The government and the private sector are very close to finding a solution to the rise in the price of medicines and the long-standing issue of the Lm12 million in late payments owed to Malta’s pharmaceutical importers.

Over recent weeks, the government has been engaged in low-key discussions – led by Prime Minister Lawrence Gonzi and Finance Ministry Parliamentary Secretary Tonio Fenech – with the Malta Chamber for Small and Medium Size Enterprises (GRTU), the Chamber of Commerce and Enterprise and the Federation of Industry.

Speaking to The Malta Independent on Sunday yesterday, GRTU Pharmaceutical section head Mario Debono said that from meetings with the government held so far, the authorities have been “extremely receptive” and the two sides are very close to reaching a solution encompassing the needs of all parties concerned – the consumer, the manufacturer and the importer.

He added that further discussions are to be held in the coming two weeks with a view to wrapping up negotiations – a conceivable prediction as all parties involved are seeing matters from the same viewpoint in terms of principles, while the only remaining sticking points revolve around technicalities.

But although discussions are close to being finalised and are undoubtedly on the right track, the issue is complex and, Mr Debono warns, “No solution is a magic wand.”

In its discussions, the GRTU has called for, among other things, a national medicines registration system that would simplify and reduce the costs associated with the current excessively bureaucratic registration system. The strengthening and streamlining of the Medicines Authority – through additional funding, training and staff – has also been proposed.

The GRTU is also pushing for the Authority to be made an autonomous entity that would be run along business lines where possible. To this end, the GRTU has proposed that a new board be created, comprising representatives of political parties, consumer interests and the private sector.

“We have proposed a simple formula to bring the market prices of medicines down, but the government also has its role to play,” Mr Debono explained.

One such instance is the proposal tabled by the GRTU on generic prescriptions, where doctors would be able to prescribe cheaper generic drugs instead of the costlier branded variety. The suggestion has been greeted with stiff opposition from some quarters and the government appears unwilling to take up the recommendation.

An agreement is also close on the thorny issue of late payments owed to pharmaceutical importers. But, Mr Debono added, “If the government really wants to help SMEs, it must pay its debts and interest due.

“The government is flippantly flaunting the late payments issue every day. Importing businesses are finding it very difficult to be burdened with this debt. Compounding matters is the fact that importers need to make a 10 per cent bank guarantee every time they accept an order from the government.”

The private sector has been assured that the Treasury has the physical funds to make good on the government’s debt to the private sector, but final settlements are being waylaid by the Government Pharmaceutical Services, which is tasked with issuing the payments.

“Every file for payment goes through he some 15 people, which is one of the reasons why the GPS is notoriously inefficient. The whole tendering process needs to be overhauled. We cannot have pharmacists, as is the case today, heading an organisation that takes business decisions which have such an impact on the private sector. The GPS also has to be run along business lines. We have offered and are ready to lend any assistance required and pass on our business skills to the government should they be required.”

Touching on the issue last week, Malta Chamber of Commerce and Enterprise Healthcare Trade Section spokesperson Reginald Fava also cited “very positive” talks with the government. He explained the problem of payments as not being one of funds, which were available, but rather one of administration and excessive red tape in the payments system.

Stressing there is absolutely no relation between the late payments issue and the market price of medicines, Mr Fava added that companies are suffering because they have to extend their overdrafts as a result of being owed large payments, which has incurred further great expenses on an already burdened sector.