E-drug: Generic Prescribing to enhance access to medicines
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[Thanks Azhar for this information. Generic drug policies and
generic substitution are important ways to lower drug prices. Your
Argentina example below shows how much! However, I would
encourage you to think of the whole spectrum of cost reduction
measures, including making (international) drug price information
widely available at all levels; bulk purchasing and competitive
tendering; and reducing a variety of hidden costs of drugs, e.g.
taxes, tariffs, profit margins, etc. Documents you may want to
consult are:
- World Health Organization. (2001) How to develop and implement
a national drug policy. Geneva, 2nd edition. (available from WHO,
or downloadable from www.who.int/medicines).
- Grace C. (2002) Mechanisms for differential pricing of drugs and
vaccines for developing countries: The evidence base for technical
feasibility and potential impact. DRAFT. (the author or I can send it
to you if you like).
- Levison L. (2003) Policy and programming options for reducing
the procurement costs of essential medicines in developing
countries. (downloadable from http://dcc2.bumc.bu.edu/richardl/
IH820/Resource_materials/Web_Resources/Levison-hiddencosts.doc
(long url; will need repair). This document has recently been
discussed on E-drug.
Finally, a generic scheme is fine, but to achieve real and lasting
impact, all pharmacotherapy teaching (prescribers and dispensers!)
must also be based on generic names. Hilbrand Haak]
Dear E-Druggers,
On 4 March 2003 the National Assembly of Pakistan unanimously
adopted a resolution on reducing prices of drugs. The resolution
called for the introduction of generic names in prescribing, instead
of brand names. If adopted, this would be a great development for
the country and likely to enhance access to medicines.
In 1972 the Government of Pakistan made a first attempt to
introduce a generics scheme, which failed due to the pressure of
multinational drug companies. We are now gathering information on
the experiences of generic schemes/laws adopted in different
countries, problems faced while adopting them, and their
successes.
I am attaching information on Argentina's experience with
introducing a Generic Law and its impact in reducing prices.
An early response will be appreciated.
Best regards,
Azhar Hussain
Project Coordinator - Pharmaceuticals
40-A Ramzan Plaza,
G-9 markaz,
Islamabad, Pakistan
Email: azhar@thenetwork.org.pk
Site: www.thenetwork.org.pk
Tel # 2261085 Ext 243
Fax # 2262495
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Argentina: Law on generic drugs brought steep drop in prices
Buenos Aires, 26 Feb (IPS/Marcela Valente) -- A law on generic
medicines that Argentina passed in 2002 has led to a substantial
decline in prices, which in the late 1990s were among the highest
in Latin America, and in some cases higher than the cost of the
same products in rich European Union nations.
The law obligates doctors to prescribe drugs by their generic name,
and allows consumers to choose between all products that contain
the active ingredient, based on price and quality considerations and
advice from pharmacists.
"Without a doubt, the law on generic drugs approved last May
significantly changed the market in many aspects, including prices,"
Marcelo Pereta, president of the pharmacies division of the Buenos
Aires association of pharmacists and biochemists, told IPS.
"Over the past year, the prices of the top 50 brands have dropped,
a few small laboratories have gained market share, multinationals
have pulled out of the country, and there have also been increases
in the prices of new drugs or products that face no competition,
which means it is difficult to say how much prices fell on average,"
he explained.
Due to the increased competition, the cost of one drug against
hypertension, which was sold under two commercial brand names,
plunged by 40%, and something similar occurred in the case of
antibiotics based on amoxicillin.
But the real drop in prices was even greater, since inflation in
Argentina, in the grip of its worst economic crisis ever, amounted
to 41% last year.
The new law smashed the monopolies on certain drugs produced by
transnational pharmaceutical companies, which must now compete
with cheaper nationally produced versions.
For example, a vaccine against hepatitis B that was marketed by a
drug giant with a 40-peso price tag must now compete with a local
brand that sells for just nine pesos.
Since 1991, when price controls on pharmaceuticals were removed
in Argentina, the cost of medicines had risen steadily. Doctors
prescribed drugs by their brand name, and the prescriptions could
only be used to purchase those specific commercial products, even
if cheaper versions were available.
That enabled several pharmaceutical giants to corner the market for
certain drugs, and raise their prices, according to a study carried
out in the late 1990s by the private foundation Isalud, which offers
graduate courses in public health.
From 1991 to 1999, prices rose 106% on average, despite the low
inflation rate achieved in that period. Since the mid-1990s,
Argentina's pharmaceutical products were among the most
expensive in Latin America, and in some cases even more costly
than in rich countries like Spain, France, Britain or Italy.
Ventolin, the British pharmaceutical giant Glaxo's commercial name
for an inhalation aerosol based on salbutamol sulphate, used to
treat asthma, cost the equivalent of $14 in 2001 in this Southern
Cone nation, while the same Glaxo product sold for the equivalent
of just $2 in Spain.
In 1999, the Secretariat of Industry and Commerce compared the
prices of medicines in Argentina with those of the same products in
Brazil, Paraguay and Uruguay - this country's partners in the
Southern Common Market (Mercosur) trade bloc - and Chile, an
associate member, and found that the drugs cost 270% more on
average in Argentina.
A currency board held the Argentine peso at par with the dollar for
a decade, until it was scrapped in January 2002, after which the
local currency crashed. The peso currently stands at 3.2 against the
dollar.
The collapse of the local currency and the law on generic medicines
prompted several multinational drug companies to leave Argentina
in the past year, said Pereta.
Dr. Gines Gonzalez Garcia, who lobbied hard for passage of a law
on generic medicines as president of Isalud, was named health
minister in January 2002. A few months later, parliament approved
the bill.
"What we are trying to do is improve access to medication through
this policy of prescription by generic name, even though we know
that this will let all hell loose in the market and in terms of
competition," the health minister said at a seminar held to evaluate
the new policy.
"Pharmacists cannot accept a prescription that names a commercial
brand. They can only fill prescriptions that are written out for the
active ingredient, while advising patients which brand to buy," said
Pereta, the coordinator of a network of more than 1,700 Buenos
Aires pharmacies.
The new rules have led to a shift in the relationship between
customers and pharmacies. In the past, pharmacists were simply
merchants, but now they must be behind the counter to provide
advice on the characteristics of each product, including aspects like
possible secondary effects, he said.
The law on generics was "an extremely important step" in a
country that for years saw consumers' access to pharmaceutical
products shrink, economist Carlos Vasallo, president of the
Association of Economy of Health, commented to IPS.
"People ceased to be captives of a laboratory, and can now seek
out cheaper alternatives, which means the number of people with
access to medicines has increased," said Vasallo, who is also
director of the Observatory of Health, Medicines and Society
Research Centre.
But there is still a long way to go, especially in terms of quality
controls, he stressed.
"At an international seminar I recently attended, someone from the
United States told me that in his country, he felt fully confident in
buying a generic medicine, but that when he's abroad he chooses
well-known brands, even if he has to pay more, because he doesn't
know how good the quality controls are," said Vasallo.
Public universities and hospitals in Argentina have asked the state
for support that would allow them to produce generic drugs only
identified by their active ingredient, at lower prices than their
brand-name equivalents, and to improve quality controls, in order to
offer high-quality products at low prices, or even free of charge.
A hospital in the district of Hurlingham, on the outskirts of Buenos
Aires, opened a laboratory this month capable of producing 70
pharmaceutical products at a cost 20 times lower than that of
commercial versions available on the market. The initial investment
in the new laboratory totalled less than $100,000.
The medicines will be provided free of charge to patients admitted
to the hospital.
"A medication that costs 40 pesos in the pharmacy will cost us two
pesos to produce here," said the mayor of Hurlingham, Luis Acuna.
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