Dr. Dele Abegunde
Medicines Access and Rational Use

Access to pharmaceuticals essential to healthcare
25 -70% of health spending in the developing countries,
10-18% in OECD countries
Relatively low marginal cost of unit of pharmaceutical production not translating to consumer surplus
Marginal cost of consumption at point of need for most consumers in the developing countries is way greater than zero.
Less that 3% of population in low-income countries have some forms of insurance cover
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Total pharmaceutical expenditure: 0.2 – 3.8% of GDP
TPE share of Total Health expenditure vary up to between 25 – 36% OECD countries. Likely higher in LIMC countries?
Share of TPE from external sources increase from 12% in 2000 to 17% in 2006 in LMIC, 22% in the 49 least developed countries.
80% global TPE spent on 18% of population: May suggest regressive global financing scenario
Medicines financing remain regressive in LMIC: Medicines are largely financed through OOP – only about 3% have access to some forms of insurance mechanism
Market failures justify public intervention
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Regulation for cost containment and equitable financing is weak in many countries
Global recession threatening to dry up traditional funding sources
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WHO has partnered with HAI for about a decade
Medicines pricing surveys: up to 70 so far
Development of policy guidance
Global activities:
WHO Regions: EMRO, WPRO, PAHO countries and
NGOs such as the OBIG/PPRI, OECD, MeTA etc.
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Innovative medicines financing schemes and tools
Pooled procurement
Patent pooling
Bilateral AIDS and donations
Air ticket tax
Sin tax – tobacco and soda etc
Players- financial intermediation
GF, UNITAID, PEPFAR, GDF, GAVI, Bilateral, Task force for Innovative financing . . . . . . . . . . .
Estimating real impact?
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Market impact analysis?
Structural impact?
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Distorted view of total essential medicines financing with inputs to specific disease programs by donors
Reduced government contributions to health and medicines
Constrained technical capacity in countries
Political will
Global economic (financial) crisis
Human resources
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Healthcare systems
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Response so far resonates more with the supply side of pharmaceutical market
Expanding response to the determinants of demand; opportunity to advance development of response to inaccessibility and low affordability of medicines synergize with work so-far
Empowers consumers to increase access to essential medicines
Enhance positive consumer behaviour towards use of essential medicines
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Goal:
To ensure that medicines are available and affordable for all populations
Purpose:
Encourage and support the development, strengthening and implementation of global, regional and national actions aimed at greater availability and improved affordability of medicines
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Stimulate the commitment of governments, international organizations and others to address the issues surrounding medicine financing, pricing and availability
Increase global awareness of the main issues surrounding financial management of pharmaceuticals, including prices, availability and affordability.
Intensify advocacy for equity in access to essential medicines
Promoting medicines financing schemes that targets empowering the poor
Advocate for high-level government support for country-level action
Promote and facilitate measures to manage and contain medicine prices
Collaborate with professional associations, scientific institutions, governmental and NGOs.
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Develop practical guidance on the implementation of policies and other interventions for managing medicine prices and availability, including pharmaceutical financing and reimbursement systems.
Convene international experts to review evidence for policy programmatic options
Support the regular publication of medicine price data: transparency, information sharing, and tool for price negotiations and decision-making.
Develop tools to guide and assist policy and decision makers to navigate the broad mix of policy options and implementing home-grown interventions.
Disseminate information on policies and other interventions.
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Build national capacity for evidence-led development, adoption, implementation and monitoring of policies and interventions for improving the access to and the financing of, essential medicines, and the evaluation their impact.
support the collection and management of country information provide technical support for the development, implementation and evaluation of national policies and interventions
Facilitate dialogue and information exchange among policy- and decision-makers,
Advocate and support processes of pharmacoeconomic evidence-led decision making.
Facilitate and support the process of developing, establishing and evaluating medicines finance strategies
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Support operational research in a broad spectrum of relevant areas, including the determination of and refinements of financing norms, measurement of price, availability and affordability, and evaluation of interventions
Promote the consistent use of standard methodology for medicine price and availability
measurement: WHO/HAI survey protocol
Encourage and support periodic surveys and routine monitoring of medicines prices, availability and availability
Conduct secondary and subset analyses of medicine price, availability and affordability
Data: disease group, treatment, country and region.
Support operational research into the effectiveness of various policies and interventions in different contexts. 12

Financing of medicines
Normative exploration of TPE – collaboration with University of Brunel the UK and experts
Preliminary explorations into adaptation of the developments in Micro financing to improving economic access to essential medicines:
Micro insurance, Community health funds, Mutual health organizations, Rural health insurance, Revolving drug fund, Community involvement in user-fees
Management
Advocating for and promoting the expansion of existing insurance coverage particularly to include out patient prescription
Promoting developments to improve the incorporation of pharmacoeconomic values into medicines policy
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National, country model a.k.a Macro model
Maximize
Health welfare = Ʃ Cost of Medicines j
X Treatment needs
Subject to: j budget constraints (GDP, budget allocation, income from cost recovery)
Availability constraints (supply and distribution) constraints
Health system constraints
Public/private market participation
Budgetary model
Total Cost = Ʃ Cost of Medicines (C j
) X Quantity (Q j
)
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Household (consumer) model aka Micro model
Out of pocket from household wealth, budget, social capital, etc.
Medicines compete with: other healthcare services and product
Food security
Other household demand – education, transportation, shelter etc household investment
Demand for medicines is inelastic
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Imperfections:
Asymmetrical information
Supplier induced demand
Justification for public intervention in the funding of medicines
Most advanced countries
Pooled risks:
Public insurance and reimbursement systems - tax based, premium based,
Labour insurance or Government insurance schemes.
Private insurance systems.
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Most developing countries:
Out of pocket expenditure – over 90%
Public provision – weak at best
Some forms of insurance coverage especially community health financing schemes
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Measures Targets
1 supply-side measures
2 proxy demandside measures
1. Manufacturers
2. Providers
3. Middle market
1. Prescribers: physicians, nurses, CHEW
2. Pharmacists, dispensers
3 demand-side measures.
1. patients
Mechanisms
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Challenges: Formal sector, limited cover to the larger informal sector
Community health (medicines) insurance
Relatively untapped broad area of opportunities
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Generic expression that describes a variety of health financing arrangement:
Micro insurance
Community health funds
Mutual health organizations
Rural health insurance
Revolving drug fund
Community involvement in user-fees management
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Community finance schemes
– This market is evolving in the contest of:
• Government failure to organize taxes, public finance, provision of social protection to vulnerable populations and to exercise oversight over the health sector.
• Market failure to offer effective exchange between demand and supply
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Strength
Social capital
Pre existing community institutions
Interconnectivity between local communities
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Limitations to overcome to serve the community well
Lack of insurance and reinsurance mechanisms to spread risk over larger population
Isolation from formal financing and provider networks
Have difficulties in mobilizing enough resources to cover costs of priority health services for the poor
Limited ability to encourage prevention or use of therapies effectively
Rely on management staff with limited professional training.
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• five key policies available to governments to improve the effectiveness and sustainability of existing community financing schemes. subsidized premiums of low-income populations
• insurance to protect against expenditure fluctuations and re-insurance to enlarge the effective size of small risk pools
• effective prevention and case management techniques to limit expenditure fluctuations
• technical support to strengthen the management capacity of local schemes
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4/17/2020 establishment and strengthening of links with the formal financing and provider networks.
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Microfinance Institutions (MFIs) – Alternative Finance
Institutions (AFIs).
Quality of financial services for poor and near-poor clients
Most have been not-for-profit non-governmental organizations
In addition to a financial objective, they also have a developmental or social
Objective
AFIs include state-owned agricultural, development, and postal banks; memberowned savings and loan institutions; other savings banks; low-capital local and/or rural banks; and specialized microfinance institutions and programs (MFIs) of varying types
There are over 750 million accounts in various classes of financial institutions that are generally aimed at markets below the level of commercial banks, and that some substantial fraction of these institutions' clients are probably poor or near-poor.
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Regional coverage (MFIs, AFIs)
Region
Africa (sub-Saharan)
East Asia and the Pacific
Europe and Central Asia
Latin America and the Caribbean
Middle East and North Africa
South Asia
% of Accounts
4
2
7
48
3
36
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Accounts by institutional types (AFIs)
Region
Postal Banks
MFIs
Credit unions and coops
Community Banks
State Agricultural development banks
% of Accounts
48
18
5
3
26
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• hypotheticated taxes, e.g. 'sin taxes' for tobacco and alcohol
• national and state lotteries dedicated to health
• public-private partnerships between governments and the private sector to co-fund health care.
• Other mechanisms are internationally focused, such as:
– the (recently proposed) International Finance Facility (IFF). This would frontload development assistance by selling government bonds secured by future aids flows
• debt for health swaps, in which external government debt is converted into domestic debt, thereby resulting in less pressure to generate foreign exchange for debt service. A debt-for-health swap also represents an opportunity for a foreign donor to increase the local currency equivalent of a donation.
• the use of public-private partnerships to develop new products using capital markets.
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4/17/2020
Thank you for listening
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