Qatar is to abolish government controls on medicines prices and open up the market to competition, in order to tackle current drug shortages and high price levels.

The cabinet has now approved the draft of a new law which will abolish the current exclusive dealerships held by a small number of importers and also end the setting of wholesale and retail drug prices by the Supreme Council of Health (SCH)’s Pharmacy and Drug Control Department. This process currently provides profit margins of 10% for importers and close to 30% for medicines retailers.

The new law will be enacted as part of Qatar’s public health strategy for 2011-2016, and follows an investigation by the SCH into complaints by consumers about high prices and non-availability of some drugs.

“The proposed law aims to address the shortage of certain drugs in the market and make quality medicines available to all at affordable prices,” said Dr Salih Ali Al Marri, assistant secretary general for medical affairs at the SCH. Opening up the market could lead to a fall in prices, he added, but also emphasised that the issuing of new import licenses will be subject to strict regulations and standards in order to ensure product safety and quality, reports The Peninsula newspaper.

It also quotes Dr Aisha Al Ansari, director of the Pharmacy and Drug Control Department, as stating that her officials would no longer “interfere” with prices, and that these will now be decided by demand and supply mechanisms in the open market. She added, however, that monitoring of the market will be strengthened to ensure the safety and quality of imported medicines.

Under Qatar’s present system, registered importers are responsible for the quality of the products which they bring into the country, and they are required to produce documentation showing that the drugs conform to international standards and are approved for sale in neighbouring countries such as Kuwait, Saudi Arabia and United Arab Emirates (UAE). Opening up the market to more companies will create an enormous challenge in terms of monitoring for quality, the importers warn.

- Last month, Business Monitor International (BMI) forecast strong growth for pharmaceutical sales in Qatar, projecting annual increases averaging 10.1% to 2014, when it expects the market to be worth 1.37 billion riyals compared to 848 million riyals in 2009.