Measuring medicine prices, availability,

1

• Measuring medicine prices, availability,
• affordability and price components
• Alexandra Cameron
• Department of Essential Medicines and
  Pharmaceutical Policies
• World Health Organization
• November 2008

2
WHO/HAI Project on Medicine Prices Availability

• improve the availability and
• affordability essential medicines
• Outcome of the WHO/public interest NGOs
  Roundtable on Pharmaceuticals
• Develop a reliable methodology for collecting and
  analysing price and availability data across
  healthcare sectors and regions in a country
• Price transparency survey data on a freely
  accessible website allowing international
  comparisons
• Provide guidance on pricing policy options and
  monitoring their impact

3
WHO/HAI standard methodology

• Survey tool to measure
• medicine prices
• medicine availability
• affordability of treatments
• components in the supply chain
• 1st edition launched at WHA 2003
• About 60 surveys conducted to date
• 2nd edition launched at WHA 2008
• adjustments to methodology
• practical advice based on surveys
• new guidance on international comparisons,
• policy options, advocacy regular monitoring
• additional tools and resources

4
Medicine price and availability surveys to date
using WHO/HAI methodology
Completed or nearing completion
Underway
5
How is the survey conducted?

• Trained data collectors visit a sample of
  "medicine outlets" and record information on the
  price and availability of selected medicines
• Data on government procurement prices are also
  collected
• During medicine outlet visits, data are recorded
  on hard copy Medicine Prices Data Collection
  forms
• At the end of fieldwork, completed forms are
  entered into the electronic survey Workbook by
  data entry personnel
• The Workbook automatically generates analyses of
  the survey data
• Medicine price components are also identified by
  tracking medicines through the supply chain and
  identifying add-on costs

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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
• Originator brand
• Lowest-priced generic equivalent (at facility)

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Where are data collected from?

• Patient price and availability data
• collected by data collectors visiting a sample of
  medicine outlets in up to 4 sectors
• public sector - health centres
• private sector - retail pharmacies
• 1-2 other sectors e.g. dispensing doctors
• Government procurement prices
• Centralised system collect from procurement
  office or Central Medical Store
• Decentralised at outlet level

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How is the sample of medicine outlets selected?

• 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
• the main public hospital 4 public outlets,
  randomly selected from those within a 3 hours
  drive of the main hospital, are selected
• the private sector outlet closest to each public
  outlet is selected
• The other sector medicine outlet closes to each
  public sector outlet is selected

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Sampling frame
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Survey structure
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Data entry, quality assurance analysis

• Training workshop pilot test for data
  collectors and supervisors
• At outlet visit, data are recorded onto the
  Medicine Prices Data Collection Form. Form
  checked that day by supervisor and verified in
  20 of outlets
• At the end of fieldwork, all completed forms are
  entered into the Excel Workbook by trained data
  entry personnel
• Data are entered twice and checked for errors
• Automated data checker identifies possible errors
• An additional data quality control check is
  conducted by HAI or WHO before posting on the
  website

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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
• MSH international reference prices used recent
  procurement prices offered by not-for-profit
  suppliers to developing countries for
  multi-source generic equivalent products.
• Medicine must be found in at least 4 outlets for
  MPR to be calculated
• Price comparisons innovator 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

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Price Components

• The add-on costs that are applied to medicines as
  they move through the supply chain, from
  manufacturer to patient
• Examples insurance freight costs, port
  inspection charges, handling charges, import
  duties, import, wholesale retail mark-ups,
  VAT/GST, dispensing fees
• The amount of charge is often variable depending
  on whether the medicine is
• Imported or locally manufactured
• Innovator brand or generic
• Sold in the public or private sector
• Crucial to understanding why prices are high and
  what policy options can be considered
• An integral part of the Medicine Prices survey

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Price components are analysed by stage of the
supply chain
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Price components methodology

• 2 parts
• Central level data collection on national
  policies that affect pharmaceutical prices
• Collected through interviews with pharmacists,
  wholesalers, importers, Ministry of Health,
  Ministry of Trade, Customs office, etc.
• Identification of the actual price components of
  selected medicines as they move along the supply
  chain.
• Identified by tracking 5-7 medicines backwards
  through the supply chain, starting from the final
  patient price
• At each stage (retailer, wholesaler etc) the
  charges applied to the medicine are recorded

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Price components data analysis

• Data are entered into the electronic survey
  Workbook standard analyses are automatically
  generated
• Price components are analysed by
• cumulative per cent mark-up how much greater a
  certain price is above the MSP
• contribution of each stage to the final price
• Comparisons by sector, region, medicine type
  (e.g. originator vs. generic, import vs. local)