[e-drug] Can we standardise the pharmaceuticals' mark-up on cost?

e-drug
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E-DRUG: Can we standardise the pharmaceuticals' mark-up on cost?
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[Excellent proposal! Can we hear from E-druggers whether they have succesfully standardised markups in their countries or projects?
Can we get more reports from the Zeist conference? Sounds interesting! WB]

Dear E-druggers,

I want to report from a conference on Pharmaceutical policy analysis, first announced on e-drug in January this year.

The conference was held in Zeist 19-21 September 2007. It was organized by Utrecht Institute for Pharmaceutical Science and World Health Organization. More than 80 very interesting papers were presented. Price of Medicines was among issues that have been discussed. Below my reflection on this fruitful conference.

Access to essential medicines is one of the basic human rights. We all know that the price of medicines is one of main factors that affect access to essential medicines. Using Health Action International (HAI) and World Health Organization (WHO) model for price survey, a number of studies are now available. I think, we, e-druggers, are in a better position to think of standardizing mark-up on costs. This is because a lot of data are now available about components of medicine prices (including manufacturers' cost; freight and insurance; sea and air ports fee; customs and governments' other charges; transport cost within countries; and importers, wholesalers and retailers mark-ups). Information also available about different countries purchasing power; economic and political systems; expenditure on health, in general, and medicines, in particular; mechanisms of health care financing; and households income and expenditure on medicines.

The central question is: can we use all these information to develop an optimum mark-up on cost of pharmaceuticals? I think the answer is yes. But diversities in different settings are a real challenge. This could be overcome by dividing middle and low-income countries into different zones based on, for example, their mechanisms of medicine financing (public, insurance or out-of-pocket); households income; per capita expenditure on health; Gross Domestic Product; and so on.

E-druggers, can we all thinks of this serious issue!!!

Yours sincerely

Gamal Khalafalla Mohamed Ali PhD, MSc, PG Diploma, B.Pharm(Hon)
Mobile +249123039450
P.O. Box 11995
Public Health Institute
Khartoum
Sudan

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E-DRUG: Can we standardise the pharmaceuticals' mark-up on cost? (2)
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Dear E-druggers,

Perhaps someone with more knowledge of health economics should jump in
here... but more in general I do know that cost-plus systems are fraught
with problems.

The main one is that 'cost' is not such a clear cut
phenomenon as many people think, and is *very* open to issues of
interpretation (also known as accounting principles). It is very easy to
manipulate accounting principles and practices in such a way that 'cost' is
funnelled towards cost-plus products and away from products which can be
priced more freely.

Just my two cents (which, by the way, cost considerably more than two cents
to produce...)

regards

Michael Keizer
student, La Trobe University,
Australia
gnm7-uva6@spamex.com

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E-DRUG: Can we standardise the pharmaceuticals' mark-up on cost? (3)
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dear E-druggers,

Whilst the ideals are nobel, there are many factors in the value chain that
vary as do the outcomes of drug supply. One must assume efficiency
optimisation throughout the process along with the intent of all to act in
the patients' best interest, without 'cost inputs' from the beancounters and lawyers etc. (Just look at a dispensing fee when that happens!)

Economies of scale, sourcing capability and capacity, transportation etc.--
In my opinion it probably would be cheaper to extoll like minded people to
develop a 'not for profit company' (faith based or other) who produce EDL
products at optimum cost, using volunteered expertise and time in the
manufacture and supply process I am sure the cheapest most effective form of HOPE can be provided.

regards

James Meakings
Written in my personal capacity.
South Africa
jamesm@dismedcriticare.co.za