Drug prices are not falling: who is to blame and why the ban on marketing agreements failed
3 April 20:46
After the National Security and Defense Council (NSDC) temporarily banned marketing agreements with pharmacies, manufacturers refused to reduce selling prices for medicines. This was stated by Yuriy Zaslavsky, a member of the Verkhovna Rada Committee, in an interview with UNN, Komersant ukrainskyi reports.
The ban on marketing agreements between pharmacies and drug manufacturers, which was supposed to reduce the final cost of drugs for consumers, has not yet had the expected effect. Moreover, the pharmaceutical market has reached a critical situation, which Ukrainian MP Yuriy Zaslavsky called a collapse. Prices for medicines continue to rise, and the MP blames this primarily on manufacturers.
Marketing has been banned, but prices have risen
According to a member of the parliamentary committee on national health, marketing agreements allowed pharmacy chains to receive additional income for promoting certain drugs. According to the manufacturers themselves, such agreements cost them 40-60% of the cost of each drug sold. This is what they referred to when explaining the high selling prices in 2022-2024.
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The MP noted that after these marketing practices were officially banned on March 1, 2025, no significant price reductions were made by the factories. Instead, pharmacies, having lost a significant portion of their income, were forced to increase their margins on their own to cover their basic expenses – rent, salaries, utilities.
“If marketing is banned, reduce the cost of medicines by at least this percentage. But this did not happen. Prices have gone up again,” Zaslavsky emphasized.
Manufacturers are in the shadows, pharmacies are under attack
The politician reminded that the cost of medicines in Ukraine is formed by 72% at the production stage. However, in the public space, they are trying to shift the responsibility to retail – they say that it is pharmacies that create “sky-high” prices. The MP calls this manipulation, because the profitability of pharmacies depends on a specific item, and many drugs, especially vital ones, are sold with a minimal markup.
“A pharmacy is a business with 5,000 items. And margins are different in each case. It is convenient but unfair to blame pharmacies,” he explained.
Falling budget revenues and the risk of shadowing
Yuriy Zaslavsky also drew attention to the fiscal aspect of the problem. Prior to the ban, pharmacy chains paid taxes on income received under marketing agreements. From now on, these revenues will disappear, which will reduce tax revenues to the state budget.
In addition, he warned that a complete abandonment of marketing without creating a transparent alternative could lead to the growth of shadow schemes – when advertising or bonus services are provided unofficially or through other legal mechanisms.
“Marketing is a tool. If it is completely removed without being replaced, the system will fail,” the MP said.
European experience: balance, not prohibition
According to Zaslavsky, the way out should be the return of marketing agreements, but in a transparent form – with taxation and reporting. He reminded that the EU has a different logic: marketing of prescription drugs is prohibited, while OTC drugs are promoted freely within the framework of market rules.
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According to the MP, Ukraine should follow the example of countries where the state does not prohibit but regulates, stimulating fair competition.
“The problem is not the monopoly – it does not exist. There can be five pharmacies on one street. The problem is that the state interferes but does not create clear regulations. And without it, there is chaos,” he added.
What’s next?
The problem of drug pricing in Ukraine is complex. On the one hand, there are inflated selling prices, and on the other hand, there is no transparent mechanism to support pharmacy chains after the cancellation of marketing agreements.
According to Yuriy Zaslavsky, the key should be systematic regulation of the entire vertical: from the manufacturer to the retailer. This should be based not on prohibitions, but on economic feasibility, transparency and European regulatory standards.
