“Before the state introduced reference prices, you were selling medications at such high prices that people could not afford to buy them. After the introduction of reference pricing, you adapted normally, reducing your margins within your capabilities. Does this fit into any kind of business ethics - is there anything that ‘restrains’ you from selling medicines at such catastrophic prices to citizens?” said MP Nino Tsilosani at a session of the parliamentary commission on price regulation, addressing the director of GM Pharma, Gocha Gogilashvili.

As Tsilosani noted, in 2024 the company had a net profit of 60 million.

“In 2024, your total revenue was up to 185 million, of which you retained 60 million as net profit after taxes and other expenses. This is in conditions where medicine prices in Georgia are among the highest. Before the state introduced reference pricing, you sold medicines at such prices that people physically could not afford to buy them to save their lives. They went to Turkey to bring in medicines from there because locally you were selling them with incredibly high markups. After reference pricing, you adapted normally, reduced your margins within your capabilities, and continued to operate successfully.

Does this fit into any kind of business ethics, when you could have a reasonable, humane profit, yet citizens have to pay colossal sums for medicines due to these profit margins? If not for reference pricing and direct intervention by the ministry, would our citizens be buying medicines at much higher prices than they now purchase at quite normal prices?

I am interested in hearing your position as a manufacturer. You could set even a 200% profit margin on medicines - you were free to do so before reference prices were established for certain drugs. Is there anything that restrains you from selling medicines at such catastrophic prices, when these are essential for people’s health and survival? There must be some business ethics - this is not a luxury good, it is a fundamental prerequisite for human existence.

By what ethics and standards do you operate, when medicine prices are almost more expensive than even in Western European countries? I am not addressing you only as a manufacturer - you represent a powerful pharmaceutical and medical group that is, one could say, almost monopolistically present in all directions, where you have many opportunities to somehow manipulate patients. Perhaps I am mistaken, but I would like you to explain where the safeguards for patients are.

Before reference pricing, you were making much higher profits, and not a single manufacturer or pharmacy chain present here felt any discomfort that you were harming consumers and our citizens. I am interested in how this network you have created works. Are you colluding with doctors? Do doctors deliberately prescribe certain medicines? Do they receive specific income for this? Do they have bonuses? At what markup are your produced medicines sold in pharmacy chains?” said Nino Tsilosani.

The statement was responded to at the commission session by the director of GM Pharma, Gocha Gogilashvili. According to him, all companies act in accordance with state regulations.

“All companies act exactly as the state regulates. Once reference prices were set, those prices were implemented. Some medicines left the market. Today, GM Pharma sells five of its products at a loss, which are included in social and reference pricing programs,” said Gogilashvili.