Monday, 23 November 2009

Drugs sector outpacing regulation



Photo by: Pha Lina
Khat Orsthany, 23, assists a customer at a Pharmart in Phnom Penh last week.

Boom-bust market


Whereas others prosper in the pharmacy sector, 60-year-old Vinh Tong, who runs the Roung Roeung pharmacy near Kandal market, says his profits have fallen nearly 50 percent. He grew up in his parents’ pharmacy near the Russian Market. After the fall of Democratic Kampuchea, Vinh Tong began his own pharmacy of sorts, selling painkillers and antibiotics out of a bucket on the street, though selling drugs outside government hospitals was prohibited. He aquired his supplies by stealing them from the post office. Vinh Tong finally opened his own place in 1999. “I am not worried about having to close,” he said. “People trust me, and they know I will help them if they are sick.”

(CAAI News Media)

Monday, 23 November 2009 15:01 Colin Meyn

The pharamaceuticals market is developing, but analysts say a dose of legislation is required

Cambodia’s pharmaceutical sector is booming, say industry professionals, but little progress has been made in extending access to quality medicine or enforcing regulations that would legitimise an industry that they say is plagued by counterfeit drugs, untrained personnel and uneducated consumers.

Yim Yann, president of the Pharmacists Association of Cambodia (PAC), said sales in the industry have tripled in the past five years – in 2008 alone, revenues approached US$100 million, and the increased demand has brought about a steep rise in drug outlets, distributors and domestic production of pharmaceuticals.

The Kingdom has more than 2,000 drug outlets supplied by more than 130 importers, distributors and wholesalers, according to the PAC, as well as seven Cambodia-based pharmaceutical manufacturers, which account for 30 percent of domestic supply – one even exports to Africa.

Expansion of the sector has been a boon to importers, who purchase drugs from China, Malaysia, Bangladesh, the US and France, among many other nations, but it has also created difficulties in maintaining oversight to ensure that quality medicine ends up in the hands of those in need.

“It is almost impossible to keep track of over 130 distributors,” said Yim Yann.

Manufacturers are supposed to follow standard practices laid out by the World Health Organisation (WHO), Yim Yann said, but the government lacks the resources to hold producers accountable for their products.

In cooperation with the WHO and other health groups, standards and protocols have been created for both pharmacies and pharmacists, leading to the closure of more than 1,000 pharmacies nationwide from 2005, but more than 50 percent operate unregulated and unlicensed, Yim Yann has said.

William Mfuko, a WHO technical officer for essential medicines in Cambodia, said that laws are in place but lack enforcement mechanisms to support government edicts.

“If you want to start a pharmacy, it is like starting any other store. You just buy the products and begin,” he said. “And if you want to buy medicine, it is the same. You go to the store, and you can buy it. This is how it works in many developing countries, not just Cambodia.”

Stratified market
Along with the expansion of the industry as a whole, an emerging market has developed for modern pharmacies that cater to upper-class Cambodians, expats and tourists.

But despite investments of capital and expertise from the private sector for pharmacies such as U-care, Pharmart and Pharmalink, investors still struggle to profit, and managers find it difficult to meet international operating standards.

U-care opened in 2003 with venture capital from the French and Cambodian investment firm Geolink. Operations manager Khun Bolin said the chain had a slow start getting customers to pay higher prices and has recently suffered from the global economic crisis. “In Phnom Penh we still have expats who come to our stores,” but the four pharmacies in Siem Reap “would die without tourists”.

“Supply and human resources are the two biggest problems we have faced,” said Christophe Forsinetti, vice president of Devenco, the venture capital fund that finances and manages Pharmalink, which opened in Cambodia in 2006. “One day our distributors will have an excess of a drug, and the next day they don’t have any.”

The WHO’s Mfuko said well-financed pharmacies are not immune to the challenges that affect the sector in general. In particular, he cited a lack of division of labour between those who prescribe and those who fill prescriptions as one of the leading agents that prevent change.

“Walk out of Naga clinic and there is a pharmacy right there which is under the same management,” he said about the Pharmalink adjacent to Naga clinic.

“Not until a division of labour takes place will we see a limited number of shops being opened and a rise in the quality of dispensing pharmaceuticals.”

The number of qualified professionals in the industry remains low – only about 400 or 500 qualified pharmacists nationwide to staff some 2,000 drug dispensaries, Yim Yann said.

Under Cambodian law, pharmacies must employ a qualified pharmacist in order to obtain a government licence. However, the shortage of available professionals relative to the number of pharmacies makes this requirement problematic and leads to further irregularities in the sector.

One pharmacist who asked not to be named said graduates in the field have made a business out of selling their names for licensing purposes, earning as much as $150 a month.

Yim Yann said that despite existing challenges, companies such as U-care, Pharmart and Pharmalink have brought a previously unavailable level of credibility to the pharmacy sector, but that their services have done little to expand access to medications for most of the country.

Khun Bolin said that U-care does not target a specific population but admitted that expats and tourists remain the lifeblood of the company.

Pharmalink targets upper- and middle-class Cambodians by keeping prices competitive and locating stores in residential neighbourhoods, Devenco’s Forsinetti said.

Mok Po Bonrith, owner of Pharmart, said she has sacrificed profit for lower prices to encourage lower- and middle-class Cambodians to seek Pharmart’s services. A Pharmart pharmacist reported that the shop does $30,000 in sales in an average month.

“It has always been the same,” Yim Yann said. “The rich can get quality healthcare and the poor cannot.”

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