essential medicines & pharmaceutical policies dhs/emro who perspective on medicine prices &...

Essential Medicines & Pharmaceutical PoliciesDHS/EMRO

WHO Perspective on Medicine Prices & Policies

Meeting of Drug Board on Medicine PricingFederal Ministry of Health

Government of Pakistan

Dr Zafar MirzaRegional Adviser

Essential Medicines & Pharmaceutical PoliciesDivision of Health Systems & Services Development

East Mediterranean Regional Office

World Health Organization

14th November 2008ISLAMABAD

Essential Medicines & Pharmaceutical PoliciesDHS/EMROEssential Medicines & Pharmaceutical PoliciesDHS/EMRO

The Presentation

PART 1: WHO Perspective on access to medicines

PART 2: Medicine prices and affordability in EMR & in Pakistan

PART 3: Medicine Pricing Policy considerations

PART 4: Conclusions & Recommendations


WHO Constitution

“The enjoyment of the highest attainable standard of health is one of the fundamental

rights of every human being without distinction of race, religion, political belief, economic or

social condition.” and

“Governments have a responsibility for the health of their peoples which can be fulfilled only by the provision of adequate health and

social measures.


WHO Health System Framework - includes both public and private sectors

v


WHO Medicines Strategy: 4 objectives, 7 components, 44 expected outcomes

Policy

Access

Quality & safety

Rational use

1. Implementation and monitoring of national medicines policies

2. Traditional and complementary medicine

3. Fair financing and affordability4. Medicines supply systems

5. Norms and standards6. Regulations and quality assurance

systems (DRA)

7. Rational use by health professionals and consumers

Objectives Components


Access to Medicines

Access to essential medicines is a integral component of: right to health Health care

1/3rd of people in world do not have reliable access to essential medicines.

In some developing countries up to 50% of the population lack this access.


WHO Framework

Determinants of Access to Medicines

1. R

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4. R

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2. Affordable

prices

3. Sustainable

financing

ACCESS


1. Rationalselection and use

4. Reliablehealth and supply

systems

2. Affordableprices

3. Sustainablefinancing

ACCESS

WHO Framework

Determinants of Access to Medicines


Medicine Prices – why regulation

In the public sector, typically, governments in developing countries spend 30-40% of their recurrent health budgets on buying medicines: Largest category after salaries

In the private sector, individuals and families spend a very high proportion of their health budget on buying medicines. In some countries it reaches up to 80-90% of household health

budget.

Hence, governments (MoH) directly or indirectly regulate medicine prices all over the world in their effort to expand health care coverage. Approaches differ

Context


Expenditure on medicinesfrom 9 NHA studies in the Region

Pakis

tan


Medicine Prices – contesting field

Challenging area of public policy – interface of public health, commerce & industries and law.

Stakes are high for both public health as well as for business community.

Government has to strike a balance between numerous stakeholders – with ultimate goal of benefiting people.

Primacy of public health.

Context


The Presentation






National Surveys on Medicine Prices

Through a standard methodology for: collection and analysis of prices of

essential medicines affordability availability component costs in various sectors and

regions in a country

Surveys have taken place in 11 countries in the East Mediterranean region and in around 50 countries world wide.

EMRO


National Surveys on Medicine Prices

EMRO

In the national survey, prices of 30 medicines are collected from 20 public and 20 private pharmacies for both originator brand and lowest priced generic equivalent.

In case of Pakistan 29 medicines were surveyed in 30 public and 48 private pharmacies in all the four provinces Sept 2004.


Survey FindingsSurvey Findings

Public sector procurement prices

■ Generally, ministries of health were found to obtain good procurement prices compared to International Reference Prices (IRPs) except■ Morocco: 3.7 times the IRPs

■ Pakistan came up well with its public procurement prices when compared with International Reference Prices.

International Reference Price

International Reference Prices (IRPs) for this methodology are selected as those of Management Sciences for Health (MSH) which are published yearly in The International Drug Price Indicator Guide and which provide an indication of pharmaceutical prices on the international market.


Availability of medicines in public sector

Yemen 16/35 medicines were not found in any facility 29/35 medicines were available only in 4 facilities

Pakistan 23/29 medicines were not found in more than 15 out of 30 facilities

Lebanon only 15 of the 32 surveyed medicines were found at 20 public dispensaries


Private sector Patient Prices in Pakistan

Overall, prices of originator brands were 3.36 times the international ref price compared to 2.26 times for the lowest priced generics


Survey FindingsSurvey Findings

Affordability

Respiratory infection: 2.3 days’ income to buy a week’s supply of originator branded amoxicillin in Jordan

Depressive illness: 7.7 days’ income to buy a month’s supply of lowest priced generic fluoxetine in Pakistan; 36.4 days’ income to buy originator branded fluoxetine

Ulcer: One month’s treatment with lowest priced generic omeprazole – 2.9 days’ income in Sudan and 7.7 days’ income in Jordan; with originator brand 10.6 days’ income in Morocco and 23.7 days’ income in Pakistan

Number of days’ income a lowest paid government servant Number of days’ income a lowest paid government servant has to spend to buy pre-selected treatment regimes for 9 has to spend to buy pre-selected treatment regimes for 9 common diseases in the private sectorcommon diseases in the private sector


AffordabilityNo. of days wages to purchase treatments from the private sector

DIABETES OB LPG

Metformin 1.9 1.6

Glibenclamide 1.4 0.9

ARTHRITIS

Diclofenac 4.5 1.7

PEPTIC ULCER

Omeprazole 23.7 4.8

Ranitidine 8.5 6.5

DEPRESSION

Amitriptyline 1.4 --

Fluoxetine 36.4 7.7

RESPIRATORY TRACT INFECTION (adult)

Amoxicillin 1.0 1.0

Ciprofloxacin 11.3 3.0


Affordability & Poverty

Figure 1

Income distribution curve 2004

100.00

59.93

38.76

22.37

9.39

0

41%86%43%

0

10

20

30

40

50

60

70

80

90

100

0% 20% 40% 60% 80% 100%

Income Quintiles

Perc

enta

ge o

f tot

al in

com

e

Income distribution curve2004under US$ 1 a day

under US$2 a day

Lowest paid gov worker


Affordability of Atenolol: 50mg/day LPG in private sector: at the cost of USD 0.04/day

not affordable for the poorest 80% of the population at the 2.5% income threshold.

CATASTROPHIC APPROACH


Affordability of 4 selected medicines

Proportion of population becoming impoverished because of medicine procurement

IMPOVERISHMENT APPROACH


The Presentation






Medicine Pricing Policies

Pricing Policies for New Chemical Entities (NME)

Patent protection & access to medicines TRIPS and public health safeguards Data protection Differential pricing Cost-effectiveness analysis

Pricing Policies of Generics


Pricing Policies for GenericsGeneral Considerations

Lifeline of local pharmaceutical industry in developing countries.

Expiry of patents and introduction of generics is known to bring prices down in first year up to 40%.

Pricing policies need to be developed within the context of each country.


Paradox of Pharmaceutical Industrial Development in Developing Countries

The Case of India

Claims to be the 4th largest producer of medicines in the world

Exports to almost every country in the world – 70% of medicines in Africa are exported from India

And yet 50 to 80% of people within India do not have reliable access to needed medicines

Proportion of out-of-pocket expenditure on health is highest in the world i.e. 84%

A World Bank study suggests OOP medical costs alone may push 2.2% of the population below the poverty line in one year.


Contextual Factors Guiding Pricing Policies for Generics

National vision

Level of public health care coverage

Level of social protection

Existence and capacity of local pharmaceutical industry

Regulatory capacity and effectiveness

Access to Medicines

National Medicine

Policy

Medicine Prices

National Health Policy

National Development

Objectives

National Constitution

Globalization

Medicine Prices

Access to MedicinesAccess to MedicinesAccess to MedicinesAccess to Medicines

Medicine Prices

Medicine Prices


Five sets of policy tools for Generics for better availability, improved quality & affordable prices

1. Policies aimed at early introduction of generics.

2. Encouraging generic production and competition in the market

3. Promoting generic medicine use in public and private sectors.

4. Controlling / regulating prices of generic medicines

5. Effective quality control


Five sets of policy tools for Genericsfor better availability, improved quality & affordable prices

1. Policies aimed at early introduction of generics.

2. Encouraging generic production and competition in the market

3. Promoting generic medicine use in public and private sectors.

4. Controlling / regulating prices of generic medicines

5. Effective Quality control


Price Regulation of Generic Medicinescommon policy tools

Price controls or price fixing Cost plus formula

India; Bangladesh; Egypt; Syria… Gradual movement towards decontrol

Pakistan post 1993 experience Experience from Latin American countries

Maximum prices or leader price ceiling Can be a good policy in evolutionary process for de-

controlled medicines with strong monitoring system in place

Price negotiations

Reference pricing Internal reference pricing External reference pricing


The Presentation






Conclusions & Recommendations

Fixing medicines prices alone cannot improve the overall access situation

A comprehensive NMP-based approach is required along with major institutional reforms. DRA development has become imperative.

Unavailability of medicines in public sector facilities requires urgent attention in terms of improving financing and medicine supply systems.

Affordability analyses must be part of medicine pricing discussions and decisions.

A health system approach is needed for equitable financing and social protection in the face of rising inflation and poverty. Accessibility to essential medicines should be a part of such reform package.



The socio-economic situation, local pharmaceutical industry needs and aspirations and lessons learnt from June 1993 partial medicine prices de-regulation policy must set the context for a review of the existing medicine price policy and practice.

A major institutional development is needed for medicine pricing regulation and monitoring. Indian National Pharmaceutical Pricing Authority is a good example.

Prices of NCE must be negotiated in line with regional prices and those in Australia.

Policies must be adopted whereby generic entry into the market is facilitated as quickly as possible after the expiry of patents. Patent protection and market authorization must not be linked.



A clear criteria needs to be developed for the selection of medicines for the controlled category i.e. public health significance of medicines and the level of competition in the market. The prices of these medicines must be controlled so they are affordable for the poor. Appropriate Cost-plus formula can be developed for controlling the prices of these medicines.

The decontrolled category must also be provided a ceiling and these should be closely monitored.

The non-availability of important low priced essential generic medicines because of lack of profitability must be reviewed and appropriate price increases must be awarded.

Once agreed, the medicine pricing policy must be drafted, notified and implemented in letter and spirit.


Thank you

essential medicines & pharmaceutical policies dhs/emro who perspective on medicine prices &...

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