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9M m9.1 BackgroundThe p i e pai o a me i ine omp ises a numbe o price components , the manu-a tu e s se ing p i e (MSP) being just one o them. As me i ines mo e a ong thesupp hain, om the manu a tu e to the patient, a itiona osts a e a e tothe MSP. These p i e omponents ome om a a iet o sou es, su h as eightosts, go e nment- o e te ta i s, taxes an ma k-ups o e te b mi emento meet thei o e hea s, an p o u ement p o e u es. Su h ees a e o ten high,egu a onstituting between 30% an 45% o the p i e o the ispense me i-ine but the an e en ex ee 100% ( 13 ). P i e omponents a e a on e n oa a to s in o e in pub i hea th an a ess to me i ines, om go e nments,nongo e nmenta o ganizations (NGOs) an so ia insu an e p ans to p es ibe s

an patients.P i e omponents ha e both a i e t an umu ati e impa t on the p i e o theme i ine. Sin e p i e omponents a e umu ati e (i.e. ea h is app ie to the un-ning tota ), ea h p i e omponent ises om the base (MSP) p i e on whi h asubsequent ha ges a e e ie . E en a e ati e sma p i e omponent ea in thesupp hain an ont ibute signi ant when its e e ts a e ompoun e as othep i e omponents a e app ie .

Go e nments ma not a wa s ha e a omp ete pi tu e o me i ine p i e ompo-nents be ause i e ent minist ies ma be in o e in pu hasing an ist ibutingessentia me i ines. Howe e , a u ate in o mation on the a ious p i e ompo-nents, in u ing the MSP, is nee e to e e op measu es that e u e the p i espai o me i ines, make ist ibution s stems as e ient as possib e an enab ee iab e inte nationa p i e ompa isons.

Be o e the WHO/HAI P oje t on Me i ine P i es an A ai abi it , the e was no meth-o o og to s stemati a o e t, ana se an ompa e in o mation on me i inep i e omponents. A u ate bu geting tota osts o se i e e i e an makinga e u p e i tions about how man patients an be t eate a e i u t withouta ea un e stan ing o the osts in u e in p o u ing, sto ing an ist ibutingme i ines. Un e iab e in o mation on me i ine p i es an the inabi it to ana sethei p i e omponents hampe go e nments om onst u ting soun me i inep i ing po i ies an e a uating thei impa t. It a so makes it ha o go e nments toete mine whethe thei me i ine expen itu e is ompa ab e to that o othe oun-t ies at a simi a stage o e e opment. Fina , those esponsib e o pu hasing

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M EASUrING M EdIc INE Pr Ic ES, AvAI lAB I l ITy, AFFOrdAB I l ITy ANd Pr Ic E c OM PONENTS

me i ines annot negotiate bette ea s be ause the ha e no soun basis omwhi h to sta t thei negotiation.

As pa t o the WHO/HAI me i ine p i es su e , in i i ua p i e omponents anthei impa t on me i ine p i es at the point o e i e a e being in estigate .

The ata o e te on p i e omponents an be use to e e op nationa pha ma-euti a po i ies, su h as eating tax an ta i exemptions, ont o ing ma k-upsan estab ishing go e nment- e ommen e se ing p i es, whi h aim to in easea ess to i e-sa ing me i ines.

The P i e components stu has two goa s. The st th ee-p onge goa is to he pthe pa ti ipant atego ize p i e omponent osts in the nationa hea th s stem;i enti those omponents with the most signi ant ont ibution to the na p i e;an e e op pha ma euti a po i ies that an e u e the p i e pai o ispenseme i ines. The se on goa is to gathe ata on the manu a tu e s se ing p i eo e iab e inte nationa p i e ompa isons. As with the ata gathe e on me i inep i es, a ai abi it an a o abi it , p i e omponent ata wi a so be poste on

the WHO/HAI Me i ine P i es web site, whi h wi p o i e g oba ma ket inte igen eo the manu a tu e s se ing p i es. The web site wi a so a ow inte nationa om-pa isons o me i ine p i es at i e ent stages o the supp hain.

Th pric c mp ts sur is i t r l p rt th m dici pric s sur .

9.2 overview o the price coMponents surveyMethodology

The p i e omponents ata o e tion metho o og has two pa ts: a pha ma euti-a po i in estigation at the ent a e e an esea h into a tua p i e ompo-nents a ong the me i ine ist ibution hain. WHO an HAI on u te an in- eptha i ation stu in th ee ount ies (Mo o o, Pakistan an Ugan a) in 2005 an ana itiona stu in New de hi, In ia, in 2007 ( 4 , 5 ), whi h on m the app op iate-ness o the metho o og .

data o e tion begins at the ent a e e whe e in estigato s gathe in o mation onnationa po i ies that a e t pha ma euti a p i es. This in u es:

in o mation on impo t ta i s on nishe p o u ts, in u ing exemptions o pa -ti u a p o u ts an o e tain bu e s;

nan ia ha ges in u e in impo ting pha ma euti a s, su h as ha ges o et-te s o e it at the ent a bank o ha ges o o eign u en t ansa tions;

po i ies on taxes e ie on me i ines, both a ong the supp hain an to the naustome ;

po i ies that ont o ma k-ups in the supp hain;

po i ies on qua it assu an e, as set b the minist o hea th, an asso iateha ges o an equi e qua it ont o tests;

the ent points o impo te me i ines into the ount as we as the po t eesan the osts o ustoms ea ing that a e in u e .

co e ting these ata wi equi e inte iewing sta in a ious minist ies an hea th-a e e i e s stems to i enti what ma k-ups a e a owe b aw an an est i -tions that a e impose on them ( o examp e, a maximum ma k-up).

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9 . M EASUrING Pr Ic E c OM PONENTS

The su e s se on pa t omp ises o e ting the a tua p i e omponents o se e te me i ines as the mo e a ong the supp hain. Sin e the e a e man possib e ist ibution outes an inte me ia ies, the su e begins at the en o the supp hain an t a ks ea h me i ine ba kwa s to the beginning. That is,esea he s must begin at the en o the supp hain at the ispensa ies in thepub i se to o etai pha ma ies in the p i ate se to an t a k the ta geteme i ine to the beginning o the supp hain the manu a tu e s o impo te s.

data a e o e te in at east the pub i an p i ate se to s, as we as an othe se to use in the me i ine p i es su e , in two egions. Fi e to se en me i inesa e t a ke om the time the a e p o u e om the manu a tu e unti the ea hthe patient. Me i ines a e se e te to efe t a ange o atego ies (e.g. sing e- anmu ti-sou e p o u ts, impo te an o a p o u e p o u ts) in whi h i e entp i e st u tu es ou be oun . Whe e possib e, ata a e o e te o both theo iginato b an p o u t an a gene i equi a ent o ea h me i ine.

At the ispensa ies o p i ate etai pha ma ies, in estigato s o e t in o mation

on the p o u ement p i e an the ispensing p i e, an i enti the who esa eo pub i se to supp ie o ea h me i ine. The a so note an ma k-ups, taxesan ispensing ees. On e in estigato s ha e isite a ispensing points the agg egate the who esa e in o mation to i enti whi h who esa e s shou be inte -iewe . Next the in estigato s isit these who esa e s an pub i se to supp ie s,an o e t in o mation on who esa e ma k-ups, o a ist ibution osts an an tax-es o e te . At the who esa e s/pub i se to supp ie s, in estigato s wi i enti the inte nationa supp ie o o a manu a tu e . In estigato s wi isit as man o the supp hain stages as possib e, an gathe as mu h in o mation on the p i eomponents as an be oun . data o e tion ontinues at ea h stage o the supp hain within the ta get ount , en ing with the impo te ( o impo te me i ines)an the manu a tu e ( o those me i ines that a e o a p o u e ).

The ata o e te on the omponents o me i ine p i es a e ana se a o ingto e ommon stages o the supp hain that a me i ines t a e se as the mo eom manu a tu e to patient:

manu a tu e s se ing p i e + insu an e an eight (Stage 1);

an e p i e (Stage 2);

who esa e se ing p i e (p i ate) o ent a me i a sto es p i e (pub i ) (Stage3);

etai p i e (p i ate) o ispensa p i e (pub i ) (Stage 4); an

ispense p i e (Stage 5).This atego ization a ows ompa isons both among hea th s stems an betweenount ies. The o e te ata a e ente e into the Price Components Data Entry page o the ompute ize wo kbook (Pa t II). The Price Components Data Analy-

sis page wi he p in estigato s stu the i e ent omponents an i enti thosewith the most signi ant impa t. The p i e omponents su e n ings shou bein u e as a ase stu in the gene a me i ine p i es an a ai abi it su e e-po t. As with othe su e ata, p i e omponents ata a e pub ishe on the HAIweb site o oss- ount ana ses o the manu a tu e s se ing p i es an p i eomponent st u tu es.

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R sults r m th pric c mp ts sur r pr s t d s c s stud , r th r th squ tit ti r s rch r sults.

9.3 overview o price coMponents

P i e omponents a among ount ies, among se to s o the hea th- a e s steman among me i ines. Fo examp e, e tain asses o me i ines (e.g. i e-sa ingme i ines) might be exempte om a ma k-up o the pub i se to might be ex-empte om e tain taxes an ta i s. Some ount ies a ministe o iginato b anan gene i a equi a ent me i ines i e ent . The o owing p i e omponentsa e ommon oun in the me i ine p i e hain:

MSP

Insu an e an eight

Po t an inspe tion ha ges

Pha ma euti a impo t uties

Ma k-ups b impo te s, who esa e s an etai ist ibuto s

va ue A e Tax (vAT)/Goo s an Se i es Tax (GST)

dispensing ees.

To un e stan the impa t o these omponent osts, the supp hain has beeni i e into e stages that me i ines t a e se as the mo e om manu a tu e topatient (see Fig. 9.1). The omponents in ea h stage a b ount , an ompo-nents a e in u e in i e ent o e s. Howe e , using the e-stage app oa h a owso ompa isons at the en o ea h stage among se to s an among ount ies.STage 1: MSP plus i sur c d r i ht . Fo o a p o u e me i ines, theStage 1 ost is the MSP o the e ommen e o su e e pa k size, p us (possi-b ) omesti t anspo t to the pu hasing entit . Fo impo te me i ines, the Stage1 ost is the MSP p us insu an e an inte nationa eight (cIF).

STage 2: L d d pric . The an e p i e in u es a othe p i e omponents thata ise u ing me i ine p o u ement an e i e to the p o u ement o e. Thisin u es banking ees o o eign u en pu hases, inspe tion ha ges (eithep e- o post-shipment), po t ees ( o king, sto age, han ing, insu an e in po t),ustoms ea ing, impo t ta i an impo te s ma k-up. An ees o e te ent a

a e iste he e, e.g. the Pha ma Boa ee. The an e p i e a so in u es o at anspo t ha ges to the ent a wa ehouse, the impo te o the who esa e butoes not in u e omesti sto age an ist ibution osts a te the me i ines ea ethe pu hasing wa ehouse.

STage 3: Wh l s l s lli pric (pri t ) r C tr l M dic l St r s pric (pub-lic) . The who esa e se ing p i e o cent a Me i a Sto es p i e is base on thean e p i e, an in u es eithe the who esa e s a itiona expenses o the en-t a wa ehouses o e hea osts, e.g. qua it ont o , sto age, han ing, o e heaexpenses (su h as sa a ies, se u it an ent) an p o t ma gin as we as o at anspo t to the etai e /hea th a i it . Man o these might be in u e in thewho esa e ma k-up; it is impo tant not to ount them twi e.

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STage 4: R t il pric (pri t ) r disp s r pric (public) . The etai (pha ma )se ing p i e is base on the who esa e se ing p i e, an in u es the etai e s/ispensa s a itiona expenses, e.g. sto age, han ing, o e hea expenses anp o t ma gin. Man o these expenses might be in u e in the etai e s ma k-up;it is impo tant not to ount them twi e.

STage 5: Disp s d pric . The ispense me i ine p i e in u es the Stage 4p i e p us an ispensing ees an an sa es taxes (vAT o GST), i app i ab e.Whe e the e is no ispensing ee o sa es tax app ie , the e a e no Stage 5 ostsan the p i e at the en o Stage 4 is the ispense p i e. Fu the mo e, in man pub i se to p og ammes the patient oes not pa ; the ost at the en o Stage 5is inten e to efe t the ost at the point o e i e , whethe to the hea th s stem,insu an e g oup o patient.


Fig. 9.1 i ust ates the stage app oa h to p i e omponents. di i ing the supp hain into stages in this wa has se e a a antages. The i ision into Stage 1 anStage 2 a ows ount ies to examine the MSP ost sepa ate om the osts o p o-u ing an an ing the p o u t. The i ision between Stage 2 an Stage 3 a owso ompa ison o the an e ost o the me i ine at the po t o at the impo te swa ehouse be o e it ente s the omesti ist ibution s stem. distinguishing be-tween the who esa e an the etai e se ing p i es (Stage 3 om Stage 4) a owsthe in estigato to examine the ma k-ups that o e the o e hea osts an p o tma gins o these a to s in the supp hain. The in o mation o e te in Stage 5is impo tant o un e stan ing ees the patient pa s that a e sepa ate om the

etai e s ma k-up, p us an taxes app ie at the etai e e .P i e omponent names a wi e between ount ies. The next se tion p o i esa ist o p i e omponents, with a e nition an an examp e o ea h. Use thesees iptions both as a gui e to what osts to ook o an to mat h the p i e om-ponents ou n in ou esea h. These a e the most ommon p i e omponentsis o e e to ate; othe ount ies might ha e i e ent ones.

9.3.1 St 1: M u ctur rs s lli pric + i sur c d r i ht

The Stage 1 p i e omp ises two p i es: a me i ines base p i e (MSP) an insu -an e an eight ha ges. Fo an impo te p o u t, this is the MSP p us osts o

insu an e an eight to the impo ting ount . Fo a o a p o u e me i ine, theStage 1 p i e is the MSP. de ning Stage 1 in this wa a ows o ompa isons o

Box 9.1

a m -

A ma k-up is a ha ge a e to the pu hasing p i e to o e the osts an ma gins o the who esa eo etai e . The ma k-up ma be a xe amount o a pe entage ha ge. In some ount ies, thego e nment sets a maximum who esa e o etai ma k-up. In othe ases, p i ing is un egu ate :the go e nment oes not est i t the ma gins an manu a tu e s, who esa e s an pha ma ies ma ha ge what the wish. Some ount ies app a ombination at the etai e e o a sma e xe ma k-up p us a set ispensing ee. Whe e a go e nment sets imits on ma k-ups but is not ab e to en o ethese imits, the esu t an be that who esa e s an etai e s ha ge highe ma k-ups than a owe b aw. But in e ompetiti e ma kets who esa e s an etai e s might o e t ess than the maximumma k-ups to gain mo e ustome s.

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p i es between impo te an o a p o u e equi a ent me i ines, an i enti esthe MSP.

Manu a tu e s se ing p i e (MSP)

The MSP is the p i e the manu a tu e ha ges o the me i ine.

Insu an e an eight

Insu an e an eight a e the osts o insu ing an shipping the p o u ts to theestination ount . Fo o a manu a tu e p o u ts, these omponents o notapp .

Shipping osts a e a ounte o in i e ent wa s. The p in ipa shipping te msa e:

exW: ex-W rks: The se ing p i e efe ts the p i e at the pu hase site. The bu e

is esponsib e o a insu an e an eight osts.FoB: Fr B rd: The se e is esponsib e o t anspo t to the po t o shipment

(in the expo ting ount ); the bu e is esponsib e o inte nationa shipping aninsu an e.

CIF: C st, I sur c , Fr i ht: The se e is esponsib e o eight to the estina-tion po t an in u es this ost in the se ing p i e; the bu e is esponsib e o in-su an e on e goo s a e oa e on the a ie an a osts a te a i a in po t.

DDU: D li r d Dut U p id: The se e is esponsib e o insu an e an eightto a name p a e o estination; the bu e assumes esponsibi it o insu an ean t anspo t, in u ing impo t uties, on e e i e e .

It is impo tant that in estigato s t to sepa ate the MSP om insu an e an eight,a though it might not a wa s be possib e. Manu a tu e s se the same p o u t toi e ent o ganizations o i e ent p i es: when the MSP is oup e with the ship-ping osts this is i u t to see. These p i e i e en es o u o man easons,among them: some p o u ement o es ha e bette negotiating ski s; some ha ebette a ess to ma ket inte igen e; an some a e being pena ize o a poo pa -ment histo . Sepa ating the MSP an the insu an e an eight wi a ow o mo ea u ate inte nationa p i e ompa isons.

MSP in o mation an be a ha enge to n (a though ount ies ha e manage too so), pa ti u a in the p i ate se to . Howe e , this su e s aim is to i enti itas a u ate as possib e. In the pub i an othe se to s, the in estigato shou

he k the awa e ten e p i e. Fo impo te p o u ts it is ne essa to he k i the ten e p i e is EXW, FOB, cIF o ddU. In the p i ate se to , the who esa e (s),the ustoms o e o the minist o hea th wi o ten be ab e to p o i e in o mationon the impo t p i e (Stage 1 p i e), whi h the know o ta i pu poses. Fo o a p o u e p o u ts, the MSP is the p i e that the who esa e o the pub i o p i atep o u ement agen pa s a o a manu a tu e . remembe that the e a e two si esto e e t ansa tion: one si e might be easie to app oa h than the othe .

9.3.2 St 2: L d d pric

The an e p i e is the ost o the me i ine a te it has a i e in a ount , has

ea e a ustoms an impo t equi ements, an is then t anspo te to the who e-sa e , the impo te o cent a Me i a Sto es. This stage a so in u es the p i eomponents that a ise om the p o u ement p o ess. The an e p i e the e o e


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in u es, among othe s, the MSP, insu an e an eight osts, inspe tion, impo tta i s, inspe tion an po t ha ges an o a t anspo t osts to the who esa e ,impo te o cent a Me i a Sto es. These a e es ibe be ow.

Finan e/banking eesP o u ing pha ma euti a s usua in o es a ge ten e s wo th mi ions o o a s.In estigato s shou ask about the ost o ette s o e it, the pu hase o o eign ex hange, spe ia o eign u en bank a ounts, ommissions anspe ia i en es o impo tation. Mo eo e , banks o ten equi e a u en eposito a ontingen ee to gua antee the a ai abi it o un s. contingen ees on be ome p i e omponents when the ontingen ee is o e te , but bank han ingo a minist ati e ees a e o ten o e te . In estigato s shou onsu t with aninte nationa bank to i enti these an othe nan ia osts.

Inte nationa inspe tion

P o u ts ossing bo e s a e inspe te to e i quantit , qua it , expo t ma ketp i e, impo t ustoms a ue an impo t e igibi it . Inspe tion an be a ie outeithe p io to shipment o upon a i a in the e ei ing ount . Fees o inspe tiona e eithe base on a pe entage o the o e a ue o a e a minimum fat ee (usu-a o sma o e s). The inspe tion ee is pai eithe b the impo te /bu e o ,in the ase o p e-shipment inspe tions, an be in u e in the se ing p i e. P e-shipment inspe tion ees a e o ten abe e SGS ees. In estigato s shou he kwith the ustoms o e an the minist o t a e to n these osts.

I sp cti s r sp ci l c s wh lli i th C ll cti sh t d th w rkb k. I rd rt ll w c mp ris s ll i sp cti s, u r sk d t r c rd b th pr -shipm t d i -c u tr

i sp cti s s St 2 pric c mp ts.

Impo t ta i o ut

I the e is an impo t ta i , it ma app to a impo te me i ines o the e might bea s stem to exempt e tain p o u ts an pu hase s. In estigato s shou he kwhethe an impo t ta i is e ie on the ta get me i ines. In a ition, he k whethe

the same e e o tax o ut app ies to a p o u ts. Exemptions o i e entp o u ts, i e ent se to s, an i e ent e i e p og ammes shou be epo te .(Note that impo t tax o ut ma a so app to impo ts o aw mate ia o o ap o u tion, but this is outsi e the s ope o this stu . you an mention this in thena epo t.) In estigato s an he k with an tax o ia about ta i s that app tome i ines.

Impo te s ma k-up

The impo te pu hases pha ma euti a s inte nationa an se s them omesti-a to a ious hea th s stems. The impo te s wi a a ma k-up to o e theiosts an p o t. Impo te s osts in u e o a sto age ( ent, uti ities, sta ),o a t anspo t, pa kaging an ma keting. When isting the impo te s ma k-up, takea e not to oub e ount osts e o e e sewhe e (e.g. the impo t ta i ). I the

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impo te s ma k-up is go e nment- egu ate in ou ount , p ease note that a tin ou na epo t.

Po t an ea ing ha ges

Othe ha ges ma be o e te to o e su h osts as ea an e, tempo a sto -age, stamp ut , han ing an insu an e in po t. Go e nments ma ha ge o o u-mentation, su h as ata o e tion o statisti a pu poses. In estigato s shouinte iew impo te s to i enti these osts.

Pha ma boa ee o nationa ug autho it ee

A pha ma boa ee is a ha ge on me i ines (pe entage o xe ee) o e tein some ount ies that goes to the pha ma boa ( oun i ) o simi a bo , othe nationa ug egu ato autho it . In some ount ies, this ee is app ie to ame i ines, whi e othe s app it on to impo te me i ines o o a manu a tu e

me i ines. The pha ma boa ee shou not be on use with the egist ationee o e te b the nationa ug egu ato autho it to egiste a p o u t o usein ount . The pha ma boa ee is base on o ume o numbe o pu hases,whi e the egist ation ee is a one-time (o on e a ea ) pe item ee. che k withthe pha ma boa , as we as the minist ies o hea th o t a e an the me i asto es to n the pha ma boa ee. I the pha ma boa ee a ies b atego o me i ine (i.e. essentia o non-essentia ), these a iations shou be e o ein the na epo t.

Qua it ont o testing

Me i ines a e o ten teste as ea h new bat h a i es in the ount (o at the p o-u ement o e) to ensu e that the meet qua it stan a s. The osts o unningthese tests, o o e ting samp es o ea h bat h o me i ine an o sto ing it oate ompa ison an be a -on osts.

Qua it ont o ees i e om othe p i e omponents be ause thei ost has ai e t bene t to the patient; the a e inten e to gua antee the p o u ts qua it .These p i e omponents show that a p i e omponents o not ha e to be e imi-nate , but simp a ounte o . It is impo tant to i enti these osts, to in easeo e a t anspa en in p i ing an to e u e the han e o hi ing othe p i e om-ponents behin the aim that the a e ne essa o sa egua ing the me i inesupp . Me i ine qua it ont o osts shou not be e iminate , but the shou beose examine . che k with the nationa ug egu ato autho it .

T anspo t osts

Stage 2 t anspo t osts ep esent the ost o mo ing goo s om the po t o ai po t( o impo te me i ines), om the impo te (i app i ab e) o om the a to ( oo a p o u e me i ines) to the who esa e s wa ehouse o ent a me i asto es. che k with impo te s, who esa e s an ent a me i a sto es on theseosts.

Othe ees an ta i s

Man ount ies ha e a itiona ees an ta i s that o not a into the abo e at-ego ies. Examp es in u e the de en e le that use to be o e te in S i lankaon a impo te me i ines, the consu a In oi e whi h is use in cent a Ame i a, o


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ees o hea th, sa et an te hni a stan a s o umentation a ompan ing ea ho e . P ease es ibe a othe ees an ta i s in u e a te pu hase an u -ing Stage 2 o the supp hain in etai in ou na epo t, being su e to es ibea iations b p o u t o se to .

The minist ies o hea th, t a e an nan e, as we as ustoms, the me i a sto esan p i ate se to impo te s shou be ab e to i enti a itiona ees an ta i s.

Nationa taxes

Some ount ies o e t nationa , state an /o o a taxes on the p o u ement o me i ines. These taxes a e o e te in a ition to the Goo s an Se i es Tax(GST) o va ue A e Tax (vAT) pai b the na pu hase .

I the e is a nationa tax e ie on goo s bought b the impo te o supp ie , ist itin Stage 2. che k with the minist o nan e, impo te s, an me i a sto es. GSTan vAT a e han e spe ia , an a e is usse in Stage 5 be ow.

9.3.3 St 3: Wh l s l s lli pric r c tr l m dic l st r s pric

The who esa e se ing p i e is the tota ost at the en o Stage 2, p us the who e-sa e s osts an p o t ma gin, as we as an osts o mo ing the me i ines omthe who esa e to the etai e an an egiona taxes that a e app i ab e. In thepub i se to (an o ten the othe se to ), this is the p i e o the goo s when the ea e the cent a Me i a Sto es. In the p i ate se to , this is the p i e when theme i ine ea es a who esa e .

Who esa e ma k-up

The who esa e ma k-up is the pe entage a e b the who esa e o cent a Me i-a Sto es to o e o e hea osts. These osts en ompass o e hea expensessu h as ent, se u it , e e t i it , sta sa a ies an oss. In some situations, itin u es osts to t anspo t me i ines to etai e s. In the p i ate se to , the ma k-up a so in u es a p o t ma gin; in the pub i an mission se to , the ma gin anp o i e apita o utu e in estment o o e un o eseen in eases in osts (e.g.infation o e a uation).

I the me i ines mo e th ough mo e than one who esa e on thei wa to thepatient, mu tip e who esa e ma k-ups might be e ie . This ten s to happen asme i ines mo e om ent a , u ban a eas to mo e u a ones. ( 6 )

In some ount ies, the go e nment app ies a ei ing o maximum pe entage im-iting the ma k-up that a who esa e an a . In some ases, this ma k-up is noten o e an mu h highe pe entages an be obse e . Whe e app i ab e, boththe maximum a owab e ma k-up an the a tua obse e ma k-up shou bees ibe in the na epo t.

regiona o state taxes

Some ount ies o e t state o egiona taxes on me i ine p o u ement. Thesetaxes a e o e te in a ition to the nationa taxes is usse abo e, an the GSTo vAT the na pu hase pai .

I the e is a egiona tax e ie on goo s bought b the who esa e o me i a sto es,ist it he e. che k with the minist o taxation, who esa e s an me i a sto es.GST an vAT a e han e spe ia , an a e is usse in Stage 5 be ow.

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T anspo t osts

Stage 3 t anspo t osts in u e the ost o mo ing goo s om the wa ehouse(who esa e ) to the point o e i e ( etai e ) o , in the pub i se to , om the en-t a o egiona me i a sto es to the hospita pha ma ies/ ispensa ies o hea th

post.In the pub i se to an in some othe se to s (e.g. hu h mission se to ), me i-ines a e ist ibute om a ent a wa ehouse i e t to hea th a i ities o iaegiona an /o ist i t sto age a i ities. Ma k-ups an be ha ge b a egionasto e as we as the ent a sto e, so he k this in o mation.

9.3.4 St 4: R t il pric (pri t s ct r) r disp s r pric (public s ct r)

The Stage 4 p i e omponents in u e the etai e s/ ispensa s a itiona ex-penses, e.g. sto age, han ing, o e hea an p o t ma gin. The etai se ing p i eat the en o Stage 4 efe ts the tota ost to the pub i se to ispensa o p i-ate se to pha ma , in u ing o e hea osts an p o t ma gin.

retai ma k-up

The etai ma k-up is the pe entage that etai e s (pha ma ies) a to o e theiosts, in u ing thei p o t. These osts in u e those o e hea osts that etai e sin u in thei p a ti e, su h as ent, sta sa a ies, epa kaging an oss, as weas p o t. retai ma k-ups a e not imite to the p i ate se to : the pub i an othese to s an a so use ma k-ups to o e thei osts.

Ma k-ups an a between p o u ts: impo te an o a p o u e me i ineso ten ha e i e ent ma k-ups. Pha ma ies ma a so ha ge i e ent ma k-ups ono iginato b an s an gene i a equi a ent p o u ts. In some ount ies, o exam-p e, the ma k-ups a e highe on gene i equi a ents be ause, e en with the ma k-up, the a e onsi e e to be a o ab e. I this app ies in ou su e a ea, it shoube epo te in the na epo t.

In some ases, the go e nment app ies a ei ing o maximum pe entage imitingthe ma k-up that a etai e an a . Howe e , it is a so ommon to n that thisma k-up is not en o e an mu h highe pe entages an be oun in p a ti e.Whe e app i ab e, both the maximum a owab e ma k-up an the a tua obse ema k-up shou be es ibe in the na epo t.

In some ount ies, the e ma be i e ent maximum ma k-ups o i e ent p i eban s: this is a e a eg essi e ma k-up an means that the ma k-up e easesas the p i e o the me i ine in eases. I this is the ase, ente the app op iatema k-up o ou ta get ug in the wo kbook, an es ibe the ange o the ma k-ups stem in the na epo t.

In ount ies whe e p i es a e not egu ate o whe e egu ations a e not en o e ,the e might be g eat a iation in etai ma k-ups. I me i ines a e so in the in o -ma se to (me i ine out ets), p i e a iations an be e en g eate . (In this stu ,in estigato s a e on equi e to o e t in o mation in one etai estab ishment pese to : howe e , i in estigato s a e awa e o these a iations, the a e en ou ageto es ibe the a iations an the su e e estab ishments in thei na epo t).


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lo a o town taxes

Some muni ipa ities o e t o a o town taxes on me i ines. These taxes a e o -e te in a ition to the nationa an state taxes is usse abo e, an the GST ovAT the na pu hase pai .

I the e is a o a tax e ie on goo s the etai e o hea th post bought, ist it he e.che k with the minist o taxation, etai e s an pub i se to hea th posts toi enti these taxes. remembe that GST an vAT a e han e spe ia , an a eis usse in Stage 5 be ow.

9.3.5 St 5: Disp s d pric

At Stage 5 o the supp hain, the p i e omponents a e the vAT, GST an an ispensing ees that a e o e te when the me i ine is ispense . These p i eomponents a e in u e in the su e , ega ess o whethe the patient, the pub-i se to , an insu an e o ganization o anothe institution pa s o the me i inebe ause the a e sti a omponent that aises the na ost o me i ine e i e .

va ue A e Tax (vAT) an Goo s an Se i es Tax (GST)

vAT an GST an be e ie on sa es. These taxes a om ount to ount , ana so om state to state within a ount . In man ount ies, me i ines o e tainse to s a e exempte om vAT o GST; in othe ount ies, vAT is o e te at ea hstage o the supp hain. Ea h pa ti ipant in the supp hain pa s ost p us vAT,an then a s vAT to its se ing p i e. The vAT is thus e un e to the pa ti ipantso that the na pu hase is the on one who pa s vAT. In these ases, vAT shouon be e o e as a Stage 5 ost an shou not be iste on ea h inte me iate

sa e a ong the supp hain. Simi a , i the go e nment eimbu ses vAT app ie inthe ist ibution hains inte me iate stages, it shou not be ounte . Howe e , i vAT is app ie in mo e than one stage o the ist ibution hain an this amount isnot e o e e in the se ing p i e o eimbu se b go e nment, then it shou beounte in ea h app op iate stage. In some ount ies, GST is ha ge on me i-ines. As with vAT, on the tax a e to the na p i e shou be e o e .

dispensing ees

Pha ma ies ma be a owe to ha ge a ispensing ee pe item ispense o pep es iption e . The ee is inten e to efe t the wo k in o e in han ing a p e-s iption; it is not a o to s ee o se i e. The ispensing ee an take a iouso ms: a pe entage ma k-up, a ee pe item o a ee pe p es iption. dispensingees an a so a o o iginato b an an gene i o mu ations.

dispense me i ine p i e

In estigato s shou e o the na ispense me i ine p i e pai b the napu hase . This ou be the patient, the go e nment o an insu an e p o i e . Foount ies that use a maximum etai p i e (MrP), in estigato s shou he k i thepatient pa s the MrP o i a i e ent p i e is ha ge , an note this in the epo t.

In othe ases, the go e nment sets a maximum etai p i e, an it is e t to thewho esa e an etai e to ag ee on thei espe ti e ma k-ups. I the e is a maximum

sa es p i e o ou ta get me i ines, epo t whethe the ispense me i ine p i eis i e ent om the maximum sa es p i e in ou na epo t.

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9.4 costs that are not included in price coMpositionanalysis

The o owing me i ine p i e omponents shou not be in u e in the p i e om-

ponents ana sis.

regist ation ees

The nationa me i ines (o ugs) egu ato autho it ma ha ge a ee when ap o u t is egiste e in the ount , p us a enewa ee o as ong as the p o u tis on the ma ket. Sin e these ees a e ha ge on when a ma ket autho ization isissue o as an annua ee, an a e in epen ent o the quantit o me i ine so ,the shou not be in u e he e as a p i e omponent.

Patient ees o se i e

In o mation on the o owing ha ges shou not be in u e in the p i e ompo-nents su e :

ees o se i es othe than the ost o the me i ine (an the ispensing ee)su h as the o to s onsu tation; an

t a e expenses o a patient to ea h a ispensing site.

Howe e , i these ees a e a signi ant bu en o the patient the shou be is-usse in the na epo t.

Whe e a stan a ha ge (e.g. a ee o the onsu tation/ ee o se i e, in u ingme i ines) is set o a patients in pub i hea th a i ities, this in o mation shoube in u e in the su e epo t.

co-pa ments

A o-pa ment is a pa ment an in i i ua makes, usua at the time a me i ine isobtaine , to o set pa t o the me i ine an /o ispensing ost. Sin e o-pa mentsma not be uni e sa app ie (e.g. i e ent ees ma be ha ge o i e entasses o patients), an a e usua not e ate to the a ue o the p o u t being

supp ie , these ha ges a e not in u e in the p i e omponents ana sis.

In o ma ha ges

The e ma a so be in o ma ha ges about whi h no in o mation is pub i a ai a-b e. The on wa o measu ing them is b househo su e s (inte iewing patientsat home) o exit inte iews (inte iewing patients when the ea e the pha ma oo to ). Su e s o this kin a e not o e e he e, but an be e e ope as sepa-ate p oje ts. Howe e , pa ti ipants a e en ou age to es ibe a itiona in o maha ges in thei na epo t.

dis ounts an ebates

Manu a tu e s an supp ie s sometimes ewa bu e s with is ounte p i es 1 o ebates. 2 dis ounts a e a so sometimes o e e to patients, with pha ma ies


1

A is ount an take se e a o ms, in u ing: 1) a p i e e u tion gi en to ustome s at the ate o sa e; 2)bonus ea s: a itiona units supp ie to ustome s be ow ist p i e; 3) sa e o equipment at a e u e ate;4) ont ibutions to sa a ies o othe in enti es o se i es.

2 A ebate is a pa ment ma e b the se e to the pu hase a te the ate o sa e.

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e u ing the p i e o a me i ine (e.g. o ustome o a t ); o e ing the patient anon-me i a p o u t at a is ount when a me i ine is pu hase ; o o e ing otheewa s an enti ements.

dis ounts an ebates a e not un ommon, an an be p o i in some ount ies.

O ten the a epen ing on the me i ine o the patient. In man ount ies, it isext eme i u t to o e t in o mation on the is ounts an ebates being o -e e , an in su h ases these shou be ex u e om the p i e omponentssu e . Howe e , in some ount ies is ounts an ebates a e stan a ize anin o mation is mo e ea i a ai ab e. Fo examp e, a p i e omponents stu inNew de hi, In ia, oun e i en e o bonus ea s (e.g. bu nine get one ee) onpha ma in oi es ( 3 ).

I it is possib e to o e t in o mation on is ounts an /o ebates, then theseshou be in u e in the p i e omponents su e . That is, the shou be notein the comments o umns o the P i e components data co e tion o m an thePrice Components: Data Entry page o the wo kbook. The shou a so be is usse

in the na epo t, i ea in u ing a sepa ate ana sis that shows thei impa t ona ious p o t ma gins in the supp hain.

Manu a tu ing p i e omponents

P i e omponents exist in a supp hains, in u ing those o the mate ia s nee -e to manu a tu e essentia me i ines o a . Fo examp e, the e a e impo t ta i san sa es taxes on aw a ti e pha ma euti a ing e ients; the ex ipients an thema hine use in manu a tu ing; o a ist ibution ha ges to t anspo t supp iesto the a to ; an ope ating osts to o e ent, e e t i it an business taxes.

count ies with a signi ant o a p o u tion apa it might be inte este in p o u -

tion ine p i e omponents. Howe e , the goa o the p i e omponents su e is toun e stan the MSP as it e ates to the osts to ist ibute me i ines to the point o e i e the p i e omponents o ist ibution. Un e stan ing the MSP an manu-a tu ing p i e omponents equi es a i e ent t pe o ana sis, in u ing assigningin i e t a to osts to in i i ua tab ets an amo tizing osts a oss a subset o o a p o u e me i ines. It is a so ike that it wou not be possib e to ana semanu a tu ing p i e omponents be o e a omp ete ana sis o ist ibution p i eomponents ha been omp ete . Thus, p i e omponents a e est i te in thissu e to the p o u ement an ist ibution o nishe p o u ts.

9.5 planning the price coMponents survey

9.5.1 M ti with th d is r c mmitt

An a iso ommittee meeting is essentia in p anning the p i e omponents su -e . The meetings obje ti es in u e:

i enti ing the goa s o the p i e omponent su e an the in o mation to o e t;

e ei ing a i e on whi h me i ines to t a k an whi h p i e omponents tosu e ;

gaining insight into me i ine p o u ement an supp hains in a ious se to s;an

is ussing an p anning ata o e tion, name : i enti ing ke in o mants, e-te mining how the shou be app oa he an b whom (this ou in u e a i-so ommittee membe s).

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The a iso ommittee o the p i e omponents su e ou be the same as thato the gene a me i ine p i es an a ai abi it su e , o ou be a sub ommitteewith pa ti u a know e ge o the me i ines supp hain in a ious se to s.

9.5.2 P rs l

Fin ing p i e omponent in o mation an be i u t an equi es spe i expe tise.Sin e gathe ing ata on p i e omponents wi equi e inte iewing go e nment, p o-u ement an nan ia o ia s, esea he s shou ha e expe ien e in qua itati eesea h, spe i a in on u ting open-en e inte iews. Some p i e omponentsmight be onsi e e t a e se ets that pa ti ipants a e not wi ing to e ea : o ex-amp e, a who esa e might not be wi ing to pub ish his ma k-up o ea o osing us-tome s. resea he s wi the e o e nee goo in estigati e an inte pe sona ski s,in u ing an inquisiti e, non-th eatening app oa h. The a so equi e an un e stan -ing o the e ationships an the po iti a situations in thei ount , an shou i ea be e ognize in the pha ma euti a se to . In estigato s o the a iso ommitteeshou ha e onne tions that an a i itate obtaining meetings with ke in o mants.

Su e pe sonne om the gene a me i ine p i es su e an be use o the p i eomponents su e p o i e that the ha e the ne essa ski s an a e a ai ab eu ing/ o owing the gene a me i ine p i es su e . The su e manage is themost ike to possess the ski s ne essa to on u t p i e omponents ata o -e tion. In ases whe e the su e manage a ks the ne essa ski s o is subje tto time onst aints, sepa ate su e pe sonne wi nee to be e uite to on u tthe p i e omponents su e ; possib someone om the A iso committee.

Two peop e shou un e take ata o e tion isits o a ious easons, amongwhi h is to ensu e that omp ehensi e notes a e taken u ing inte iews. The ata

o e tion team an be ompose o the su e manage an an a ea supe iso ,pa ti u a when o a know e ge o a egion is equi e . A te nati e , the su e manage ou on u t the inte iews with a membe o the a iso ommittee, owith a esea he e uite spe i a o the p i e omponents su e .

9.5.3 S ki d rs m ts

As with the gene a me i ine p i es su e , a signe , o ia ette o en o sementan be o g eat he p in a ing out the p i e omponents su e . A samp e etteo en o sement, shown in Annex 2, is in u e as a Wo e on the cd-rOM oo a mo i ation as app op iate. WHO wi a so p o i e a ette o en o sement on

equest.

9.5.4 Pl i tim li

The p i e omponents su e an eithe be on u te at the same time, o a tethe gene a me i ine p i es su e . con u ting both su e s simu taneous wiequi e ess time an esou es, sin e su e teams wi on nee to t a e to thee on e. Fo examp e, a ea supe iso s an o e t ata on p i e omponentsu ing the a i ation isits on u te as pa t o the gene a me i ine p i es su -e . Howe e , on u ting the p i e omponents su e a te the gene a me i inep i es su e has the istin t a antage that the samp e me i ines an a i itiesan be se e te base on the esu ts o the me i ine p i es an a ai abi it su e .Fo this eason, it is st ong e ommen e that the p i e omponents su e beon u te i e t a te the gene a su e .


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Tab e 9.1 be ow p esents a samp e time ine o a ti ities o the p i e omponentssu e . It is un e stoo that o ia s a e bus an appointments might not o uin this o e , an that mo e time might be nee e o e tain a ti ities. In a ition,ount ies might ha e othe o ganizations to be a e to the inte iew ist. Mu tip emeetings with e tain stakeho e s might a so be nee e , i.e. two o th ee manu-a tu e s, o o ow-up meetings with the same in o mant. Expe ien e om p e iousp i e omponents su e s shows that meetings at the ent a e e equi e at eastone u hou an sometimes two hou s; th ee meetings a a is the e o e ea isti .An emaining time shou be use o the team to e iew ata o e te on the a ,o obo ate that team membe s hea the same thing an t ans ibe notes.

9.5.5 Pl i wh r t c duct th stud

The p i e omponents su e in u es two t pes o ata o e tion: ent a atao e tion on o ia po i ies e ate to p i e omponents, an t a king spe ime i ines th ough the supp hain to i enti a -on osts. cent a ata o e -tion gene a takes p a e in the main u ban ent e, though isits to ke in o mantso ate in othe a eas ma be equi e . Me i ine t a king is on u te in two o the six su e a eas whe e the gene a me i ine p i es an a ai abi it su e wason u te , name

the main u ban ent e; an

one a itiona su e a ea.

The a itiona su e a ea shou be u a an shou be o ate as a om theu ban ent e as possib e. This wi ensu e that ata a e o e te on the ma k-upsb inte me ia ist ibuto s an on o a ist ibution an sto age osts as me i-ines mo e out to the ist i t an hea th ent e e e s. I ea , the a itiona su e a ea shou a so ontain mu tip e etai e s, so that a te nati es a e a ai ab e i oneetai e oes not ag ee to pa ti ipate.

T 9.1 S p t o p o po ts s v

Day TaSk DeTailS

12 Planning Survey planning meeting with advisory committee. Select regions, sectors, dispensing sites andmedicines to be surveyed. Identi y key in ormants and schedule appointments or data collectionvisits. Seek endorsements, prepare data collection orms and plan travel.

3 Training/briefng Training o national team. Meeting with private sector pro essional (e.g. wholesaler), who can giveprivate system overview.

48 Central data collection Meet with ministries o health, fnance and trade, WHO, pricing authority, drug regulatory authority,manu acturers association, pharmacists council, tax consultant, importers, Central Bank, transport company, pharmacy sellers association, quality control laboratory.

911 Medicine tracking (capital) Data collection at dispensing sites: public and mission health centres and retail pharmacy. Collect central data rom procurement agents, Central Medical Stores, local manu acturers.

1214 Medicine tracking Data collection at dispensing sites: public and mission health centres, and retail pharmacy. Identi y(rural area) and visit other resellers , procurement agents, local manu acturers and local wholesalers.

1516 Medicine tracking (capital) Visit wholesalers and collect data.1720 Analysis Data analysis.

21 Clarifcation Day or additional meetings to clari y data, as necessar y.22 Synthesis Meeting o advisory committee to review results, develop recommendations and consider urther

research.

2324 Write-up Report writing.

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9.6 selecting the Medicines to Be surveyed

resea he s shou se e t e to se en me i ines that i uminate p i ing po i iesin thei ount . Some ount ies ma nee to su e a itiona me i ines i it isknown that ma k-ups an othe a -on osts a a o ing to i e ent atego ieso me i ines. Ta geting mo e than se en me i ines omp i ates ata o e tion inbus etai pha ma ies.

Whe e a me i ine p i es an a ai abi it su e has been on u te , the esu tsshou be use to se e t me i ines with high p i es, an /o a iab e p i ing pat-te ns. Ta get me i ines shou be se e te om the g oba an egiona o e istso me i ines in u e in the me i ine p i es su e (th ee to ou om the g obaist an two to th ee om the egiona ist). Ta get me i ines shou a so ha e highuse/sa es o umes an shou be ommon oun in a se to s su e e . depen -ing on the o a situation, the me i ines se e te shou a so o e atego ies o me i ines that wi p o i e the u ange o p i ing st u tu es. These shou in u eboth impo te an o a p o u e me i ines, whe e these exist. Othe atego iesan in u e:

sing e-sou e, mu ti-sou e an imite -sou e (e.g. AcTs) p o u ts;

Nationa Essentia Me i ines list (NEMl) an non-NEMl me i ines;

p i e- ont o e an non-p i e ont o e me i ines;

taxe an tax-exempt me i ines;

t eatment o a ute an h oni on itions;

a ious o mu ations (tab et, iqui , inje tion); an

a u t an pae iat i t eatment/ai ment.

In some ount ies, it ma be use u to se e t a me i ine use in pub i hea theme gen ies o p o i e b inte nationa ono s su h as the G oba Fun to FightAIdS, Tube u osis an Ma a ia, sin e these ma be exempte om e tain ma k-ups. These ata an a so he p to p an bu get equi ements to sto e an ist ibutethese onate me i ines.


Wh c ll cti prici d t , pric c mp ts sh uld b sur d i b th th urb c tr d rur l r i t c ptur th ull t t p ssibl m rk-ups b middl m .

It is us ul t dr t t bl sh wi th ch r ct ristics th m dici s s l ct d r thc mp ts sur , d t i clud it i th l r p rt.

data wi be o e te on both the o iginato b an an a gene i equi a ent, whe ethese exist. The gene i p o u t shou be the owest-p i e gene i most om-mon oun u ing the me i ine p i es an a ai abi it su e . I this me i ine isnot a ai ab e at a ispensing site, the owest-p i e gene i p o u t a ai ab e at the

ispensing site shou be use .

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Up to 7 me i ines, with 2 p o u t t pes pe me i ine, in up to 4 se to s, esu ts ina tota o 56 possib e items to t a k pe egion, as i ust ate in Tab e 9.2. But it isun ike that a o ms a e a ai ab e. The pub i se to in man ount ies sto ks on gene i s, an man sing e sou e me i ines wi not ha e a gene i equi a ent.

T 9.2 D t to o t d

MaIn URBan CenTRe

Med 1 Med 2 Med 3 Med 4 Med 5 Med 6 Med 7

P Generic Generic Generic Generic Generic Generic GenericOriginator Originator Originator Originator Originator Originator Originator

P v t Generic Generic Generic Generic Generic Generic GenericOriginator Originator Originator Originator Originator Originator Originator

Oth 1 Generic Generic Generic Generic Generic Generic GenericOriginator Originator Originator Originator Originator Originator Originator


aDDITIonaL RegIon (RURaL SURvey aRea)

Med 1 Med 2 Med 3 Med 4 Med 5 Med 6 Med 7

P Generic Generic Generic Generic Generic Generic GenericOriginator Originator Originator Originator Originator Originator Originator

P v t Generic Generic Generic Generic Generic Generic GenericOriginator Originator Originator Originator Originator Originator Originator



9.7 selecting dispensing sites (Medicine outlets)to survey

In t a king me i ines th ough the supp hain, ata a e o e te o a se to s inthe p i e su e (pub i , p i ate se to s an othe se to s).

In ea h egion, at east one ispensing site is su e e pe se to . Su e sitesa e se e te be o e ata o e tion begins, om the a i ities use in the Me i ineP i es su e . Se e tion o a i ities shou be base on the o owing ite ia:

A /most o the ta get me i ines we e a ai ab e at the time o the me i ine p i essu e

Me i ine p i es we e oun to be outsi e the no ma ange (e.g. outsi e inte -qua ti e ange)

Pha ma ist (o a i it sta ) at the ispensing site we e oope ati e an wou beike to pa ti ipate in a itiona ata o e tion

con enien e/ easibi it pub i an othe se to a i ities an be se e te baseon thei p oximit to a p i ate se to out et satis ing the abo e ite ia.

Fo u a a i it : me ium to ong supp hain.

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cent a ata o e tion

i enti ing in o mants an setting up appointments

on u ting inte iews p o ess an te hniques

onso i ating an s nthesizing ata equent en ounte e p ob ems an how to a ess them ( o e p a

exe ises, e.g. un oope ati e ministe )

Me i ine t a king

the p i e omponents ata o e tion o m

me i ine t a king p o ess an te hniques

equent en ounte e p ob ems an how to a ess them

data ent

data ana sis

repo t w iting.

du ing the t aining session, substantia gui an e shou be p o i e on on u tingp i e omponents inte iews, sin e spe i ski s a e equi e when obtaining whatan sometimes be pe ei e as sensiti e in o mation. T aine s shou emphasizethe o owing:

Upon a i a o the inte iew, the inte iewe s shou int o u e themse es,exp ain the isits pu pose, an p o i e in o mants with a op o the ette o en o sement an business a s (whe e app op iate). Inte iewe s ma a sowant to eassu e omme ia in o mants that thei on entia it wi be main-taine .

Inte iewe s shou exp ain the su e s obje ti es, name to imp o e a ess toa o ab e me i ines o a b esea hing me i ine p i es an ha ges a ongthe supp hain.

It is use u to st ess that the supp hains iabi it is a ke onsi e ation in thiswo k.

To estab ish a ia ogue, esea he s shou begin the inte iew b asking gen-e a , a tua questions about the un tion o the inte iewees o e.

Inte iewe s wi nee to gauge the in o mants inte est an manage is ussionsa o ing . I time is sho t, esea he s shou o us on the ke obje ti es an

iti a in o mation to be obtaine .Abo e a , it is impo tant to un e stan an be sensiti e to ea h in o mants o ein the me i ines supp hain.

The wo ing o e i ate questions must be a e u se e te . du ing t aining,it ma be use u to p o i e examp es o the ight an w ong wa s o asking thesame question.

Th oughout the inte iew, a ow the inte iewee time an spa e to question thesu e team o exp ess thoughts/opinions.

Being ab e to isten to an in o po ate the inte iewees opinions into the ques-tioning wi bui a ommon g oun o u the is ussion.

It ma be use u to ask the inte iewee to p o i e examp es o spe i me i inesto i ust ate omp ex po i ies o p i ing o mu as.

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At the inte iews on usion, esea he s shou ea e oom o ongoing om-muni ation. It is o ten ne essa to onta t in o mants a se on o thi time toa i the in o mation obtaine an /o e i in o mation om othe sou es.

9.10 planning data collection visits

As mu h as possib e, ata o e tion appointments shou be p anne in a an e.resea he s shou a o ate time to p an an s he u e meetings with bus p o es-siona s be o e the su e begins. This app ies to ent a e e isits to o e t in o -mation on nationa pha ma euti a po i ies, as we as to isits to ispensing pointsin the pub i , p i ate an othe se to s to t a k ta get me i ines th ough the supp hain. Note that in t a king me i ines, the pub i pu hase s, who esa e s, impo t-e s an manu a tu e s to be isite wi be i enti e as ata o e tion p og esses;as su h it wi not be possib e to make these appointments in a an e.


e p ri c sh ws th t u c bt i m r i rm ti i u r qu st pp i tm t r th r thisiti with ut pri r tic t wh t m b th busi st tim d .

P e ious su e s ha e shown that onne tions with ke onta ts a e impo tant ose u ing ata o e tion isits. Membe s o the a iso ommittee shou suppo tthe esea he s in setting up appointments with ke in o mants. An o ia ette o en o sement ma a so assist in se u ing appointments. It is impo tant to bui sup-po t o the esea h b exp aining the p oje t an its goa s. Emphasis shou bep a e on un e stan ing p i e st u tu es in o e to in ease ount wi e a essto me i ines, o a peop e, whi e maintaining the iabi it o the supp hain.

Within ea h o ganization/asso iation/ ompan to isit, onsi e ation shou begi en to the most app op iate in o mant to inte iew. A mi - e e sta membe ma ha e a bette un e stan ing o a -to- a ope ations than a ministe o hie exe u-ti e o e (cEO), ma be mo e a essib e an ma ha e mo e time a ai ab e. It ansometimes take two o th ee phone a s o isits be o e n ing the ight pe sonto ta k to. When setting up appointments, inte iewees shou be aske when thebest time is to isit in o e to a oi peak hou s o a ti it .

It will pr b bl b si r t sp k t imp rt rs r m u ctur rs t r d t h b c ll ct dr m wh l s l rs d r t il rs s th t th r s rch r lr d h s u d rst di th issu sth t wh l s l rs d r t il rs c .

9.11 data collection

The o owing se tion p o i es gui an e on the two t pes o ata o e tion in thep i e omponents su e : ent a ata o e tion on o ia po i ies e ate to p i eomponents, an t a king spe i me i ines th ough the supp hain to i enti

a p i e omponents. Tab e 9.3 p o i es a ist o ommon p i e omponents anpossib e sou es o in o mation.

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T 9.3 P o po ts d poss so s o o t o

TariFF/Ta x POSSible SOurc eS OF inFOrmaTiOn

STage 1

Manu acturers selling price (MSP) Manu acturers list prices ( rom wholesalers) , Public sector tenders, customs declaration orms,local manu acturers

Freight and insurance charges Importers, customs declaration ormsMinistry o health tenders

STage 2

Finance/banking ees Ministry o fnance, Central bankInternational inspection Drugs/Medicines regulatory authority, Ministry o tradePort charges, clearance Customs, Importers, Medical storesQuality control testing Ministry o health, Procurement o fce, Quality assurance/Drug testing labImport tari or duty Customs, Ministries o health, trade, fnance, Medical stores, ImportersImporters mark-up Importers, Wholesalers, Ministry o tradePharmacy council/Board ee Pharmacy board/associat ion/council, Ministries o health, trade, fnance, Medical storesOther ees Ministries o health, trade, fnance; Medical stores, Importer s, WholesalersNational taxes Ministry o fnance

STage 3

Transportat ion costs Importer s, WholesalersMinistry o health, Medical stores

Wholesale mark-up, o fcial (hypothetical) Wholesaler, Ministry o health, retailers, Pharmacy board/association/council, Medical stores,Ministry o health

Wholesale mark-up, observed in the feld Wholesaler, retailer Medical stores

Quality control costs Wholesaler, Medical stores, Quality assurance/Drug testing laboratoryRegional taxes Ministry o fnance

STage 4

Retail mark-up, o fcial (hypothetical) Retailers, Drugs/Medicines regulatory authority, Pharmacy board/associat ion/council,Ministry o health

Retail mark-up, observed in the feld Retailers /Health acilitiesLocal or town taxes Retailers, Ministry o fnance

STage 5

VAT/GST Retailers, Ministry o fnanceDispensing ees Pharmacies, Ministries o health or trade, Pharmacy board/associat ion/councilCost to patient Retailers

Othe sou es o in o mation that ha e p o en use u in ount ies that ha e on-u te p i e omponents su e s in u e:

o a ep esentati es o mu tinationa pha ma euti a ompanies;

the WHO o a ep esentati e;

in epen ent tax atto ne s ( o tax o e) (meetings with tax an impo t expe tswhose business is not ex usi e in pha ma euti a s an be e p o u ti e);an

the pha ma euti a manu a tu e s asso iation.

9.11.1 C tr l d t c ll cti ti l ph rm c utic l p lici s

At the ent a e e , in o mation wi be o e te on go e nment po i ies an egu a-tions that a e t p i e omponents. resea he s wi isit minist ies, the ustomso e, the ent a bank, the pha ma boa an othe s o this in o mation. Annex6 ontains a ist o ke in o mants to inte iew as pa t o ent a ata o e tion, the

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ke obje ti es o the inte iew, an samp e questions to ask. Un o e ing se e a o these p i e omponents wi equi e goo in estigati e ski s, ete mination an nu-me ous questions. The in o mation gathe e at the ent a e e wi be ompa e tothe p i es epo te in the e to see whi h po i ies a e imp emente an whethethe a e en o e .


It m b us ul t st rt with isit t wh l s l r r r t il r wh will b clud d r m th pricc mp t sur t sk r r i w th ph rm c utic l m rk t i th t c u tr .

9.11.2 C ll cti d t l th suppl ch i

In the se on phase, in estigato s wi o e t ata a ong the pub i , p i ate anothe supp hain in the main u ban a ea as we as in one a itiona su e a eause in the me i ine p i es su e . Pa ti ipants wi begin at the en o the supp hain, at the ispensing point o ea h se to , an t a k the ta gete me i inesba kwa s a ong the supp hain to thei point o o igin, e o ing the p i e om-ponents in u e . Pa ti ipants wi isit ispensing a i ities, etai e s, who esa e s,pub i se to pu hase s, o a manu a tu e s an impo te s in thei in estigationso the p i e omponents. Note that some o the ata o e te might ont a i tata o e te at the ent a e e . In onsisten ies an i uminate the s stem st u -tu e an s stem ope ation an shou be e o e .

Fo ea h ta get me i ine, t a k both the o iginato b an p o u t an the ow-est-p i e gene i p o u t most ommon oun u ing the me i ine p i es ana ai abi it su e . Note that in some ount ies with a a ge gene i manu a tu ingapa it , it ma be app op iate to o e t ata on b an e gene i s in a ition to/in p a e o o iginato b an s. I the owest-p i e gene i p o u t is not a ai ab e ata gi en ispensing site, o e t ata on the gene i p o u t with the owest p i e atthat site.

In the p i ate se to an some othe se to s (e.g. ispensing o to s) it is ne es-sa to sta t at the en o the ist ibution hain (the etai pha ma ) an wo kba kwa s to i enti who esa e s an manu a tu e s. In the pub i an missionse to s, howe e , the ist ibution hain is known an ata an the e o e be o -e te in eithe i e tion. Fo examp e, it ma be mo e e ient to isit the cent aMe i a Sto es u ing ent a e e ata o e tion, e en though pub i se to is-pensing sites ha e not et been isite .

Manu a tu e s o impo te s a e ike to be supp ing me i ines to mu tip e who e-sa e s, an simi a who esa e s wi be supp ing mu tip e etai e s. A te ou isita the ispensing units in a su e a ea, ompi e a ist o who esa e s an the p o -u ts the han e. I the e a e egiona who esa e s, isit them at this time. I the ea e ent a who esa e s, wait unti ata o e tion in both su e a eas is omp ete,then ompi e a ist o ent a who esa e s an the p o u ts the han e p io toon u ting isits.

as u w rk b ckw rds thr u h th distributi ch i , it is us ul t c s lid t th d t c ll ct d,. . b k pi ru i list th wh l s l rs u d t isit d th m dici d t u d tc ll ct r m th m.

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Whe e e possib e, t to obtain o umentation o the p i es ou a e quote , e.g.th ough pape in oi es o ompute s stems. va uab e in o mation on the manu a tu -e an ist ibuto is o ten gi en on the pa kaging an on pa kage inse ts. Se on a ata, su h as manu a tu e s web pages o othe Inte net sites, an a so be a use usou e o in o mation. Note that mu tip e names on pa kaging an be on using e.g.when a p o u t is impo te but the abe ing is one o a . Su h ases wi equi e a -i ation in o e to i e entiate between impo te an o a manu a tu e p o u ts

Box 9.2

h

P i e omponents a e t both si es o a t ansa tion. Bu e s wi negotiate a owe pu hase p i eso that the an a a highe ma k-up; se e s wi ask o a highe ma k-up o a g eate gua anteeo ume o sa es to sa egua thei p o t. It is he p u to ask the same question o both si es o thepu hase an sa e: who esa e s equent know what etai ma k-ups a e, an etai e s un e stanwho esa e ma k-ups.

It is a so use u to ask the same questions se e a times. This an in u e asking one question o se e a who esa e s, as we as making epeat phone a s to one who esa e an asking i e entsta the same question. E en i ou be ie e ou ha e the answe , it is wo thwhi e he king othepa ti ipants pe eptions. This shou in u e both those in o e with pha ma euti a s an thosewho a e not: po t sto age ha ges o banking ees a e the same ega ess o the impo t item.

Ask a question e en i ou think ou know the answe . Ea h pa ti ipant might ha e a i e ent iewo the same issue.

n t r rdi mpti s

M c u tri s mpt c rt i m dici s r c rt i s ct rs r m ri ust ri s d s. F r mpl , c u tr mi ht mpt li -s i m dici sr m m rk-up. D t d ds r ls t mpt r m s r l t ri s, buti cur pric c mp ts such s tr sp rt, st r d i sur c .

P ssibl mpti s i clud :

some or all of the medicines on the essential medicines list; medicines for public health programmes; some or all of the medicines on the public tender; medicines imported by NGOs or the mission sector; and donations.

I sti t rs sh uld ch ck wh th r th ir t r t m dici s d s ct rsr mpt r m s r t ri s. I dditi , i sti t rs sh uld ch ckwh th r th s m l l t r dut ppli s t ll pr ducts. e mpti s rdi r t pr ducts, di r t s ct rs, d di r t d li r pr r mm s sh uldb r p rt d. n t th t imp rt t r dut m ls ppl t imp rts r wmaterial for local production; these data are not currently being collected, butc b pr s t d i th l r p rt.

9.12 the price coMponents data collection orM

The P i e components data co e tion o m, oun in Annex 7 an on the cd-rOMthat a ompanies this manua , is use to o e t ata in the e . A sepa ate o mshou be omp ete o ea h me i ine, o ea h spe i p o u t t pe, se to an

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egion being su e e . Pa ti ipants shou photo op o p int the equi e numbeo opies o the p i e omponents ata o e tion o m. Be ause the me i ines a et a ke ba kwa s a ong the supp hain, the P i e components co e tion o m is

e in om the bottom (Stage 5) to the top (Stage 1).

9.12.1 el m ts th Pric C mp ts D t C ll cti rm

Type of charge

The T pe o cha ge o umn is o e o ing the a ious possib e p i e omponentsin ea h stage o the supp hain.

Charge status

The status o ea h ha ge is es ibe a o ing to two atego ies:

Not oun : NF: P i e omponent is known to exist, but no ata we e oun

va ue: v: P i e omponent exists an ata we e oun

Charge basis

cha ge basis e e s to whethe the ee is a:

P rc t . The p i e omponent is a xe pe entage on the p e iousumu ati e tota . Fo examp e, an impo t ta i o 8% a u ate on the tota a ueo the o e .

Fi d . A xe ee is ha ge ega ess o the umu ati e tota p i e.Examp es in u e a ispensing ee o US$ 1 on ea h p es iption o US$ 200 ointe nationa inspe tion o an enti e shipment.

Price to which charge is applied

This o umn is use o e o ing the p i e to whi h the ha ge is being app ie .Usua , this wi be the umu ati e p i e at the time at whi h the ha ge is app ie(i.e. the p e ious ine). Howe e , sometimes mu tip e ha ges a e app ie to thesame p i e. Fo examp e, in S i lanka both the impo t ta i an the e en e e we e app ie to the Stage 1 p o u ement ost. Whi e the o e in whi h xe eeha ges a e a e oes not a e t the na p i e, the p i e to whi h a pe entageha ge is app ie wi a e t the amount o the ha ge. Suppose the e is a p o u e-ment with a a ue o US$ 10 000, with an 8% impo t ta i an a 4% e en e e ,then both the impo t ta i an the e en e e shou be e ie on the base o US$ 10 000. The umu ati e tota shou be US$ 11 200. I these two ha ges a ea e sequentia , the e en e e wi be app ie to a highe p i e, esu ting in anin o e t tota (US$ 11 432).

Amount of charge

The amount o ha ge is ente e as a pe entage (e.g. 8%) o as a xe ee (e.g.US$ 200).

Comments

The comments o umn an be use o exp anato omments o an a itionain o mation, su h as in onsistent with o ia ates.


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Source

This e e s to whe e the me i ine was obtaine . Fo examp e, at a p i ate etai ethe sou e usua e e s to the who esa e om whi h the me i ine was pu hase .This in o mation is use to t a k me i ines ba kwa s th ough the supp hain.

It is lik l th t s m pric c mp t m h b miss d r mitt d: pl s list c sts ith oth r s li th ppr pri t st d pr id d scripti s th t w c c rr ct thmissi . I u h qu sti s, s d -m il t HaI r WHo.

Tab e 9.4 shows an examp e o the P i e components data co e tion o m om-p ete o Stage 3 o the supp hain.

9.12.2 I structi s r c mpl ti th Pric C mp ts D t C ll cti rm

STeP 1: Pr p r th d t c ll cti rms: ll i b ck r u d i rm ti

1. I enti the ata o e to omp eting the o m.

2. Fi in the egion an se to ( apita , u a ; pub i , p i ate, othe ).

3. Fi in the name an /o i enti ing o e o the ispensing out et.4. Fi in the name o the ta get me i ine, st ength, osage o m, manu a tu e

an pa k size. des ibe the ta get me i ine b he king the app op iate boxesan a ing an a itiona in o mation in the spa e p o i e (e.g. a ute sh oni on ition, me i ine o pub i hea th eme gen ).

5. I enti the t pe o ata being o e te . This is usua e ata (i.e. me i-ines t a ke th ough the ist ibution hain), but ou a so be h potheti aata (o ia ates obtaine ent a ).

STeP 2: visit disp si p i ts i th public, pri t d th r s ct rs

visit ea h o the se e te ispensing points in the pub i , p i ate an othe se -to s. The o e o the isits oes not matte . dispensing points a e isite to obtain

S urc : GenLabs Ltd Type of charge Charge Charge Price to which Amount of charge Commen ts

status basis charge is applied

Procure price value N/A N/A 100.00 Regional V % Stage 3 procure 3.0

tax price

Wholesale V % Stage 3 procure 10.0

mark-up price Transport V Fixed Cumula tive 5.50 Not included in mark-up

costs Sub-total

T 9.4 e p o th p o po ts d t o t o o o St g 3

Stage 3:Wholesaler or medicalstore

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the p i e at whi h the pu hase an se the ta get me i ines; to i enti Stage4 an Stage 5 a -on osts; an to i enti whe e the me i ines we e obtaine(e.g. who esa e , me i a sto e), to a ow o t a king ba kwa s th ough the supp hain.


I th m dici pric s d il bilit sur , m dici s r r c rd d s il bl l i th ril bl th d d t c ll cti . I th pric c mp ts sur , d t sh uld b c ll ct d m dici s i th r t il bl th d d t c ll cti , r mpl b r i wi

r c t i ic s.

Stage 5 osts:

1. On page 2 o the P i e components data co e tion o m, in the st ow o

the tab e ma ke Stage 5: ispense p i e, e o the se ing p i e as the totap i e o the me i ine, whethe it is being ha ge to the go e nment, insu an eompanies o the patient.

2. In the Tpe o cha ge o umn ist Stage 5 ha ges (e.g. vAT/GST, ispensingees) in the order in which they are applied . Fo ea h ha ge, in i ate the ha gestatus ( a ue o not oun ), ha ge basis (fat ee o pe ent) an the amounto the ha ge. Fo pe entage ha ges, in i ate to whi h p i e the ha ge is ap-p ie (e.g. MSP, Stage 5 p o u e p i e).

3. I the patient pa s a i e ent p i e om the se ing p i e, e o this as theost to patient. In the pub i an othe se to s this might be a a tion o thea tua ost o might be ze o. In u e a es iption o this in ou epo t.

Stage 4 osts:

1. re o the p o u ement p i e pai b the etai e o pub i ispensa . TheStage 4 p o u e p i e shou be the same as the p i e subtota at the en o Stage 3, howe e , ata om i e ent sou es o not a wa s mat h up.

2. Note the sou e (e.g. who esa e , cent a Me i a Sto es) o the ta get me i-ine, whi h is nee e to t a k the me i ine a ong the supp hain.

3. In the Tpe o cha ge o umn ist Stage 4 ha ges (e.g. etai e s ma k-up, o ao it taxes) in the order in which they are applied . Fo ea h ha ge, in i atethe ha ge status ( a ue o not oun ), ha ge basis (fat ee o pe ent) anthe amount o the ha ge. Fo pe entage ha ges, in i ate to whi h p i e theha ge is app ie .

Spe i questions to ask at the ispensing point in u e:

How o ou obtain me i ines (e.g. ist ibution ines). Pub i se to : do ou makean o a pu hases?

Who pa s o o a t anspo t? What is the ost o o a t anspo t?

What is ou ma gin? What is in u e (o e hea , o a t anspo t)?

do ou know what the who esa e / ent a sto e ma gin is?

do ou e ei e an is ounts/ ebates/s hemes?

do ou gi e an is ounts?

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STeP 3: visit public s ct r pr cur m t c d wh l s l rs

Pub i pu hase s an who esa e s a e isite to obtain the p i e at whi h the pu hase an se the ta get me i ines; to i enti Stage 3 a -on osts; an toi enti whe e the me i ines we e obtaine (e.g. manu a tu e ) to a ow o t a king

ba kwa s th ough the supp hain.Make a ist o the ese e s (i.e. who esa e s o pub i pu hase s) i enti e inStep 2. Fo ea h who esa e , ist the me i ines that the so o ispense . Go toa maximum o e who esa e s (those that se to most o the ta get a i ities) anin estigate the p i e omponents o the me i ines that the se . comp ete theStage 3 se tion o the p i e omponents ata o e tion o m o the ug so b ea h ese e .

Stage 3 osts:

1. re o the p o u ement p i e pai b the who esa e o pub i pu hase . TheStage 3 p o u e p i e shou be the same as the p i e subtota at the en o

Stage 2, howe e , ata om i e ent sou es o not a wa s mat h up.2. Note the sou e (e.g. manu a tu e o impo te ) o the ta get me i ine.

3. In the Tpe o cha ge o umn, ist Stage 3 ha ges (e.g. who esa e s ma k-up,egiona taxes) in the order in which they are applied . Fo ea h ha ge, in i atethe ha ge status ( a ue o not oun ), ha ge basis (fat ee o pe ent) anthe amount o the ha ge. Fo pe entage ha ges, in i ate to whi h p i e theha ge is app ie .

4. re o the se ing p i e o the me i ine to the etai e o ispensing point. Notethat this se ing p i e ma not mat h the etai e s epo te pu hase p i e.

Spe i questions to ask the pub i se to p o u ement o e o who esa e s

in u e:How o ou obtain me i ines (e.g. ist ibution ines)?

Who pa s o o a t anspo t? What is the ost o o a t anspo t?

What is ou ma gin? What is in u e (o e hea s, o a t anspo t)? do ou knowwhat the etai e s ma gin is?

do ou know what the manu a tu e s ma gin is?

do ou e ei e an is ounts/ ebates/s hemes?

do ou gi e is ounts?

as p rt m dici tr cki i th public s ct r, r s rch rs sh uld id ti wh th r m dici s r b i bt i d thr u h l c l purch s . I public s ct r h spit ls r pr curim dici s dir ctl r m th m u ctur r, wh l s l r r r t il r, r th r th bt i i th mthr u h r m t st r s pr cur m t s st m, th c uld b p i hi h r pric s r th curr t

dru bud t d s t ccur t l r f ct r l d.D l s i p m t, such s l t p m ts r m r m ts t suppli rs r r m ph rm ci s twh l s l rs, i ri bl i cr s th pric utur rd rs. R s rch rs sh uld tr t sc rt iwh th r d l s i p m t r c mm d i s , i clud this i rm ti i th ir r p rt.

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Locally produced medicines:

STeP 4: visit l c l m u ctur rs

Whe e possib e, s he u e isits to the o a manu a tu e s o the ta get me i inesi enti e in Step 3 abo e. lo a manu a tu e s a e isite to obtain the manu-a tu e s se ing p i e an in o mation about who esa e an etai ma k-ups, o at anspo t ha ges an taxes an about the st u tu e o the ist ibution s stem.

It ma not be possib e to se u e isits with a o a manu a tu e s, in whi h ase

it wi be ne essa to ext apo ate ata om se e te manu a tu e s a oss ta getme i ines. It might be use u to st isit a manu a tu e that is not p o u ing an o the ta get me i ines to obtain gene a in o mation on t anspo t osts, ma k-ups,et . The sou es o in o mation use to estimate the MSP an Stage 1 an Stage2 a -on osts shou be ea es ibe in ou epo t.

Stage 2 osts:

1. In the Tpe o cha ge o umn ist Stage 2 ha ges (e.g. t anspo t, pha ma asso iation/boa / oun i ee, nationa taxes) in the order in which they are applied . Fo ea h ha ge, in i ate the ha ge status ( a ue o not oun ), ha gebasis (fat ee o pe ent) an the amount o the ha ge. Fo pe entage ha g-es, in i ate to whi h p i e the ha ge is app ie .

Stage 1 osts:

1. Ente the MSP o the pa k size o the ta get me i ine in the st ow o thetab e. lea e the se on ow (INF) an thi ow (cIF) b ank.

Spe i questions to ask manu a tu e s in u e:

Who pa s o o a t anspo t to the who esa e ? What is the ost o o at anspo t?

What is ou ma k-up? What is in u e ( o a t anspo t, taxes, ma keting, p o tma gin)? do ou know what the who esa e ma k-up is?

do ou o e an is ounts/ ebates/s hemes?

do ou e e se me i ines i e t to hospita s o othe pub i se to hea thent es?

Imported medicines:

STeP 5: visit imp rt rs

Fo impo te me i ines, o e t the p i e omponents asso iate with impo tingthe ta get me i ine as Stage 2 osts.

Stage 2 osts:

1. In the Tpe o cha ge o umn, ist Stage 2 ha ges (e.g. nan e/banking ees,inte nationa inspe tion, po t ha ges/ ea an e, impo t ta i , qua it ont otesting, impo te s ma k-up, pha ma boa ee, nationa taxes) in the order


occ si ll , th r is tr st p i th suppl ch i . This ccurs wh wh l s l rs r publicpurch s rs pr cur m dici s r m th r d m stic wh l s l rs. I this is th c s i ur c u tr ,i s rt dditi l St 3 t bl i t th d t c ll cti rm, d r p t St p 3 r this dditi ll l distributi .

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in which they are applied . Fo ea h ha ge, in i ate the ha ge status ( a ue onot oun ), ha ge basis (fat ee o pe ent) an the amount o the ha ge. Fope entage ha ges, in i ate to whi h p i e the ha ge is app ie .

Note: Ente an osts o o a t anspo tation om the po t o ent to the

who esa e that a e pai o b the manu a tu e .2. Use the Othe ee atego to e o p i e omponents not iste he e. P o-

i e an exp anation o these Othe ha ges in ou epo t.

3. I ou on ha e a ess to the p i e o me i ines a te the ea e the impo teo the manu a tu e , ou an ente this a ue i e t in the na ow.

STeP 6: C ll ct d t i t r ti l pr cur m t d shippi

Fo impo te me i ines, o e t the p i e omponents asso iate with p o u ingthe ta get me i ine an inte nationa shipping as Stage 1 osts.

T 9.5 P o po ts d t o t o o o St g 1

Stage 1 osts:

Case 1: Separate Manufacturers selling price and shipping costs:

Ente the MSP o the pa k size o the ta get me i ine in the st ow o the tab e.Fo Insu an e an F eight: note whethe this is a xe ee o a pe entage, anente the amount pai . Ente the shipping te ms (e.g. cIF, FOB, EXW) in the com-ments o umn. lea e the thi ow (cIF) b ank.

Case 2: Combined Manufacturers selling price and shipping costs:

Ente the p i e oun o the me i ine, in u ing shipping in the bottom ow (cIF).lea e the st two ows b ank.

Box 9.3

a m x m m (Mrp )

labe ing pa kages with the maximum etai p i e (MrP) oes not a wa s gua antee uni o m p i esa oss a ount . Patients o not a wa s bu an enti e pa kage; instea tab ets ma be soin i i ua , an the p i e o ea h tab et is set to what patients wi pa . This ea s to p i e a iationsa oss a ount e en i the e is an MrP.

Stage 1 Type of charge Charge basis Price to which Amount of charge Commentscharge is applied

Manu acturers priceselling price

Insuranceand reight

CIF

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9.13 data entry

The ata o e te on in i i ua me i ines is ente e into Pa t II o the wo kbook,on the Price Components Data Entry page o the wo kbook. The wo kbook an thenbe use to gene ate pie ha ts an summa tab es that an be use in epo tingesu ts, as es ibe in the se tion on ata ana sis that o ows. Whi e in o mationon po i ies an egu ations is not ente e in the wo kbook, othe ent a e e ataa e (e.g. bank ees). Sin e the p i e omponents su e is a ase stu , esu ts a ees ibe in text o m.

To ente ata on in i i ua me i ines, open the wo kbook an go to the p i e om-ponents ata ent page b i king on the price coMponents ent button onthe Home page, o b i king on the P i e components ent tab at the bottom o the sp ea sheet (i this tab is hi en, use the a ow to s o th ough the tabs

unti it is isib e).At the top o the page the e a e th ee buttons:

hoMe page : c i king on this button wi b ing ou to the Home page o the wo k-book.

show/hide details : This button a ows ou to swit h ba k an o th between theu ata ent g i , an a summa ize e sion that an be opie into ou epo t.When etai s a e hi en, the cumu ati e p i e that ha ge is app ie to o umn ishi en; be su e that this o umn is isib e u ing ata ent .

price coMponents: analysis : c i king on this button wi b ing ou to the pageo the wo kbook whe e p i e omponents ata a e ana se .

The Price Components Data Entry page isp a s a b ank tab e whe e ou an enteata om a sing e P i e components data co e tion o m. To begin ente ing ata


Box 9.4

d

In onsisten ies in the o e te ata a e ommon: two minist ies wi epo t i e ent a ues o ama k-up, o the go e nment-set ee wi not mat h the ee use at the pha ma . The e is a ea e i en e o this o who esa e an etai ma k-ups: ue to a a k o en o ement, the ma k-up use inp a ti e might not mat h the o ia ate. Fu the mo e, p i es ma i e between shipments o o e s,pa ti u a in ount ies with a o ati e u en .

When in onsistent ata a e oun , ou shou st e i the ata, an i an in onsisten ison me , attempt to i enti the eason(s) o the in onsisten . An in onsistent ata shou bei enti e an is usse in the na epo t.

r f

litt e is known about p i e omponents ue to the i u t in is o e ing the equi e ata. To eatea uni o m s stem that wi a ow oss- ount ompa isons, we ha e ma e e tain assumptions. youma is o e ases that o not t into the o ms p o i e . P ease sen us epo ts an omments onthose p i e omponents that o not t into o ms, a itiona signi ant p i e omponents that a enot is usse in this han book, an othe in o mation about ou hea th se to that is e e ant to theme i ine p i es p oje t.

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om a new ata o e tion o m, p ess the new button ( e A6); the wo kbook wiisp a a new (b ank) ata ent tab e.

F r ch Pric C mp ts D t C ll cti rm, d t tr t bl is c mpl t d.

you an show o hi e ea h ata ent tab e using the show/hide buttons in co -umn A. When ata a e hi en the me i ine i enti ing in o mation is sti isib e(Fig. 9.2). On e mu tip e me i ines ha e been ente e , it is use u to hi e the atathat ou a e not wo king on to a oi s o ing th ough a ge amounts o ata.

F g. 9.2 P o pos t o p g w th h poth t d t o d v d d s h dd

9.13.1 C mpl ti th d t tr t bl

The st se tion o the ata ent tab e is use o ente ing the me i ine i enti ingin o mation (Fig. 9.2). comp ete this se tion in u , in u ing:

S ct r (C lum B): Se e t the app i ab e se to (pub i , p i ate, othe an othe2) using the op- own box p o i e ( i k on the e an then on the a ow to theight o the e ).

Imp rt/l c l (C lum C): Se e t whethe the me i ine is impo te o o a p o-u e using the op- own box p o i e .

Pr duct t p (C lum D): Se e t whethe the me i ine is an o iginato b an o agene i equi a ent using the op- own box p o i e .

M dici m , str th, d s rm d p ck siz (C lum s e-H): Ente theta get me i ine name in co umn E, its st ength in co umn F, an its osage o m inco umn G. Ente the pa k size o whi h ata was o e te in co umn H.

R i (C lum I): Se e t whethe the ata we e o e te in the u ban o u aegion su e e .

M u ctur r (C lum J): Ente the name o the manu a tu e o this me i ine. Tothe ight o the me i ine i enti ing in o mation (co umns l-P), the umu ati e p i eat the en o ea h stage o the supp hain is p o i e as a summa (note thatFina P i e is the p i e at the en o Stage 5).

C mm ts (C lum Q): you wi ha e hosen to su e i e ent atego ies o me i ines base on anti ipate i e en es in a -on osts between atego ies.Use this e to u es ibe the me i ine being stu ie a o ing to the i enti eatego ies, e.g. on/not on essentia me i ines ist, p i e ont o e /un egu ate ;impo te / o a p o u e ; sing e sou e/mu ti-sou e.

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T p d t (C lum R): Se e t whethe the ata being epo te a e e ata oh potheti a ata.

The o owing ata ent tab e se tions a e use to ente p i e omponents oea h stage o the supp hain. data ent is essentia a p o ess o op ing ata

om the P i e components data co e tion o ms into the ata ent g i in thewo kbook. As su h, the ata ent g i ontains a simi a inte a e to the P i ecomponents data co e tion o m, with th ee a itiona o umns:

v lu ch r (C lum K): The wo kbook wi automati a a u ate the a ueo ea h known ha ge in o a u en . Fo xe ees, the a ue wi be the sameas the amount o ha ge. Fo pe entages, this o umn wi show the a tuaamount o the ha ge.

T t l (C lum L): This o umn p o i es a unning tota o the ta get me i inep i e, in o a u en . The wo kbook a u ates the umu ati e p i e automati-a as ata a e ente e .

Cumul ti m rk-up (C lum M): The wo kbook wi a u ate the umu ati e peent ma k-up automati a as ea h ha ge is app ie . cumu ati e pe ent ma k-up is a measu e o how mu h highe a e tain p i e is abo e the MSP o cIF.

Th d t tr t bl is r iz d cc rdi t suppl ch i st s, sh w iC lum e. D p di th d t u h c ll ct d r St 1, s l ct MSPplus i sur c / r i ht, CIF r MSP l usi th dr p- d w m u th tpp rs wh u click th c ll c t i i th l b l MSP + i s/ r i ht(d ult). Th d t tr t bl will ut m tic ll b upd t d t ll w u tt r th St 1 d t u h c ll ct d. Simil rl r St s 3 d 4, us

th dr p-d w m u t s l ct Wh l s l /M dic l St r (St 3) d R t il/

Disp s r (St 4) cc rdi t wh th r th d t b i t r d r r mth pri t s ct r r th public s ct r.

T p ch r (C lum F): In Stage 1, ha ges (Manu a tu e s se ing p i e, insu -an e an eight, o cIF) wi be iste automati a on e ou i enti the t pe o ata ou o e te in co umn E (see abo e). In othe stages, the t pe o ha ge isse e te using the op- own ist. I the op- own ist oes not ontain the ha gein question, se e t Othe ees an i enti the ha ge in the comments co umn(co umn N/O).

Ch r st tus (C lum g): Se e t Not oun o va ue using the op- own ist.

Ch r b sis (C lum H): Se e t pe ent o xe ee using the op- own ist.Note that o MSP/cIF in Stage 1, p o u ement p i e in Stages 3 an 4, an se ingp i e in Stage 5, ha ge basis is not app i ab e sin e these a e not ha ges but thep i e o the p o u t as it ente s into the espe ti e stages o the supp hain.

Pric th t ch r is ppli d t (C lum I): This is the o umn use to i enti thep i e to whi h a percentage charge is app ie , whi h is essentia o a u ating thea ue o the ha ge o e t . Note that when the ha ge is a xe ee, the a ueo the ha ge is the same, ega ess o the point in the supp hain at whi h theha ge is app ie . co umn I is the e o e not app i ab e an is tu ne o (sha ein g e ).

Using the op- own ist, ou an se e t the o e t point in the supp hain whe ethe pe entage ha ge is app ie . Options a ai ab e a e:


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1. The umu ati e p i e o a me i ine at the en o a stage (e.g. se e ting Stage3 umu ati e tota om the op- own ist app ies the pe entage ha ge tothe p i e o the me i ine at the en o Stage 3).

2. The umu ati e p i e o the me i ine at the time the pe entage ha ge is in-

u e , i.e. the tota p i e in the p e e ing ow (most ommon s ena io). In thisase, se e t Stage [X] umu ati e tota a te [ ast ha ge that was app ie ], i.e.the ha ge in the p e e ing ow. Fo examp e, an impo te s ma k-up is app ieas 5% o (cIF + inte nationa inspe tion + po t ha ges + impo t ta i ), withthese th ee a -on osts app ie in the o e in i ate . In co umn I, Stage2 umu ati e tota a te impo t ta i wou be se e te sin e the impo t ta i was the most e ent ha ge. The wo kbook wou then a u ate the ma k-up asa pe entage o (cIF + inte nationa inspe tion + po t ha ges + impo t ta i ).

3. The a ue o an in i i ua p i e omponent (e.g. se e ting Stage 4 ma k-upom the op- own ist app ies the pe entage ha ge to the a ue o the etai /ispensa ma k-up).

4. In Stages 3 an 4, the p i e at whi h the

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