[Ip-health] Reviews of pharmaceutical pricing policies and interventions now available

Marg Ewen Marg at haiglobal.org
Mon Jun 13 03:12:28 PDT 2011

Dear Friends

HAIs medicine price database now contains data from over 60 surveys
conducted is all regions of the world using the WHO/HAI survey tool. The
problem in most countries is clear - poor medicine availability in the
public sector is forcing people to buy out-of-pocket in the private
sector at prices so high that those on low wages have to work many days,
and sometimes 1 or 2 weeks, each month to buy chronic disease medicines.
What is also clear is that substantial opportunities exist to increase
availability, lower prices, and improve the affordability of medicines.
But deciding what action to take can be challenging.

WHO, HAI and a group of international experts are developing a series of
in-depth reviews on the use of various pharmaceutical pricing policies
and interventions. The first five reviews have now been published and
are available on HAIs website
http://www.haiweb.org/medicineprices/articles/index.html :

Review 1: External reference pricing
This is the practice of using the price of a medicine in one or several
countries to derive a benchmark or reference price for setting or
negotiating the price of the medicine in a country. The paper outlines
where and how external reference pricing is used,  its effects and
indirect effects, whether it is an appropriate price regulation
mechanism, components of an external reference pricing system, and more.

Review 2: The role of health insurance in the cost-effective use of
Insurance systems have great potential to improve the cost-effective use
of medicines by leveraging better prescribing, more cost-effective
medicine use by consumers and lower prices from pharmaceutical
companies. The paper discusses product selection strategies
(formularies, generic substitution policy etc), product purchasing
strategies, reimbursement design and contracting strategies (financial
incentives, separating prescribing and dispensing, and more), and
utilization management strategies (education campaigns etc). The review
includes four case studies.

Review 3: The regulation of mark-ups in the pharmaceutical supply chain
Mark-ups in the supply chain are variable, and often unregulated in low
and middle-income countries, which can result in patients paying more
than double the manufacturers selling price for a medicine. This paper
reviews the evidence on the extent of mark-ups regulations, different
approaches in regulating wholesaler and retailer mark-ups, the viability
of wholesalers and pharmacies, enforcement issues, the impact on
medicine prices and more. In addition, 3 case studies are provided.

Review 4: Competition policy
Competition can reduce medicine prices and increase availability if the
right conditions are in place. This paper looks at competition in the
pharmaceutical sector and the role of competition law (effects of
competition on prices, common problems with the functioning on the
medicines market, examples of applying competition law to manufacturers
of originator brands, generic manufacturers, retail pharmacies etc).
Health sector policies and practices that affect competition are
reviewed - those that can support competition (generics policies, public
procurement policies etc.) and those that can limit competition (trade
and industry protection policies etc). The paper includes a
comprehensive case study on competion law in South Africa. 

Review 5: Sales taxes on medicines
Many governments apply VAT and other taxes on medicine to generate
revenue. This paper discusses the extent such taxes affect access to
care, the economic case for taxing medicines and the case against taxing
medicines, and proposes healthier ways to raise public revenue.

The reviews are not meant to recommend one policy intervention over
another, but rather provide guidance to policy-makers and others on
various policy approaches. For each review, a policy brief will be
published that highlights key points from the review. These are expected
to be published by September.

Several other reviews are in progress, including a paper on promoting
the use of generic medicines. These will be published later in the year.

The results of the policy reviews undertaken to date show that
relatively little has been published about the use of pharmaceutical
pricing policies and interventions in low- and middle-income countries.
Therefore, the review papers are published as working drafts, to be
developed as more becomes known on the use of these interventions in
low-and middle-income countries.

We hope these papers will be a useful resource, and encourage national
policy-makers to tackle the challenge of developing and implementing
policies and strategies that ensure universal access to affordable

To access the pricing policy reviews:
To access the medicine price database:
To access the WHO/HAI manual to measure medicine prices, availability,
affordability and price components:

Marg Ewen

Coordinator, Global Projects (Pricing)

HAI Global


Email marg at haiweb.org <mailto:marg at haiweb.org> 



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