Presentation on theme: "Medicines Prices and Methods of Financing in South-East Asia Indian Pharmacological Society 38 th Annual Conference, Chennai 29th December 2005 Dr K Weerasuriya,"— Presentation transcript:
Medicines Prices and Methods of Financing in South-East Asia Indian Pharmacological Society 38 th Annual Conference, Chennai 29th December 2005 Dr K Weerasuriya, Essential Drugs & Medicines Policy, World Health Organisation, South-East Asia Region, New Delhi, India
2 Introduction Prices and Methods of Financing affect access to Essential Medicines Clinical Pharmacologists see it as part of Medicines Use Previous presentations have shown the unsatisfactory prices, availability and need for standardised methodology to investigate problem This presentation looks at some of the reasons for the pricing and availability in the Region
3 Bhutan - example from a small country Government commitment to supply medicines for the whole population through state health care. An ever increasing recurrent expenditure that is difficult to sustain despite Essential Medicines List, bulk procurement. Bhutan Health Trust Fund – build capital and then use interest Lesson Lesson – even in tightly regulated state dominated situations it is difficult to finance all the medicines needed.
4 Thailand & Sri Lanka State a major provider but private sector a major player too Thailand – 30 Baht scheme in state hospitals. Patient co-payment per episode of illness state funds the rest. Good principle but major problems in implementation Sri Lanka – drugs from an Essential Medicines list free at point of dispensing in state institutions. Shortages, poor management & Health/Finance Ministry battles over funds Private sector drug supply in both countries the iniquitous escape valve Lesson Lesson - Poorly financed state sector begets a private sector with poor solutions and many additional problems
5 India and Indonesia Private sector outstrips state sector in providing drugs Produces some of the biggest distortions in medicines prices; health considerations (EML, STG, Formularies) marginalized State loses ability to influence medicines use as well as prices through indirect means Lesson Lesson – when the state does not play a a major role there is a very unsatisfactory situation
6 Medicines Prices & Financing – What other strategies do countries use? Regulating Prices of Essential Medicines Well intentioned but not well thought out decision If profits in one category, industry will shift to category where profits not controlled Regulating prices of Essential Medicines but not other Medicines will encourage ….? Higher returns will also encourage promotion of other medicines Regulation of prices of all medicines with a fair return to essential medicines and lesser return to other medicines However no country does this Lesson – incentives should aim for specific objectives and monitor for unintended consequences
7 Medicines Prices & Financing – What other strategies do countries use ? Generic substitution – Official/Unofficial, de facto. Public sector medicines supply organizations (Bangladesh, Thailand, Nepal, Sri Lanka) Variable efficiency – depends on focus Health before Profits or vice versa? Enforcement of Essential Medicines List in use and supply in state sector Is there regulation of drug promotion ? Lesson – Factors other than prices need to be regulated
8 WHAT is the basis of pricing ? Cost plus (industry data, industry perspective) Medicines should be assessed as any other industrial/consumer good OR Assess the value of a medicine for health? What is the value for money of a medicine in health care? What would be the health reasons for paying different prices for drugs in same class with same benefit (e.g. propranolol, timolol)? No country in the region use health considerations in pricing (could be simpler too) Lesson – medicines are priced according to industrial perspective – should not health be taken into account too?
9 India National Drug Policy in 1978 had strong health and cost-effectiveness component Subsequent policies severely watered down health and enlarged industrial aspects Attempts at regulations of drug prices but from market angle, crude measures & from a Ministry other than Health Broad regulation the need, but poor micro management the reality Indian Industry is capable - 1% by value BUT 8% by volume of global market No health focus in medicines activities Lesson – The social contract of serving health while making profits was not imposed on the industry
10 Conclusion Medicines prices and methods of financing have a major influence on the health Present situation globally and in the region is very confused and does not serve health The standardized method provides valuable insight into medicines prices Medicines are seen as industrial/consumer goods & there is no health focus Despite this the data in the surveys would help to improve the situation and make medicines more accessible The ultimate solution should be including a health aspect in medicines pricing and financing methods suitable to individual countries