Price, availability and affordability of medicines international comparison in 30 countries

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Price, availability and affordability of
medicines international comparison in 30 countries
Richard Laing PAR/PSM World Health
Organization, Geneva Geneva December 13th 2006
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Problems of medicines and their prices

• Medicines have variable prices, often high and
  unrelated to countries income levels
• Medicines are often unaffordable for individuals
  and are a major burden on government budgets The
  burden frequently falls on patients in developing
  countries while in developed countries insurance
  often covers the cost of medicines.
• The availability of medicines is often poor,
  especially in public sector facilities
• Trade agreements may severely affect the price
  and availability of medicines
• Many developing countries have no pricing
  policies or regulation
• But little is known about the actual prices
  people pay and how these prices are set, from the
  manufacturers selling price to the patient
  price.
• Prices of medicines are well above their
  production costs, and that there is great scope
  for reductions to improve access..

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WHO/HAI Project on Medicine Prices

• Developed a methodology for collecting and
  analysing the prices of medicines, affordability,
  availability and component costs in various
  sectors and regions in a country
• Data freely accessible on HAIs web site so
  international price comparisons are possible
• www.haiweb.org/medicineprices
• A monthly monitoring tool, measuring prices,
  availability and affordability, is currently
  being piloted - will complement the survey tool

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Survey tool data collection

• Systematic sampling of 5 public and 5 private
  medicine outlets in at least 4 areas,
• Prices of 30 pre-selected commonly used medicines
  
• Predetermined dose forms strengths,
  recommended pack sizes
• Supplementary lists are encouraged, adapted to
  local needs
• Prices of innovator brand and lowest price
  generic are collected
• All components of price from manufacturer to
  retailer are identified

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Survey tool analysis

• Price calculated as Median Price Ratio (MPR)
  actual price compared to MSH International
  reference price
• Availability calculated as number of facilities
  having that product at time of survey reported as
  a percentage
• Affordability assessed for ten pre-selected
  courses of treatment compared to daily wage of
  lowest paid government worker
• Excel workbook, for data entry and analysis,
  accompanies manual

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How prices are expressed

• Median price ratio
• ratio of median unit price across facilities
  surveyed
• by an international reference price
• International reference price
• external standard for evaluation of local prices
• recommend using Management Sciences for Health
  Drug Price Indicator Guide
• web-based, prices relatively stable, updated
  annually
• Note
• MPR only calculated if medicine found in at least
  4 facilities
• Availability affordability all data included

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Surveys underway or completed

• Middle East Lebanon, Jordan, Kuwait, Syria,
  Sudan,
• Africa Tunisia, Algeria, Morocco, Mali, Chad,
  Uganda, South Africa, Tanzania, Kenya, Ethiopia,
  Zimbabwe, Mozambique, Nigeria, Ghana, Cameroon,
  Senegal
• Asia/Pacific Pakistan, Indonesia, Philippines,
  Malaysia, Fiji, China (Shandong), Vietnam, India
  - West Bengal, Haryana, Karnataka, Maharashtra
  (2), Chennai, Rajasthan
• Central Asia Mongolia, Kazakhstan, Tajikistan,
  Kyrgyzstan, Uzbekistan
• Other Peru, Dominican Republic, Bosnia
  Herzegovina
• 43 surveys in 37 countries 9 pilot studies

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Surveys included in secondary analysis

• AFRO Cameroon, Chad, Ghana, Kenya, Mali, South
  Africa (Kwazulu Natal State), Uganda
• AM/PAHO Brazil (Rio State), Peru
• EMRO Kuwait, Lebanon, Jordan, Morocco
• EURO Armenia, Kazakhstan, Tajikistan
• SEARO India - West Bengal, Haryana, Karnataka,
  Maharashtra (2), Chennai, Rajasthan, Indonesia,
  Sri Lanka
• WPRO China (Shandong), Fiji, Malaysia, Mongolia,
  Philippines

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Comparing Prices across Countries

• Only valid to compare median MPRs for price or
  availability if identical or very similar basket
  of medicines compared
• Better to compare MPRs of individual identical
  medicines (same dose and dosage form)
• Prices from different years adjusted to 2003
  reference prices
• For comparing affordability need to compare
  identical treatment regimens

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Diabetes Medicine data Glibenclamide 5mg tabs

• Government procurement prices availability
• Public sector patient prices availability
• Private retail pharmacy patient prices
  availability
• Affordability
• Combination therapy glibenclamide metformin

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Glibenclamide 5mg tabs (generics)Government
procurement prices
MPR (corrected with IPR MSH 2003)
Median 0.82
Min 0.27
Max 5.15
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Glibenclamide 5mg tabsPublic sector patient
prices
MPR (corrected with IPR MSH 2003)
Max 26.47
Min 0.94
Median for Generic 4.49
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Glibenclamide 5mg tabs, patient prices Private
retail pharmacies
Min 1.6
Median for Innovator 32.1
Median for Generic 6.1
Max 79.4
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Availability Glibenclamide 5mg tabsPublic
sector facilities
()
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Availability Glibenclamide 5mg tabsPrivate
sector facilities
()
()
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Affordability one months treatment,
glibenclamide 5mg twice daily, public sector,
lowest paid unskilled govt worker
Days' Wages
Max 6.2
Min 0.1
Median for Generic 0.7
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Affordability one months treatment,
glibenclamide 5mg twice daily, private retail
pharmacies
Days' Wages
Median for Generic 0.5
Median for Innovator 1.4
Max 8.4
Min 0.1
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Combination glibenclamide 5mg x 2 daily
metformin 500mg x3 daily for a month,
affordability, private pharmacies
Days' Wages
Median for Generic 1.0
Median for Innovator 4.15
Max 13.2
Min 0.2
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Asthma Medicine data Salbutamol 0.1mg/dose, 200
dose inhaler

• Government procurement prices
• Public sector patient prices availability
• Private retail pharmacy patient prices
  availability
• Affordability
• Combination therapy salbutamol beclometasone

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Salbutamol (generics)Government procurement
prices
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Salbutamol 0.1mg/dose inhalerpublic sector
patient prices

• Free Uganda, Kuwait, Lebanon, Morocco, India,
  Malaysia
• MPR
• Shandong China 2.29 (innovator brand)
• Kazakhstan 1.57 (innovator brand)
• Peru 2.12 (lowest priced generic)
• Tajikistan 1.01 (lowest priced generic)

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Median Innovator 0Median Generic 5
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Median Innovator 1.2 daysMedian Generic 0.7 days
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Median Innovator 5.5 daysMedian Generic 2 days
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• Price issues
• Some huge differences within countries between
  innovator brand and generic prices brand
  premiums. Is this a problem for patients? YES
  if
• the generic is not available
• the medicine is patented and faces no competition
• the brand is sold to increase profits
• medicine prescribed by brand name and
  substitution not permitted
• Some large differences within countries between
  brand generic prices, and the international
  reference price
• The wide variation in retail price for the same
  product across countries
• Public sector sometimes purchasing expensive
  innovator brands

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Malaysia 2003
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Add-on component costsshown as actual costs,
private sector
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Add-ons do they matter?

• add-ons vary tremendously both in type and
  quantity
• e.g. in some states in India lt40, in Peru gt
  100
• pharmacy profits largely based on mark-ups
• variable range 15 to 55, Malaysia and
  Uganda gt 100
• governments in some countries are taxing the sick
  by applying high import taxes and adding VAT/GST
  eg Peru - 12 import tax and 18 VAT are added
  Tajikistan - removing taxes duties would
  reduce total additional costs from 82 to 32
• a small component cost applied early in the
  distribution chain can contribute significantly
  to the final price as most add-ons are applied as
  percentages, the higher the manufacturers price,
  the higher the price to the patient
• Both manufacturers prices and add-on costs
• need to be lower to improve access to essential
  medcines

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Affordability

• Not only is the innovator brand unaffordable in
  many countries, but sometimes also the generic
• Affordability could be improved through
• availability of generics in the public sector (in
  most but not all countries)
• therapeutic selection
• In some countries such as Tajikistan prices can
  be acceptable but wages are extremely low so
  medicines are unaffordable

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Availability issues

• Some cases, based on facilities surveyed
• - no generics found for older products
• e.g. beclometasone inhaler in Philippines (2002
  2005)
• valproic acid in Malaysia
• - some important medicines not found at all
• e.g. phenytoin in Tajikistan
• In many countries where medicines are free in the
  public sector, availability is extremely low
• In private sector high priced innovator may be
  only product available

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Possible options to lower prices (1)

• EDLs purchase low priced quality generics for
  off-patent medicines
• Regional pooled procurement with open tenders
• Patented medicines equitable prices, use the
  flexibilities of trade agreements to introduce
  generics while patent is in force
• Aid generic competition eg fast-tracking, waiving
  registration fees
• Stop taxing and charging duties on essential
  medicines
• Where there is little competition, goverments
  should consider regulating prices - from
  manufacturers selling price to margins in
  wholesale and retail.

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Possible options to lower prices (2)

• Pharmacists remuneration linked to service not
  value of medicines dispensed
• If mark-ups used, stimulate dispensing of cheaper
  generics
• Standard treatment guidelines
• Educate doctors and consumers on availability and
  acceptability of generics
• Prescribe by INN and have a generic substitution
  policy
• Separate prescribing and dispensing

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Characterizing Policy Issues arising from Price
Surveys
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Synthesis Studies

• Regional Medicines and Pricing policies with
  Impact Assessments
• Therapeutic Group Synthesis and Policy and
  Programmatic Options
• Components synthesis studies (including
  comparisons with OECD countries)
• Global Cross cutting Policy Issues Studies
  Synthesis (How do tax, duty or price control
  policies vary and Impact on price and
  availability)

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Linkages with other Initiatives or Programmes

• MeTA and WHO/HAI
• National Health Accounts and Price Surveys
• MDGs and Price Surveys
• OECD Study on Medicine Prices

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Related Survey or Study Activities

• Raw Materials Sources, Prices and Availability
• Investigating low availability in public sectors
• Price Component knowledge and dissemination
  (Addressing Information Asymetry)
• Effect of Exemptions

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Policy IssuesTransferring Experiences

• Price Control Options and Effects (?OBIG
• Generic promotion policies
• Generics and Quality Issues
• Learning from other Advocacy Implementation
  Experiences (e.g. Tobacco, Land Mines, GFATM,
  Asthma, Transperancy International )

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• Medicine Prices web-site
• www.haiweb.org/medicineprices