Drug PricingSamira (paraphrasing, not exact quote!): "A lot of governments spent a lot of money during Covid. And as they look to see where they can cut costs, one easy place is pharma pricing. Impacts the pharma industry as a whole. We continue to monitor, be aware of and be concerned about the subject."
From the Annual Information Form ('Business Risks'): Pricing pressure and demand fluctuations
Our customers may undergo consolidation and may form strong commercial alliances leading to increased pressure
on price, as well as terms and conditions required to do business. In addition, our customers are proactively
managing their business in order to constantly lower the cost of drug prices. Further, as governments, insurers and
health institutions attempt to manage their budgets after COVID-19, they may update regulations on pricing, price
increases and reimbursement of pharmaceutical products. For example, since 2019, Programa de Atencin Mdica
Integral (“PAMI”), our largest customer in Argentina has been moving their drug procurement model from a direct
purchase model from pharmaceutical companies to a tender process based on solely pricing. In addition, during
2021, the Colombian Ministry of Health instituted an emergency measure in response to the COVID-19 pandemic
and banned price increases on pharmaceutical products that may be used in the treating COIVD-19 and associated
diseases.
Our revenues may also be affected by fluctuations in the buying patterns of our customers, whether resulting from
seasonality, pricing, wholesaler buying decisions or other factors. As customers, move to a tender process for the
acquisition of customers, the Corporation revenues and results from operations may be negatively impacted due
to the binary nature of the results from the tenders. In 2021, Knight recorded approximately $13,500 to $16,300 of
revenues related to a higher demand for our infectious diseases to treat invasive fungal infections associated with
Covid-19. Such sales may not continue into 2022.