Medicines: Shortages and Rising Prices | Desabastecimiento y alza de precios

By Vision 360:

Shortages and Rising Prices: The Deadly Impact of the Dollar Shortage, According to Importers and Manufacturers

Cifabol and Asprofar agree that the zero tariff for medicine imports, implemented by the government last year and valid until March 2025, is not a solution.

La farmacia del Hospital de Clínicas, en la ciudad de La Paz, que abastece de medicamentos a los pacientes. Foto: Paolo Lizárraga

The pharmacy of the Hospital de Clínicas in La Paz, which supplies medications to patients. Photo: Paolo Lizárraga

The price of medications has increased by up to 20% recently due to the shortage of U.S. dollars and the surge in exchange rates on the so-called black market, according to manufacturers and importers. Additionally, the dollar shortage directly interferes with the regular supply of domestic demand.

According to Josep Lino, manager of the Bolivian Pharmaceutical Industry Chamber (Cifabol), the cost of domestically manufactured medications has risen between 10% and 20% because the raw materials required are only available in international markets. “Bolivia depends on foreign raw materials for 90% of its production,” he explained.

Frida Terceros, a board member of the Association of Professional Pharmacy Owners of Bolivia (Asprofar), stated that imported drugs alone have increased in price by 10%, while sales have plummeted drastically.

The first discussion of the dollar shortage in Bolivia since 2011—when the boliviano stabilized—surfaced in April 2023. At that time, long lines formed outside the Central Bank of Bolivia (BCB) offices in La Paz as people tried to purchase U.S. dollars, with some even setting up tents to secure access to the foreign currency.

Despite complaints, the dollar shortage remains unresolved. Currently, U.S. dollars are only available on the informal market at rates as high as Bs 14, far above the official exchange rate of Bs 6.96.

Lino lamented the unresolved situation, which affects many sectors, especially the pharmaceutical industry due to its direct connection to public health. “We understand as Bolivians that prices can’t increase significantly, but the situation has exceeded us,” he stated in an interview with Visión 360.

He stated that the national pharmaceutical industry covers up to 60% of the demand generated in the institutional sphere, namely the health insurance funds, due to regulations prioritizing national industry in this area; meanwhile, it serves 40% of the private sector, which includes pharmacies that acquire both national and imported products.

The manager of Cifabol explained that demand, and therefore supply, varies depending on factors such as procurement, seasons, and especially pandemics. For example, during winter or periods of low temperatures, people catch colds and require cold medications and all necessary treatments to combat the illness.

According to Terceros, the shortage of medications is also explained by the lack of U.S. dollars, as importers cannot obtain foreign currency, making it impossible to bring in certain medications that the population needs.

This situation affects medications in general, but some specific ones that are urgently needed for chronic and terminal illnesses are unavailable. Thus, the most affected are patients suffering from these conditions, along with elderly individuals who, due to their advanced age, have multiple health complications and require medications.

The Asprofar representative identified another collateral issue stemming from this situation: access to certain medications due to price increases, as many people lack the financial resources, leading to reduced medication sales.

Nonetheless, she mentioned that in their desperation to obtain medications, people often turn to institutions that assist in facilitating access after searching through pharmacies, especially when obtaining the medicines becomes urgent.

On August 28 of last year, as a significant solution, the government announced the reduction of import tariffs on medications to zero, a measure initially valid until December 31, 2024, later extended to March 31, 2025. This provision resulted from discussions between the Executive and private entrepreneurs.

On November 27, Economy Minister Marcelo Montenegro stated: “So, tariffs that were at 5, 10, 15% have been reduced to zero. These are 28 subcategories, and this tariff reduction is valid until March 31, 2025.”

According to representatives from Cifabol and Asprofar, the measure did not resolve the price increases or the medication shortage, as the central issue is the lack of U.S. dollars.

“It’s not a solution because the tariff on dollars doesn’t help; there are no dollars in the formal banking system. We must look to other markets where rates are 11, 12, 13, 14 bolivianos, and we cannot stop production,” said Lino.

He recalled that his sector had repeatedly sent letters to the Ministry of Economy and held meetings with its authorities to find a solution, but access to dollars remains impossible.

According to Lino, one alternative is for the government to prioritize the pharmaceutical sector in providing U.S. dollars through the banking system.

Terceros argued that the zero-tariff policy for medication imports “doesn’t help at all.” It might be useful in another situation, but now, “what good is not paying the tariff if dollars are unavailable?”

Visión 360 sought comments from the Ministry of Health but was told there are currently no spokespersons available to address the issue.

Doctors in La Paz are seeking a meeting with the Minister of Health

The La Paz Medical Association seeks a meeting with the Minister of Health, María Renée Castro, to present their concerns and issues requiring solutions, including the increase in medication prices due to the lack of U.S. dollars, which also affects the importation of medical equipment.

Luis Larrea, president of this professional body, who was re-elected in November 2024, explained that after sending the corresponding letter, they hope to receive a response and schedule the meeting in the coming week.

According to Larrea, known for his opposition to the government, the rise in medication costs is solely due to the lack of U.S. dollars. He believes a policy is needed that not only includes a zero tariff for medication imports but also facilitates access to foreign currency for pharmaceutical companies, considering this action should be a priority.

He pointed out that many medication procurement processes have collapsed. For this reason, the La Paz Medical Association requested meetings with these companies to understand the situation. The response was the same: the lack of dollars prevents payments to import requested medications, as well as the raw materials needed to produce medicines in the country.

“For this term, unfortunately, the issue of medications has seen a price increase in the country, and this is primarily due to the lack of dollars. That’s the explanation provided by companies or pharmaceutical firms,” said Larrea.

According to him, the price hike affects all medications equally, as they are either imported or manufactured using inputs purchased from foreign markets.

Larrea added that the situation is so critical that even the public health system cannot supply itself with medications, directing patients to seek them in the private sector, where prices have risen between 10% and 20%. Many cannot afford them despite the pressing need.

In May, the Vice Minister of Consumer and User Defense, Jorge Silva, explained that of 100% of the medications demanded in the country, 85% are produced by national pharmaceutical laboratories, ensuring production. He claimed that any price increase would be minimal, not exceeding 1% in cost structure. However, this statement was later disproven, as national medicines are manufactured using imported inputs.

A month later, in June, Susana Salinas, head of the Ombudsman’s Office Research Unit, cited on the Ombudsman’s website, stated that the National List of Medications (Liname) includes 780 items, encompassing medications and medical supplies. However, Bolivia only has the capacity to produce 45% of the medicines on that list, with the remainder needing to be imported.

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