TURKMENISTAN'S PHARMACEUTICALS MARKET

UNCLAS SECTION 01 OF 02 ASHGABAT 001528 SIPDIS STATE FOR SCA/CEN E.O. 12958: N/A TAGS: PGOV AMED EIND ETRD SOCI TX SUBJECT: TURKMENISTAN'S PHARMACEUTICALS MARKET ¶1. (SBU) SUMMARY: Turkmenistan's pharmaceutical market offers a wide variety of basic pharmaceuticals made in Europe, Russia, Ukraine, Turkey, India and China, sold through drugstores owned by the Ministry of Health or private entities which have received Ministry licenses for distributorships and commercial activity. A limited number of private individuals operate small illegal distributorships of, primarily, European and Russian natural biostimulants and vitamins. Ministry of Healthcare and Medical Industry officials have many rent-seeking opportunities due to the Ministry's involvement in the business of importing pharmaceuticals. Untangling the web of corruption will be difficult. END SUMMARY. DISTRIBUTORS OF PHARMACEUTICALS: MOSTLY GOVERNMENT ¶2. (SBU) Of about ten registered and licensed distributors pharmaceuticals in the country, the largest is the Ministry of Health. The Ministry sells pharmaceuticals through a wide network of drug stores, both attached to hospitals and located separately. The Hungarian company Gedeon Richter is the only large pharmacy chain, whichoperates in Turkmenistan. It runs a small drug-store chain in Ashgabat. PRIVATE DISTRIBUTORS MUST OBTAIN MINISTRY AUTHORIZATION ¶3. (SBU) A private distributor/supplier of pharmaceuticals must receive a license from the Ministry of Health before getting involved in this sector. The Ministry of Health created a department, the Center for Drugs Registration, which is responsible for registration of pharmaceuticals for distribution and sale in the country. LEGISLATION ABOUT PHARMACEUTICAL DISTRIBUTION ¶4. (U) Turkmenistan's law "On Pharmaceutical Activity and Supply of Pharmaceuticals" (passed July 5, 2002) says that the state regulates pharmaceutical activity and supply of pharmaceuticals by carrying out the following actions: 1) registration of pharmaceuticals; 2) licensing pharmaceutical activity; 3) certification of specialists, engaged in pharmaceutical activity; 4) expert examination for environment and sanitary and epidemiological safety with regard to pharmaceutical production; and 5) quality control and control over production, storage, and sale of pharmaceuticals. MINISTRY MUST ALSO REGISTER NEW OR CHANGED PHARMACEUTICALS ¶5. (U) The Ministry of Health is also responsible for registration of pharmaceuticals. The law requires state registration for new pharmaceuticals; new combinations of previously registered pharmaceuticals; pharmaceuticals which have been previously registered but in different forms, with new dosages, additives, or recommended for treatment of different diseases. HOW TO APPLY FOR REGISTRATION OF A PHARMACEUTICAL ¶6. (U) Applications for registration of pharmaceuticals should include a sample of pharmaceutical in the proposed packaging, with name and trademark; the producer's name and address; a license for pharmaceutical manufacturing; names of active substances (synonyms); production form and composition of pharmaceutical; method of application, indication, and contra indication for use; dosage information; pharmacy purchasing terms; expiration date and storage conditions; information on this pharmaceutical's registration in other countries; results from pre-clinical and clinical studies; release specifications; certificate of quality, including Good Manufacturing Practice (GMP) standard conformance; and a receipt for payment of the registration fee. The Ministry of Health is supposed to respond to the application within a three-month period. Registration is valid for five years. After the expiration of the five-year term, a pharmaceutical requires re-registration with the Ministry of Health. According to an unofficial source, the amount of bribe needed for registration can reach as high as $10,000 fee -- ten percent of the authorized capital stock. OTHER PAPER REQUIREMENTS AND EXCEPTIONS ASHGABAT 00001528 002 OF 002 ¶7. (U) Certificates of Quality and Certificates of Conformance to Good Manufacturing Practice (GMP) and National Quality Standards are additional prerequisites for registration and import. The Ministry can lift the registration requirement if pharmaceuticals are brought into the country for the following purposes: as samples brought into the country for clinical studies, registration purposes, a trade show and conference (not for the purpose of sales); for personal use of citizens; for treatment of specific animals in zoos; and for responding emergency situations. Import of pharmaceuticals for the purpose of humanitarian aid is regulated by the Cabinet of Ministers. ADVERTISING REGULATIONS ¶8. (SBU) After registration with the Ministry of Health is completed, a distributor can place advertisements in state-owned health periodicals, run commercials through a state-owned television health program, or place advertisements on billboards. Companies with good ties in the Ministry have an easier time with distribution procedures and placing advertisements. ORIGINS OF PHARMACEUTICALS IMPORTED INTO TURMENISTAN ¶9. (SBU) The Ministry of Health maintains a list of essential pharmaceuticals that are supposed to be available at state-owned pharmacies and hospitals. In the early 1990's, Turkmenistan received most of these required pharmaceuticals from Ukraine as in-kind payment for natural gas supplies. Presently, the Ministry of Health buys pharmaceuticals made in Russia, Ukraine, Turkey, India, Pakistan and China. Also, the Ministry supplies pharmaceuticals to its specialized health units to treat diabetes and tuberculosis. According to the head of the Diabetic Center of Ashgabat, the Ministry provides the center with pharmaceuticals from U.S. manufacturer Eli Lilly. However, low prices of Asian-produced products guarantee that the largest portion of imported pharmaceuticals come from Asia. Commercial drug stores offer a wide variety of good quality but expensive pharmaceuticals from such producers as Gedeon Richter, Hoffman-la-Roche, Nycomed, Pfizer, Schering-Plough, Berlin-Chemie, and others. Due to complex and expensive registration and licensing procedures, some commercial suppliers distribute pharmaceuticals through their own unofficial networks of public and private health care providers. ONLY GERMAN COMPANIES EXHIBIT AT HEALTH TRADE SHOW ¶10. (SBU) At the International Health Exhibition held in Ashgabat on November 8-11, 80 companies from 25 countries exhibited health care products and technology. President Gurbanguly Berdimuhamedov encouraged German companies Hospitalia International and Siemens to develop turnkey construction projects for multipurpose clinics for each region of Turkmenistan, including medical equipment and training of clinic staff. Hospitalia International and Siemens have traditionally equipped all of Turkmenistan's modern clinics and diagnostic centers. ¶11. (SBU) COMMENT: As illustrated in the example of pharmaceuticals in Turkmenistan, the result of government involvement in business activities is corruption. Stakeholders in Turkmen ministries and agencies have a vested interest in maintaining the status quo, including in the Ministry of Healthcare and Medical Industry. This also explains why today, Turkmenistan imports pharmaceuticals from Russia, Ukraine, Turkey, India, Pakistan and China, and why notoriously corrupt companies such as Siemens are so active in Turkmenistan. Untangling the web of corruption will be difficult. END COMMENT.