Kazakhstanis are paying significantly more for medicines than residents of many other countries, and often struggle to find essential drugs at all. According to the Agency for Protection and Development of Competition (APDC), rising prices, supply disruptions, and an inefficient procurement system are driving a worsening healthcare crisis.

Price Hikes

Kazakhstan’s medicine procurement system is complex. In principle, essential drugs should be available to patients free of charge under the guaranteed volume of medical care and mandatory social health insurance. In practice, many face shortages or receive lower-quality substitutes. As a result, patients are often forced to buy medicines themselves, an increasingly unaffordable burden.

According to the APDC, inflated prices are caused by several factors. One is the lack of pricing transparency. Previously, drug prices were pegged to the highest prices in reference countries, figures submitted by suppliers without verification. As a result, generics sometimes cost nearly as much as original-brand drugs.

Another issue is procurement through intermediaries. Up to 45% of state-purchased medicines are bought not from manufacturers but from local distributors, who add their own markups.

Costs are also inflated by expensive inspections. To enter the market, companies must pay for production inspections, fees set independently by a state agency that can reach millions of tenge. These costs are passed on to consumers.

To address these problems, the APDC has recommended switching to average reference-country prices, limiting inspections on products from countries with stringent regulations, and transferring inspection services to a state monopoly with controlled rates. It also urges more direct procurement from manufacturers and better verification of supplier costs.

Tax Reforms Threaten Further Price Increases

Despite already high prices, medicines will soon be subject to new taxes. Under Kazakhstan’s revised Tax Code, beginning in 2026, medical services and the sale of medicines and medical products will be subject to value-added tax (VAT), initially at 5%, rising to 10% from January 1, 2027.

An exception will apply to medicines and services provided under the guaranteed medical care package and mandatory health insurance. However, as noted earlier, many patients struggle to access these programs in practice.

Pharmaceutical companies warn that these VAT changes will drive prices even higher and lead to fresh shortages. Industry leaders also point to the planned 16% VAT on pharmaceutical raw materials, equipment, and components, calling it a distortion of tax policy and a threat to the sector’s stability.

“The market is on the edge. Many drugs are already unprofitable and are being withdrawn. The introduction of VAT will accelerate the outflow. The number of registered medicines in Kazakhstan has already dropped from 12,000 to 6,900,” said Marina Durmanova, President of the Association for the Support and Development of Pharmaceutical Activity. “If no measures are taken, the country could face shortages of key drugs and further monopolization of the pharmacy sector,” she warned.

Kazakhstan produces few essential medicines domestically, meaning prices continue to rise month by month.

When Medicines Vanish, So Do Lives

Price increases are only part of the crisis. Vital medicines frequently disappear from the shelves entirely, including those guaranteed under state programs.

Kazakhstan imports around 14% of its medicines from Russia and about 15% from Germany. Since the start of the war in Ukraine, supply chains have been disrupted, leading to widespread shortages of insulin, Diprosalic, and essential cancer and epilepsy medications. The private sector, which handles roughly 70% of drug supplies, has been hit by high purchase prices, delayed imports, and limited stock.

In September, cancer patients in Almaty reported the disappearance of Tagrisso, a life-saving drug previously provided under a state benefits program. The Public Health Department attributed its absence to budget cuts. With a price tag of over 2 million tenge (more than $3,600), the drug remains far out of reach for most.

Following complaints, state distributor SK-Pharmacy said the drug would arrive in October, blaming the delay on documentation errors.

SK-Pharmacy has long faced criticism. In July 2025, the Prosecutor General’s Office launched a pre-trial investigation into the company over large-scale financial violations. A Supreme Audit Chamber report estimated the budgetary damage from medicine procurement at 35.8 billion tenge (over $63 million).

These failings have serious consequences. Delays in medicine delivery cost lives. Healthcare reform may no longer be optional, but an urgent priority for Kazakhstan’s government.