E-DRUG: New analysis of antiretrovirals prices
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A nice study confirming again that getting lower prices for ARVs is not dependent on large volume or bulk purchasing but rather on negotiating skill of national procurement agencies as well as presence of more competitor companies and availability of generics.
Paper also shows how reporting price data as mandated by Global Fund in the Global Price Reporting Mechanism (GPRM) has helped to create transparency around procurement prices of antiretrovirals in low and lower middle income countries that can be useful toll to support price negotiations through benchmarking.
I wonder how similar systematically collected procurement price data (in addition to MSH Drug Price Indicator) can be made available for medicines used for treatment of chronic diseasses. These disease often affect large segment of the population in developing countries and even marginal price reductions achived through increased procurement efficiency may translate into very significant savings for their health systems and patients.
Klara Tisocki,
European Commission Technical Assistance for Health Sector Policy
Bureau of Food and Drugs (BFAD), Philippines
Klara Tisocki <ktisocki@yahoo.ie>
The Cost of Antiretrovirals
Maximizing Value for Money
Veronika J. Wirtz, National Institute of Public Health, Cuernavaca, Mexico,
Steven S. Forsythe, Futures Institute et al..
Executive summary and Background
Antiretroviral medicines (ARVs) are the single most costly component of an AIDS treatment
program. Many countries are struggling to provide universal access to ARVs for all people
living with HIV and AIDS (PLWHA). Although substantial price reductions of ARVs have occurred,
especially between 2002 and 2008, achieving sustainable access for the next 25 years remains a major
challenge, especially for low and middle income countries. PLWHA are living longer due to increased access to first line therapy, but this also requires increased access to second and third line therapies
which are significantly more expensive. Among other elements in the medicine supply chain, prices,
procurement procedures and policies are all crucial to increasing sustainable and universal access to
ARVs.
Aim of the paper
To assess the long-term needs and consequences of ARV procurement and to identify policies and
practices that could assure long-term sustainable access to ARVs.
Objectives
- To analyze ARV prices variations between 2005 and 2008 and associated factors, particularly
procurement methods and key donor policies on ARV procurement efficiency;
- To discuss the options of procurement processes and policies which should be considered when
implementing or reforming access to ARV programs.
Methods and data sources
An analysis of ARV price variation between 2005 and 2008 was carried out using Global Price
Reporting Mechanism (GPRM) from the World Health Organization (WHO). A selection of 12
ARVs was identified and price reductions were evaluated for both innovator and generic products.
Linear regression models for each ARV were used to identify factors which were associated with
lower procurement prices. Additionally, logistic regression models were used to identify factors
which influenced countries' abilities to procure ARVs close to production costs.
Results
There is a large ARV price variation across countries, even for those countries with a similar
socioeconomic status. The price reductions between 2005 and 2008 were greatest for those ARVs
which had more providers. Three key factors appear to have an influence on a country's ARV prices:
(a) whether the product is generic or not;
(b) the socioeconomic status of the country;
(c) whether the country is a member of the Clinton HIV/AIDS Initiative (CHAI).
Factors which did not influence procurement below the highest direct manufacturing cost (HDMC) were HIV prevalence, procurement volume, whether the country belongs to the least developed countries or a focus country of the United States President's Emergency Plan for AIDS Relief (PEPFAR).
Discussion
Three principal mechanisms which can help to lower prices for ARV over the next decades are:
1) increasing procurement efficiency,
2) encouraging competition among manufacturers and
3) emphasizing the need for improved production efficiency.
To achieve higher procurement efficiency the use of global data on prices can provide a useful tool. However, this needs to be complemented with more research on optimizing procurement methods, such as third party negotiation used by CHAI. In addition, strategies should be pursued to increase production efficiency and competition among manufacturers through the use of trade-related aspects of intellectual
property rights (TRIPS) flexibilities with the support of international organizations.
Download from:
http://www.resultsfordevelopment.org/sites/default/files/resources/The%20Cost%20of%20Antiretrovirals.pdf