Download Price - World Health Organization

Medicine prices and availability,
evidence for policy
Technical Briefing Seminar, 2012
Richard Laing with materials provided by
Alexandra Cameron, Department of Essential Medicines and
Pharmaceutical Policies, World Health Organization
1
Overview
1. International effort to improve medicine affordability
and availability: WHO/HAI Project
2. Generating reliable evidence: how to measure
medicine prices and availability
3. What have we learned about medicine prices,
availability and affordability?
4. Evidence to policy: what can be done?
2
The WHO/Health Action International Project
on Medicine Prices and Availability
• Outcome of the WHO/public interest NGOs Roundtable on
Pharmaceuticals
Objectives
• To develop and apply a reliable methodology for collecting
and analysing price and availability data across healthcare
sectors and regions in a country
• To promote price transparency: survey data is made freely
accessible on the HAI website, allowing international
comparisons
• To provide guidance on pricing policy options and monitor
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their impact
WHO/HAI standard methodology for measuring
medicine prices and availability
Facility-based survey that measures:
• medicine prices
• medicine availability
• affordability of treatments
• components in the supply chain
Launched at the World Health Assembly 2003
Survey data publicly available on HAI web site
Second edition published 2008 includes:
• adjustments to methodology
• practical advice based on prior surveys and
additional tools and resources
• new guidance on international comparisons,
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policy options, advocacy and regular monitoring
Over 70 medicine price and availability surveys to date using
WHO/HAI methodology
Survey tools, data, reports & more:
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www.haiweb.org/medicineprices
Overview
1. International effort to improve medicine affordability
and availability
2. Generating reliable evidence: how to measure
medicine prices and availability
3. What have we learned about medicine prices,
availability and affordability?
4. Evidence to policy: what can be done?
6
How are data collected?
 Data on the price and availability of medicines are
obtained by data collectors during visits to "medicine
outlets"
– Data is collected in 6 regions of the country ("survey areas")
– In each survey area, data is collected from a sample of
medicine outlets in up to 4 sectors:
• public sector (e.g. hospitals, health centres)
• private sector (e.g. licensed pharmacies, licensed drug stores)
• up to 2 "other" sectors (e.g. mission hospitals)
 Data on government procurement prices are also
collected
 Medicine price components are also identified by
tracking 5-7 medicines through the supply chain and
identifying add-on costs
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What medicines are surveyed?
•
50 medicines with specific dosage forms and strengths
– 30 pre-determined to enable international comparisons
– 20 selected nationally for local importance
•
For each medicine, two products are surveyed:
1. Originator brand – original pharmaceutical product that
was first authorized for marketing, normally as a patented
product
• Identified centrally before data collection, does not vary from outlet
to outlet
2. Lowest-priced generic (LPG) – products other that the
originator brand that contain the same active ingredient
(substance), whether marketed under another brand name
or the generic name
• generic with the lowest price found at each medicine outlet
• LPG product will therefore vary from outlet to outlet
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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
– e.g. MPR = 2 means that the local medicine price is 2x the international
reference price
– MSH international reference prices used: median prices of multi-source
medicines offered to developing and middle-income countries by different
suppliers.
 Affordability: how many days wages would the lowest paid government
worker need to spend to pay for treatment? Based on median local medicine
price prescribed at a standard dose.
• Price components: cumulative % mark-up and % contribution to final price.
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Overview
1. International effort to improve medicine affordability
and availability
2. Generating reliable evidence: how to measure
medicine prices and availability
3. What have we learned about medicine prices,
availability and affordability?
4. Evidence to policy: what can be done?
10
Median % availability by World Bank income group
A Cameron, M Ewen et al, The Lancet online 1 Dec2008
public sector
generics
private sector
generics
private sector11
originator brands
Median government procurement prices,
lowest priced generics
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Public sector patient prices
• In many countries medicines are free but availability is
often very poor
• Where patients pay, even cheapest generics can be
expensive e.g. in the Western Pacific Region the median
price was about 12x international reference prices
• Good procurement prices are not always passed on to
patients
• In some countries, public sector prices are similar to
private sector prices, e.g. China, Shanghai
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Median patient prices, private sector
Adjusted CPI & PPP
141
90
80
70
Med MPR
60
50
40.9
40
35.9
30
29.4
20
10
13.8
9.6
12.6
10.5
11
0
low
income:
India
(n=7)
other low
income
(n=17)
lowermiddle
income
(n=16)
Originator brands
upper
middleincome
(n=3)
low
income:
India
(n=7)
other low
income
(n=17)
lowermiddle
income
(n=16)
upper
middleincome
(n=3)
Lowest priced generics
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Differences between originator brands & lowest priced generics,
matched pairs, private sector
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Affordability: mean number of days wages of the lowest paid
unskilled govt. worker needed to buy 60 glibenclamide 5mg tabs,
for diabetes, in the private sector (by WHO region)
n=4
WPR
n=3
n=8
SEAR
Lowest priced generic
n=8
Originator brand
n=4
EUR
n=1
n=11
EMR
n=7
n=1
AMR
n=7
AFR
n=7
0
1
2
3
4
5
No. of days' w ages
6
7
8
9
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Cumulative percentage mark-ups between manufacturer's selling
price and final patient price, private sector
Country
Total cumulative % mark-up
China (Shandong)
11-33%
El Salvador
165-6894%
Ethiopia
76-148%
India
29-694%
Malaysia
65-149%
Mali
87-118%
Mongolia
68-98%
Morocco
53-93%
Uganda
100-358%
Tanzania
56%
Pakistan
25-35%
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Overview
1. International effort to improve medicine affordability
and availability
2. Generating reliable evidence: how to measure
medicine prices and availability
3. What have we learned about medicine prices,
availability and affordability?
4. Evidence to policy: what can be done?
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Many policy options exist
•
Improve procurement efficiency (e.g. national pooled purchasing, procurement by
generic name)
•
Ensure adequate, equitable, and sustainable financing, e.g.
– Health insurance systems that cover essential medicines
– schemes to make chronic disease medicines available in the private sector at
public sector prices
•
Prioritize drug budget, i.e. target widespread access to a reduced number of
essential generic medicines, rather than attempting to supply a larger number of both
originator brand and generic medicines.
•
Promote generic use:
– preferential registration procedures, e.g. fast-tracking, lower fees
– ensure the quality of generic products
– permit generic substitution and provide incentives for the dispensing of generics
– educate doctors/consumers on availability and acceptability of generics
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I DON’T TAKE CHANCES
I ONLY USE ORIGINALS
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Many policy options exist
• Separate prescribing and dispensing
• Control import, wholesale and/or retail mark-ups through
regressive mark-up schemes
• Provide tax exemptions for medicines
• Where there is little competition, consider regulating
prices
• Patented medicines
– use the flexibilities of trade agreements to introduce generics
while a patent is in force
– differential pricing schemes whereby prices are adapted to the
purchasing power of governments and households in poorer
countries.
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Must watch for unintended negative effects
• Price controls may lead to excessive prices
when the price is not adjusted to consider
changes in the market
• Setting prices too low can discourage
production/stocking of a product
• Regulating mark-ups can provide incentive to
sell higher-priced products
• Eliminating taxes can provide an opportunity for
retailers to increase their margin (i.e. savings not
passed on to patient)
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BUT……are these the best policies for
improving access to affordable medicines???
Our current challenge: what are the most
effective policy actions in different contexts?
WHO/HAI and international price policy experts are
developing guidance on options for policies affecting
medicine prices and their impact in various settings:
- developed a policy ‘landscape’
- commissioned a series of policy review papers
- policy briefs & electronic policy analysis tool
- identify research needs
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WHO / HAI Reviews of pricing policies
and interventions now published
• Substantial opportunities exist to increase medicine availability,
reduce prices, and improve the affordability of medicines in all
regions of the world and at all levels of economic development.
• However, it can be challenging to identify and prepare suitable lines
of response. To assist policy-makers and others, WHO and HAI are
developing a series of reviews on pharmaceutical pricing policies
and interventions, with a focus on low- and middle-income countries.
Five reviews have now been published on:
• External Reference Pricing
• The Role of Health Insurance in the Cost-Effective Use of Medicines
• The Regulation of Mark-ups in the Pharmaceutical Supply Chain
• Competition Policy
• Sales Taxes on Medicines
• Another four reviews are in development, including a review on
promoting the use of generic medicines.
http://www.haiweb.org/medicineprices/policy/index.html
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