PHM-Exch> Worldwide survey on the actual cost of medicines

[Claudio Schuftan]

From: Meghana Bahar meghana at haiap.org

Not everyone has access to medicines and not all medicines are available in
the public sector. Medical reimbursement schemes are too expensive for most
patients. What are the consequences? Pay for medicines at their full price
in the private sector, purchase just a fraction of the treatment course, or
worse, be untreated. Sickness should never result in making such choices.
For the millions of people living in the impoverished regions of the world,
medicines cost the sky.

To illustrate the issue of high prices, Health Action International (HAI)
undertook a one day global ‘snapshot’ of the price of ciprofloxacin, a
commonly-used off-patent antibiotic. The ‘snapshots’ indicate the full
retail price a patient pays at a pharmacy on that day.  Data were collected
from 93 countries. Individuals from HAI’s extended network collected the
prices for both the originator brand product manufactured by Bayer and the
lowest priced generic equivalent in the pharmacy. An interactive map is on
HAI’s website (www.haiweb.org/medicineprices), indicating the price
variations between the Bayer originator product and the generic product, for
a 7 day treatment course (14 tablets) in US$ using the exchange rate of 30
November 2009.

In South East Asia, on average both the originator brand price (US$17.46)
and the price of the lowest priced generic (US$1.19) were substantially less
than prices in other regions. For example the originator brand was 16 times
the price of the lowest priced generic (as found in Africa). A course of the
originator brand varied in price from about US$57 in Malaysia to about US$2
in Nepal and India. Generic prices ranged from about US$32 in Australia to
less than US$1 in Myanmar (US$0.42), Sri Lanka (US$0.57), Indonesia
(US$0.66), Viet Nam (US$0.66) and Lao PDR (US$0.59).  Indonesia had the
largest brand premium with the originator brand priced at over 47 times the
price of the lowest priced generic. By contrast, in India the originator
brand was only 30% more than the generic.

The variation in price across countries within each income level was greater
for the originator brand compared to the generics. For example, in lower
middle-income countries the originator brand price varied from US$2 to
US$131 whereas generics ranged from less than US$1 to US$27. Generic
ciprofloxacin is available at much lower prices than the originator brand
product. In many countries, the price of the generic versions could be much
lower and more affordable.

To improve treatment affordability, interventions are needed to *increase
the use of low priced generics*. Governments need to ensure only good
quality medicines are on the market and mandate generic substitution and
create incentives for the dispensing of low priced generics. Sickness cure
should not cost the sky.

*Please refer to HAI website to see the interactive map reporting the price
data, and the analysis of results and recommendations: **
http://www.haiweb.org/medicineprices* <http://www.haiweb.org/medicineprices>
*. **For further information, contact Marg Ewen at HAI Global (telephone:
+31206833684 or e-mail: **medicineprices at haiweb.org*<medicineprices at haiweb.org>
*) or Jinani Jayasekera at HAI Asia-Pacific (telephone: *

*Being sick and needing medicines is a costly misfortune in many countries*

When you are sick the price of a medicine matters – especially if you are
one of the millions of people living in poverty in many countries around the
world. Medicines are inaccessible for many people; they are either
unavailable in the public sector, or patients cannot afford to be covered by
a medical reimbursement scheme. People who face this dilemma are either
forced to purchase medicines at full price in the private sector, go
without, or buy a partial course of treatment.

To illustrate the issue of high prices, Health Action International (HAI)
undertook a one day global ‘snapshot’ of the price of ciprofloxacin.
Ciprofloxacin is a broad spectrum antibacterial used to treat various common
infections, with a usual adult dose of 250-750mg twice daily for up to 14
days. The medicine has been off-patent in the US, Europe and elsewhere for
at least than 5 years and numerous generic versions are manufactured
throughout the world.

Individuals from HAI’s extended network collected the price which a patient
would have to pay if they paid the full price (as opposed to a co-payment
amount where reimbursement systems exist) for ciprofloxacin 500mg tablets in
their nearest private retail pharmacy on 30 November 2009. Prices were
collected for both the originator brand product manufactured by Bayer and
the lowest priced generic equivalent in the pharmacy.

Below is shown the price for a 7 day treatment course (14 tablets) in US$
using the exchange rate of 30 November 2009 for the Bayer originator product
in each location where data was collected - the larger the ‘bubble’, the
higher the price.  An interactive form of this map is on HAI’s website (
www.haiweb.org/medicineprices), where prices of the lowest priced generics
can also be viewed. These prices should not be considered representative of
the situation in a given country, since great price variation exists within
some countries, and they only report the final stage of the supply chain.
However, they are indicative of what patients would have to pay, if paying
the full retail price, in those pharmacies on that day.

The price a patient would pay for a course of the originator brand product
in the private sector was highest in Colombia at more than 200 times the
price in 5 Asian countries where the price of generics was lowest - a
difference of almost 20,000%.

 *Prices in the South East Asia region are much lower than in other regions
*

As shown in the chart, the average price a patient would pay for a course of
treatment with ciprofloxacin varies greatly across regions. In the South
East Asia region, both the originator brand price (US$17.46) and the price
of the lowest priced generic (US$1.19) were substantially less than prices
in other regions.

In the South East Asia region, the originator brand was 16 times the price
of the lowest priced generic (as found in Africa). In other regions, the
originator brand was about 11-14 times the price of the lowest priced
generic.

 *Prices vary greatly within the region*

Prices in countries within the region were also highly variable; the chart
shows average prices for the originator brand and lowest price generics in
countries in South East Asia and the Western Pacific region. The price for a
course of treatment varied from US$57.12 in Malaysia (originator brand) to
US$0.42 in Myanmar (generic).

A course of the originator brand varied in price from about US$57 in
Malaysia to about US$2 in Nepal and India. Generic prices ranged from about
US$32 in Australia to less than US1 in Myanmar (US$0.42), Sri Lanka
(US$0.57), Indonesia (US$0.66), Viet Nam (US$0.66) and Lao PDR (US$0.59).
Indonesia had the largest brand premium with the originator brand priced at
over 47 times the price of the lowest priced genericvii. By contrast, in
India the originator brand was only 30% more than the generic.

*Inequitable pricing –originator brand price is unrelated to the income
level of the country*

The chart below shows the price a patient would pay for a course of
treatment in countries grouped by World Bank income level. For the
originator brand (OB), the average price (indicated in red) showed very
little variation across the different income levels. A different picture is
seen for lowest priced generics (LPG) where the average price (also
indicated in red) decreased as the wealth of the country decreased (from
about US$ 20 in high income countries to about US$ 3 in low income
countries).

The variation in price across countries within each income level was greater
for the originator brand compared to the generics. For example, in lower
middle-income countries the originator brand price varied from US$ 2 to US$
131 whereas generics ranged from less than US$ 1 to US$ 27.

*Purchasing power: ciprofloxacin can be considered as expensive in many
countries*

Since theoretically currencies should trade at the rate that would make the
price of goods the same in each country, purchasing power is a good
indicator of how expensive goods are. Where the price in terms of
purchasing-power parity is greater than the price at market exchange rates,
the goods can be considered as expensive in that country. Likewise where the
price in terms of purchasing-power parity is less than the price at market
exchange rates, the goods can be considered to be low priced.

The price for the originator brand in Kyrgyzstan was extremely high at US$
248 at purchasing-power parity (and a much lower price at market exchange
rates), whereas it was low in France at only US$ 28 (with a similar price at
market rates), illustrating that in some countries the prices are too high.

Similarly for generics, the prices at purchasing-power parity were expensive
in a number of countries. In Guatemala, the price of a course of a generic
was high, at US$ 51 at purchasing power parity (and U$28 at market exchange
rates), while the reverse applied in Switzerland.

 *Conclusions*

   - Generic ciprofloxacin is available at much lower prices than the
   originator brand product
   - In many countries, the price of the generic versions could be much
   lower and more affordable
   - The average price for the Bayer originator brand product was consistent
   across countries of different income levels

*Recommendations*

To improve treatment affordability, interventions are needed to *increase
the use of low priced generics*. Governments need to:

   - Ensure only good quality medicines are on the market
   - Mandate generic substitution and create incentives for the dispensing
   of low priced generics
   - Ensure the public has easy access to information about the price they
   should pay for a medicine
   - Encourage active involvement of consumer and health professional
   organisations in education initiatives about the use of generic medicines
   - Remove taxes and duties on medicines, and regulate margins in the
   supply chain

For patients who cannot afford even the lowest priced generics purchased in
the private sector, governments must provide essential medicines free of
charge in the public sector, and ensure adequate financing and efficient
supply systems to prevent stock-outs.

This snapshot of the price of ciprofloxacin is useful in illustrating prices
across the world. However, governments need to continuously monitor prices,
as well as availability and affordability, in various sectors and regions
within their country. More important is to act on the findings to develop
policies and strategies to improve medicine affordability and availability,
monitor the outcomes and adapt to the continuously changing environment.

WHO/HAI has a tool available to survey medicine prices and availability, and
is developing in-depth reviews on pricing policy options (see
www.haiweb.org/medicineprices).
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