Medicine Prices MatterMedicine Prices Matterto

People and Insurance CompaniesPeople and Insurance Companies

Margaret EwenHealth Action International

Medicines coverage in Medicines coverage in health insurance systemshealth insurance systems

Equitable Access

available to the poor

Quality Use

necessary, safe, effective, properly taken

Affordable cost

to patient & system

Source: MedIC

WHO/HAI Project on Medicine Prices & Availability

improve the availability and affordability of 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

• 55+ 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)

• Prices of 30 pre-selected commonly used medicines (core medicines)

• 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 Management Sciences for Health’s International Drug Price Indicator Guide (procurement prices offered to developing countries for multi-source medicines)

• Availability calculated as number of facilities having that product on the day of data collection (%)

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

Selected surveys in WHO Eastern Mediterranean Region

Country No. of Meds

Conducted by

Jordan, 2004 29 JFDA

Kuwait, 2004 29 University of Kuwait

Lebanon, 2004 32 Ministry of Health

Sudan (Khartoum) 2005 41 Ministry of Health

Syria, 2003 27 Ministry of Health

Tunisia, 2004 27 Ministry of Health &National Union of Mutual Insurance Companies

Yemen, 2006 35 Ministry of Health

Median % availability - public sector

0102030405060708090

100

Jordan Kuwait Lebanon Sudan Tunisia Yemen

med

ian

% a

vaila

bilit

y

Originator brand Lowest priced generic

Median % availability - private sector

0

20

40

60

80

100

Jordan Kuwait Lebanon Sudan Syria Tunisia Yemen

med

ian %

avail

abilit

y

Originator brand Lowest priced generic

Public sector Procurement price

Public sectorPatient price

Originator brand

Lowest priced

generic

Originator brand

Lowest priced

generic

Jordan 0.69 0.84

Kuwait 4.96 free

Lebanon 1.45 free

Sudan 6.13

Syria 1.56 not surveyed

Tunisia 0.96 free

Yemen 0.41

Public sector prices: Public sector prices: glibenclamide 5mg tabs

Adjusted to same reference price (MSH 2003) & inflation/deflation

Public sector Procurement price

Public sectorPatient price

Originator brand

Lowest priced

generic

Originator brand

Lowest priced

generic

Jordan 2.46 2.41

Kuwait 18.43 free

Lebanon free

Sudan 1.32 5.67

Syria 11.39 3.42 not surveyed

Tunisia 7.99 3.58 free

Yemen

Public sector prices: Public sector prices: diazepam 5mg tabs

Adjusted to same reference price (MSH 2003) & inflation/deflation

Lowest Price Generic and “Brand Premium” in Private Retail Outlets by Country Income

0

5

10

15

20

25

30

India(n=7)

Low (n=7) Lower Mid(n=10)

UpperMid-High

(n=3)

World Bank Income Group

Med

ian M

PR

for

Core

M

edic

ines

Found

MinMaxAverage

Low Price Generic

10%

300%

218% 126%

Brand

* MPR = Median price of core medicines found in 4+ outlets as ratio of MSH generic procurement priceNote: Surveys with 8+ medicines on WHO/HAI core list found in both OB and LPG

Patient prices: Patient prices: private retail pharmaciesdiclofenac 25 mg tabs

Adjusted to same reference price (MSH 2003) & inflation/deflation

0

10

20

30

40

50

60

70

80

90

Jordan Kuwait Lebanon Sudan Syria Tunisia Yemen

MPR

Originator brand

Lowest priced generic

Patient prices: Patient prices: private retail pharmaciesatenolol 50 mg tabs

0

10

20

30

40

50

60

Jordan Kuwait Lebanon Sudan Syria Tunisia Yemen

MPR

Originator brand

Lowest priced generic

AffordabilityAffordability: glibenclamide 5mg 3xday 30 days treatment, purchased by lowest paid unskilled govt

worker from private sector – by country income group

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

India(n=7)

Low(n=15)

Lower Mid(n=11)

Upper Mid-High

(n=3)

World Bank Income Group

Ave

rage

Day

s' W

ages

N

eeded

to P

ay for

Tre

atm

ent

LPGBrand

AffordabilityAffordability: atenolol 50mg daily 30 days treatment, purchased by lowest paid unskilled

govt worker from private sector

0 1 2 3 4 5 6

Jordan

Kuwait

Lebanon

Sudan

Syria

Yemen

days' wages

Lowest priced generic

Originator brand

Price components

Wholesale mark-up

Retail mark-up

Cumulative mark-up

Jordan 19% 26% 62%

Kuwait 35% 25% 70%

Lebanon 10%* 30%* 60%*

Sudan 15% 20% 67%

Syria 8% regressive: 8-30% variable

Tunisia 8.7% regressive: 31.6-42.9% variable

Yemen 10% 20% 57%

TaxesJordan: import fee up to 5%, sales tax 4%Sudan: customs duty 10%, MoD duty 1%Yemen: import tax 5%, tax 5%Tunisia: VAT 6%

* After the survey Lebanon implemented regressive mark-ups for importers, wholesalers & pharmacies

Key issues from survey results

Govt. procurement – over-reliance on originator brands for old, off-patent medicines when cheaper generics exist

Public sector – availability poor and prices not always low

Private sector - prices generally high for both originator brands and lowest priced generics

Affordability – standard treatments generally affordable for low wage earners in the public sector when generic medicines available, but not in private sector especially for originator brands

Price components – largest component in final patient price is the manufacturer’s selling price, taxes applied to essential medicines, fixed % mark-ups provide incentives to wholesalers and retailers to sell more expensive medicines

Workshop: Towards equitable and affordable medicine prices policies in Jordan

4-5 Dec 2007, Dead Sea90+ policy-makers, civil society groups, industry, health professional

orgs, health insurance industry & othersHosted by JFDA and HAI, under the patronage of his Excellency,

Minister of Health Dr. Salah Mawajdeh

Key recommendations:- Improve public sector procurement and supply chain management- Implement pro-generics policies & programmes- Abolish taxes and duties on medicines- Review price setting in the private sector (not supported by all eg.

pharmaceutical industry)- Establish monitoring system: prices, availability & affordability

Pricing in the private sector

Pricing controls in Jordan:Method includes external reference pricing & generics up to 80% of originator

price- choice of comparator countries is crucial- which price are you benchmarking against & why?

eg. procurement, manufacturers selling price, reimbursement price, retail price

Outcome: - high priced generics (shown in survey)- favouring export market not local people - review requested at workshop by many

Alternatives include- stimulate competition amongst generics- modify formula & reduce the manufacturers selling price- subsidise local price for key essential medicines especially for the poor

(SMART card)

Evaluation of all options is needed

Role of insurance systems in educating consumers

Educate people about prevention, health problems and treatment options, medicines, acceptability of generics, support adherence

Governments to publish results of quality testing (and insurance companies use information in purchasing decisions)

Publish prices - newspapers, health facility notice boards etc.

Control drug promotion

Prescribing at major medical institutions

I DON’T TAKE CHANCES, I ONLY USE ORIGINALS Guatemala 2006

Source: WHO/ HAI Drug Promotion Database 2004

Evidence about effects of promotion on physician behaviour

• Evidence about the problem– Promotion and samples impact prescribing– Sponsorship influences practice and research– Doctors do not realise or acknowledge influence

• Evidence about solutions– Voluntary regulation and guidelines are ineffective– Some strategies show promise

• Government regulation• Unbiased information to professionals & consumers• Training medical students about promotion• Media exposure of abusive promotion

Consumer perspective on Jordan National Health Insurance Scheme

Equitable coverage and transparent system

Basic package:- meet people’s needs- affordable charges (especially for the poor)

Everyone knows their entitlements including knowing the prices of medicines

Civil society organisations should be actively involved in the design, implementation and monitoring of the scheme