CONSUMER PRICES

Copayment system sees cost of medicines up by over a third

Annual inflation rate rises to 2.2 percent on the back of change in charges for prescription drugs

The introduction of a copayment system for pharmaceuticals in Spain last month saw the cost of medicines for consumers rise by 36.3 percent in July compared to the month before -- an increase that has never before been seen on the statistical data recorded by the National Statistics Institute (INE).

What's more, the rise in the cost of medicines, which went up 22.7 percent in July compared to the same month in 2011, had a huge effect on the general price index (IPC). According to data released on Tuesday by INE, the annual rate of inflation rose to 2.2 percent, which is 0.3 percentage points more than in June.

The copayment system is based on income levels, and for the first time ever obliges Spain's 7.5 million pensioners to pay 10 percent of the cost of their medicines, with a monthly cap of eight, 16 or 60 euros.

In a statement, the Economy Ministry said that annual inflation would have stayed at the 1.9 percent seen in June were it not for this change to the system for medicines.

What's more, the ministry continued, the rise in July corresponds to a "step effect," which will be corrected after 12 months.

According to the INE, as well as the cost of medicines, the cost of transport also rose in July, by 3.8 percent, mostly due to the rise in gas prices. Also on the rise were the costs of home maintenance, which rose 5.4 percent given the higher electricity rates introduced by the government.

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