Action Needed : Spiraling Drug Prices Empty Russian Pockets

Abstract

In large measure, this is due to the relatively low level of public health spending in the country (about 3.6 percent of gross domestic product (GDP) in 2008) that underlines the significant gap between the constitutional commitment to a range of medical care services and the actual funding to pay for them. While drugs are supposed to be provided to hospital patients free of charge, an estimated 80 percent of inpatients still have to pay part of the costs of their medicines and most outpatients must purchase them from pharmacies. The outpatient drug program under mandatory health insurance covers only around 16 million people (11 percent of the total population in the country), with more than half of them opting to receive cash rather than in-kind benefits under the 2005 'monetization' of prescription drug benefits. Those who continue with the in-kind benefits appear to be the ones greatest in need of drugs. The situation is further aggravated by the country's ineffective enforcement of controls on wholesale and retail mark-ups for medicines. Household expenditure on drugs accounted for about 30 percent of total health expenditure in Russia, as compared to 12 percent in Organization for Economic Co-operation and Development (OECD) countries in 2008.