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Medicine Prices Matter to People and Insurance Companies Margaret Ewen Health Action International.

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Presentation on theme: "Medicine Prices Matter to People and Insurance Companies Margaret Ewen Health Action International."— Presentation transcript:

1 Medicine Prices Matter to People and Insurance Companies Margaret Ewen Health Action International

2 Medicines coverage in health insurance systems Equitable Access available to the poor Quality Use necessary, safe, effective, properly taken Affordable cost to patient & system Source: MedIC

3 WHO/HAI Project on Medicine Prices & Availability improve the availability and affordability of 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

4 Launched WHA 2003 Measures medicine prices availability affordability component costs 55+ surveys to date in all regions of the world Medicine Prices a new approach to measurement

5 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) Prices of 30 pre-selected commonly used medicines (core medicines) 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

6 Data analysis Price calculated as Median Price Ratio (MPR) local price compared to Management Sciences for Healths International Drug Price Indicator Guide (procurement prices offered to developing countries for multi-source medicines) Availability calculated as number of facilities having that product on the day of data collection (%) Affordability assessed for ten pre-selected courses of treatment compared to daily wage of lowest paid unskilled government worker

7 Selected surveys in WHO Eastern Mediterranean Region CountryNo. of Meds Conducted by Jordan, JFDA Kuwait, University of Kuwait Lebanon, Ministry of Health Sudan (Khartoum) Ministry of Health Syria, Ministry of Health Tunisia, Ministry of Health & National Union of Mutual Insurance Companies Yemen, Ministry of Health

8 Median % availability - public sector

9 Median % availability - private sector

10 Public sector Procurement price Public sector Patient price Originator brand Lowest priced generic Originator brand Lowest priced generic Jordan Kuwait4.96free Lebanon1.45free Sudan6.13 Syria1.56not surveyed Tunisia0.96free Yemen0.41 Public sector prices: Public sector prices: glibenclamide 5mg tabs Adjusted to same reference price (MSH 2003) & inflation/deflation

11 Public sector Procurement price Public sector Patient price Originator brand Lowest priced generic Originator brand Lowest priced generic Jordan Kuwait18.43free Lebanonfree Sudan Syria not surveyed Tunisia free Yemen Public sector prices: Public sector prices: diazepam 5mg tabs Adjusted to same reference price (MSH 2003) & inflation/deflation

12 Lowest Price Generic and Brand Premium in Private Retail Outlets by Country Income Low Price Generic 10% 300% 218% 126% Brand * MPR = Median price of core medicines found in 4+ outlets as ratio of MSH generic procurement price Note: Surveys with 8+ medicines on WHO/HAI core list found in both OB and LPG

13 Patient prices: Patient prices: private retail pharmacies diclofenac 25 mg tabs Adjusted to same reference price (MSH 2003) & inflation/deflation

14 Patient prices: Patient prices: private retail pharmacies atenolol 50 mg tabs

15 Affordability Affordability: glibenclamide 5mg 3xday 30 days treatment, purchased by lowest paid unskilled govt worker from private sector – by country income group

16 Affordability Affordability: atenolol 50mg daily 30 days treatment, purchased by lowest paid unskilled govt worker from private sector

17 Price components Wholesale mark-up Retail mark-up Cumulative mark-up Jordan19%26%62% Kuwait35%25%70% Lebanon10%*30%*60%* Sudan15%20%67% Syria8%regressive: 8-30%variable Tunisia8.7%regressive: %variable Yemen10%20%57% Taxes Jordan: import fee up to 5%, sales tax 4% Sudan: customs duty 10%, MoD duty 1% Yemen: import tax 5%, tax 5% Tunisia: VAT 6% * After the survey Lebanon implemented regressive mark-ups for importers, wholesalers & pharmacies

18 Key issues from survey results Govt. procurement – over-reliance on originator brands for old, off- patent medicines when cheaper generics exist Public sector – availability poor and prices not always low Private sector - prices generally high for both originator brands and lowest priced generics Affordability – standard treatments generally affordable for low wage earners in the public sector when generic medicines available, but not in private sector especially for originator brands Price components – largest component in final patient price is the manufacturers selling price, taxes applied to essential medicines, fixed % mark-ups provide incentives to wholesalers and retailers to sell more expensive medicines

19 Workshop: Towards equitable and affordable medicine prices policies in Jordan 4-5 Dec 2007, Dead Sea 90+ policy-makers, civil society groups, industry, health professional orgs, health insurance industry & others Hosted by JFDA and HAI, under the patronage of his Excellency, Minister of Health Dr. Salah Mawajdeh Key recommendations: -Improve public sector procurement and supply chain management -Implement pro-generics policies & programmes -Abolish taxes and duties on medicines -Review price setting in the private sector (not supported by all eg. pharmaceutical industry) -Establish monitoring system: prices, availability & affordability

20 Pricing in the private sector Pricing controls in Jordan: Method includes external reference pricing & generics up to 80% of originator price - choice of comparator countries is crucial -which price are you benchmarking against & why? eg. procurement, manufacturers selling price, reimbursement price, retail price Outcome: -high priced generics (shown in survey) -favouring export market not local people -review requested at workshop by many Alternatives include -stimulate competition amongst generics -modify formula & reduce the manufacturers selling price -subsidise local price for key essential medicines especially for the poor (SMART card) Evaluation of all options is needed

21 Role of insurance systems in educating consumers Educate people about prevention, health problems and treatment options, medicines, acceptability of generics, support adherence Governments to publish results of quality testing (and insurance companies use information in purchasing decisions) Publish prices - newspapers, health facility notice boards etc.

22 Control drug promotion Prescribing at major medical institutions

23 I DONT TAKE CHANCES, I ONLY USE ORIGINALS Guatemala 2006

24 Source: WHO/ HAI Drug Promotion Database 2004 Evidence about effects of promotion on physician behaviour Evidence about the problem –Promotion and samples impact prescribing –Sponsorship influences practice and research –Doctors do not realise or acknowledge influence Evidence about solutions –Voluntary regulation and guidelines are ineffective –Some strategies show promise Government regulation Unbiased information to professionals & consumers Training medical students about promotion Media exposure of abusive promotion

25 Consumer perspective on Jordan National Health Insurance Scheme Equitable coverage and transparent system Basic package: -meet peoples needs -affordable charges (especially for the poor) Everyone knows their entitlements including knowing the prices of medicines Civil society organisations should be actively involved in the design, implementation and monitoring of the scheme


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