Thursday, January 29, 2015

Kremlin Fears Shortages of Critical Medicines Could Spark More Unrest than Financial Crisis

Paul Goble


            Staunton, January 29 – Russians already suffering from cutbacks in medical services and the importation of many drugs Russian firms have never produced now face what may be an even more serious threat: many domestic companies are refusing to produce any more insulin or cancer drugs unless Moscow renegotiates their contracts and pays them more for their output.


            More than a dozen plants have already shut down, some observers say, and others are “at the edge of collapse.”  If diabetics cannot get insulin or cancer victims the necessary chemotherapy drugs, all will suffer and some will die. Not surprisingly, those directly affected are furious and ready to protest (


            And while this may seem a minor issue to those without such illnesses, a source in the Kremlin told that officials there think “the medicine crisis could become a more serious problem than the currency, price or banking crises” Russia already faces and could even become “a potential cause of real social unrest.”


            The reason for that is simple, the source said. “Grandmothers don’t have bank accounts, they don’t exchange foreign currency, they buy the least expensive products, and most of their pensions go for medications.  If medications double or triple in price,” he added, “a social explosion could take place.”


            Moscow media have focused on the high profile suicides of two senior figures who could not get the medicines they needed for their diseases, but the news outlets have devoted much less attention to the broader problem which affects hundreds of thousands if not millions of ordinary Russians.


            Instead, reports, the Moscow television channels have criticized plants for not providing enough medicines at low prices and played up the statements of officials that any problems in this sector are being played up by the owners of these plants in the hopes of boosting their profits.


            According to government officials, those plants which were operating last year are still operating, but Moscow is worried: The Duma heath committee has set up a special anti-crisis working group on the situation in the medicine marketplace, and its staff say that many plants “’are experiencing difficulties’ and are at the edge” of closing down.


            The current crisis is the result of the government’s past efforts to keep prices low, even if they are below the cost of production, and of the fact that Russia produces only a minuscule part of the components of many drugs and thus is at risk of cost and price pressures when the exchange rate changes as it has in recent months.


            And it is compounded by the purchasing policies of government hospitals and pharmacies. Many of them buy for three months at a time and are unwilling, as recent court cases show, to adjust prices during  a quarter even if there are good reasons to do so. In response, producers in some cases decide that their best course is not to deliver what they promised.


            Russian pharmaceutical firms started seeking meetings with Prime Minister Dmitry Medvedev and Health Minister Veronika Skvortsova already in December to address these issues lest production fall dramatically and the health of Russians suffer as a result, the journalists say. Some meetings were held but the fundamental problems were not resolved.


            As a result, the journalists say, “the first interruptions” in the supply of medications from abroad “have begun to appear in Moscow,” and domestic manufacturers have not been able to compensate.  That in and of itself is harming the health of the population.


            One Russian diabetic speaking on condition of anonymity said that she now can find foreign insulin in a single pharmacy in Moscow and doesn’t want to use domestically produced insulin because it makes her sick.” Her experience almost certainly is being replicated across the Russian Federation.


            A few days ago, Prime Minister Medvedev issued a decree which seeks to stabilize the situation by indexing prices for key medicines, providing additional subsidies, and adopting more protectionist measures. But no one is certain that these measures will turn out to be effective. Indeed, many experts say they are at best too little, too late.


            Russia will need “a minimum of four to five years” to produce enough medicine on its own to compensate for what it is not buying abroad, and it will have to spend a great deal of money to come up with the components such medicines consist of. Unless and until it does so, many Russians are going to suffer and in ways that the regime will find hard to justify.


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