E-DRUG: Article on competition as a means to increase access
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Dear e-druggers,
I would like to call your attention to an article published today in the International Journal for Equity in Health.
The paper examines medicines price competition that ensued in a rural village in Kyrgyzstan after the opening of a small network of non-profit pharmacies created and managed by an NGO.
While the rural pharmacies were created to increase access to medicines in villages where no pharmacies existed, the project had unexpected, substantial spillover effects, spurring medicines price reduction in pharmacies quite far away.
These rural pharmacies were established with very little investment (~$25,000) and lots of social capital. The case study provides a positive example of collaboration between community members, international organizations, the government, and an NGO. The project also demonstrates the potential to leverage competition as a means of increasing access to medicines in rural regions.
The research was possible due to the availability of insurance claims data and highlights the utility of this type of data in analyzing impacts of policies and projects on access to medicines.
link: http://www.equityhealthj.com/content/8/1/43
Brenda Waning
Director of Pharmaceutical Policy
Boston University School of Medicine
Email: bwaning@bu.edu <mailto:bwaning@bu.edu>
Abstract (provisional)
Background
A rural pharmacy initiative (RPI) designed to increase access to medicines in rural Kyrgyzstan created a network of 12 pharmacies using a revolving drug fund mechanism in 12 villages where no pharmacies previously existed. The objective of this study was to determine if the establishment of the RPI resulted in the unforeseen benefit of triggering medicine price competition in pre-existing (non-RPI) private pharmacies located in the region.
Methods
We conducted descriptive and multivariate analyses on medicine insurance claims data from Kyrgyzstan's Mandatory Health Insurance Fund for the Jumgal District of Naryn Province from
October 2003 to December 2007. We compared average quarterly medicine prices in competitor pharmacies before and after the introduction of the rural pharmacy initiative in October 2004 to determine the RPI impact on price competition.
Results
Descriptive analyses suggest competitors reacted to RPI prices for 21 of 30 (70%) medicines. Competitor medicine prices from the quarter before RPI introduction to the end of the study period decreased for 17 of 30 (57%) medicines, increased for 4 of 30 (13%) medicines, and remained unchanged for 9 of 30 (30%) medicines. Among the 9 competitor medicines with unchanged prices, five initially decreased in price but later reverted back to baseline prices. Multivariate analyses on 19 medicines that met sample size criteria confirm these findings. Fourteen of these 19 (74%) competitor medicines changed significantly in price from the quarter before RPI introduction to the quarter after RPI introduction, with 9 of 19 (47%) decreasing in price and 5 of 19 (26%) increasing in price.
Conclusions
The RPI served as a market driver, spurring competition in medicine prices in competitor pharmacies, even when they were located in different villages. Initiatives designed to increase equitable access to medicines in rural regions of developing and transitional countries should consider the potential to leverage medicine price competition as a means of achieving their goal. Evaluations of interventions to increase rural access to medicines should include impact assessment on both formal and informal pharmaceutical markets.