Drug prices do not escape the dynamics of inflation.
However, in the last three months, the increase curve intensified and further deteriorated the purchasing capacity of all consumers.
Especially those who consume them the most: retirees.
It is estimated that this segment of the population
spends between 20% and 30% of their income on the purchase of medicines.
In January, within a general increase of 13.6% in the medication basket,
the 10 medications most consumed by older adults showed an average increase of 31%
.
January inflation was 20.6%.
Above that average, monthly increases of
83% and 45% were recorded,
according to
a "
Report on the medications most consumed by the elderly in Argentina."
This is a report prepared by the Center for Argentine Political Economy (CEPA) together with the Latin American Association of Community Gerontology (ALGEC) and the Center for Political Studies for Older People (CEPPEMA).
According to this research, in 2020, when the pandemic began, remedies registered an average increase of
34.6%
.
In 2021, a 42.9%
increase
was reached , and in 2022,
82.8%
.
In 2023, the average increase in pharmacies was
276%
, exceeding the general inflation index that closed the year with an increase of 211%.
Only in the month of November there was an increase of 25.7% and in the month of December the increase in prices was 40.9%, well above the inflation rates of 12.8% and 25.5% respectively. , according to INDEC.
These strong increases obviously led to a drop in consumption:
the sale of medicines collapsed between November and January, according to CAME, up to 45%.
To a different extent, the decrease was also recognized by the different chambers that bring together pharmacists.
According to Eugenio Semino, defender of the Third Age, a phenomenon that is occurring is that “
retirees do not consume remedies according to the doses prescribed by doctors but according to what they can buy.”
Then, “they self-medicate by varying the medical indication and treatment, thus, it ends up not working,” the ombudsman warned.
As the CEPA report highlights, “in this context,
prices with PAMI coverage
(which reaches 60% of the country's elderly population) turned out to be
a fundamental element for caring for the income of older people
, as they registered increases well below those represented by retail prices and the general inflation index.
That is to say, they were a significant saving for the affiliated population."
Medications, exchange rate and income
Laboratories usually explain that, given the participation of imported inputs in the production process, medicines should follow the evolution of the exchange rate.
According to CEPA, "beyond the veracity of this, what is perceived is
a dissociation with respect to the evolution of the exchange rate from April 2021."
"Drug prices and prices measured in the CPI were dissociated from the evolution of the exchange rate, reaching a significant gap."
According to Hernan Lechter, an economist at CEPA, ”when there are no sudden movements in the exchange rate and there is a process of exchange rate appreciation, medicines suffer increases above the exchange rate.
Furthermore, in instances of strong devaluations, medicines reflect those increases instantly as could be seen in August and December 2023, as in 2019,” he commented.
Regarding the impact on income, the economist explains: “After Javier Milei's triumph,
the minimum retirement without bonuses was reduced by 20.1 percentage points from December 2023 to January 2024
measured in terms of medicines (according to drug prices). PAMI public sale)
Going forward, "increases of 10% in this basket of medicines are projected for the months of February and March 2024, at the same time that an update of 33.5% of the minimum retirement in March is contemplated. With these hypotheses,
a "a new drop in the minimum retirement without bonuses in February of 5.4 percentage points in relation to January
and a recovery in March that does not compensate for the successive falls."
"The minimum retirement with bonuses suffers a drop of 25.2 percentage points between December 2023 and January 2024 and would register another drop of 6.8 points from January to February considering the same hypotheses. “Taking into account
a bonus of $70,000 for March, no
The previous losses in purchasing power in relation to the basket of medicines
would be compensated ,” the report clarified.