Medicine Prices and Affordability Survey in West Bengal, India ( )

Local Survey Leadership CUTS, Kolkata –Ms. Dalia Dey –Mr. Santanu Banerjee Supported by World Health Organization Health Action International CDMU, WB –Prof. S. K. Tripathi –Dr. Avijit Hazra With special thanks to Dr. Anita Kotwani - Dept. of Pharmacology, VPCI, University of Delhi CUTS behalf - Mr. Ranajit Dey, & Dr. Pranabesh Chakraborty CDMU behalf - Mr. Amitava Guha, Dr. Amitava Sen, & Mr. Sushanta Roy

indicates surveyed districts Geographic Regions Surveyed

Sectors Surveyed & Sampling Public sector Initial plan was to survey 3 public facilities in each of the 7 districts. Accordingly a list of 3 (+ 3 for backup) facilities, not below the level of rural hospital, was drawn up for each district through convenience sampling. It was decided a priori that if < 50% of the target number of medicines (total 32) were available at any facility, that would be dropped and replaced by a standby facility. Later this figure was modified to < 25%. Private retail sector 5 retail pharmacies were identified in and around the public facilities selected and surveyed. The selection was done on spot. Minimum availability criterion was fulfilled for all outlets.

Public Sector Procurement is central through open tender system. Procurement prices are therefore uniform. However, small variations in price were encountered, presumably because medicines were procured in different financial years and in case of some manufacturers tax components (e.g. Excise Duty and Sales Tax) were not applicable. Private Retail Sector Procurement is by individual outlet from preferred stockists / distributors (wholesalers). Price of same product could vary because of procurement of different batches, differences in retail margins, or rounding off of tax components. Special Features in Survey Setting

Core Medicines Dropped NAPF = Not available in public facilities.

Supplementary Medicines Added PF = Public facilities.

Date of Training - Sep 4-6, Background of Data Collectors - All graduates with past experience of market survey. Area supervisors were from medical representative background. Dates of Data Collection - Sep to Nov, Some residual data gathered beyond Nov, Other Information - Approval letters had to be sought from DHS, Govt. of W.B. Copies were forwarded and carried by data collectors. Individual letters of introduction provided by SKT (one of the authors), in his official capacity, also helped in facilitating access. Implementation of Survey

Problems Encountered: Planning, Implementation & Data Analysis Getting access to a few public health facilities. Procurement prices at public health facilities could not be obtained from the facility itself in most cases but were ascertained later from the CMS list of Govt. of WB. In cross-checking prices from medicine strips in a few private retail facilities. Some confusion during data entry due to the changing versions of the worksheet. In general the planning and implementation of the survey proceeded smoothly through a MOU between the two implementing bodies - CUTS and CDMU. Problems were encountered in the following areas:

Daily salary of lowest paid unskilled government worker = Rs The minimum daily wage of unskilled labor, in the unorganized sector, should be Rs. 97/- [Govt. of West Bengal - Labor department]. Estimated proportion of population on less than this salary 1 = 79.9% live on less than $2US per day. 1 Source = According to WB Development Report, Newsweek Magazine, May 23, 2005, pg 10. Affordability Baseline

Public Sector Procurement Prices (measured as Median Price Ratios) -- IB MPR for Omeprazole MPR for Ceftriaxone MPR for Amoxicillin Median MPR for all medicines LPGMSG MPR for Doxycycline

IB 0.89 MPR for Salbutamol inhaler MPR for Ceftriaxone MPR for Amoxicillin Median MPR for all medicines LPGMSG Median Price Ratios in the Private Retail Pharmacy Sector MPR for Doxycycline

Median Price Ratios in the Private Retail Pharmacy Sector - 2

Availability and Affordability of Lowest Price Generics – Acute and Chronic Conditions Affordability in Private Sector (# days work for unskilled government worker) 1 / 26 (3.8%) Co-trimoxazole suspension Pediatric ARI 25 / 26 (96.2%) AmoxicillinAdult ARI 4 / 26 (15.4%) AtenololHypertension 0 / 26Hydrochloro- thiazide Hypertension 1 / 26 (3.8%) GlibenclamideDiabetes Availability in Public Sector (no. of facilities out of 26 surveyed) MedicineCondition

Availability and Affordability of Lowest Price Generics – Acute and Chronic Conditions Affordability in Private Sector (# days work for unskilled government worker) 0 / 26RanitidinePeptic ulcer 0 / 26Salbutamol inhaler Bronchial asthma, chronic 5 / 26 (19.2%) AmitriptylineDepression 0 / 26Diclofenac sodium Osteoarthritis 0 / 26CiprofloxacinGonorrhea Availability in Public Sector (no. of facilities out of 26 surveyed) MedicineCondition

Availability and Affordability of Lowest Price Generics – Acute and Chronic Conditions Affordability in Private Sector (# days work for unskilled government worker) 0 / 26MetronidazoleAmebic dysentery 5 / 26 (19.2%) CeftriaxoneAdult meningitis Availability in Public Sector (no. of facilities out of 26 surveyed) MedicineCondition

Affordability in the Private Retail Pharmacy Sector

Availability: Public vs. Private Retail Sectors - 1 Private retail Sector Public SectorMedian availability (%) -- MSG 19.2 % 96.2 % 0.0 % LPG 0.0 % 5.7 % 68.6 % IB 85.7 % 77.1 % 20.0 % MSG -- IB 85.7 % Ceftriaxone 94.3 % Amoxicillin 31.4 % Aciclovir LPG

Availability: Public vs. Private Retail Sectors - 2 Private retail Sector Public SectorMedian availability (%) -- MSG 0.0 % LPG 0.0 % 94.3 % 60.0 % IB 91.4 % 94.3 % 85.7 % MSG -- IB 91.4 % Phenytoin 94.3 % Metronidazole 85.7 % Salbutamol inhaler LPG

Brand Premium - 1 Brand Premium (BP) is the increased cost to be borne by the consumer in choosing an innovator brand over the corresponding low price generic equivalents. Brand Premium (BP) is the increased cost to be borne by the consumer in choosing an innovator brand over the corresponding low price generic equivalents. BP varied from 100 % with majority in the 10 – 40 % range. BP varied from 100 % with majority in the 10 – 40 % range.

Brand Price Generic Price Brand Premium Metronidazole % Albendazole % Doxycycline % Brand Premium - 2

Statistical analysis showed a strong direct correlation (Rho = 0.948) between brand price and generic price and a good correlation (Rho = 0.602) between brand price and brand premium. Brand Premium - 3

Other Interesting Findings 1. In many private retail outlets only the Innovator Brand (IB) and the Most Sold Generic (MSG) equivalent were available. The IB was cheaper than MSG (e.g. DAONIL cheaper than EUGLUCON). However, since IB price could not be repeated in any cell of the worksheet, MSG was taken as the LPG available, and thus in these instances LPG becomes costlier than IB. 2. Some of the supplementary medicines initially proposed (e.g. Paracetamol and ORS) could not be taken because of the difficulty in locating Innovator Brand or MSH reference price. These medicines are, in general, available in public facilities in West Bengal. The public sector availability picture would have been slightly better if these could have been included.

Conclusions This cross-sectional survey of availability and public procurement or private retail prices in West Bengal is perhaps the only one of its kind in recent times. 2. The survey used a basket of 32 indicator drugs, all of which are essential medicines intended for common health problems. 3. Public health facilities in West Bengal use only low- priced generic (LPG) equivalents for free distribution.

Conclusions Availability situation in the public sector is far from satisfactory, with 19 of the 32 medicines (59.4%) not being available. 5. Procurement in the public sector is quite economical with the median MPR (in comparison with MSH 2003 median prices) for all medicines being 0.64 and the 25th to 75th percentile range being 0.37 to Availability is evidently better in the private retail sector, with the median availability of all the 32 medicines being 70% in terms of most sold generic (MSG) equivalents and 77.1% as LPG.

Conclusions The median MPR and the 25th to 75th percentile range of MPRs of MSG and LPG equivalents in the private sector indicate that medicines are costlier than the international reference prices but not too costly. There is some price variation for the same product. 8. Standard treatments are likely to be affordable to individuals who draw at least the minimum daily wages. 9. Medicine price mark-ups and components could not be ascertained through the field survey.

Preliminary Thoughts on Implications for Policy With the government committed to providing universal access to essential medicines, serious investigation is needed into the causes of the low availability in the public sector. 2. It remains to be ascertained whether medicines selected for the public list do not cover some common health problems or whether the public distribution system for medicines in West Bengal is not functioning well.

Preliminary Thoughts on Implications for Policy The reason for small variation in prices of the same brand in the private sector needs to be explored. 4. It is difficult to ascertain price mark-ups and components in the private retail sector through field surveys. The proper source will have to be determined first if this information is required. 5. Quality issue should also be addressed.

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