The Competition Council (KP) in Latvia is actively monitoring the pharmaceutical industry to ensure fair competition. Discussions have emerged regarding proposed changes by the Ministry of Health to the pricing model for prescription drugs, aiming to address concerns about the current less patient-friendly pricing model compared to neighboring countries.

In a 2019 report, the KP identified differences in drug prices among Baltic countries, attributing them to varying value-added tax rates and pricing regulations. The new amendments in Latvia regulate that drug manufacturers cannot set prices higher than in Lithuania and Estonia, promoting transparent pricing and potentially reducing costs for patients.

KP supports the Ministry's plan to analyze the new pricing model's effectiveness and submit a report to the Cabinet with recommendations for its development. The Competition Council also suggests a new approach to assessing competition in the pharmacy market to provide a more precise understanding of competition in the pharmaceutical retail market.

Concerns about monopolies in the pharmaceutical sector have been raised, with the Council approving the acquisition of AS 'Olainfarm' by AS 'AB CITY.' The concentration of the drug manufacturing market among Latvian companies was noted, with foreign drug manufacturers also having a significant presence in Latvia, reducing risks to competition.

The Competition Council clarified that the decision on the acquisition did not evaluate the impact on pharmaceutical retail markets. AS 'Olainfarm' committed to divest all shares of SIA 'LATVIJAS APTIEKA' to eliminate concerns about negative effects on competition in pharmaceutical retail markets.

The deadline for divesting SIA 'LATVIJAS APTIEKA' shares was extended to February 1, 2025, due to market fluctuations and changes in regulations. KP evaluated a case of vertical integration in the pharmaceutical sector, emphasizing risks associated with it in markets with high administrative barriers like pharmacy retail markets.

Reports from 2018 and 2019 highlight potential competition restrictions in the distribution and pricing of medicines in Latvia. Competition law advisors should pay attention to these reports to guide businesses in complying with competition laws and navigating legal risks in the pharmaceutical industry.