Monday, May 23, 2016 - 15:08
Ognian Donev - President of the CEIBG1
First TV Presenter: We are going to comment on the business environment promised by the new government. Mr. Ognian Donev, President of the CEIBG - one of the largest employers' organizations in the country - is our guest. Good morning.
Mr. Ognian Donev Good morning.
Second TV Presenter: Good morning. We are going to talk about the government, the business and the latest political developments. But let's start with your own business. The BSP2 talk about reducing drug prices. I've heard the new Health Minister Mrs. Andreeva talking about drug price reduction. Is this feasible? Is this a realistic promise having in mind the existing regulations?
Mr. Ognian Donev: Of course, this is feasible provided the issue is part of a professionally developed and well implemented policy aimed at drug price reduction. I mean, you know that drugs split in two types. On the one hand you have innovative drugs and there you can do nothing since the only manufacturer of such a drug - the innovative company, which discovered or developed the product, protects it by a 20-year patent. Therefore, there is nothing to do there. Once this patent protection expires all companies begin manufacturing the same product under another brand name and trade name. Bulgarian government policy has never been directed towards stimulating this second drug type although once the patent protection expires, the product prices go down dramatically. I'll take an example - you have a product, for which the government used to pay BGN 100 by yesterday, today such patent protection expires and as of the very next day the companies start offering the same product at BGN 20 or 30. Keeping this in mind, if the Health Ministry policy and, let's say generally, if Bulgaria's health policy was aimed at encouraging such generic drug manufacturing, and in such case there is no difference between Bulgarian and foreign products, this would bring considerable resource as both Bulgarian and foreign generic products are cheaper, much cheaper.
Second TV Presenter: So, you say that this is a good opportunity, don't you?
Mr. Ognian Donev: Yes, but this is part of a philosophy. If this approach is adopted, such price effect would be achieved for all prescription drugs - these are the drugs prescribed by your physician. On the other hand you have the free market - the drugs that you can buy at the drugstore. There nothing has to be done as the competition is extremely severe, the companies keep close watch on each other and no company can afford large margins although I've heard people speaking about very high prices ... No company can afford to be BGN 0,05 above it's direct competitor's price. For example, when a product with similar characteristics is offered by let's say 17 companies, the competition is so fierce and every player pays attention ... I mean, the control both inside the industry branch and amongst the professionals is much stronger than that of the society because it is not so familiar with the issue.
First TV Presenter: Please tell us why the National Health Security Fund buys a drug at BGN 10 and when I go to drugstore to buy the same drug the price is BGN 6. It isn't anti- market logic, is it?
Mr. Ognian Donev: Anti-market logic is preconditioned by only one thing and it is called a monopoly. The National Health Security Fund is a monopoly - there is no alternative or whatsoever basis to make comparison in terms of functional efficiency. Therefore, CEIBG has always stood for market liberalization and gradual admission of private competitors on this market segment. I don't mean we have to close the National Health Security Fund, I mean we have to admit private players ... Well, I mean all these heath insurance players, which according to a popular joke 'are practicing outside the stadium' since they are not admitted to the market but are entitled to provide additional services only, paid by generous employers that can afford to insure their employees additionally as a gesture of good will. But of course this is wishful thinking and more specifically when state-owned companies provide such additional services to their staffs, they do it with some other purpose supposedly.
First TV Presenter: And what about this decentralized drug purchasing? Now hospitals are entitled to negotiate with drug selling companies, aren't they? Did this regulation make things messier?
Mr. Ognian Donev: I have been asked this question by three consecutive health ministers. The issue has its pros and cons. In principle, the measure was correct, nowhere in the world or at least in Europe, the Ministry of Health is vested with trade functions. Of course it is quite convenient to have the available resource at one place. For the clerks the things are much easier when the resource is at one place and they don't have to negotiate on behalf of hundreds of buyers taking in mind that there are more than 300 hospitals in Bulgaria. It was good to have the financial resources in the hospitals but the way they did it ... We have enough of political discourse and we know what the highest price is ... Now the political campaign is over and we may say ... There was a medicine of a world leading company and its price increased by 386 % ... at least I've seen this and in my opinion this was the highest percentage. Later on I've heard of prices rising by 500 % and 900 % ... This is not true. There was a drug price increase by 386 %. There was an opportunity and some people made use of it; furthermore mistakes were made by the people that implemented the shift from a Health Ministry central organized tender to hospital organized negotiations and purchases. Recently, I've heard that there was a wish to go back to the old rules. The fact that something wasn't done properly does not mean that the idea was wrong by itself.
Second TV Presenter: Maybe the regulation needs a touch of polishing. You said that three ministers have asked you this question. Did they look for your expert opinion?
c No, generally they didn't.
Second TV Presenter: Now, about the new health minister. You don't know her, do you?
Mr. Ognian Donev: No, I don't. I know she used to be Chief Physician at Sheynovo Hospital. And of course I saw her at the taking-an-oath ceremony in the Parliament.
Second TV Presenter: I am asking you this question because there is a systematic suspicion that you either participate somehow in the political processes or at least you aspire and are ambitious to do so. I think the latter was said during the Parliament election campaign by Mr. Tsvetan Vassilev in an interview for Der Standard. So I feel I have to ask the question.
Mr. Ognian Donev: Well, in competition when you don't have other arguments you use such definitions too. Both presidential and parliamentary elections in Bulgaria are over. No one saw me attending a political meeting or otherwise being involved in such events.
Second TV Presenter: I don't mean such obvious involvements, I mean some things behind-the-curtain ...
Mr. Ognian Donev: Many bad things that happened as well as the attempts to impose restrictions on our business .... Well, this is how things happen in Bulgaria - when you are successful and are the best in a branch, of course, if they can't stop you by means of economic instruments, they will do otherwise. It is high time to discontinue this approach; it's time to encourage excellent students and allow them to pull out the whole class. Another option is to bring excellent students back to repeat the class and force them to help poor performers. It's a matter of choice.
First TV Presenter: So, you have nothing to do with the architecture of the Caretaker Government and do not have ambitions to the present one, do you?
Mr. Ognian Donev: In Oresharski Government I know the Premier Oresharski and yet other two ministers. Let's say I have met them and have spoken with them personally. Neither of them is my personal friend or so, if you mean something like that ... Of course, I know also Minister Chobanov. For one year he has been Chairperson of the Financial Supervision Committee since he manages a public company and of course I've had discussions with him.
Second TV Presenter: Now a question of principle. When a person has a serious business and when they become financially powerful enough, don't they yield to the temptation to have political powers in addition to their financial and economic businesses?
Mr. Ognian Donev: It depends on such person's character. Now I can tell you, that's why I've mentioned the three ministers ... During the office of Minister Atanasova - the last minister, she also can confirm, I refrained strictly from meeting her anywhere and on any occasion, and that was exactly within this context. And for such reason the new minister is going to have less opportunities to meet competent people and to develop some other policy, respectively. Success can't always be due to having met somebody or having done something ... It is just the opposite - the environment is so competitive and the reproaches are so groundless. I'm tired of explaining but there is no audibility. There is something and it is more interesting ... Everybody knows and even the Prime Minister became aware of the fact that our company is successful and perhaps the reason to be successful is that we receive 1,86 % from the public resource available, i.e. the most successful Bulgarian company is given less than 2 % from the public resource. You may explain the fact on your own ...
Second TV Presenter: Well, thePrime Minister became aware but do you think that the people became aware of the fact? You have been attacked exactly with allegations relevant to drug prices, pharmaceutical tourism and your drugs being many times more expensive in this country than abroad ... Do you think that the people managed to realize it? You explain the facts through market mechanisms but ...
Mr. Ognian Donev: Frankly speaking, you can't beat the propaganda machine ... it is always stronger than you. Everyone should believe their own eyes and their own ears ... I've been repeating this for 12 years now... or as it is said elsewhere 'by their actions you will recognize them'. When you are criticized by agronomists for example and the people believe them and then three days later it becomes clear that the criticism was groundless, tell me why the people believe such agronomists a week later when they reiterate the attacks with a new thesis ... Well, it depends on the people and whether they want to believe or not. Therefore, the CEIBG is going to insist on encouraging the Bulgarian education at any price. We stand for more transparency, for better informed people in order not to become victims of such campaign. But now my greatest hope is that after the political season is about to be over, this confrontation will disappear gradually and will leave room for the reasonable arguments. Lately aiming at achieving some goals arguments were used to support one or another thesis ...
Second TV Presenter: You've said that 'by their actions you will recognize them' ... Well, sometimes it appears that 'by their lawsuits you will recognize them'3 ... First TV Presenter: So far no lawsuits have been brought against you.
Mr. Ognian Donev: Just the opposite, I've won some lawsuits. I suppose you are a journalist but even you didn't learn that I've won some lawsuits. One lawsuit is still pending, the very first one ...
First TV Presenter: You speak about the two specific charges - money laundering and tax evasion, which resulted from the campaigns you mentioned a while ago ... Second TV Presenter: The charges for money laundering were withdrawn, didn't they?
Mr. Ognian Donev: Look, it is quite interesting ... when you have a successful company in Bulgaria, instead of supporting it like people do in normal countries, you create a false criminal image of this leading company and thus prevent it from doing business internationally. The fact that my company continues developing and it is still looked for when foreign delegations come to our country and there is no other facility to be shown off, but the authorities need to organize a decent business tour ... Well in such case you realize that there is something wrong. I'm not here to justify myself, this is part of authorities' responsibilities. People can get informed how such procedures are finalized. The procedures are slow, exhausting and unfortunately one has no useful move therein.
First TV Presenter: As far as I remember the Prosecutor's Office didn't find evidences for money laundering, did it?
Mr. Ognian Donev: I think no evidences will be discovered since there was no money laundering.
Second TV Presenter: Well, since we began talking about politics, let's see a video and then comment on political bon-ton and those scenes that we are going to see:
Reporter: The hope to have a short Parliament day just failed. Scandals began yet in the early morning. Initially deputies' feelings ran high because of a declaration of the CEDB4 against the MRF5 based on this Wednesday argument between Mr. Delyan Peevski and Mr. Tsvetanov:
Tsvetan Tsvetanov, CEDB: This aggressive act, performed by a deputy, who never said a single word in the 41st National Assembly since he used to be very quit, very careful ...
Delyan Peevski, MRF: Turn, turn Mr. Tsvetanov ... Do not pretend ... I'm going to tell you ... you've told many lies ... Yesss, I love this smile ...
Reporter: These words added fuel to the fire.
CEDB deputy: The person Delyan Peevski didn't stop here and continued whooping and disturbing deputies' work on several occasions. Even Mr. Lutfi Mestan, Delyan Peevski's new patron, was unable to pacify his nursery. Delyan Peevski's arrogance peaked when he took the floor despite National Assembly Vice-President Maya Manolova's timid objections.
Delyan Peevski, MRF: I see you are scared, Mr. Tsvetanov. I've got to tell you something. You've performed many illegal things ... and don't chuckle ... I respect the Bulgarian Parliament, but you Mr. Tsvetanov, I certainly don't respect you ...
Reporter: There was yet another scene that escalated deputies' passions. Ataka6 deputies ambushed CEDB's office where there was a meeting between Mr. Boyko Borisov and OLJ7 leader Mr. Yane Yanev.
Deputies: Gor-chi-vo!8 Gor-chi-vo! ...
Mr. Boyko Borissov, CEDB: Lately you've got a lot of experience, so you can show how it should be done ...
Reporter: Mr. Yane Yanev visited Mr. Boyko Borisov to discuss their requests for parliament election invalidation. As per his calculations the MRF won three seats in Sofia by means of illegal votes coming from Turkey.
Mr. Volen Siderov, Ataka: Erdogan isBoyko's friend ...they are best friends ...
Mr. Yane Yanev, OLJ: Why don't you say a word against this forgery? ... Why didn't you say a word? ... Why are you so silent? ... Why are you now kissing with Lutfi Mestan and Dogan? ...
Deputies: Gor-chi-vo! Gor-chi-vo! ...
Mr. Boyko Borissov, CEDB:Obviously, Ataka deputies' are jealous because they will never have prime ministers as their friends ...
Reporter: In fact the former Prime Minister expected nationalists to support the OLJ petition because of their long-year battle with the MRF. After all, Ataka deputies' shouts at him made him angry.
Mr. Boyko Borissov, CEDB: You will call Boyko your uncle!
Reporter: Mr. Volen Siderov didn't find anything wrong in this sideline attack.
Mr. Volen Siderov, Ataka: Yes, this was a proper parliamentary behavior ... Go to the European Parliament and see that there is chanting, there is banging on the tables ... I reminded that Borisov was a friend of Erdogan, best friend ... therefore, hugs, kisses, arkadash9 ...
First TV Presenter: Well, you've seen the politicians on whose decisions the minimum salary of BGN 450, opening of 250 000 jobs and a bunch of other promises, that we've heard, depend ...
Mr. Ognian Donev: I've got to disagree with you; these things don't depend on politicians. The politicians are going to say that these things should happen, or that the politicians want these things to be done but somebody else should do them. In fact the business owners will have to implement politicians' promises.
First TV Presenter: Where can one open 250 thsd. jobs having in mind the present economic environment?
Mr. Ognian Donev: In this economic environment, unless the government policy is changed, no 250 thsd. jobs will be opened. After all, this is a political discourse. If the economic conditions continue deteriorating, no one will be able to open 250 thsd. jobs. But if you develop a reasonable policy ... first, the existing jobs must be preserved, since there is an ideologeme ...
Second TV Presenter: To stop the rise in unemployment ...
Mr. Ognian Donev: Everybody speaks about creating jobs, attracting investments. Here I'm going to explain especially for our viewers, this is about reindustrialization of Bulgaria. And this is correct ... You know Obama is going to reindustrialize the USA ... and where are we on the map? Of course we must do our best to develop the Bulgarian industry.