E-DRUG: Reviews of pharmaceutical pricing policies and interventions
--------------------------------------------------------------------
Dear E-druggers,
HAI's medicine price database now contains data from over 60 surveys
conducted is all regions of the world using the WHO/HAI survey tool. The
problem in most countries is clear - poor medicine availability in the
public sector is forcing people to buy out-of-pocket in the private sector
at prices so high that those on low wages have to work many days, and
sometimes 1 or 2 weeks, each month to buy chronic disease medicines. What is
also clear is that substantial opportunities exist to increase availability,
lower prices, and improve the affordability of medicines. But deciding what
action to take can be challenging.
WHO, HAI and a group of international experts are developing a series of
in-depth reviews on the use of various pharmaceutical pricing policies and
interventions.
The first five reviews have now been published and are available on HAIs
website http://www.haiweb.org/medicineprices/articles/index.html
Review 1: External reference pricing
This is the practice of using the price of a medicine in one or several
countries to derive a benchmark or reference price for setting or
negotiating the price of the medicine in a country. The paper outlines where
and how external reference pricing is used, its effects and indirect
effects, whether it is an appropriate price regulation mechanism, components
of an external reference pricing system, and more.
Review 2: The role of health insurance in the cost-effective use of
medicines
Insurance systems have great potential to improve the cost-effective use of
medicines by leveraging better prescribing, more cost-effective medicine use
by consumers and lower prices from pharmaceutical companies. The paper
discusses product selection strategies (formularies, generic substitution
policy etc), product purchasing strategies, reimbursement design and
contracting strategies (financial incentives, separating prescribing and
dispensing, and more), and utilization management strategies (education
campaigns etc). The review includes four case studies.
Review 3: The regulation of mark-ups in the pharmaceutical supply chain
Mark-ups in the supply chain are variable, and often unregulated in low and
middle-income countries, which can result in patients paying more than
double the manufacturers selling price for a medicine. This paper reviews
the evidence on the extent of mark-ups regulations, different approaches in
regulating wholesaler and retailer mark-ups, the viability of wholesalers
and pharmacies, enforcement issues, the impact on medicine prices and more.
In addition, 3 case studies are provided.
Review 4: Competition policy
Competition can reduce medicine prices and increase availability if the
right conditions are in place. This paper looks at competition in the
pharmaceutical sector and the role of competition law (effects of
competition on prices, common problems with the functioning on the medicines
market, examples of applying competition law to manufacturers of originator
brands, generic manufacturers, retail pharmacies etc). Health sector
policies and practices that affect competition are reviewed - those that can
support competition (generics policies, public procurement policies etc.)
and those that can limit competition (trade and industry protection policies
etc). The paper includes a comprehensive case study on competition law in
South Africa.
Review 5: Sales taxes on medicines
Many governments apply VAT and other taxes on medicine to generate revenue.
This paper discusses the extent such taxes affect access to care, the
economic case for taxing medicines and the case against taxing medicines,
and proposes healthier ways to raise public revenue.
The reviews are not meant to recommend one policy intervention over another,
but rather provide guidance to policy-makers and others on various policy
approaches. For each review, a policy brief will be published that
highlights key points from the review. These are expected to be published by
September.
Several other reviews are in progress, including a paper on promoting the
use of generic medicines. These will be published later in the year.
The results of the policy reviews undertaken to date show that relatively
little has been published about the use of pharmaceutical pricing policies
and interventions in low- and middle-income countries. Therefore, the review
papers are published as working drafts, to be developed as more becomes
known on the use of these interventions in low-and middle-income countries.
We hope these papers will be a useful resource, and encourage national
policy-makers to tackle the challenge of developing and implementing
policies and strategies that ensure universal access to affordable
medicines.
To access the pricing policy reviews:
http://www.haiweb.org/medicineprices/articles/index.html
To access the medicine price database:
http://www.haiweb.org/MedPriceDatabase/
To access the WHO/HAI manual to measure medicine prices, availability,
affordability and price components:
http://www.haiweb.org/medicineprices/manual/documents.html
Regards
Marg Ewen
Coordinator, Global Projects (Pricing)
HAI Global
Amsterdam
marg@haiglobal.org