E-DRUG: Nepal RH Commodity Price Survey
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Dear Colleagues,
In April and May of 2005 myself and Nepali colleagues conducted a RH commodity pricing survey in Nepal. The methodology for the survey was largely based on the HAI/WHO, "Medicine Prices: a new approach to measurement" handbook. The work was guided by a technical advisory group (TAG) chaired by the Director General of Health Services and included the national drug control authority, donors, NGOs and other groups. The survey was unique in the sense that it did not measure the set of essential tracer medicines included in the handbook. Instead, a tracer list of essential RH drugs * developed with input from UNFPA, the World Bank, USAID and JSI * was used to examine issues around equity access and affordability.
The survey data collection team included four 4th year pharmacy students from Tribhuvan University in Kathmandu who helped us collect data from 83 private, public and NGO medicine outlets in 18 districts. This included 47 private pharmacies, 12 hospitals 13 government outlets and 11 NGO clinics in the Hill, Terai and the remote Mountain zone.
One of the most significant findings in the report indicated that private sector cumulative margins (for the RH tracer list) ranged between 77 - 82 percent in the four regions surveyed. In the remote Mountain areas * where sample size was much smaller * mean cumulative margin was over 200 percent. By product, margins for Ampicillin and Oxytocin stood out at 259 and 163 percent. These margins were observed despite a regulatory allowable range between 26 - 42 percent.
The survey report also details other findings including: an analysis of public and private sector procurement compared to IRPs, product availability and affordabity (comparing income by quintiles and retail prices).
Because most, if not all of the products on the tracer list are off patent, innovator brands were not applicable in the examination of procurement and retail prices. Instead, the survey distinguished between highest and lowest priced generics. Despite the absence of innovator brands, we found that the median price ratio for the highest priced generics (HPGs) is 4.11 (compared with international reference procurement price).
The findings from an examination of public sector procurement prices were unexpected. The ratio was .82 (compared to IRPs). In interviews with procurement staff, it was reasoned that Nepal's close proximity to the growing generic pharmaceutical industry in India (and in Nepal itself), may account for the relatively low prices.
A number of recommendations were developed by the TAG to address the issues highlighted in the report. One of the more visible ones included strengthening the pricing regulatory mechanisms (for all essential medicines) to help ensure retail prices fall within the existing guidelines. Also, given the median price ratio (MPR) difference between low and high priced generics, it is suggested in the recommendations to provide consumers with more information on the cost benefits of using lowest, or lower, priced generics (in a country where out-of-pocket drug expenditures are 70 percent). The TAG also suggested that the survey should be replicated and expanded to include a wider sample of essential medicines to validate these initial findings.
The full report is available on the DELIVER Project website at www.deliver.jsi.com under publications: Nepal Reproductive Health Commodity Pricing Survey: Understanding Equity, Access and Affordability of Essential Reproductive Health Commodities.
Please let me know if you have any questions or ideas on how to improve, replicate or expand surveys of this type.
Regards,
Raja
Raja Rao, Policy Advisor
DELIVER Project
John Snow, Inc.
1616 N. Fort Myer Drive 11th Floor
Arlington, VA 22209-3100
tel: (703) 528-7474 ext. 5218
fax: (703) 528-7480
"Raja Rao" <raja_rao@jsi.com>