WHO%20Perspective%20on%20Medicine%20Prices%20

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WHO Perspective on Medicine Prices Policies

• Meeting of Drug Board on Medicine Pricing
• Federal Ministry of Health
• Government of Pakistan
• Dr Zafar Mirza
• Regional Adviser
• Essential Medicines Pharmaceutical Policies
• Division of Health Systems Services Development
• East Mediterranean Regional Office
• World Health Organization
• 14th November 2008
• ISLAMABAD

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The Presentation

• PART 1 WHO Perspective on access to
  medicines
• PART 2 Medicine prices and affordability in
  EMR in Pakistan
• PART 3 Medicine Pricing Policy considerations
• PART 4 Conclusions Recommendations

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WHO Constitution

• ? The enjoyment of the highest attainable
  standard of health is one of the fundamental
  rights of every human being without distinction
  of race, religion, political belief, economic or
  social condition.
• and
• ? Governments have a responsibility for the
  health of their peoples which can be fulfilled
  only by the provision of adequate health and
  social measures.

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WHO Health System Framework - includes both
public and private sectors
v
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WHO Medicines Strategy 4 objectives, 7
components, 44 expected outcomes

• Implementation and monitoring of national
  medicines policies
• Traditional and complementary medicine
• Fair financing and affordability
• Medicines supply systems
• Norms and standards
• Regulations and quality assurance systems (DRA)
• Rational use by health professionals and consumers

Objectives Components

• Policy
• Access
• Quality
• safety
• Rational use

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Access to Medicines

• Access to essential medicines is a integral
  component of
• right to health
• Health care
• 1/3rd of people in world do not have reliable
  access to essential medicines.
• In some developing countries up to 50 of the
  population lack this access.

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WHO FrameworkDeterminants of Access to Medicines
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WHO FrameworkDeterminants of Access to Medicines
1. Rationalselection and use
3. Sustainablefinancing
ACCESS
4. Reliable health and supply systems
2. Affordableprices
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Medicine Prices why regulation
Context

• In the public sector, typically, governments in
  developing countries spend 30-40 of their
  recurrent health budgets on buying medicines
• Largest category after salaries
• In the private sector, individuals and families
  spend a very high proportion of their health
  budget on buying medicines.
• In some countries it reaches up to 80-90 of
  household health budget.
• Hence, governments (MoH) directly or indirectly
  regulate medicine prices all over the world in
  their effort to expand health care coverage.
• Approaches differ

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Expenditure on medicinesfrom 9 NHA studies in
the Region
Pakistan
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Medicine Prices contesting field
Context

• Challenging area of public policy interface of
  public health, commerce industries and law.
• Stakes are high for both public health as well as
  for business community.
• Government has to strike a balance between
  numerous stakeholders with ultimate goal of
  benefiting people.
• Primacy of public health.

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The Presentation

• PART 1 WHO Perspective on access to
  medicines
• PART 2 Medicine prices and affordability in
  EMR in Pakistan
• PART 3 Medicine Pricing Policy considerations
• PART 4 Conclusions Recommendations

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National Surveys on Medicine Prices
EMRO

• Through a standard methodology for
• collection and analysis of prices of essential
  medicines
• affordability
• availability
• component costs in various sectors and regions in
  a country
• Surveys have taken place in 11 countries in the
  East Mediterranean region and in around 50
  countries world wide.

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EMRO
National Surveys on Medicine Prices

• In the national survey, prices of 30 medicines
  are collected from 20 public and 20 private
  pharmacies for both originator brand and lowest
  priced generic equivalent.
• In case of Pakistan 29 medicines were surveyed in
  30 public and 48 private pharmacies in all the
  four provinces Sept 2004.

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Survey FindingsPublic sector procurement prices
International Reference Price International
Reference Prices (IRPs) for this methodology are
selected as those of Management Sciences for
Health (MSH) which are published yearly in The
International Drug Price Indicator Guide and
which provide an indication of pharmaceutical
prices on the international market.

• Generally, ministries of health were found to
  obtain good procurement prices compared to
  International Reference Prices (IRPs) except
• Morocco 3.7 times the IRPs
• Pakistan came up well with its public procurement
  prices when compared with International Reference
  Prices.

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Availability of medicines in public sector

• Yemen
• 16/35 medicines were not found in any facility
• 29/35 medicines were available only in 4
  facilities
• Pakistan
• 23/29 medicines were not found in more than 15
  out of 30 facilities
• Lebanon
• only 15 of the 32 surveyed medicines were found
  at 20 public dispensaries

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Private sector Patient Prices in Pakistan
Overall, prices of originator brands were 3.36
times the international ref price compared to
2.26 times for the lowest priced generics
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Survey FindingsAffordability
Number of days income a lowest paid government
servant has to spend to buy pre-selected
treatment regimes for 9 common diseases in the
private sector

Respiratory infection 2.3 days income to buy a
weeks supply of originator branded amoxicillin
in Jordan Depressive illness 7.7 days income
to buy a months supply of lowest priced generic
fluoxetine in Pakistan 36.4 days income to buy
originator branded fluoxetine Ulcer One
months treatment with lowest priced generic
omeprazole 2.9 days income in Sudan and 7.7
days income in Jordan with originator brand
10.6 days income in Morocco and 23.7 days
income in Pakistan
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AffordabilityNo. of days wages to purchase
treatments from the private sector
DIABETES OB LPG
Metformin 1.9 1.6
Glibenclamide 1.4 0.9
ARTHRITIS
Diclofenac 4.5 1.7
PEPTIC ULCER
Omeprazole 23.7 4.8
Ranitidine 8.5 6.5
DEPRESSION
Amitriptyline 1.4 --
Fluoxetine 36.4 7.7
RESPIRATORY TRACT INFECTION (adult) RESPIRATORY TRACT INFECTION (adult) RESPIRATORY TRACT INFECTION (adult)
Amoxicillin 1.0 1.0
Ciprofloxacin 11.3 3.0
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Affordability Poverty
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Affordability of Atenolol 50mg/day LPG in
private sector at the cost of USD 0.04/day
CATASTROPHIC APPROACH
not affordable for the poorest 80 of the
population at the 2.5 income threshold.
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Affordability of 4 selected medicines
IMPOVERISHMENT APPROACH
Proportion of population becoming impoverished
because of medicine procurement
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The Presentation

• PART 1 WHO Perspective on access to
  medicines
• PART 2 Medicine prices and affordability in
  EMR in Pakistan
• PART 3 Medicine Pricing Policy considerations
• PART 4 Conclusions Recommendations

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Medicine Pricing Policies

• Pricing Policies for New Chemical Entities (NME)
• Patent protection access to medicines
• TRIPS and public health safeguards
• Data protection
• Differential pricing
• Cost-effectiveness analysis
• Pricing Policies of Generics

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Pricing Policies for GenericsGeneral
Considerations

• Lifeline of local pharmaceutical industry in
  developing countries.
• Expiry of patents and introduction of generics is
  known to bring prices down in first year up to
  40.
• Pricing policies need to be developed within the
  context of each country.

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Paradox of Pharmaceutical Industrial Development
in Developing Countries

• The Case of India
• Claims to be the 4th largest producer of
  medicines in the world
• Exports to almost every country in the world
  70 of medicines in Africa are exported from
  India
• And yet 50 to 80 of people within India do not
  have reliable access to needed medicines
• Proportion of out-of-pocket expenditure on health
  is highest in the world i.e. 84
• A World Bank study suggests OOP medical costs
  alone may push 2.2 of the population below the
  poverty line in one year.

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Contextual Factors Guiding Pricing Policies for
Generics

• National vision
• Level of public health care coverage
• Level of social protection
• Existence and capacity of local pharmaceutical
  industry
• Regulatory capacity and effectiveness

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Globalization
National Constitution
National Development Objectives
National Health Policy
National Medicine Policy
Access to Medicines
Access to Medicines
Access to Medicines
Access to Medicines
Access to Medicines
Medicine Prices
Medicine Prices
Medicine Prices
Medicine Prices
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Five sets of policy tools for Generics for
better availability, improved quality
affordable prices

1. Policies aimed at early introduction of generics.
2. Encouraging generic production and competition in
   the market
3. Promoting generic medicine use in public and
   private sectors.
4. Controlling / regulating prices of generic
   medicines
5. Effective quality control

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Five sets of policy tools for Genericsfor better
availability, improved quality affordable prices

1. Policies aimed at early introduction of generics.
2. Encouraging generic production and competition in
   the market
3. Promoting generic medicine use in public and
   private sectors.
4. Controlling / regulating prices of generic
   medicines
5. Effective Quality control

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Price Regulation of Generic Medicinescommon
policy tools

• Price controls or price fixing
• Cost plus formula
• India Bangladesh Egypt Syria
• Gradual movement towards decontrol
• Pakistan post 1993 experience
• Experience from Latin American countries
• Maximum prices or leader price ceiling
• Can be a good policy in evolutionary process for
  de-controlled medicines with strong monitoring
  system in place
• Price negotiations
• Reference pricing
• Internal reference pricing
• External reference pricing

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The Presentation

• PART 1 WHO Perspective on access to
  medicines
• PART 2 Medicine prices and affordability in
  EMR in Pakistan
• PART 3 Medicine Pricing Policy considerations
• PART 4 Conclusions Recommendations

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Conclusions Recommendations

• Fixing medicines prices alone cannot improve the
  overall
• access situation
• A comprehensive NMP-based approach is required
  along with major institutional reforms. DRA
  development has become imperative.
• Unavailability of medicines in public sector
  facilities requires urgent attention in terms of
  improving financing and medicine supply systems.
• Affordability analyses must be part of medicine
  pricing discussions and decisions.
• A health system approach is needed for equitable
  financing and social protection in the face of
  rising inflation and poverty. Accessibility to
  essential medicines should be a part of such
  reform package.

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Conclusions Recommendations

• The socio-economic situation, local
  pharmaceutical industry needs and aspirations and
  lessons learnt from June 1993 partial medicine
  prices de-regulation policy must set the context
  for a review of the existing medicine price
  policy and practice.
• A major institutional development is needed for
  medicine pricing regulation and monitoring.
  Indian National Pharmaceutical Pricing Authority
  is a good example.
• Prices of NCE must be negotiated in line with
  regional prices and those in Australia.
• Policies must be adopted whereby generic entry
  into the market is facilitated as quickly as
  possible after the expiry of patents. Patent
  protection and market authorization must not be
  linked.

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Conclusions Recommendations

• A clear criteria needs to be developed for the
  selection of medicines for the controlled
  category i.e. public health significance of
  medicines and the level of competition in the
  market. The prices of these medicines must be
  controlled so they are affordable for the poor.
  Appropriate Cost-plus formula can be developed
  for controlling the prices of these medicines.
• The decontrolled category must also be provided a
  ceiling and these should be closely monitored.
• The non-availability of important low priced
  essential generic medicines because of lack of
  profitability must be reviewed and appropriate
  price increases must be awarded.
• Once agreed, the medicine pricing policy must be
  drafted, notified and implemented in letter and
  spirit.

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Thank you