Some pharmacies close their doors, while others open them, announcing the unavailability of most medicines, including what was considered self-evident, such as Panadol, to name a few. It is strange that the Ministry of Health confirms that the stores are full with medicines, and agrees to wait for the dollar supported by the Bank of Lebanon The central released the dollar. The ministry confirmed the provision of medicines…but pharmacies are still empty. And the worst may not be delayed for more than a month.
Support play classes
At noon on Thursday, May 27, it was not agreed that the Banque du Liban would secure sufficient support to release medicines from warehouses. What was clear at the time, did not go beyond the promises that the Minister of Health, Hamad Hassan, obtained from the Governor of the Banque du Liban, Riad Salameh.
In the afternoon of the same day, the Ministry of Economy broke the news of Salama’s approval to secure $180 million in coverage of the price of medicines in importers’ warehouses, which were not released because their import was not subject to the prior approval decision required to secure the subsidized dollar. However, none of these drugs were delivered by the dealers to pharmacies to sell at the black market price. They know that the interruption of medicines means pressure on the Banque du Liban to secure the subsidized dollar, so the profit margin becomes wider, not because the medicine is sold in Lebanon, but it may be smuggled abroad. And here is the whole point of the play of drug support and its exclusion from the market. If the drug is sold according to the market dollar formula, the profit margin for importers is less than what can be obtained, if the drug was imported according to the official price of 1500 pounds and sold in dollars.
In a simple equation, if a merchant buys a box of medicine for one dollar, and the Bank of Lebanon subsidizes it, he will have bought it for 1,500 pounds. And if he sells it in Lebanon for Lebanese pounds, his profit margin will be narrow, as the drug will be sold at about 2000 pounds, and in the best case, its price may double to 3000 pounds. But if it was smuggled, and if it was sold at cost, i.e. one dollar, then this dollar will be worth about 13 thousand in lira. And certainly no one sells at cost. However, the biggest profit is getting the cash dollar, regardless of the profit margin in numbers, which is not secured by selling in the local market.
Pharmacies are empty
The release of support led to the release of medicines. This was explained by the Ministry of Health, which confirmed that it “will monitor the start of distribution starting tomorrow morning (Friday, May 28) in a fair and transparent manner to all Lebanese regions.”
As of Sunday, May 30, the state of pharmacies has not changed. Medicines, baby formula and many medical supplies are still missing. The tour that Al-Modon made to many of the capital’s pharmacies, to the Khaldeh area and its outskirts, and to the south, proves that pharmacies are not supplied with the minimum of their needs. Heading north was no better. So where are the subsidized drugs?
The head of the Parliamentary Health Committee, MP Assem Araji, did not fall into the trap set by the Ministry of Health for itself, as he did not specify a clear time limit for seeking the presence of medicines in pharmacies. Today, Sunday, May 30th, he announced that “pharmaceutical companies are supposed to be able within days to deliver medicines and medical supplies to pharmacies, hospitals and health facilities,” thus leaving a wider margin that prevents negative points from being recorded in this file. Any question about the lack of medicines and supplies will be met with procrastination and waiting for promises.
But Araji quickly set a date for the crisis to be renewed, and the date may be a starting point for a more dangerous stage than before. The quantities of drugs covered by the subsidized dollar, “must serve two months.” After this period, importers will have to submit to a pre-approval before importing the drugs, otherwise the Banque du Liban will be relieved of responsibility for securing the subsidized dollar. Thus, the market is faced with two options, the best of which is bitter: the drugs are cut off more, or some of them are provided at the black market price. However, the odds of one option over another is not guaranteed, as nothing prevents traders from stockpiling medicine to put pressure on the Banque du Liban, especially since no one is obligating them to release the medicines. There is no room for reliance on ethics in this crisis.
So, “the solution is temporary, and the problem reappears after this period in the event that a final solution is not reached,” says Araji.
Blast after a month?
In Araji’s opinion, the crisis may not wait two months to be renewed, as it may explode within one month “if the security services do not move quickly to prevent smuggling of medicines that are available in the market.”
It is the smuggling that everyone admits, and no one takes the initiative to stop it. Note that the relevant ministries are able to reduce it, at least, by monitoring warehouses and pharmacies. This is an essential role for the Ministry of Health, which promises that it will begin to “prioritize drug purchases in quantity and quality according to the need of the drug market, and will continue to determine the available stock of all types in a way that does not allow the misuse of support.” This is in parallel with the implementation of the new phase, i.e. prior approval of import.
The Ministry and the Parliamentary Committee put themselves before a test, the result of which is known in advance. Smuggling continues to Syria and African countries. As for “restoring balance to the drug market,” which is the ministry’s goal, it does not depart from the saying “what is written is known from its title.”