On 30 April 2014, at the plenary session of the Parliament of Georgia, Member of the Parliamentary Minority, Mikheil Machavariani, spoke about the inflation problem in the country. According to his statement:  “Practically everything got more expensive by 20%-25% in Georgia.” Another Member of the United National Movement, Gigi Tsereteli, commented upon the topic and said:  “Prices rise. The 25% Machavariani mentioned comes as a part of the drug prices. Drugs are one of the biggest problems of the health care programme as the [Universal Health Care] state programme does not fund the costs for medicines. If we analyse the expenses on health care, we will see that up to 40%-50% are spent on medicines.” While researching the inflation issue, FactCheck first verified Mikheil Machavariani’s statement. Based upon the official data of the National Statistics Office of Georgia, the annual inflation rate comprised 3.4% in April 2014 while the monthly inflation rate equalled 3%. Additionally, in 2014 neither the annual nor the monthly inflation rate exceeded 3.5% and it never comprised 20%-25% as asserted by Machavariani. FactCheck also investigated Gigi Tsereteli’s information about the increased prices and accessibility of medicines. In general, drug prices were the number one topic for discussion for the last week. The former Minister of Labour, Health and Social Affairs of Georgia, Zurab Chiaberashvili, spoke about the obviously increased prices of medicines that were directly connected to an improper implementation of the Universal Health Care Programme. According to Chiaberashvili: “As compared to 2012, the prices of commonly used medicines have increased by 20%.” This statement was criticised by the current Minister of Labour, Health and Social Affairs of Georgia, Davit Sergeenko, who proclaimed that:  “There is no identified tendency about the significant increase of drug prices on the Georgian drug market. Furthermore, even the prices of the most expensive medicines have decreased by 60%.” While looking deeper into Gigi Tsereteli’s abovementioned statement, we contacted him in order to inquire about the exact period to which he was referring in terms of the 25% increase in the prices of medicines. He explained that he meant the rising prices in the current period and, more precisely, in 2014. Tsereteli also indicated that he relied upon an article dated 29 April published by the business and economic web portal, bpn, which reported a 20%-25% increase in drug prices. In order to further verify the changes of drug prices, we contacted the National Statistics Office of Georgia with the following questions:

• What was the average increase of drug prices in percentages in January, February, March and April 2014 (as compared to the previous months)?
• What was the average increase of drug prices in percentages in January-April 2014 as compared to the same period of the previous year?

Based upon the data of the National Statistics Office of Georgia, the following changes were observed in drug prices in January-April 2014:  as compared to the previous month, in January the prices of medicines decreased by 0.4%, in February prices increased by 6.8%, in March – by 2.5% and in April – by 0.1%.

In addition, according to the National Statistics Office of Georgia, as compared to the same period of 2013, the average increase of prices of medicines comprised 5.1% in January-April 2014. As is clear, this indicator does not coincide with the MP’s data. Gigi Tsereteli also discussed the Universal Health Care Programme. FactCheck investigated this topic earlier (follow the link). The Universal Health Care Programme was enacted on 28 February 2013 and targeted all Georgian citizens without insurance policies. The second stage of the programme began from 1 July 2013. The first stage of the Universal Health Care Programme comprised funding for 453 various types of nosology, the service of a general practitioner and basic laboratory tests.  With the start of the second stage, the list of services was augmented by planned surgeries, the treatment of oncological diseases and childbirth expenses. The Universal Health Care Programme funds the usage of medicines only in the case of emergency hospitalisation treatment. Otherwise, the programme does not include expenses for medicines as was reported by Tsereteli. In addition, according to the Health System Performance Assessment Report, published in January 2013, the costs of medicines comprise almost half of the total health care expenses. Therefore, the MP was right about this part of his statement.   Conclusion As compared to the data of the same period of 2014, in January-April 2014 the average increase in the prices of medicines comprised 5.1% while in January 2014 a decrease of prices by 0.4% was observed if compared to the previous month. In February, the prices went up by 6.8% with the same tendency observed in March (2.5%) and April (0.1%). According to the abovementioned statistical data, the prices of medicines have in fact increased although not by 25%, as stated by Gigi Tsereteli. Therefore, the MP is wrong in these terms. However, Tsereteli is more or less correct in the second part of his statement about the accessibility of medicines. The Universal Health Care Programme does not in fact include expenses for medicines at this stage. Additionally, the costs of medicines comprise almost half of the total health care expenses. Therefore, FactCheck concludes that Gigi Tsereteli’s statement:  “Prices of drugs have increased by 25%. Drugs are one of the biggest problems of the health care programme as the [Universal Health Care] state programme does not fund the costs for medicines. If we analyse the expenses on health care, we will see that up to 40%-50% are spent on medicines,” is HALF TRUE.

Originally published in The Financial, issue N. 22 (402)