During the Soviet era, there was one “wholesale” company importing and distributing pharmaceuticals for Georgia. Moscow controlled registration and licensing procedures (45). Pharmacies belonged to the state. Drug distribution was tightly regulated and patients needed a prescription to access many products. Drugs were provided free to inpatients and on a subsidized basis to outpatients (21). Since independence, the pharmaceutical sector has undergone many changes. The sector has undergone privatization for the development and distribution of drugs, and the role of the state has been changed from supplying drugs to accrediting and monitoring the sector.

At independence, one of the first activities in the reform of the health sector was the privatization of the pharmaceuticals importation and distribution sector through the Law on Privatization of Public Enterprises, which was passed in 1996. Today there are 12 wholesale pharmaceutical companies. In terms of local pharmaceutical distribution, there are around 600 registered, but now privatized, pharmacies and an estimated 80–100 non-registered and illegal pharmacies.

The drug production industry in Georgia is small, and nearly all pharmaceuticals are imported. According to official import license data, around US $50 million worth of drugs are imported annually into Georgia. Local production supplies only an estimated 2% of the domestic market. However, there are a number of projects under way to develop capacity in this area. For example, a joint venture with a Czech enterprise has resulted in the formation of the Lechiva company, which produces a number of pharmaceuticals. Large numbers of drugs are also brought in illegally, although the amount has decreased as the state role has been strengthened during the latter half of the 1990s. During the early 1990s, the medicines market was almost completely unregulated and much low-quality and outdated or, in other ways, dangerous products were being sold (45). The black market trade is now estimated to form around 20% of total drug imports into Georgia. Black market drugs are fairly commonly traded in fairs and other informal locations (47). In a large household survey carried out in 2000, 4.1% of those surveyed reported that they had bought drugs from unregulated sellers found in fairs and markets (47). Drug registration, regulation and market research in Georgia is now carried out by the Department of Drugs and Pharmaceutical Affairs. This department, which is part of the MoLHSA, was created in 1996.

All pharmaceuticals, with the exception of those supplied free or with some co-payment required under the BBP, public health or municipal programmes, must be purchased directly by patients. In 1995, Georgia developed an Essential Drugs List (EDL). Under this, 253 generic drugs are listed. State treatment guidelines are based around drugs on this list. While the list is well considered in general, there have been some problems in persuading doctors to adhere to the practice of prescribing the recommended generic products. The prices for the EDL drugs are not regulated, with the exception of “restricted” drugs (for example, narcotic medications). Today patients can directly buy drugs from pharmacies without a prescription, although this is technically against the law. However, this law is not enforced at present, and patients wishing to avoid paying doctors consultation fees go directly to pharmacies or unregulated drug sellers.

Because of the financial problems faced by many people in accessing pharmaceuticals, a three-year pilot project, “Drug Polis: Drug Reimbursement Pilot System” was undertaken in Kutaisi, between 1997 and 2000 to investigate ways of sharing and lowering drug costs and returning to a prescription based system. The project experimented with a voluntary insurance system for pharmaceutical provision (48). The results and lessons of this project are planned to be included in the next expanded family medicine programmes in Georgia. In an effort to help some of the poorest of the population access pharmaceuticals over the last decade, humanitarian organizations have also played a key role, although this is now decreasing. In 1997, such organizations were supplying around 70% of all drugs to Georgia. In 2000, the figure was estimated to be around 17%. However, for low-income rural communities in some areas, this supply seems invaluable at the primary care level. According to a 1999 survey in western Georgia, 55% of ambulatories and 48% of polyclinics totally relied on drugs supplied by the humanitarian organizations.