Paying the Price: The Affordability of Medicines Across the Commonwealth (and elsewhere) Margaret Ewen Health Action International

Uganda pharmaceutical survey Sept 2002

WHO/HAI Project on Medicine Prices improve the availability and affordability essential medicines Develop a reliable methodology for collecting and analysing price and availability data across healthcare sectors in a country Price transparency; survey data on a freely accessible website allowing international comparisons Advocate for appropriate pricing policies and monitor their impact

Launched WHA 2003 Measures medicine  prices  availability  affordability  component costs 40+ surveys to date in all regions of the world Medicine Prices a new approach to measurement

Methodology - Data collection Systematic sampling: at least 6 regions, minimum of 5 pharmacies/facilities per sector per region Public sector facilities, private retail pharmacies and ‘other’ sectors (e.g. dispensing doctors or mission sector) Prices of 30 pre-selected commonly used medicines – 14 global + 16 regional Predetermined dose form & strength, & recommended pack size Supplementary medicines highly encouraged, adapted to local needs Prices of originator brand and lowest price generic All components of price from manufacturer to retailer identified

Data analysis Price calculated as Median Price Ratio (MPR) – local price compared to MSH International reference price, world market generic procurement price Availability calculated as number of facilities having that product on the day of data collection reported as a percentage Affordability assessed for ten pre-selected courses of treatment compared to daily wage of lowest paid unskilled government worker Excel workbook accompanies manual, for data entry (double entry, with error checking) and analysis

Surveys to date Middle East: Lebanon, Jordan, Kuwait, Syria, Sudan, UAE, Yemen Francophone Africa: Cameroon, Tunisia, Morocco, Algeria, Mali, Chad, Senegal, Niger Anglophone Africa: Uganda, South Africa, Tanzania, Kenya, Nigeria, Ghana, Ethiopia, Zimbabwe Asia/Pacific: Sri Lanka, Malaysia, Pakistan, Mongolia, China: Shandong & Shanghai, Philippines, Fiji, Indonesia, Vietnam, Cook Islands, India: West Bengal, Haryana, Karnataka, Maharashtra (2), Chennai, Rajasthan Central Asia: Kazakhstan, Tajikistan, Kyrgyzstan, Uzbekistan Europe: Bosnia Herzegovina, Kosovo South America: Peru, Brazil

Public sector Procurement price Public sector Patient price OriginatorGenericOriginatorGeneric Malaysia (2004)0.5free Pakistan (2004)10.4free India, Karnataka (2004)0.2free Kenya (2004) Ghana (2004) Tanzania (2004) Cameroon (2005)0.31 facility Mongolia (2004) Philippines (2005)6.2-1 facility3.6 China, Shandong (2004) facilities2 facilities Median price ratio, public sector, metformin 500mg tab Prices adjusted to MSH 2003

Public sector Procurement price Public sector Patient price OriginatorGenericOriginatorGeneric Malaysia (2004)1.4free India, Karnataka (2004)0.5free Uganda (2004)0.7free Kenya (2004) Ghana (2004) Tanzania (2004)0.8free to most Cameroon (2005)0.5not found Indonesia (2004) Jordan (2004)6.56 Tunisia (2004)4.5free China, Shandong (2004) Median price ratio, public sector, phenytoin 100mg tab Prices adjusted to MSH 2003

Public sector Procurement price Public sector Patient price OriginatorGenericOriginatorGeneric Uganda (2004)0.8free Ghana (2004) Tanzania (2004) Pakistan (2004)1free India, Maharashtra (2005)1.1free Kazakhstan (2004)60.8not found Tunisia (2004)5.1free Philippines (2005) Morocco (2004) free Median price ratio, public sector, ciprofloxacin 500mg tab Prices adjusted to MSH 2003

Median price ratios, private retail pharmacies captopril 25mg tab Prices adjusted to MSH 2003

Median price ratio, private retail pharmacies glibenclamide 5mg tab 79 » Prices adjusted to MSH 2003

Median price ratio, private retail pharmacies amoxicillin 250mg tab Adjusted to MSH 2003

Public sectorPrivate sector OriginatorGenericOriginatorGeneric India, Maharashtra 0%42%85%46% Pakistan 0%40%96%50% Malaysia 0%100%91%88% Kenya 0%76%62%71% Tanzania 0%13%0%38% China, Shandong 0%5%0%5% Mali 0%5%55%45% Morocco 0%100% Availability: glibenclamide 5mg tab

Public sectorPrivate sector OriginatorGenericOriginatorGeneric Tanzania 0%3%0%2% Kenya 0%2%14%16% Ghana 0% 2% Pakistan 0% 21%0% India, Rajasthan 0%25%0%65% China, Shandong 30%0%25%0% Mongolia 0% 4% Philippines 4%0%2%0% Tunisia 0%81%0%95% Availability: beclometasone inhaler 50mcg/dose

Affordability: captopril 25mg x 2 tab/day 30 days treatment, private retail pharmacies

Affordability: fluoxetine 20mg x 2 tab/day 30 days treatment, private retail pharmacies

Affordability: amitriptyline 25mg x 3 tab/day 30 days treatment, private retail pharmacies 96 »

EML Availability Public sector facilities OriginatorGeneric Ugandayes0% Ghana?4%11% Maliyes0% Pakistanyes0%3% Indonesiano13%0% Affordability Private retail pharmacies OriginatorGeneric 5.6 days2.0 days 8 days4.6 days 4.2 days2.7 days 1.4 days 4.1 days- salbutamol inhaler 0.1mg/dose: availability vs affordability

Examples of taxes on medicines imported, private sector Tajikistan VAT 20% Customs duty 5% Tax 1-5% + transport charges, wholesale & retail mark-ups Eliminate taxes: cumulative mark-up 123% → 74% Peru VAT 12% IGV 19% Municipal promotion tax 2% + insurance, import, wholesale & retail mark-ups Eliminate taxes: cumulative mark-up 238% → 149% Indonesia VAT 10% - charged twice Philippines Import tariff 4% national taxes 3-6% VAT 12% Yemen Customs duty 5% Taxes 5%

Uganda (preliminary data) -locally manufactured generics 30-32% -imported 66% MSP, insurance, freight + landed costs + NMS mark-up Chad (official rates) Cumulative mark-ups for generics 92% Statistics tax 2% Central Medical Store mark-up 16% Regional Medical Store mark-up 25% Health facility mark-up 30% Examples of price components, public sector

Price components – private sector Importers mark-up: 10% – 61% Wholesaler mark-up: 2% - 65% Pharmacy mark-up: 8% – over 300% Public or private sector add-on costs: - applied as % mark-up or fixed fee -fixed or variable (originator brand/generic, imported/local, regressive) - cumulative so higher the manufacturer’s price the higher the patient price

Lebanon implemented a new pricing structure for all imported medicines estimated to reduce patient prices by 3-15% (was 71.4%) FOB $Shipping Insurance Customs Clearance Importer Markup Pharmacy Markup Cumulat. Markup 0- $106%10% 30%66% $10 - $504.5%8.5%10%30%62% $50 - $1003.5%7.5%9%27%54% > $1002.5%6.5%8%24%46%

Malaysia: atenolol 50mg tab private retail pharmacies

Financial Sources Used to Pay for Health Care Reason Average % Reporting Range in 8 Surveys Current income of any household member – 91.0 Payments from health insurance – 13.0 Savings – 17.7 Sold Items – 16.1 Family/friends resources outside household – 27.4 Borrowed from other than family/friend – 24.5 Preliminary results Anita Wagner et. al World Health Survey of households & individuals. Analysis of 8 countries: Senegal, Morocco, Tunisia, Cote d’Ivoire, Ghana, India, Pakistan, Philippines

Many policy options Off-patent medicines - purchase low priced quality generics, public and private sector Patented medicines – equitable prices, use the flexibilities of trade agreements to introduce generics while a patent is in force Aid generic competition eg fast-tracking, waive registration fees Permit generic substitution and provide incentives for the dispensing of generics

Stop taxing essential medicines Where there is little competition, consider regulating prices - from manufacturers’ selling price to margins in wholesale and retail. Educate doctors and consumers on availability and acceptability of generics, and publicise the price of generics Separate prescribing and dispensing Many policy options