Health economy paradox: local pharma and private medicine potential left underused

At the Dienas Bizness conference "The First Line of Defence", representatives of the Ministry of Economics, industry associations, the pharmaceutical company Grindeks and SEB bank discussed the health economy. They agreed that healthcare and pharmaceuticals are strategically important for both Latvia's economy and national security, but that development is limited by underused local production, unequal competition and a disorganised investment environment. Participants said existing resources should be used better and conditions created for private capital investment.

Pharmaceutical market and imports

SEB bank economist Dainis Gašpuitis noted that China and India, with lower production costs, are playing a growing role in global pharmaceutical markets. Manufacturing in Latvia costs more, which affects competitiveness and prices. According to the State Agency of Medicines, local producers hold 5% of Latvia's medicines market, while 95% of medicines consumed are imported. This is one reason the sector's trade balance is negative, even though exports are growing.

Riccardo Rubini of Medicines for Europe, an organisation representing European medicine manufacturers, stressed that producing medicines within the European Union reduces dependence on international supply chains and third countries. The EU is already working on rules so that public procurement considers supply stability and local capacity as well as price.

State support and private medicine

Elīna Pētersone, director of the Ministry of Economics' Business Competitiveness Department, cited faster decisions, less bureaucracy and better-aligned support programmes, since research programmes are often not linked to commercialisation.

Māris Rēvalds, chair of the Healthcare Employers' Association, criticised the state's attitude to private medical institutions, which he said are placed in a worse position than public companies. He said private providers deliver a significant share of state-funded services yet receive a disproportionately small share of EU structural funds. Rēvalds also proposed delegating some doctors' duties to other specialists such as paramedics, technicians and phlebotomists.

Crisis preparedness

Egils Einārs Jurševics, adviser to the chair of Grindeks' board, voiced concern about readiness for prolonged supply disruptions. He suggested letting chronic patients build 90-day medicine reserves. He said the government's new rules provide for reserves of critically needed medicines, but the list is not known to local manufacturers, and the funding allocated via the Ministry of Defence would run out within a week for chronic-patient medicines.