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 Those firms have received a favorable exchange rate through
Venezuela's currency controls to produce or import price-controlled
medication to treat chronic ailments such as thyroid conditions,
Health Minister Henry Ventura said in an interview late on Tuesday.
But they instead primarily used those dollars to produce or import
more profitable items such as vitamins, he added.
"They are not producing medication that is subject to price
regulation, and they are producing medicine that makes profit for
them," Ventura said in his office in Caracas.
"We want transnational companies to stay in the country, but to
produce ethically."
Venezuela has for years clashed with international companies, most
notably during a wave of state takeovers of foreign-owned factories
led by late socialist leader Hugo Chavez who died of cancer in 2013.
Bayer received $200 million at the preferential rate of 6.3 bolivars
per dollar in 2014, Ventura said. He described the company as having
a "monopoly" on birth control medication but said those products
were not available in pharmacies.
He said Merck, which supplies thyroid medication Euthyrox, received
$285 million at the preferential exchange rate, but that thyroid
medication has also vanished from pharmacies.
"We have to tell the transnationals that are in this country that
they should continue producing, but they should not continue
conspiring," said Ventura, himself a doctor who was also a Socialist
Party legislator. Shortly before becoming Health Minister, Ventura
accused pharmaceutical companies of worsening medicine shortages.
The 12-year-old currency controls provide dollars at the
preferential rate for priority goods such as food and medicine,
compared with a weaker official rate of nearly 200 bolivars and the
black market rate of almost 280 bolivars.
Officials say some unscrupulous companies game the system by
acquiring cheap dollars on the pretense of importing priority goods,
and then either resell the dollars on the black market or import
different products that have higher profit margins.
'ECONOMIC WAR'
Merck did not immediately respond to requests for comment.
A Bayer spokesman said in a statement that "Despite the financial
crisis and significant outstanding payments, Bayer has been working
very closely with the Venezuelan government to ensure the supply of
our medical products for high unmet medical needs."
The company has provided drugs for cancer, hemophilia and multiple
sclerosis as required by the Venezuelan social security system, he
added.
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Bayer's Venezuela division as of year-end 2014 had around 150
million euros in local currency that it had been unable to
repatriate due to the currency controls.
Balance sheet losses have become routine for multinationals with
business to Venezuela as steady devaluations of the bolivar have
forced them to write down asset values.
President Nicolas Maduro has described shortages of consumer goods
ranging from analgesics to dish soap as being part of an "economic
war" against his socialist government led by businesses leaders with
Washington's backing.
"We do not want to think that the pharmaceutical industry is backing
the economic war," Ventura said.
The shortages, which have spawned long lines at many supermarkets
and pharmacies, are weighing on Maduro's popularity and may
strengthen the opposition in this year's legislative elections.
Critics and industry leaders say the shortages are the result of
insufficient hard currency to import raw materials, and price
controls that limit incentives for production while stimulating
contraband of goods to nearby countries.
Euthyrox in some cases sells for as little as 7 bolivars due to
price controls, according to the health ministry, which is
equivalent to $0.03 based on the black market exchange rate.
Colombian online drug retailer Farmalisto sells a similar amount of
Euthyrox for the equivalent of around $5.75.
Ventura said a registry of patients with chronic illnesses such as
epilepsy or diabetes that the Health Ministry is setting up will
serve to help authorities understand the prevalence of such
conditions to steer dollars toward the right products.
Opposition leaders have called the system, known as Siamed, a
mechanism to ration insufficient supplies of medication. Venture
dismissed that as a political smear.
(Editing by Andrew Cawthorne and Christian Plumb)
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