Ms Yusi Anggriani and her poster on generic medicine prices and policies in Indonesia, ICIUM 2011

ICIUM 2011 discusses medicine price and financing issues

From 14-18 November 2011 over 500 people gathered in Antalya, Turkey (with a further 200 following a live webcast in Alexandria, Egypt) for the Third International Conference for Improving Use of Medicines (ICIUM). In addition to plenary sessions and poster displays, a number of parallel track sessions were held on different topics including ‘Economics, Financing and Insurance Systems’. Discussions and recommendations from this track included the need to develop and evaluate interventions to enhance the use of quality-assured lower-priced generics that align incentives among patients, providers and industry; and, given the lack of research, study the impact of pricing interventions and related policies in low and middle income countries.

See the ICIUM website for more on the conference.

The Ceylon Medical Journal recently published the findings of a survey on the availability of key essential medicines for children in Sri Lanka. The survey, conducted in mid-2009, used the WHO/HAI methodology to assess the availability of 25 medicines for children in a total of 40 public hospitals (pharmacies dispensing to outpatients), 40 private pharmacies, and 8 Rajya Osusala (ROS) pharmacies across 8 provinces of the country. Mean availability of the basket of medicines was 52% in the public hospitals, compared to 80% in the private pharmacies and 88% in ROS pharmacies. Interestingly the availability of the medicines in public hospitals and private pharmacies far from the capital Colombo was either equal to or greater than in hospitals and pharmacies close to Colombo. The authors concluded that Sri Lanka needs to adopt WHO's four-part framework - rational selection and use of essential medicines, sustainable financing, affordable prices and reliable supply systems - to improve access to key essential medicines for children, especially in public hospitals where children are being deprived access to effective and safe medicines.

Click here to access the journal article

Reliable, accessible, potentially cheap and effective treatments with generic medicines for the majority of non-communicable diseases (NCDs) such as cardiovascular disease, diabetes and asthma are within our grasp. But low availability, and high prices of originator brands and even some lowest-priced generics, put them out-of-reach of the majority of the world’s poor. HAI calls on delegates at the UN High Level Meeting on NCDs on 19/20 September 2011 in New York to refocus on the attainable goal of universal access to essential medicines as a core priority for the treatment of NCDs. Donors need to recognise the paucity of support for essential medicines initiatives, globally, regionally and nationally, such as those by WHO, civil society and governments. In the longer term, donors should consider scaling-up support to establish a Global Fund for Essential Medicines for Non-Communicable Diseases that promotes universal access to low-priced generic medicines of assured quality.

Click here to read HAI's briefing note on access to medicines for non-communicable diseases

Over the last three months the UAE government has lowered the price of about 550 originator brand medicines by 5-55% (most about 20-30%). While this is a welcome step, these medicines are still beyond the reach of the poor. Based on a daily wage of 15 AED for construction workers (as advised by the Dubai Economic Council), many standard treatments with originator brands to treat common conditions are not affordable when purchased from private pharmacies. For example, about 15 days wages would be needed each month to buy a month’s supply of Zocor 20mg tablets to treat high cholesterol levels, and about 6 days wages are needed each month to buy a month’s supply of Renitec 10mg tablets for hypertension. The UAE government needs to focus on lowering the prices of generics so they are affordable for all, especially those on low wages, and implementing policies that ensure low priced generics are prescribed and dispensed.

New price lists: 1 July 2011 and 1 September 2011
Press article (published 11 September in The National)

In 2010 the Ministry of Finance in Pakistan proposed to apply a 16% General Sales Tax on medicines. The Ministry of Health (supported by HAI) and others opposed this. The National Assembly recently decided that all medicines would be exempt this tax. This was welcome news, especially as tax exemptions on many other items were withdrawn. It is especially good news for a country where medicine availability in the public sector is very low, and medicines purchased in the private sector are largely unaffordable for millions of people. Interestingly, this is not the first time the Pakistan government has proposed to tax medicines. Back in 2003, 12.5% sales tax was imposed on medicines but with an exemption for life-saving medicines. The Ministry of Health’s list of life-saving medicines expanded to 90% of medicines on the market. As little revenue was collected on medicines, it was decided to abolish the tax on all medicines.

To read more about sales taxes on medicines click here.

Substantial opportunities exist to increase medicine availability, reduce prices, and improve the affordability of medicines in all regions of the world and at all levels of economic development. However, it can be challenging to identify and prepare suitable lines of response. To assist policy-makers and others, WHO and HAI are developing a series of reviews on pharmaceutical pricing policies and interventions, with a focus on low- and middle-income countries. Five reviews have now been published on:

• External Reference Pricing
• The Role of Health Insurance in the Cost-Effective Use of Medicines
• The Regulation of Mark-ups in the Pharmaceutical Supply Chain
• Competition Policy
• Sales Taxes on Medicines

Another four reviews are in development, including a review on promoting the use of generic medicines. For further information click on 'policy and publications' above and select 'policy'.

The Bulletin of the World Health Organization has published a study by Alexandra Cameron et al who investigated differences in the availability of 30 commonly-used medicines for acute and chronic conditions, using data from 50 WHO/HAI price and availability surveys conducted in 40 low and middle-income countries. The availability of medicines for both acute and chronic conditions was suboptimal across countries, particularly in the public sector. Generics for chronic diseases were significantly less available than those for acute conditions in both the public (36% vs. 53.5%) and the private sector (54.7% vs. 66.2%). Antiasthmatics, antiepileptics and antidepressants, followed by antihypertensives, were the drivers of these differences. The authors concluded that measures are needed to better respond to the epidemiological transition towards chronic diseases in developing countries.

The WHO Collaborating Centre of Pharmaceutical Pricing and Reimbursement Policies in Vienna is hosting a conference entitled "Balancing pharmaceutical policies between equity and cost-containment – a critical discussion and lessons learned" on 29/30 September 2011 in Vienna.

Main topics of the conference will be:

• pricing and reimbursement of medicines in the in- and out-patient sectors
• interface management
• the rational use of medicines
• from a global, international, European perspective.

Date: 29/30 September 2011
Venue: Österreichische Akademie der Wissenschaften / Austrian Academy of Sciences, Dr. Ignaz Seipel-Platz 2, 1010 Vienna
Registration fees: Early bird registration, standard fee, reduced fees
Information and registration: http://whocc.goeg.at/conference
Provisional agenda

The WHO/HAI method for measuring medicine prices, availability and affordability assesses affordability as the number of days wages needed by the lowest paid unskilled government worker to purchase a course of treatment for an acute disease or a months treatment for a chronic disease. But in many countries most people earn less or a lot less than this government worker and so this metric may overestimate medicine affordability for most of the population.

To address this problem Laurens Niëns (Erasmus University) undertook a research internship at HAI and WHO's Essential Medicines department. The outcome of the work has been published as an article in PLoS Medicine entitled Quantifying the Impoverishing Effects of Purchasing Medicines:A Cross-Country Comparison of the Affordability of Medicines in the Developing World .

Affordability was assessed in terms of the proportion of the population being pushed below US$1.25 or US$2 per day poverty levels because medicines are purchased. The prices of four commonly used medicines - salbutamol 100 mcg/dose inhaler, glibenclamide 5 mg cap/tab, atenolol 50 mg cap/tab, and amoxicillin 250 mg cap/tab - were obtained from HAIs database (findings from surveys undertaken using the WHO/HAI methodology). The World Bank's World Development Indicators provided household expenditure data and information on income distributions. In the countries studied, purchasing these medicines would impoverish large portions of the population (up to 86%). Originator brand products were less affordable than the lowest-priced generic equivalents. In the Philippines, for example, originator brand atenolol would push an additional 22% of the population below US$1.25 per day, whereas for the lowest priced generic equivalent this demographic shift is 7%. Given related prevalence figures, substantial numbers of people are affected by the unaffordability of medicines.

The authors concluded that the high cost of medicines alone is having catastrophic effects on poor people. Concerted action is urgently required to improve medicine affordability and prevent poor populations from being pushed further into poverty. Such action includes actively promoting the use of quality assured, low-cost generic medicines; ensuring the availability of essential medicines in the public sector at little or no charge to poor people; establishing health insurance systems with outpatient medicine benefits; and encouraging pharmaceutical companies to differentially price patented medicines.

Media: Reuters: Drug costs would push mlns more into poverty: study
Nigerian Tribune: How high medicine costs make patients poorer

On 16 July 2010 WHO, WTO and WIPO held a joint technical symposium in Geneva to discuss the influence of medicine prices, procurement practices, intellectual property and competition on access to medicines. In her address, Dr Margaret Chan, Director-General of the WHO explained why the price of medicines is such a critical issue for public health 'Price can be an absolute barrier to access for the poor. For the poor, access and affordability are usually one and the same.....As I said, price matters' (click here to read her address). A number of presentations and panel discussions were held during the one-day meeting. These included a presentation by Margaret Ewen from HAI on medicine prices, availability, affordability and price components, and a presentation by Dr Richard Laing from the Essential Medicines and Pharmaceutical Policies department of WHO on medicine procurement, selection, pre-qualification, pricing and monitoring of medicines.

On 11 May 2010 people from 60 countries collected the price a patient would have to pay (if they paid the full price) for a 10 ml traditional vial of 100IU/ml soluble human insulin injection (neutral, regular) in their closest private retail pharmacy. This one-day snapshot of the price of insulin is the second in the series – on 30 November 2009 a snapshot was taken on the price of a course of ciprofloxacin 500mg tablets.

The map above shows prices in US$ for each brand of soluble human insulin found in the pharmacy on 11 May 2010 (10ml traditional vial only). If you click on the ‘bubble’, a text box will give the location, brand, manufacturer and the price of the insulin. Unlike the snapshot of ciprofloxacin prices, in the map all brands of insulin have been considered as originator brands (it appears that Eli Lilly and Novo Nordisk first marketed insulin at about the same time).

These prices should not be considered representative of the situation in a given country, since great price variation exists within some countries. However, they are indicative of what patients would have to pay, if paying the full retail price, in those pharmacies on that day.

As can be seen on the map, prices vary considerably across countries and between brands; from US$1.55 in Iran to US$76.69 in Austria – a difference of almost 5000%. While patient prices are often lower in low-income countries, the prices in some low- and middle-income countries are higher than in high-income countries. Even when prices are lower, insulin is still unaffordable for those on low incomes - which is often the majority of the population - resulting in dire consequences for people with diabetes if they cannot afford to buy the medicine.

Nearly ninety years after its discovery, access to insulin is beyond the reach of millions of people with diabetes around the world. Access to insulin is an essential and non-negotiable need, in short, a matter of life or death. Governments need to examine access to affordable insulin and give it the priority it deserves.

The first step is understanding the medicine price, availability and affordability situation, for example through undertaking a medicine price and availability survey (click on ‘Undertaking a survey’ above), then identifying the causes of high prices and poor availability, developing and implementing policies and strategies, and monitoring their impact to ensure patients benefit from lower prices and improved availability.

Click to access the following:

• an analysis of the results and recommendations
• charts showing the average price of a 10ml vial of soluble human insulin in US$ across the 60 countries where data was provided: Eli Lilly insulin, Novo Nordisk insulin, all manufacturers
• table of all data collected

Click here for information on the 30 November 2009 global snapshot of the price of a course of ciprofloxacin 500mg tablets.

In September 2009 a ministerial decree went into effect that changed the way medicine prices are set in Egypt. Following the filing of a lawsuit by the Egyptian Initiative for Personal Rights (EIPR) against the decree, and the subsequent court case, the Court of Administrative Justice provisionally suspended the new system in April 2010.

Under the former legislation, patient prices were set using a cost-plus system (based largely on the cost of manufacturing plus the addition of fixed percentage mark-ups in the supply chain plus tax). However, often prices were determined based on negotiations between the national Pricing Committee and the pharmaceutical company.

Key features of the new system include:

• Prices of single-source originator brands are set at 10% less than the lowest company-declared patient price in 36 countries (predominantly in Europe and the Middle East)
• Prices of generics are set at 30%, 40% or 60% less than the originator brand price, depending on the manufacturing standard (member of ICH, WHO prequalified manufacturer etc) and ownership.

EIPR stated during the court case that the new system was flawed and that prices would increase, especially for generics. EIPR called on the Ministry of Health to permit civil society to contribute to the development of a workable and equitable pricing system. Click here to access a media statement from EIPR on the court decision.

Medicine price, availability and affordability issues were discussed by delegates at the recent meeting of the Regional Committee for WHO’s Eastern Mediterranean Region, held in Cairo 20-23 October 2007.

Dr Zafar Mirza, regional advisor on essential medicines and pharmaceutical policies, presented the results from 11 surveys undertaken in the region using the WHO/HAI medicine price measurement methodology. Key findings included:

• Substantial differences in government procurement prices across countries
• Government purchasing of expensive originator brands, as well as cheaper generics, in all but 3 countries. On average, originator brands were about 3 times more expensive than generics. Prices of generics were often high.
• Availability in public sector facilities was very poor e.g. 16 of the 35 surveyed medicines were not found in any outlet surveyed in Yemen, 23 of 29 medicines were not found in 50% of the outlets in Pakistan
• Excessive prices in the private sector for originator brands and lowest priced generics e.g. Sudanese patients were paying 18 times international reference prices for originator brands. Lowest priced generics were over 5 times the reference prices in most countries
• Most treatments purchased in the private sector were unaffordable for the poor
• Some countries were applying taxes to essential medicines

A lengthy discussion followed with comments from Ministers, or their representatives, from 16 countries. They acknowledged the many problems related to medicine prices in both public and private sectors. Many also noted that the TRIPS Agreement had contributed to rising prices and diminished access to medicines, especially in developing countries. Various policy and programme options were mentioned including the increased use of quality generics to improve affordability, regressive mark-ups to encourage the dispensing of lower priced generics, pooled procurement, plus greater transparency and the sharing of price information. WHO Regional Director, Dr Gezairy, said the issue of medicine pricing was sensitive and of the utmost importance, and offered a number of options for countries to consider to reduce prices. HAI urged countries to develop, implement and enforce sound evidence-based policies and programmes, and monitor their impact, to ensure medicines are affordable and available to all.

A resolution was passed that featured the establishment of a web-based medicines prices hub in the region to share information on medicine prices and pricing structures, as well as best practices in medicine management. This innovative approach is welcomed as it will improve price transparency and empower governments to negotiate for more favourable prices. The resolution also urged governments to strengthen pricing policies (including public procurement of generics, and enhanced competition amongst suppliers) and rationalize supply chain costs in the private sector. WHO EMRO resolved to support Members States in this work including the development of guidelines on pricing policies and sharing information on best practices from other regions.