Paying the Price: The Affordability of Medicines Across the Commonwealth (and elsewhere)

Paying the Price:Paying the Price:

The Affordability of Medicines

Across the Commonwealth (and elsewhere)

Margaret EwenHealth Action International

Uganda pharmaceutical surveySept 2002

WHO/HAI Project on Medicine Prices

improve the availability and affordability essential medicines

• Develop a reliable methodology for collecting and analysing price and availability data across healthcare sectors in a country

• Price transparency; survey data on a freely accessible website allowing international comparisons

• Advocate for appropriate pricing policies and monitor their impact

• Launched WHA 2003

• Measures medicine prices availability affordability component costs

• 40+ surveys to date in all regions of the world

Medicine PricesMedicine Pricesa new approach to measurementa new approach to measurement

www.haiweb.org/medicinepriceswww.haiweb.org/medicineprices

Methodology - Data collection

• Systematic sampling: at least 6 regions, minimum of 5 pharmacies/facilities per sector per region

• Public sector facilities, private retail pharmacies and ‘other’ sectors (e.g. dispensing doctors or mission sector)

• Prices of 30 pre-selected commonly used medicines – 14 global + 16 regional

• Predetermined dose form & strength, & recommended pack size

• Supplementary medicines highly encouraged, adapted to local needs

• Prices of originator brand and lowest price generic• All components of price from manufacturer to retailer

identified

Data analysis

• Price calculated as Median Price Ratio (MPR) – local price compared to MSH International reference price, world market generic procurement price

• Availability calculated as number of facilities having that product on the day of data collection reported as a percentage

• Affordability assessed for ten pre-selected courses of treatment compared to daily wage of lowest paid unskilled government worker

Excel workbook accompanies manual, for data entry (double entry, with error checking) and analysis

Surveys to date

Middle East: Lebanon, Jordan, Kuwait, Syria, Sudan, UAE, Yemen

Francophone Africa: Cameroon, Tunisia, Morocco, Algeria, Mali, Chad, Senegal, Niger

Anglophone Africa: Uganda, South Africa, Tanzania, Kenya, Nigeria, Ghana, Ethiopia, Zimbabwe

Asia/Pacific: Sri Lanka, Malaysia, Pakistan, Mongolia, China: Shandong & Shanghai, Philippines, Fiji, Indonesia, Vietnam, Cook Islands,

India: West Bengal, Haryana, Karnataka, Maharashtra (2), Chennai, Rajasthan

Central Asia: Kazakhstan, Tajikistan, Kyrgyzstan, Uzbekistan

Europe: Bosnia Herzegovina, KosovoSouth America: Peru, Brazil

Public sector Procurement price

Public sectorPatient price

Originator Generic Originator Generic

Malaysia (2004) 0.5 free

Pakistan (2004) 1 0.4 free free

India, Karnataka (2004) 0.2 free

Kenya (2004) 0.7 0.9

Ghana (2004) 0.8 2.3

Tanzania (2004) 0.9 1.1

Cameroon (2005) 0.3 1 facility

Mongolia (2004) 2.9 12.1

Philippines (2005) 6.2 - 1 facility 3.6

China, Shandong (2004) 9.6 8.2 3 facilities 2 facilities

Median price ratio, public sector, metformin 500mg tabMedian price ratio, public sector, metformin 500mg tab

Prices adjusted to MSH 2003




Malaysia (2004) 1.4 free

India, Karnataka (2004) 0.5 free

Uganda (2004) 0.7 free

Kenya (2004) 0.4 1.7

Ghana (2004) 2.1 5.1

Tanzania (2004) 0.8 free to most

Cameroon (2005) 0.5 not found

Indonesia (2004) 2.2 21.5

Jordan (2004) 6.5 6

Tunisia (2004) 4.5 free

China, Shandong (2004) 0.3 0.7

Median price ratio, public sector, phenytoin 100mg tabMedian price ratio, public sector, phenytoin 100mg tab





Uganda (2004) 0.8 free

Ghana (2004) 2.1 7.1

Tanzania (2004) 0.5 2.9

Pakistan (2004) 1 free

India, Maharashtra (2005) 1.1 free

Kazakhstan (2004) 6 0.8 not found

Tunisia (2004) 5.1 free

Philippines (2005) 34.9 - 42.2 19.5

Morocco (2004) 66.9 25.5 free free

Median price ratio, public sector, ciprofloxacin 500mg tabMedian price ratio, public sector, ciprofloxacin 500mg tab


Median price ratios, private retail pharmacies Median price ratios, private retail pharmacies captopril 25mg tabcaptopril 25mg tab

0 5 10 15 20 25

China, Shandong

Kuwait

Peru

Indonesia

Pakistan

India, Maharashtra

Malaysia

Ghana

Kenya

Cameroon

median price ratio

Lowest priced generic

Originator brand


Median price ratio, private retail pharmaciesMedian price ratio, private retail pharmaciesglibenclamide 5mg tabglibenclamide 5mg tab

0 10 20 30 40 50 60 70

Tajikistan

Kuwait

Morocco

Indonesia

Tanzania

Ghana

Uganda

Malaysia

Pakistan

India, Maharashtra

median price ratio


Originator brand

79 »


Median price ratio, private retail pharmaciesMedian price ratio, private retail pharmaciesamoxicillin 250mg tabamoxicillin 250mg tab

0 5 10 15 20 25 30

Peru

Jordan

Indonesia

Morocco

India, Maharashtra

Malaysia

Pakistan

Uganda

Kenya

Ghana

median price ratio

lowest priced generic

originator brand

Adjusted to MSH 2003

Public sector Private sector


India, Maharashtra 0% 42% 85% 46%

Pakistan 0% 40% 96% 50%

Malaysia 0% 100% 91% 88%

Kenya 0% 76% 62% 71%

Tanzania 0% 13% 0% 38%

China, Shandong 0% 5% 0% 5%

Mali 0% 5% 55% 45%

Morocco 0% 100% 100% 100%

Availability: glibenclamide 5mg tabAvailability: glibenclamide 5mg tab

Public sector Private sector


Tanzania 0% 3% 0% 2%

Kenya 0% 2% 14% 16%

Ghana 0% 0% 0% 2%

Pakistan 0% 0% 21% 0%

India, Rajasthan 0% 25% 0% 65%

China, Shandong 30% 0% 25% 0%

Mongolia 0% 0% 0% 4%

Philippines 4% 0% 2% 0%

Tunisia 0% 81% 0% 95%

Availability: beclometasone inhaler 50mcg/doseAvailability: beclometasone inhaler 50mcg/dose

Affordability: captopril 25mg x 2 tab/day Affordability: captopril 25mg x 2 tab/day 30 days treatment, private retail pharmacies30 days treatment, private retail pharmacies

0 2 4 6 8 10 12

China Shandong

Jordan

Philippines

India, Rajasthan

Pakistan

Ghana

Kenya

Uganda

days wages


Originator brand

Affordability: fluoxetine 20mg x 2 tab/day Affordability: fluoxetine 20mg x 2 tab/day 30 days treatment, private retail pharmacies30 days treatment, private retail pharmacies

0 10 20 30 40 50

Yemen

Jordan

Kuwait

Peru

Indonesia

Philippines

India, West Bengal

Pakistan

Kenya

days' wages


Originator brand

Affordability: amitriptyline 25mg x 3 tab/day Affordability: amitriptyline 25mg x 3 tab/day 30 days treatment, private retail pharmacies30 days treatment, private retail pharmacies

96»

0 1 2 3 4 5 6 7 8

Kyrgzystan

Yemen

Peru

Kuwait

India, West Bengal

Pakistan

Ghana

Kenya

days wages


Originator brand

EML

AvailabilityPublic sector

facilities

Originator Generic

Uganda yes 0% 0%

Ghana ? 4% 11%

Mali yes 0% 0%

Pakistan yes 0% 3%

Indonesia no 13% 0%

AffordabilityPrivate retail pharmacies

Originator Generic

5.6 days 2.0 days

8 days 4.6 days

4.2 days 2.7 days

1.4 days 1.4 days

4.1 days -

salbutamol inhaler 0.1mg/dose: salbutamol inhaler 0.1mg/dose: availability vs affordability availability vs affordability

Examples of taxes on medicinesExamples of taxes on medicinesimported, private sectorimported, private sector

TajikistanVAT 20% Customs duty 5% Tax 1-5%+ transport charges, wholesale & retail mark-ups

Eliminate taxes: cumulative mark-up 123% → 74%

PeruVAT 12% IGV 19% Municipal promotion tax 2%+ insurance, import, wholesale & retail mark-ups

Eliminate taxes: cumulative mark-up 238% → 149%

Indonesia VAT 10% - charged twice

Philippines Import tariff 4% national taxes 3-6% VAT 12%

Yemen Customs duty 5% Taxes 5%

Uganda

(preliminary data)

-locally manufactured

generics 30-32%

-imported 66%

MSP, insurance,

freight + landed costs

+ NMS mark-up

Carbamazepine imported, generic, public sector

Wholesale23%

Landed11%CIF

66%

Retail0%

Dispensed0%

Chad (official rates) Cumulative mark-ups for generics 92%• Statistics tax 2%• Central Medical Store mark-up 16%• Regional Medical Store mark-up 25%• Health facility mark-up 30%

Examples of price components, public sectorExamples of price components, public sector

Price components – private sector

Importers mark-up: 10% – 61%

Wholesaler mark-up: 2% - 65%

Pharmacy mark-up: 8% – over 300%

Public or private sector add-on costs: - applied as % mark-up or fixed fee-fixed or variable (originator brand/generic, imported/local, regressive)- cumulative so higher the manufacturer’s price the higher the patient price

Lebanon 2005 - implemented a new pricing structure for all imported medicines estimated to reduce patient prices by 3-15%

(was 71.4%)

FOB $ Shipping

Insurance

Customs

Clearance

Importer

Markup

Pharmacy

Markup

Cumulat.

Markup

0- $10 6% 10% 10% 30% 66%

$10 - $50 4.5% 8.5% 10% 30% 62%

$50 - $100 3.5% 7.5% 9% 27% 54%

> $100 2.5% 6.5% 8% 24% 46%

Generic (patient price: 24 RM)

4: Retail 50%

3: Wholesale 3%

2: Landed 7%

1: MSP, CIF 40%

Originator (patient price: 72 RM)

1: MSP, CIF 56%

2: Landed 11%

3: Wholesale 13%

4: Retail 20%

Malaysia: atenolol 50mg tab Malaysia: atenolol 50mg tab private retail pharmaciesprivate retail pharmacies

Financial Sources Used to Pay for Health Care

ReasonAverage % Reporting

Range in 8 Surveys

Current income of any household member

75.6 47.2 – 91.0

Payments from health insurance 3.6 1.5 – 13.0

Savings 11.4 5.4 – 17.7

Sold Items 9.5 5.7 – 16.1

Family/friends resources outside household

18.6 12.3 – 27.4

Borrowed from other than family/friend 14.1 5.1 – 24.5

Preliminary results Anita Wagner et. al. 2002 World Health Survey of households & individuals. Analysis of 8 countries: Senegal, Morocco, Tunisia, Cote d’Ivoire, Ghana, India, Pakistan, Philippines

Many policy optionsMany policy options

• Off-patent medicines - purchase low priced quality generics, public and private sector

• Patented medicines – equitable prices, use the flexibilities of trade agreements to introduce generics while a patent is in force

• Aid generic competition eg fast-tracking, waive registration fees

• Permit generic substitution and provide incentives for the dispensing of generics

• Stop taxing essential medicines • Where there is little competition, consider regulating

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

• Educate doctors and consumers on availability and acceptability of generics, and publicise the price of generics

• Separate prescribing and dispensing

Many policy optionsMany policy options

Documents

Paying the Price: The Affordability of Medicines Across the Commonwealth (and elsewhere)