing will become increasingly important to bear in mind when launching a new product in these markets.

For more information on Alliance’s global pricing intelligence service, please see our Pricentric product page.

  1. Source: Pricentric™ data – April 2014 prices

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