APDC COMPLETES ITS WORK ON MEDICINE PRICE REGULATION

During the period when the Agency participated in the regulation of prices for medicines and medical devices, pricing approaches were revised, trade mark-ups and administrative barriers were reduced, and a significant share of medicines was brought into a competitive environment.

Systematic work was carried out over six years. At the end of 2020, pursuant to an instruction from the Head of State, the Agency for Protection and Development of Competition of the Republic of Kazakhstan was included as a co-regulator in the price-setting system for medicines and medical devices. The main objective of the joint work with the Ministry of Healthcare was to ensure balanced price regulation aimed at preventing unjustified increases in medicine prices and anti-competitive practices by market participants.

Between 2020 and 2026, the Agency approved 38 draft orders on maximum prices for medicines and medical devices. Following their review, the Agency submitted recommendations to the Ministry of Healthcare to eliminate factors contributing to unjustified price increases, reduce administrative barriers and improve the pricing mechanism.

At the initial stage, during the pandemic, the Agency took prompt measures to mitigate the negative effects of the crisis. A special procedure for setting prices for COVID-19 medicines was introduced, and unjustified trade mark-ups were revised. As a result, the prices of COVID-19 medicines decreased by 30–40%, the prices of medical masks fell by more than three times, and the prices of PCR tests decreased twofold. Subsequently, the Agency shifted its focus towards systematically reforming the regulatory mechanism and creating conditions for the development of competition in the pharmaceutical market.

In 2022, amendments were made to the Code of the Republic of Kazakhstan “On People’s Health and the Healthcare System”, and a Roadmap for the Development of Competition in Healthcare was approved. The Roadmap provides for reducing excessive price regulation, increasing transparency in price formation, and expanding market participants’ access to public procurement of medicines under the Guaranteed Volume of Free Medical Care (GVFMC) and the Mandatory Social Health Insurance (MSHI) system.

In the course of its work, the Agency identified a number of factors that created conditions for unjustified increases in the prices of medicines and medical devices. In particular, marketing, transportation and customs costs, as well as quality assessment costs, were taken into account when setting prices, while significant trade mark-ups were also applied. At the same time, the mechanism did not take into account the actual prices charged by manufacturers or the cost of imports.

To address the identified issues, the Agency, jointly with the Ministry of Healthcare, revised the pricing approaches. The key change was the transition to reference pricing, with greater reliance on the actual cost of medicines, including mandatory confirmation through contracts with manufacturers and invoices for import prices.

To improve the objectivity and transparency of reference pricing, external and internal referencing mechanisms were introduced, and the list of information sources was expanded. These included NALVIN information resources on medicine prices recommended by the World Health Organization. The composition of costs taken into account when setting prices was also revised. Since 2025, quality assessment, customs and transportation costs have been fully excluded from the calculations. Marketing costs have also been excluded when procuring medicines under the GVFMC and MSHI systems.

Trade mark-ups were also reduced. In the retail segment, the mark-up was gradually reduced from 55% in 2022 to 30% in 2026, while under the special procedure it was reduced from 27.5% to 15%. In the wholesale segment, the mark-up under the special procedure was reduced from 10.5% to 10%.

In addition, differentiated pricing for medicines was introduced: the price of a generic medicine must be 30% lower than the price of the original medicine, while the price of a biosimilar must be 10% lower than that of the reference biological medicine. The relevant amendments were established in December 2024 in the rules for setting maximum prices and mark-ups for medicines. Following the revision of the pricing mechanism, maximum prices were reduced by an average of 26.5% for 76% of all medicines. For individual products, the reduction ranged from 10% to more than 90%.

One of the key outcomes of the Agency’s work was the gradual reduction of the scope of state price regulation. In August 2022, maximum prices were set for 7,537 trade names of medicines. As a result of the gradual revision of the list and the transfer of medicines into a competitive environment, prices for 4,994 medicines are currently regulated. In total, 4,918 medicines have been removed from price regulation.

In 2023, 302 over-the-counter medicines were removed from regulation, followed by 952 medicines in 2024. In 2025, the removal of over-the-counter medicines from price regulation was completed, with 1,868 positions excluded from regulation. Since May 2026, an additional 3,050 prescription medicines priced below 1 MCI have been removed from regulation. Full completion of price regulation in the commercial segment is planned for 2027. State price regulation will remain in place only for medicines procured under the GVFMC and MSHI systems.

Following the removal of certain medicines from state price regulation, actual price dynamics were monitored based on data from the medicine labeling system. The Committee for Medical and Pharmaceutical Control compared the selling prices of 2,635 medicines as of 8 August 2025 and July 2026.

Prices for 698 medicines decreased by an average of 26.2%: by up to 20% for 456 positions and by more than 20% for 242 positions. Prices for 1,142 medicines remained unchanged. Price increases were recorded for 795 medicines, averaging 29.9%, including increases of up to 20% for 646 positions and of more than 20% for 149 positions.

Overall, the monitoring results show that prices did not increase significantly following the removal of regulation and confirm the possibility of independent price formation under competitive market conditions. At the same time, price dynamics vary across the regions of the Republic of Kazakhstan.

Improvements to the pricing mechanism were accompanied by the reduction of administrative barriers related to bringing medicines and medical devices to the market and by the digitalization of procedures.

Within the framework of the Head of State’s Decree “On Measures for Liberalizing the Economy”, the “Single Window” project is being implemented. It provides for the automation of a number of public services, including price registration, amendments to registration dossiers, expert assessments and the inclusion of medicines in the national drug formulary. The introduction of digital solutions is expected to reduce the time required to bring medicines to the market from several years to 100 business days.

In September 2026, amendments to the Code of the Republic of Kazakhstan “On People’s Health and the Healthcare System” providing for the Ministry of Healthcare to independently approve maximum prices for medicines will enter into force. Thus, the Agency’s participation as a co-regulator in the pricing of medicines and medical devices will come to an end.

This approach is consistent with OECD recommendations on separating the functions of competition authorities and sectoral regulators and is intended to allow the Agency to focus its efforts on ensuring and developing competition.

The Agency will continue monitoring the state of competition in the pharmaceutical market. The use of data from the medicine labeling system will make it possible to monitor price dynamics and the behaviour of market participants, identify signs of unjustified price increases and, where appropriate, take enforcement measures provided for by law.