Medicine prices and availability, evidence for policy
Technical Briefing Seminar, November 18th 2009
Alexandra Cameron, Department of Essential Medicines and
Pharmaceutical Policies, World Health Organization
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Overview
1. International effort to improve medicine affordability
and availability
2. Generating reliable evidence: how to measure
medicine prices and availability
3. What have we learned about medicine prices,
availability and affordability?
4. Evidence to policy: what can be done?
2
The WHO/Health Action International Project
on Medicine Prices and Availability
• Outcome of the WHO/public interest NGOs Roundtable on
Pharmaceuticals
Objectives
• To develop and apply a reliable methodology for collecting
and analysing price and availability data across healthcare
sectors and regions in a country
• To promote price transparency: survey data is made freely
accessible on the HAI website, allowing international
comparisons
• To provide guidance on pricing policy options and monitor
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their impact
WHO/HAI standard methodology for measuring
medicine prices and availability
Facility-based survey that measures:
• medicine prices
• medicine availability
• affordability of treatments
• components in the supply chain
Launched at the World Health Assembly 2003
Survey data publicly available on HAI web site
Second edition published 2008 includes:
• adjustments to methodology
• practical advice based on prior surveys and
additional tools and resources
• new guidance on international comparisons,
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policy options, advocacy and regular monitoring
Over 70 medicine price and availability surveys to date using
WHO/HAI methodology
Survey tools, data, reports & more:
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www.haiweb.org/medicineprices
Overview
1. International effort to improve medicine affordability
and availability
2. Generating reliable evidence: how to measure
medicine prices and availability
3. What have we learned about medicine prices,
availability and affordability?
4. Evidence to policy: what can be done?
6
How are data collected?
 Data on the price and availability of medicines are obtained by
data collectors during visits to "medicine outlets"
 Medicine outlets are places where medicines are dispensed to patients
(e.g. pharmacies, health centres)
 Data on government procurement prices are also collected
 During medicine outlet visits, data are recorded on hard copy
Medicine Prices Data Collection forms
 Medicine price components are also identified by tracking
medicines through the supply chain and identifying add-on
costs
 At the end of fieldwork, all completed forms are entered into the
electronic survey Workbook by data entry personnel
 Data are entered twice and checked for errors
 The Workbook automatically generates analyses of the survey data
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Where is data collected?
• Data is collected in 6 regions of the
country ("survey areas")
– Area 1 = capital city
– 5 other regions within 1 days’ travel
of capital, randomly selected
• In each survey area, data is
collected from a sample of medicine
outlets in up to 4 sectors:
– public sector (e.g. hospitals, health
centres)
– private sector (e.g. licensed
pharmacies, licensed drug stores)
– Up to 2 "other" sectors (e.g. mission
hospitals)
Plus, government procurement
data (collected centrally)
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What medicines are surveyed?
•
50 medicines
–
–
30 pre-determined by WHO/HAI to enable international comparisons (14 global
medicines and 16 regional medicines)
20 selected nationally for local importance
•
Predetermined dose forms & strengths, & recommended pack sizes
•
For each medicine, two products are surveyed:
1. Originator brand – original pharmaceutical product that was first
authorized for marketing, normally as a patented product
•
•
Always has a brand name
Identified centrally before data collection, does not vary from outlet to outlet
2. Lowest-priced generic (LPG) – products other that the originator brand
that contain the same active ingredient (substance), whether marketed
under another brand name or the generic name
•
•
generic with the lowest price found at each medicine outlet
LPG product will therefore vary from outlet to outlet
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How are data analyzed?
 Availability: % of outlets where medicine was found on the day of data
collection
 Price: median local prices expressed as ratios to international reference
prices
Medicine Price Ratio (MPR) =
median local unit price
International reference unit price
– e.g. MPR = 2 means that the local medicine price is 2x the international
reference price
– MSH international reference prices used: median prices of high quality multisource medicines recently offered to developing and middle-income countries by
different suppliers.
– Medicine must be found in at least 4 outlets for MPR to be calculated
 Price comparisons: originator brand and lowest priced generics; public,
private and other (e.g. mission) sectors; districts/states/provinces; countries
 Affordability: how many days wages would the lowest paid government
worker need to spend to pay for treatment? Based on the median local 10
price
of a medicine prescribed at a standard dose
Price Components
• The add-on costs that are applied to medicines as
they move through the supply chain, from
manufacturer to patient
• Crucial to understanding why prices are high and
what policy options can be considered
• Identified by tracking 5-7 tracer medicines
backwards through the supply chain, from the
patient price to the manufacturer’s selling price/CIF
price
• Method also involves interviews with pharmacists,
wholesalers, importers, Ministry of Health, Ministry
of Trade, Customs office, local manufacturers….
• Price components are analysed by cumulative per
cent mark-up and per cent contribution to the final
price
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Overview
1. International effort to improve medicine affordability
and availability
2. Generating reliable evidence: how to measure
medicine prices and availability
3. What have we learned about medicine prices,
availability and affordability?
4. Evidence to policy: what can be done?
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Median % availability by World Bank income group
A Cameron, M Ewen et al, The Lancet online 1 Dec2008
public sector
generics
private sector
generics
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private sector
originator brands
Median government procurement prices,
lowest priced generics
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Public sector patient prices
• In many countries medicines are free but availability is
often very poor
• Where patients pay, even cheapest generics can be
expensive e.g. in the Western Pacific Region the median
price was about 12x international reference prices
• Good procurement prices are not always passed on to
patients
• In some countries, public sector prices are similar to
private sector prices, e.g. China, Shanghai
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Differences between originator brands & lowest priced generics,
matched pairs, private sector
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Affordability: mean number of days wages of the lowest paid
unskilled govt. worker needed to buy 60 glibenclamide 5mg tabs,
for diabetes, in the private sector (by WHO region)
n=4
WPR
n=3
n=8
SEAR
Lowest priced generic
n=8
Originator brand
n=4
EUR
n=1
n=11
EMR
n=7
n=1
AMR
n=7
AFR
n=7
0
1
2
3
4
5
No. of days' w ages
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7
8
9
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Cumulative percentage mark-ups between manufacturer's selling
price and final patient price, private sector
Country
Total cumulative % mark-up
China (Shandong)
11-33%
El Salvador
165-6894%
Ethiopia
76-148%
India
29-694%
Malaysia
65-149%
Mali
87-118%
Mongolia
68-98%
Morocco
53-93%
Uganda
100-358%
Tanzania
56%
Pakistan
25-35%
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Overview
1. International effort to improve medicine affordability
and availability
2. Generating reliable evidence: how to measure
medicine prices and availability
3. What have we learned about medicine prices,
availability and affordability?
4. Evidence to policy: what can be done?
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General observations
• One finding can have many causes:
• Low public sector availability: lack of resources or underbudgeting; inefficient procurement / distribution, low
demand/slow-moving products
• High private sector prices: high manufacturer’s selling price,
high import costs, taxes and tariffs, high mark-ups
• Mix of policies needed to improve availability
and affordability; evolutionary
• Need to be part of the National Medicines Policy
(National Health Policy and Constitution)
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Many policy options exist
•
Improve procurement efficiency (e.g. national pooled purchasing, procurement by
generic name)
•
Ensure adequate, equitable, and sustainable financing, e.g.
– Health insurance systems that cover essential medicines
– schemes to make chronic disease medicines available in the private sector at
public sector prices
•
Prioritize drug budget, i.e. target widespread access to a reduced number of
essential generic medicines, rather than attempting to supply a larger number of both
originator brand and generic medicines.
•
Promote generic use:
– preferential registration procedures, e.g. fast-tracking, lower fees
– ensure the quality of generic products
– permit generic substitution and provide incentives for the dispensing of generics
– educate doctors/consumers on availability and acceptability of generics
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I DON’T TAKE CHANCES
I ONLY USE ORIGINALS
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Many policy options exist
• Separate prescribing and dispensing
• Control import, wholesale and/or retail mark-ups through
regressive mark-up schemes
• Provide tax exemptions for medicines
• Where there is little competition, consider regulating
prices
• Patented medicines
– use the flexibilities of trade agreements to introduce generics
while a patent is in force
– differential pricing schemes whereby prices are adapted to the
purchasing power of governments and households in poorer
countries.
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Kenya: increased financing and differential pricing have
increased the availability of Artemether/lumefantrine 20/120 mg
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Must watch for unintended negative effects
• Price controls may lead to excessive prices
when the price is not adjusted to consider
changes in the market
• Setting prices too low can discourage
production/stocking of a product
• Regulating mark-ups can provide incentive to
sell higher-priced products
• Eliminating taxes can provide an opportunity for
retailers to increase their margin (i.e. savings not
passed on to patient)
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BUT……are these the best policies for
improving access to affordable medicines???
Our current challenge: what are the most
effective policy actions in different contexts?
WHO/HAI and international price policy experts are
developing guidance on options for policies affecting
medicine prices and their impact in various settings:
- developed a policy ‘landscape’
- commissioned a series of policy review papers: 6 will
be published by mid-2010, more to follow
- policy briefs & electronic policy analysis tool
- identify research needs
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