RESEARCH Open Access

Enhancing medicine price transparency throughprice information mechanismsMichael Hinsch*†, Miloud Kaddar† and Sarah Schmitt†

Abstract

Background: Medicine price information mechanisms provide an essential tool to countries that seek a betterunderstanding of product availability, market prices and price compositions of individual medicines. To be effectiveand contribute to cost savings, these mechanisms need to consider prices in their particular contexts whencomparing between countries. This article discusses in what ways medicine price information mechanisms cancontribute to increased price transparency and how this may affect access to medicines for developing countries.

Methods: We used data collected during the course of a WHO project focusing on the development of a vaccineprice and procurement information mechanism. The project collected information from six medicine priceinformation mechanisms and interviewed data managers and technical experts on key aspects as well as observedmarket effects of these mechanisms.The reviewed mechanisms were broken down into categories including objective and target audience, as well asthe sources, types and volumes of data included. Information provided by the mechanisms was reviewed accordingto data available on medicine prices, product characteristics, and procurement modalities.

Results: We found indications of positive effects on access to medicines resulting from the utilization of thereviewed mechanisms. These include the uptake of higher quality medicines, more favorable results from contractnegotiations, changes in national pricing policies, and the decrease of prices in certain segments for countriesparticipating in or deriving data from the various mechanisms.

Conclusion: The reviewed mechanisms avoid the methodological challenges observed for medicine pricecomparisons that only use national price databases. They work with high quality data and display prices in theappropriate context of procurement modalities as well as the peculiarities of purchasing countries. Medicine priceinformation mechanisms respond to the need for increased medicine price transparency and have the potential tocontribute to improved access to medicines in developing countries.Additional research is required to explore more specific aspects. These include the market effects of dedicateddonor funds for certain medicines to explain the driving force of user demands, and the effects of increased pricetransparency on different groups of medicines in context of the maturity of their markets.

Keywords: Medicine price information mechanisms, Price transparency, Procurement, Access to medicines

* Correspondence: hinschm@who.int†Equal contributorsExpanded Programme on Immunization (EPI), Department of Immunization,Vaccines and Biologicals (IVB), World Health Organization, Avenue Appia 20,Geneva 1211, Switzerland

© 2014 Hinsch et al.; licensee BioMed Central Ltd. This is an Open Access article distributed under the terms of the CreativeCommons Attribution License (http://creativecommons.org/licenses/by/2.0), which permits unrestricted use, distribution, andreproduction in any medium, provided the original work is properly credited.

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BackgroundOpinions diverge about the effects of improved pricetransparency in medicine markets. There is some debateas to whether increased price transparency would havemore positive or negative effects on the availability andaffordability of medicines [1].Medicine price information mechanisms are significant

tools to achieve increased price transparency by provid-ing information on product prices as well as the compo-nents that influence these prices, such as volume andproduct quality. Information provided by such mecha-nisms allows developing countriesa to make more in-formed decisions about the most efficient and effectiveways to procure medicines. In addition to providingcomparative price information between market partici-pants, which would be challenging to access in similarquality for individual countries without such tools, medi-cine price information mechanisms can help identifyand improve inefficiencies in existing procurement sys-tems when providing contextual information about thereported prices.Cost reductions through improved efficiencies have the

potential to create more effective public health systems indeveloping countries, where the pricing of medicines is acritical factor in accessing treatment. This article takes acloser look at the pros and cons of increased medicineprice transparency with regards to access to medicines indeveloping countries and assesses the role of medicineprice information mechanisms in this context.It is important to note that any comparison of medicine

prices will only produce significant results when takinginto account the quality aspect and comparing productsof same and similar effect. Unregulated, mislabeled or de-liberately counterfeited pharmaceutical products pose asignificant problem not only to procurement agenciesbut also to the safety of patients. Therefore it is im-portant to limit the comparison of medicine prices togeneric products that are considered identical ‘to a brandname drug in dosage form, safety, strength, route ofadministration, quality, performance characteristics andintended use [2]’.

Medicine prices and access to health care in developingcountriesThere are various factors influencing the access to medi-cines for the public sector, including the availability ofsustainable financing, reliable health systems, rational se-lection and use of medicines, as well as affordable pricing[3]. Medicine prices form one important aspect determin-ing access to affordable health care in developing countries,where systems are often not able to provide sufficientappropriate treatment and care. Patients frequently need topay for medication as part of public sector treatment orare required to purchase medicines in the private sector

due to low availability in the public health system [4].These payments can be significant. WHO statistics revealthat in 32 percent of the Low and Lower middle incomecountriesb private expenses constitute more than half ofthe total health spending [5]. Furthermore, statistics showthat ‘in countries where patients pay for medicines in thepublic sector, average prices of generic medicines rangefrom 1.9 to 3.5 times international reference prices’ be-tween different WHO regions [6].Price differences between regions and countries de-

pend on a variety of factors and need to be understoodin their respective context. WHO identifies some of thecontributing factors as shortcomings in public procure-ment systems, insufficient financing of public health caresystems and other policy related issues [6]. Lower medi-cine prices can be achieved by addressing some of theinefficiencies through strategies such as bulk purchasing,increased competition, skillful negotiation and thoroughsupply management [7].Increased transparency of medicine prices can have a

positive impact on the application of such strategies forcountries that have not reached their full potential inachieving appropriate prices and fully efficient procure-ment systems.

Medicine price componentsThe meaningful comparison of international medicineprices requires an understanding of the various compo-nents constituting a price. In addition to varying marketconditions for individual medicines, such as ease of mar-ket access and level of competition, specific procurementconditions can have additional effects on prices. Amongother factors, these can include volumes purchased, theterms of delivery (Incoterms) applying to a contractedprice and the currency of the purchase agreement. Con-tracts may also include specific conditions such as bund-ling or special discounts [4].While some purchase agreements are made directly

with medicine suppliers and manufacturers, others aremade through procurement agents, local import agents,wholesalers or distributors whose mark-ups need to betaken into account as well. Manufacturer prices areoften kept confidential [4], therefore conducting reli-able and useful medicine price comparisons can bechallenging for countries without appropriate skillsand access to additional information. Morgan et al. [8]note several disadvantages of confidential rebate agree-ments between countries and pharmaceutical compan-ies, such as increased administrative costs and a loss oftransparency which makes it more difficult to obtaincomparative price information. They advise policy makersto achieve more transparent prices and contract structuresin order to address disproportionate price differenceswithin and between countries.

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Call for increased price transparencyIn 2001, the World Health Assembly passed ResolutionWHA 54.11, outlining the WHO medicines strategy [9].The resolution focused on the expansion of access to es-sential drugs and the promotion of equitable access tomedicines. In addition to other aspects, the resolutioncalled for action to increase medicine price transparencyby exploring ‘the feasibility and effectiveness of imple-menting, in collaboration with nongovernmental organiza-tions and other concerned partners, systems for voluntarymonitoring drug prices and reporting global drug priceswith a view to improving equity in access to essential drugsin health systems, and to provide support to MemberStates in that regard’ [9].In the years following the resolution, various medicine

price information mechanisms were instituted, includingfive of those described in this paper, targeted primarilyat developing countries and with the aim of increasingprice transparency.

Effects of increased price transparencyIncreased price transparency can have various effects onthe medicine market. In competitive markets, economictheory predicts a decrease and convergence of prices as aconsequence of improved transparency. Measures under-taken in high income countries to increase price transpar-ency in private medicine markets have produced thiseffect [10].There is only a small amount of evidence of the net

effects of price transparency in developing country markets[1]. However, advocates of increased price transparencyhighlight potential cost savings through better informedprocurement agents and efficiency improvements for estab-lished procurement systems [4]. The availability of com-parative pricing information from other buyers allowspurchasing countries to leverage their negotiation pos-ition and demand more favorable prices for their pur-chases [1]. Improvements in efficiency can result fromreduced search costs [11] and from benchmarking na-tional medicine prices against the results achieved byother countries. Exploring the effects of increased pricetransparency of medical devices, Pauly and Burns [12]note how comparing the procurement results of differenthospitals can help improve the performance of staff. Simi-lar effects can be expected for the performance of nationalprocurement agencies.However, these effects do not necessarily translate into

cost savings or other effects that may result in increasedaccess to medicines for developing countries. As Hviidand Møllgaard [13] show, medicine suppliers may adapttheir price strategies to the improved knowledge of buyersand refrain from offering lower prices or individual dis-counts to countries. Critics point out that this can leadto a convergence of prices to a more uniform level. In

equitable pricing scenarios, this could jeopardize the bene-fits the poorest countries might derive from price discrim-ination as they would eventually need to pay more fortheir medicines if prices became more uniform [14].Other potential negative effects of price transparency in-

clude possible harmful consequences for medicine manu-facturers that could also affect the availability of medicinesin developing countries. As Outterson [15] notes, criticsmaintain that reduced medicine prices due to increasedprice transparency could harm profits to an extent thatcompanies may consider withdrawing their product fromthe market or reducing their investment in the develop-ment of new drugs specific to the needs of developingcountries. Pauly [16] indicates that profit maximizingcompanies invest in research and development based onthe expected demand and value of a product that makes itreasonable to incur such a financial risk. However, shouldprofits fall below a certain margin, such investments mayindeed be cancelled. There may also be the risk of marketexit of companies whose cost structure cannot competewith more efficient competitors, which in turn couldnegatively affect developing countries’ access to medicines.Different effects of increased transparency can be ex-

pected in markets with different stages of maturity. Forexample, in less mature oligopolistic markets, which wouldbe a characteristic of innovative medicines, given demandfor a product in the absence of an abundance of supplierswill result in high prices. However, as Møllgaard and Over-gaard [17] note, varying market behavior of suppliers andbuyers can lead to different outcomes. While increasedprice transparency could provide incentives for collusionbetween suppliers and therefore drive prices up, transpar-ency can also lead to increased competition, provided thatmarket behavior of buyers has previously been constricteddue to limited information.It could therefore be acknowledged that increased

price transparency can trigger both positive and negativeconsequences for a developing country’s access to medi-cines. As noted by Møllgaard and Overgaard [17] re-garding market effects of increased price transparency inoligopolies, ‘the effect of information or transparencyneeds to be assessed on a case-by-case basis’. Additionalresearch and a more detailed analysis on the net costs orbenefits of increased medicine price transparency will benecessary to identify the specific effects in variousmarket scenarios with different levels of maturity.

Medicine price information mechanismsVan Dongen [18] conducted a review of 50 national and21 international price sources, and provided an overviewof the availability of medicine price information as wellas an evaluation of the reported information. Her ana-lysis came to the conclusion that despite the wide availabil-ity of medicine price information websites large variations

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between medicine prices of different countries still exist foridentical productsc. Prior to the establishment of most ofthe mechanisms reviewed, Danzon and Chao [19] showedthat earlier comparisons of medicine prices between coun-tries were not methodologically sound. Unrepresentativesampling and different approaches in the collection ofnational drug prices resulted in limited comparabilitybetween different data sets. The misinterpretation of datacould therefore have led to wrong conclusions that did notallow for improvements of existing national procurementstrategies.Comparability of prices between countries is often lim-

ited due to differences in procurement modalities andsupply chain systems. Additional factors may be in placethat make a market particularly attractive for medicinesuppliers (e.g. market size and disease burden) or allowa country access to prices attributable to donor support(e.g. per capita income). Other barriers affecting thecorrect interpretation of data exist, such as differencesin reporting languages. However, van Dongen [18] alsoidentified significant price discrepancies between ra-ther similar countries, indicating considerable oppor-tunities for further improvements.From a methodological point of view, van Dongen’s

study [18] concluded that international price compari-sons are best conducted utilizing mechanisms that con-tain price information from multiple countries. This isconsidered to be less time consuming and error-pronethan retrieving data from multiple national websites whichmay apply different methodologies for data collection [18].Information provided about the procurement systems andprocedures used to achieve individual prices furthercontributes to meaningful results of price comparisons.

MethodsOriginal research was conducted for the World HealthOrganization’s (WHO) Vaccine Product, Price and Pro-curement (V3P) project [20]. The V3P project intends toaddress the need of many Middle income countries thatare not benefitting from GAVI support and are facingchallenges in the sustainable introduction of new and es-sential vaccines. The project focuses on the provision ofaccurate, reliable and neutral vaccine product, price andprocurement data, which are critical for the forecasting,budgeting and sustainable financing of vaccines, yet cur-rently not available for Middle income countries. Theintended output of the V3P project is an informationmechanism that allows for increased price transparencyand more informed decision making in the vaccine im-plementation and procurement processes of Middle in-come countries. One of the work streams of the projectincluded the review of six medicine price informationmechanisms to explore existing tools and lessons learnedthrough the operation of price information mechanisms:

WHO’s Global Price Reporting Mechanism (GPRM) [21],WHO/Health Action International’s (HAI) medicine pricedatabase [22], Management Sciences for Health’s (MSH)International Drug Price Indicator Guide [23], WHO/Western Pacific Regional Office’s (WPRO) Price Informa-tion Exchange (PIE) [24], the Global Fund’s Price andQuality Reporting (PQR) tool [25], as well as MédicinsSans Frontières’ (MSF) Untangling The Web (UTW) re-port [26]. These mechanisms were selected to provideinformation on best practices and lessons learned duringthe set-up and operation that should inform a potentialvaccine price information mechanism envisioned by theV3P project.The review was conducted through direct test utilization

of the mechanisms and the examination of supportingdocuments to learn about the mechanisms’ functionalityand their utility as data sources. Furthermore, 14 guidedsemi-structured interviews were conducted with datamanagers and other representatives of organizationshosting these mechanisms in course of the V3P projectin 2011 and 2012 in order to learn about the evolutionof the mechanisms, challenges encountered, identifiedbest practices and user feedback. Certain findings ofthis review are relevant for the debate on price trans-parency and are presented in this article.

ResultsSetup and functionality of the reviewed mechanismsThe six medicine price information mechanisms reviewedfor the V3P project include international price data withfive of the mechanisms also providing information on theprocurement modalities that resulted in the reportedprices. Table 1 provides an overview of the objective,target audience and information provided by GPRM,MSH’s Guide, PIE, PQR, UTW and WHO/HAI’s pricedatabase.All six mechanisms include the goal of increased price

transparency for their various target audiences in thefields of policy making, public health budgeting or publicmedicine procurement. With GPRM, the WHO/HAI data-base and PIE, WHO has been directly involved in thedevelopment and operation of three of these mechanisms.Since 2000, WHO also collaborates with MSH on theInternational Drug Price Indicator Guide.

Information providedAll mechanisms are publicly accessible and provideinformation on product characteristics and pricing. Withthe exception of WHO/HAI, the mechanisms also in-clude information about procurement modalities real-ized by national procurement agencies.GPRM and PQR both contain transactional data of

medicines and other health products focusing on HIV/AIDS, malaria and tuberculosis diagnosis and treatment.

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Table 1 An overview of selected medicine price information mechanismsMechanism (host, yearof inception)

Scope and focus Information provided Objective Target audience

Product Pricing Procurement

GPRM* (WHO,2005)

38 items of HIV/AIDSproducts with differentstrengths (data onmalaria and tuberculosismedicines will bereintroduced aftercompletion of qualitycontrol). About 70,000entries of transactionaldata.

Product group,strength, dosage form,manufacturer, countryof manufacture, genericname, brand name,type of package, baseunit of measure,quantity per package,number of packages,total number ofsmallest unit.

Unit price per smallestunit, total price paid.

Procuring country, datethe order was placed,delivery date, customername, Incoterms,shipment method,payment terms,consignee name.

To promote medicine pricetransparency by collecting,consolidating, analyzing anddisseminating strategicinformation regardingaffordability, accessibility,and availability of HIV,tuberculosis and malariamedicines and diagnostics,and to inform the decisionmaking process ofprocurement agenciesworking at national andglobal levels.

National and globalprocurement agencies,donor agencies andNGOs.

PQR* (TheGlobal Fund,2004)

Circa 115 items of HIV/AIDS,malaria and tuberculosismedicines and other healthproducts (about 35,000entries of transactional data).

Product, strength,dosage form,manufacturer, supplier,generic name, type ofpackage, base unit ofmeasure, quantity perpackage, number ofpackages.

Pack price, unit price,total price paid; limitedinformation aboutmark-ups.

Procurement agents,procurement date,scheduled and actualdelivery date, Incoterms;information about freightand insurance is providedas an estimate.

PQR is a grant monitoringtool for the Global Fund andits donors. It providesinformation on theefficiency of grant utilization,monitors consistency ofcosts with internationalreference ranges, andfollows up on compliancewith quality assurancepolicies.

Principal Recipients ofGlobal Fund medicinesupport as well as theGlobal Fund secretariatand partners.

InternationalDrug PriceIndicatorGuide (MSH,1986)

About 1,100 medicines andother health products, focusingon products included in WHO’sEssential Medicines List (EML).

Generic name, strength,dosage form, route ofadministration, WHOstatus, defined dailydose, AnatomicTherapeutic Chemical(ATC) classification.

Buyer and supplierprices: pack price andunit price, withindication of highest,lowest and median listedprice; approximatedshipping costs forsuppliers’ listed prices.

Incoterms. To make price informationmore widely available inorder to assist in planningbudgets and help facilitatethe procurement ofpharmaceuticals and otherhealth technologies ofassured quality (as declaredby data providers withoutconstituting pre-qualificationor quality approval fromMSH or WHO) for developingcountries for the lowest pricepossible, thereby contributingto the equitable access tohealth.

Ministries of Health,national medicalprocurement agenciesand other institutionsresponsible for medicineprocurement.

PIE (WHO/WPRO, 2009)

40 medicines (only 2009–2010data available).

Generic name, brandname, dosage form andstrength, package size,volume procured,manufacturer and supplier.

Pack price, unit price,indication aboutinsurance and freightcosts.

Procurement methodand date; description ofcountries’ public medicinesprocurement system; regulationsand quality assurance; taxes onmedicines; medicines financing/expenditure and pricing policies.

To provide WPRO memberstates with a tool to help themassess their procurementefficiency over time and leveragetheir negotiation power withmedicine suppliers, in order toobtain the best possible prices.

Ministries of Health,national and nationalmedical procurementagencies.

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Table 1 An overview of selected medicine price information mechanisms (Continued)

UTW (MSF,2001)

33 ARV medicines. Therapeutic class, manufacturer,generic name, brand name,strength, dosage form, qualityassurance (WHO prequalificationand US FDA tentative approvalstatus), WHO guidelines, updateson ARV developments, patentstatus of registered products.

Price information isprovided by productformulation and dailydosage.Indication of markettrends (i.e. evolution oflowest generic price andinnovator price for middleand low incomecountries).Access eligibility criteria tocertain prices for specificcountries and organizations.

Indications of Incotermsprovided by ARV manufacturers;world sales of originatorproduct.

To provide a transparent platformof price information made availableby medicine suppliers on the pricesthey offer to different categoriesof countries and organizations forthe benefit of countries purchasingARV medicines and receiving supportfrom organizations involved in theprovision of ARV drugs tobeneficiaries in need.

Purchasers of ARV drugswho buy the products foruse in developing countries,implementers of HIVprograms, civil society andpolicy makers in publichealth and intellectualproperty.

WHO/HAIDatabase(HAI, 2003)

Information derived fromabout 100 surveys providingprice data on a selection of 50medicines (including 14pre-selected global products,16 pre-selected regionalproducts, and 20 productsselected by the individualresearch groups).

Manufacturer, generic name,brand name, strength, dosageform, unit of measure, nationalEML status.

Government procurementprice and final patientprice for the public,private, and other sectorsin USD, local currency andas a ratio to aninternational referenceprice. Affordability ofstandard treatments.Medicine pricecomponents in the supplychain (manufacturer’sselling price, insuranceand freight; landed price;wholesale selling price forthe private sector, or theprice indicated by centralmedical stores for thepublic sector; retail pricefor the private sector, orthe dispensary price forthe public sector;dispensed price).

N.a. To improve the availability andaffordability of essential medicinesthrough the collection, analysis andpublication of medicine price,availability, affordability andmedicine price componentdata across health-care sectorsand regions in a country. Toimprove price transparency. Toprovide information on pricingpolicy options and monitoringthe impact of such policies.

For survey methodologyand results: ministries ofhealth, civil society, academiaand others. For policy advice:national decision makers inhealth policy.

*GPRM and PQR are listed in sequence due to the similarity of the two information mechanisms. Otherwise the mechanisms included in this table are listed in alphabetical order.

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GPRM was developed from an earlier version of PQRand still shares similarities, although both mechanismshave evolved differently. UTW, which is part of MSF’sCampaign for Access to Essential Medicines, focuses onAnti-Retroviral (ARV) medicines only. MSF considersUTW a provider of complementary data to informa-tion provided by GPRM and PQR.

Information sourcesGPRM is built on a broad collaboration of several part-ners and donors and is hosted at WHO. The mechanismencourages competition and accountability of suppliersand promotes benchmarking of supplier prices. Estab-lished relationships with specific procurement agenciesas regular data providers allow GPRM to receive a con-stant flow of data. One of GPRM’s data providers is theGlobal Fund through its PQR mechanism. Data includedin the PQR is automatically fed into GPRMd. PQRreceives its information from Principal Recipients ofGlobal Fund support who are required to provide priceinformation following the receipt of goods purchasedwith Global Fund support. These prices are used tomonitor the Principal Recipients and ensure that theirprocurement concurs with Global Fund standards and iswithin the international average price ranges.UTW sources its information from ARV manufac-

turers who voluntarily provide price and procurementinformation on an annual basis. This makes UTW theonly source of medicine price information reviewedthat includes information provided by pharmaceuticalsuppliers to identify criteria for price differentiationbetween buyers.PIE, MSH’s Guide and WHO/HAI’s price database

contain a broader range of medicines. PIE provides com-parative information on the procurement prices of se-lected medicines that focus on common conditions andare widely used by countries participating in the mech-anism. The mechanism receives its data from memberstates who voluntarily provide their price and procure-ment information on an annual basis. MSH’s InternationalDrug Price Indicator database provides product, price andprocurement information on various health items, includingmedicines that are registered in WHO’s Essential MedicinesList (EML). Data providers include NGOs, internationaldonor agencies, UN agencies and purchasing countries.Unlike the other five mechanisms reviewed, WHO/

HAI collects its data from independent researchers whoconduct medicine price surveys according to the instruc-tions outlined in WHO/HAI’s survey manuale. A typicalsurvey collects data on 50 medicines in six geographic oradministrative areas of a country and samples public healthfacilities, registered private retail medicine outlets and up totwo other sectors in which medicines are commonlyassessed (such as the mission sector). In addition to

providing access to survey data, WHO/HAI providesadvice on national pricing policy options and gives in-structions on the establishment of monitoring systemsthrough the WHO/HAI manual.Depending on the type of data source, the reliability of

data comparison between countries may vary. Data col-lected by mechanisms that source their informationfrom countries does not reveal the number of middle-men and the amount of mark-ups included in the re-ported price. More reliable results from medicine pricedata comparisons between countries can be expectedfrom mechanisms that source their data directly fromthe manufacturer (UTW), from international procure-ment agents (GPRM), or from data sources with astrong incentive to cut avoidable mark-ups (PQR andthe Principal Recipients of Global Fund support).

Data volumeGPRM and PQR handle large amounts of data everyyear. Since their inception, GPRM and PQR have col-lected around 70,000 and 35,000f entries of transactiondata, respectively. In comparison, MSH’s database pro-vides product, price and procurement information onmore than 1,100 items, including health products otherthan medicines. PIE provides information about 40 med-icines purchased by 23 member states within WHO’sWestern Pacific Region; however, only for the years 2009and 2010. The latest UTW reported price informationon 33 ARV medicines [27]. WHO/HAI depends on thecompletion of individual country surveys to build itsdatabase. To date, the WHO/HAI database providesinformation on 400 entries of various presentations ofmedicines from surveys conducted in 54 countries, withindividual countries being the focus of one or more ofthese surveys.

Data collationAll mechanisms except UTW and WHO/HAI allow forthe automatic collation of medicine price data betweendifferent countries and years. GPRM, PQR and PIEbreak down price information into more detail andthereby enable users to conduct additional price ana-lyses. UTW is available in report format only and whileprice developments of individual medicines over timeare depicted in charts, comparisons between years need tobe conducted manually between different reports. Inter-national price comparisons conducted with WHO/HAIdata are limited to the availability of survey data forspecific countries and years.The comparability of international medicine price data

requires certain modifications to account for differencesin purchasing power parity or inflation when comparingacross countries or years. The WHO/HAI manual [4] pro-vides detailed instructions for the users of its database to

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make such modifications and allow for the compilation ofmeaningful data. MSH’s Guide indicates exchange ratesused for individual years and instructs its users to takeinto account additional factors such as financing, procure-ment modalities and supply chain peculiarities that mayinfluence price calculations. Data included in the GPRM,PQR, PIE and UTW mechanisms are presented in USD asindicated by the individual data providers which simplifiescollation but also inhibits the risk of potential calculationerrors made before the data reaches the database of theinformation mechanisms.

Observed effects of medicine price informationmechanismsInterviews conducted with data managers of the reviewedprice information mechanisms indicated certain marketeffects that may be connected to the operation of some ofthe mechanisms.PIE learned from some of the countries participating

in the mechanism that they were able to negotiate morefavorable terms for their procurement contracts afterhaving had access to price information from other coun-tries in Pacific region which paid significantly less fortheir medicines. Similarly, a 2004 user survey conductedby MSH indicated that almost half of the price compari-sons conducted with information from the InternationalDrug Price Indicator Guide contributed to some form ofprice savings. WHO/HAI observed changes in nationalpricing policies that have resulted in lower prices inIndonesia, Lebanon and elsewhere [4].Mandatory reporting requirements applied to Principal

Recipients of the Global Fund most likely contributed toan increased demand for high quality products. Thiseffect was observed by PQR data managers following theintroduction of compulsory reporting of price and pro-curement details for all goods purchased with GlobalFund support to PQR. Although the Global Fund alwaysrequired the purchase of high quality products, the con-stant and immediate monitoring of purchases throughthe PQR triggered a significant increase in adherence toprocurement and supply management requirements andan increase in efficiency.Since its launch, UTW has achieved a lot of recogni-

tion on the ARV market, providing an incentive to man-ufacturers of ARV drugs to voluntarily and regularlyprovide price information to this annual price report.The report now includes information from all majorARV manufacturers that provide originator brands ofproducts recommended by WHO treatment guidelines.The team working on MSF’s UTW mechanism observedthat prices for some of the generic ARV drugs includedin their report have decreased and converged over time.This effect was observed particularly for medicines pro-duced by more than three generic companies, which

includes increased competition in addition to improvedprice transparency as a potential cause of price de-creases. Based on the experience with UTW, MSF notesa positive effect of price transparency on increasedaccess to medicines.

DiscussionEstablished for varying target audiences, the reviewedmechanisms respond to the need for more transparentprice information expressed by countries, donors andvarious other entities. There is little data available onhow many countries are utilizing the reviewed mecha-nisms. Still, there is continuing demand for medicineprice information. While not all of the reviewed informa-tion mechanisms conduct systematic user evaluations,MSH’s Guide, PIE and UTW receive positive feedbackfrom the users of their data. GPRM and PQR regularly re-spond to user requests regarding their data and mechan-ism. At the same time WHO/HAI continues to providetechnical support to researchers using WHO/HAI meth-odology and receives requests to use the data in theirdatabase. Following the launch of the manual, WHO/HAIobserved an unexpectedly high demand for training work-shops on the methodology. To date, about 100 surveysusing WHO/HAI’s methodology have been completed orare nearing completion.The reviewed mechanisms allow for the comparison of

international medicine prices while avoiding methodo-logical challenges observed for comparisons using onlynational price databases as information sources. GPRM,MSH’s Guide, PIE, PQR and UTW allow users to accessinformation on international medicine prices on a singleplatform. Data is coherently collected with methodolo-gies and procedures established by the individual mecha-nisms. WHO/HAI enables price comparisons throughuse of a standardized methodology and adjustment pro-cedures that allow for the comparison of medicine pricesacross countries and years. However, one needs to recognizethe caveat that all reviewed mechanisms still need to rely onthe accuracy of data received from their various sources,over which they have little to no influence.The majority of the reviewed mechanisms provide

some procurement information in addition to pricingdata, although to different extents. Such additional infor-mation is important when conducting international pricecomparisons, in order to understand prices in their indi-vidual contexts and to determine the types and levels ofmark-ups included at different stages of the supplychain. Compared to the other reviewed mechanisms,GPRM and PQR offer the most detailed information onprocurement modalities accompanying the reported prices.PIE provides detailed country profiles that present back-ground information on regulations and procedures in place,which enables a better interpretation of price information.

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MSH’s Guide urges their users to interpret prices in theirindividual contexts and UTW provides terms of access tocertain prices for specific purchasers. WHO/HAI does notprovide information on procurement modalities.

Focus on ARV pricesGPRM, PQR and UTW focus on HIV/AIDS relatedmedicines (with GPRM and PQR also including infor-mation on malaria and tuberculosis medicines and re-lated products). The amount of price information availablefor ARV medicines and other health products focusing onHIV/AIDS is remarkable and may reflect the prominenceof HIV/AIDS on the international health agenda over thepast decade.Other increasingly important pharmaceutical segments

have not seen the establishment of similar mechanismswith a specific focus. For example, in some Low incomeand Middle income countries the cost of drugs treatingchronic diseases can represent a significant share of pub-lic and private medical expenditures [28]. The successfuloperation of price information mechanisms focusing onHIV/AIDS medicines may provide an incentive for simi-lar tools to be implemented, that focus on other import-ant diseases and public health cost drivers.The focus on ARV prices of some of the observed

mechanisms may also have contributed to the decline ofprices of certain medicines reported by data managers.In addition to UTW, the data managers of GPRM andPQR observed similar developments occurring duringthe operation of price information mechanisms focusingon ARV prices and other products. Nevertheless, theseprice declines may be due to a variety of causes, poten-tially including increased price transparency. For ex-ample, a strong donor focus and the availability of donorfunds [29] created a considerably large and risk-freeenvironment that sets aside ARV from other medicinemarkets. Additional research would be necessary beforedrawing any definite conclusions on the causes of theprice decreases observed.

Potential benefits of medicine price informationmechanismsMedicine price information mechanisms contribute toincreased price transparency by allowing users to com-pare prices, understand the composition of these pricesand provide better insights into existing procurementsystems. Access to increased information can contributeto cost savings and potentially increase the access tomedicines for developing countries. In addition to theextraction of price data, the utilization of medicine priceinformation mechanisms may also help countries gain abetter understanding of the different components in-volved in medicine procurement. One important lessonlearned from PIE’s experience is that participating countries

voluntarily shared their price and procurement informationwith other countries providing information to the mechan-ism. This allowed them to evaluate their procurement pro-cedures and compare them to the systems used by othercountries.In order to derive the highest possible benefits from

improved price transparency, countries first need to beaware of the existence of tools providing detailed priceinformation. Raised awareness could help increase theutilization of price information mechanisms. Further-more, clear instructions and user support regarding themost effective utilization of the mechanisms and thecorrect interpretation of data are necessary to achievemeaningful results. Finally, depending on the need ofindividual countries, targeted capacity building can helpmaximize the effects derived from increased informationand help improve the access to medicines for developingcountries.

ConclusionWorking with accurate and contextually rich data, medi-cine price information mechanisms have the potential toplay an important role in making medicines prices moretransparent. Positive user feedback and ongoing datarequests received by the reviewed mechanisms indicate ahigh demand for increased medicine price transparency.Taking into account the amount of information gatheredand accessed by mechanisms that focus on medicinesand health products related to HIV/AIDS, malaria andtuberculosis, it would be interesting to see whether andto what extent mechanisms focusing on different diseasesegments could encounter a similar demand. Market im-pact assessments exploring the effects of dedicated donorfunds may help explain the driving force of user demands.The divergent views on whether increased medicine

price transparency generates more value or harm to theavailability and affordability of medicines in developingcountries need to be considered within the context ofindividual medicines. From a theoretical point of view, theeffects of increased price transparency are highly dependenton the degree of competition prevalent in a market. Prac-tically speaking, this requires more detailed analyses ofdifferent groups of medicines, depending on the maturityof their market.Additional research would also be necessary to provide

more clarity on the extent of which the information anddata provided by the reviewed price information mecha-nisms contributes to price decreases and other marketeffects. Information gathered during the review of thesix medicine price information mechanisms derives fromuser statements and observations made by data man-agers on price developments over time. Longitudinalstudies building on market analyses and targeted userevaluations may help produce more significant data that

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may allow conclusions on the impact of informationmechanisms on medicine suppliers and purchasingcountries.Nevertheless, as demonstrated through the informa-

tion provided by the interviewees, the review of themechanisms did reveal positive effects on the behaviorof their users. While the cause(s) of the observed re-duced procurement costs for ARV and other medicinesstill need to be fully determined, countries using the PIEmechanism were able to negotiate more favorable pricesfor their medicines. Also, the utilization of the PQRmechanism led to the procurement of better qualitymedicines.Taking into account these positive effects for developing

countries and their health systems, the operation andutilization of medicine price information mechanismsshould be encouraged and supported where needed.

EndnotesaFollowing the target audience of the medicine price

information mechanisms discussed in this article, theauthors chose the term “developing countries” to includeall countries not defined as High income countries follo-wing the World Bank Atlas method (GNI < USD 12,615per year).

b2 out of 36 Low income countries and 17 out of 54Lower middle income countries (using the World BankAtlas method).

cVan Dongen’s analysis focused on the medicineprices of seven of the 14 medicines collected globally inWHO/HAI surveys.

dWhen this article was written, GPRM only containeddata about HIV/AIDS related products, with informationabout malaria and tuberculosis related medicines andhealth products undergoing quality control.

eThe WHO/HAI survey methodology has been pub-lished as a manual with an accompanying automatedExcel workbook for data entry and analysis. The metho-dology’s second edition was published in 2008.

fThe currently available upgraded version of PQRcontains about 20,000 entries.

Competing interestsThe authors declare that they have no competing interests.

Authors’ contributionsMH, MK and SS conceptualized the research. MH and SS reviewed theinformation mechanisms and conducted interviews. MH prepared the firstdraft of the manuscript. MK and SS critiqued the draft and added text.Subsequent revisions were made by all authors. All authors reviewed thefinal draft and approved it for submission.

AcknowledgementsWe would like to thank the data managers of the reviewed medicine priceinformation mechanisms who repeatedly provided valuable insights andinformation about the individual mechanisms: Dardane Arifaj-Blumi, PatrickAylward, Arax Bozadijan, Boniface Dongmo-Nguimfack, Margaret Ewen andJulie Frye. Further information about the mechanisms was provided by

Alexandra Cameron, Randy Grodman, Richard Laing, Sophie Logez, BarbaraMilani, Pablo Panadero, Joseph Perriens, Christopher Quinn, Damir Rakytyanskyy,Raja Rao, Gitanjali Sakhuja, Budiono Santoso, Catherina Timmermans, KlaraTisocki and Brenda Waning. This work and the salaries of MH, MK and SS weresupported by the Bill and Melinda Gates Foundation through the V3P project[grant number: OPP1034340].

Received: 31 July 2013 Accepted: 19 March 2014Published: 8 May 2014

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doi:10.1186/1744-8603-10-34Cite this article as: Hinsch et al.: Enhancing medicine price transparencythrough price information mechanisms. Globalization and Health2014 10:34.

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