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1
Policy options to address access to chronic disease medicines
Dr. Richard Laing
Ms. Alexandra Cameron
Department of Essential Medicines and Pharmaceutical Policies World Health Organization
27 August 2008
2
Surveys of medicine prices and
availability reveal that: • Availability is often low,
particularly in the public sector
• Prices of even the lowest-priced generics can be several times international prices
• Originator brands are more costly than generics
• Treatment of chronic diseases is often unaffordable, especially when combination therapies are used
3
High prices, low availability and poor affordability can have many causes
• Low public sector availability: – lack of resources or under-budgeting– inaccurate forecasting– inefficient procurement / distribution– low demand/slow-moving products
• High private sector prices: – high manufacturer’s selling price– high import costs– taxes and tariffs– high mark-ups
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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 DON’T TAKE CHANCES I ONLY USE ORIGINALSI ONLY USE ORIGINALS
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• 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.
Policy options (cont'd)
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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 with percentages 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)
8
Examples of policy changes following medicine price and availability surveys
Tajikistan• Elimination of 20% VAT on medicines in May 2006. Supply chain add-on costs should
decrease from 122% to 85% for imported medicines.
Lebanon • Price reductions on >1000 imported medicines reduced prices by 20-30%• Policy of fixed mark-ups irrespective of FOB price (cumulative 71.4%) to variable
depending on FOB price; estimated retail price reductions of 3-15%• Retail prices and pharmacy margins published on a public website
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United Arab Emirates• Government reduced prices by an average of 7–8% through
modification of its procurement practices following price comparisons with other countries.
Indonesia• Pharmaceutical industry association announced that from 1
July 2006 it would reduce the price of 100 branded generic medicines, containing 34 active substances.
• Branded generics should not cost more than 3 times the price of true generics – has not happened for all products
East African Community: • 10% cut on import duties on medicines.
Examples of policy changes (cont’d)
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Constituency Building• Presentations & posters at
~70 meetings• Brochure & quarterly bulletin• Monitor supplement & articles• Synthesis reports• WHA 2006 briefing & paper• Publications: Bulletin, Lancet• Analysis of MDG Target 8.E
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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 pricing policy experts are developing guidelines on options for policies affecting medicine prices and their impact in various settings:
- mapping current policies & interventions- commissioning policy review papers- drafting policy briefs- identifying research needs
AND… What is the role of disease organizations in advocating for access to chronic disease
medicines?