Price, availability and affordability of medicines

international comparison of 29 surveys

Presented by:

Richard Laing World Health Organization, Geneva

Margaret Ewen, Health Action International EuropeRichard Laing, Gilles Forte, World Health OrganizationCo-ordinators, WHO/HAI Project on Medicine Prices

Chennai December 2005

Uganda pharmaceutical baseline surveySept 2002

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 HAI’s 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

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

Surveys included in secondary analysis

AFRO: Cameroon, Chad, Ghana, Kenya, Mali, South Africa (Kwazulu Natal State), Uganda

AM/PAHO: Brazil (Rio State), PeruEMRO: Kuwait, Lebanon, MoroccoEURO: Armenia, Kazakhstan, TajikistanSEARO: India - West Bengal, Haryana, Karnataka,

Maharashtra (2), Chennai, Rajasthan, Indonesia, Sri Lanka

WPRO: China (Shandong), Fiji, Malaysia, Mongolia, Philippines

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)

• For comparing affordability need to compare identical treatment regimens

• For price components categorize additional charges carefully

Data slides…..

Glibenclamide 5mg tabs

Government procurement: prices & availability

Public sector: patient prices & availability

Private retail pharmacy: patient prices & availability

Affordability

Combination therapy: glibenclamide + metformin

Price components

Glibenclamide 5mg tabs (generics), government procurement prices

Public Procurement (generic only)

0 1 2 3 4 5 6

Chad (2002)Mali (2004)

Uganda (2004)

Kuwait (2004)Lebanon (2004)

Morocco (2004)

Kazakhstan (2004)

India/Chennai (2004)India/Haryana (2004)

India/Karnataka (2004)India/Mah. Nagpur

India/Maharashtra (2004)India/Rajasthan (2003)

Indonesia (2004)

China/Shandong (2004)Fiji (2004)

Mongolia (2004)

Glibenclamide 5mg tabs, public sector patient prices

Availability: Glibenclamide 5mg tabs, public sector facilities

Public Sector Facilities

0 20 40 60 80 100

Cameroon (2002)Chad (2004)

Ghana (2002)Mali (2004)

Uganda (2004)

Peru (2002)

Kuwait (2004)Lebanon (2004)Morocco (2004)

Tajikistan (2005)

India/Chennai (2004)India/Haryana (2004)

India/Karnataka (2004)India/Mah.Nagpur

India/Maharashtra (2004)India/Rajasthan (2003)

India/West Bengal (2004)Indonesia (2004)

China/Shandong (2004)Mongolia (2004)

Philippines (2002)

Innovator

Generic

Median for Generic : 38%

Median for Innovator : 0%

Glibenclamide 5mg tabs, patient prices, private retail pharmacies

Private Sector Retail Pharmacy Price

0 20 40 60 80

Cameroon (2002)Chad (2002)

Ghana (2002)Mali (2004)

Uganda (2004)

Peru (2002)

Kuwait (2004)Lebanon (2004)

Morocco (2004)

Kazakhstan (2004)Tajikistan (2005)

India/Chennai (2004)India/Haryana (2004)

India/Karnataka (2004)India/Mah. Nagpur (2005)India/Maharashtra (2004)

India/Rajasthan (2003)India/West Bengal (2004)

Indonesia (2004)

Fiji (2004)Mongolia (2004)

Philippines (2002)Innovator Generic

MPR (corrected with IPR MSH 2003)

Affordability: one month’s treatment, glibenclamide 5mg twice daily, public sector, lowest paid unskilled govt worker

Affordability: one month’s treatment, glibenclamide 5mg twice daily, private retail pharmacies

Private Sector Facilities

0 2 4 6 8 10

Cameroon (2002)Chad (2004)

Ghana (2002)Mali (2004)

Peru (2002)

Kuwait (2004)Lebanon (2004)Morocco (2004)

Kazakhstan(2004)Tajikistan (2005)

India/Chennai (2004)India/Haryana (2004)

India/Karnataka (2004)India/Mah.Nagpur

India/Maharashtra (2004)India/Rajasthan (2003)

India/West Bengal (2004)Indonesia (2004)

Fiji (2004)Malaysia (2004)Mongolia (2004)

Philippines (2002) Innovator Generic

Days' Wages

Affordability: glibenclamide 5mg x2 daily + metformin 500mg x3 daily for a month, private pharmacies

Price issues

• Some huge differences within countries between innovator brand and generic prices: ”brand premiums”

– Is this a problem for patients? YES where:

– 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

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

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 alle.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

Manufacturer’s selling price vs Add-on costs (cumulative) private sector

Karnataka, brand aciclovir

Manufacturer's price Add on costs

Karnataka, generic aciclovir

Manufacturer's price Add-on costs

Mongolia, brand ceftriaxone inj

CIF Add-on costs

Mongolia, generic omeprazole

CIF Add-on costs

Malaysia 2003

Add-on component costsshown as actual costs, private sector

0 20 40 60 80 100 120

Mongolia import brand

Mongolia import generic

Karnataka brand obs. max

Karnataka generic obs. max

Chad import brand & generic

Kyrgyzstan import brand

Kyrgyzstan import generic

Kuwait

Lebanon import

Peru import generic obs. max

percentages

customs, fees,insurance, clearance import taximporters' mark-up wholesale mark-upretail mark-up VAT/other

Add-ons – do they matter?

• add-ons vary tremendously both in type and quantity e.g. in some states in India <40%, in Peru > 100 %

• pharmacy profits largely based on mark-upsvariable range – 15% to 55%, Malaysia and Uganda > 100%

• governments in some countries are taxing the sick by applying high import taxes and adding VAT/GST

Peru - 12% import tax and 18% VAT are addedTajikistan - 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 manufacturer’s 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

Possible options to lower prices

• EDLs – purchase low priced quality generics for off-patent meds• Regional pooled procurement with open tenders• Patented meds – equitable prices, use the flexibilities of trade

agreements to introduce generics while patent is in force• Aid generic competition eg fast-tracking, waive registration fees• Stop taxing essential medicines• Where there is little competition, goverments should consider

regulating prices - from manufacturers’ selling price to margins in wholesale and retail.

• Pharmacists remuneration – linked to service not value of medicine• If mark-ups needed, 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

Medicine Prices web-site:

www.haiweb.org/medicineprices