Drug pricing in Kazakhstan is built on several parallel regulatory frameworks, each defined by separate legal acts. The key ones are Order No. 96, which sets ceiling prices by International Nonproprietary Name (INN), Order No. 94, which regulates prices by brand name, and Order No. 77, which establishes price limits for drugs purchased under the state benefit package and social health insurance.
On paper, the system looks detailed and well-structured. Each drug is defined by its INN, dosage form, strength, manufacturer, and a maximum price for public procurement. In practice, however, this model creates structural distortions that directly affect how budget spending is distributed.
INN as a regulatory unit: formal comparability, real differences
INN-based pricing is meant to ensure price comparability and stimulate competition between brands. In reality, a single INN can include multiple brand-name drugs with very different ceiling prices.
Take levocetirizine as an example. Under Order No. 77, drugs with the same dosage form (film-coated tablets) and the same strength (5 mg) have sharply different price caps. The price per tablet for L-CET is 54.35 tenge, Allervay is 53.62 tenge, and Levocetil is 53.41 tenge. At the same time, Setimed is priced at 212.62 tenge per tablet. With the same active substance and dose, the price difference exceeds four times.
This means that INN, in its current form, acts more as a formal grouping label than as an economically or clinically comparable unit of regulation. The lack of clear pricing rules within a single INN, based on objective factors such as dosage, packaging, or production costs, weakens price logic and reduces transparency in regulatory decisions.
Such a structure allows higher-priced brands to be selected while formally complying with regulations. The result is higher budget spending without clinical justification.
Methodological gaps in INN-based pricing
A closer look at how ceiling prices are set shows that INN regulation often ignores key market realities, such as whether a drug is actually available, patent status, or production economics. This is especially visible in oncology and biotech drugs.
For imatinib, imported brands such as Glivec and AqVida kept stable ceiling prices, while prices for the domestic producer fell by 70 to 83 percent through abrupt and unexplained adjustments. This asymmetry does not reflect market competition. It reflects selective regulatory pressure, concentrated mainly on local manufacturers.
A similar issue appears with paliperidone. After a domestic analogue was registered, the originator (Johnson and Johnson) cut its price more than fivefold. However, even though the original drug had not been supplied for over 24 months, outdated reference prices continued to be used. At the same time, Indian generics were registered at prices more than five times higher than the originator, which contradicts basic logic of generic pricing.
Generics and biosimilars: savings potential andregulatory limits
Globally, generics and biosimilars are the main tools for lowering prices after patents expire. In Kazakhstan, this potential is used only partially.
For example, the registration of pembrolizumab biosimilars led to a 59 percent price cut for the original Keytruda. In 2025, the domestic biosimilar was priced 69 percent below the originator during its patent period.
At the same time, the 2023 removal of mandatory price reductions for generics (-30 percent) and biosimilars (-10 percent) led to higher prices for imported generics. In some cases, prices rose from 10 percent to 7.5 times compared to 2022. Since domestic prices are often calculated using average import prices, this automatically pushed local prices up as well.
As a result, the system limits the pricing space for domestic producers while creating advantages for imported generics. This distorts competition and weakens the resilience of drug supply.
Order No. 96 and price growth for essentialINNs
Comparing the September 9, 2025 and December 5, 2025 versions of Order No. 96 shows a sharp increase in ceiling prices for 52 INNs. On average, prices rose by 169.4 percent, with some drugs increasing more than sixfold.
The most striking cases involve widely used hospital drugs: glucose 40 percent (+523 percent), gentamicin (+396 percent), metronidazole 250 mg (+412 percent), diphenhydramine (+453 percent), lidocaine 2 percent (+358 percent), furosemide (+305 percent), and cefotaxime (+151 percent). Even small price increases for such drugs translate into large budget costsbecause of their high usage.
Another group includes outpatient drugs for chronic conditions, where prices rose by 100 to 200 percent, including bisoprolol, paracetamol, zoledronic acid, montelukast, and clonazepam. This increases pressure not only on the budget but also on patients within the social insurance system.
Budget concentration as a regulatory outcome
Procurement data and price dynamics suggest that budget concentration is driven less by medical need and more by regulatory design. Price increases for high-volume INNs, asymmetric pressure on domestic producers, and the use of outdated reference data mean that a small number of positions absorb a disproportionate share of public spending.
In this sense, budget concentration is not a side effect of the market. It is a direct outcome of current regulatory choices and methodology.
What needs to change
Using INN as the base unit for pricing provides formal comparability. But without a unified methodology and proper market checks, it becomes a source of systemic distortion. Pricing that ignores patent life, real market presence, and production economics leads to budget concentration, weaker competition, and higher risks for drug security.
A revision of the model requires:
- A reproducible method for setting INN ceiling prices, linked to patent status and the drug life cycle
- Excluding drugs that are not actually supplied from reference pricing
- Clear differentiation within each INN by dosage and dosage form, especially for socially important medicines
- Better alignment between retail pricing and prices under state benefit and insurance programs
Without closing these methodological gaps, the system will remain fragmented and will continue to drive budget growth regardless of real medical needs.
Tomiris Temirgalina, “PharmMedIndustry Kazakhstan” Association,
specifically for www.economyKZ.org
