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

1. Paying the Price: The Affordability of Medicines Across the Commonwealth(and elsewhere) Margaret Ewen Health Action International

2. Uganda pharmaceutical surveySept 2002

3. 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

4. Medicine Prices a new approach to measurement • Launched WHA 2003 • Measures medicine • prices • availability • affordability • component costs • 40+ surveys to date in all regions of the world www.haiweb.org/medicineprices

5. 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

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

7. 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, Kosovo South America: Peru, Brazil

8. Median price ratio, public sector, metformin 500mg tab Prices adjusted to MSH 2003

9. Median price ratio, public sector, phenytoin 100mg tab Prices adjusted to MSH 2003

10. Median price ratio, public sector, ciprofloxacin 500mg tab Prices adjusted to MSH 2003

11. Median price ratios, private retail pharmacies captopril 25mg tab Prices adjusted to MSH 2003

12. Median price ratio, private retail pharmacies glibenclamide 5mg tab 79 » Prices adjusted to MSH 2003

13. Median price ratio, private retail pharmaciesamoxicillin 250mg tab Adjusted to MSH 2003

14. Availability: glibenclamide 5mg tab

15. Availability: beclometasone inhaler 50mcg/dose

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

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

18. Affordability: amitriptyline 25mg x 3 tab/day 30 days treatment, private retail pharmacies 96»

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

20. Examples of taxes on medicines imported, private sector Tajikistan VAT 20% Customs duty 5% Tax 1-5% + transport charges, wholesale & retail mark-ups Eliminate taxes: cumulative mark-up 123% → 74% Peru VAT 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%

21. Examples of price components, public sector • 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% Uganda (preliminary data) -locally manufactured generics 30-32% -imported 66% MSP, insurance, freight + landed costs + NMS mark-up

22. 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

23. Lebanon 2005 - implemented a new pricing structure for all imported medicines estimated to reduce patient prices by 3-15% (was 71.4%)

24. Malaysia: atenolol 50mg tab private retail pharmacies

25. Financial Sources Used to Pay for Health Care 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

26. Many 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

27. Many policy options • 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