PHM-Exch> A win-win solution?: A critical analysis of tiered pricing to improve access to medicines in developing countries

[Claudio Schuftan]

From: Ruggiero, Mrs. Ana Lucia (WDC) <ruglucia at paho.org>
crossposted from: EQUIDAD at listserv.paho.org


** ** ** ** ** **

*A win-win solution?:
A critical analysis of tiered pricing to improve access to medicines in
developing countries*

*
*Suerie Moon1*, Elodie Jambert2, Michelle Childs2 and Tido von
Schoen-Angerer2 ****

1 Harvard Kennedy School and **School** of **Public Health**, ****Boston**,
**USA**** ****

2 Médecins Sans Frontières, Campaign for Access to Essential Medicines, ****
Geneva**, **Switzerland****
*Globalization and Health 2011, 7:39 doi:10.1186/1744-8603-7-39

*****

Available online at: http://bit.ly/vOOoAb

****


“…………Tiered pricing - the concept of selling drugs and vaccines in
developing countries at prices systematically lower than in industrialized
countries - has received widespread support from industry, policymakers,
civil society, and academics as a way to improve access to medicines for
the poor. We carried out case studies based on a review of international
drug price developments for antiretrovirals, artemisinin combination
therapies, drug-resistant tuberculosis medicines, liposomal amphotericin B
(for visceral leishmaniasis), and pneumococcal vaccines. ****

** **

We found several critical shortcomings to tiered pricing: it is inferior to
competition for achieving the lowest sustainable prices; it often involves
arbitrary divisions between markets and/or countries, which can lead to
very high prices for middle-income markets; and it leaves a
disproportionate amount of decision-making power in the hands of sellers
vis-à-vis consumers. In many developing countries, resources are often
stretched so tight that affordability can only be approached by selling
medicines at or near the cost of production. Policies that "de-link" the
financing of R&D from the price of medicines merit further attention, since
they can reward innovation while exploiting robust competition in
production to generate the lowest sustainable prices. However, in special
cases - such as when market volumes are very small or multi-source
production capacity is lacking - tiered pricing may offer the only
practical option to meet short-term needs for access to a product. In such
cases, steps should be taken to ensure affordability and availability in
the longer-term. ****

** **

Summary****

To ensure access to medicines for populations in need, alternate strategies
should be explored that harness the power of competition, avoid arbitrary
market segmentation, and/or recognize government responsibilities.
Competition should generally be the default option for achieving
affordability, as it has proven superior to tiered pricing for reliably
achieving the lowest sustainable prices……………”
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