Price, availability and affordability of medicines international comparison of 29 surveys

1. 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

2. Uganda pharmaceutical baseline surveySept 2002

3. 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

4. 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

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

6. 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

7. 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

8. Glibenclamide 5mg tabs (generics),government procurement prices

9. Glibenclamide 5mg tabs, public sector patient prices

10. Availability: Glibenclamide 5mg tabs,public sector facilities

11. Glibenclamide 5mg tabs, patient prices,private retail pharmacies

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

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

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

15. 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

16. 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

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

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

19. Malaysia 2003

20. Add-on component costsshown as actual costs, private sector

21. 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-ups variable 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 added Tajikistan - removing taxes & duties would reduce total additional costs from 82% to 32% • a small component cost applied early in the distribution chain can contribute significantly to the final price • as most add-ons are applied as percentages, the higher the 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

22. 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

23. Medicine Prices web-site: www.haiweb.org/medicineprices