Medicine prices in urban Mozambique: a public health and economic study of pharmaceutical markets and price determinants in low-income settings

Do private health providers help achieve Universal Health Coverage? A scoping review of the evidence from low-income countries

Universal Health Coverage (UHC) is the dominant paradigm in health systems research, positing that everyone should have access to a range of affordable health services. Although private providers are an integral part of world health systems, their contribution to achieving UHC is unclear, particularly in low-income countries (LICs). We scoped the literature to map out the evidence on private providers' contribution to UHC progress in LICs. Literature searches of PubMed, Scopus and Web of Science were conducted in 2022. A total of 1049 documents published between 2002 and 2022 were screened for eligibility using predefined inclusion criteria, focusing on formal as well as informal private health sectors in 27 LICs. Primary qualitative, quantitative and mixed-methods evidence was included, as well as original analysis of secondary data. The Joanna Briggs Institute's critical appraisal tool was used to assess the quality of the studies. Relevant evidence was extracted and analysed using an adapted UHC framework. We identified 34 papers documenting how most basic health care services are already provided through the private sector in countries such as Uganda, Afghanistan and Somalia. A substantial proportion of primary care, mother, child and malaria services are available through non-public providers across all 27 LICs. Evidence exists that while formal private providers mostly operate in well-served urban settings, informal and not-for-profit ones cater for underserved rural and urban areas. Nonetheless, there is evidence that the quality of the services by informal providers is suboptimal. A few studies suggested that the private sector fails to advance financial protection against ill-health, as costs are higher than in public facilities and services are paid out of pocket. We conclude that despite their shortcomings, working with informal private providers to increase quality and financing of their services may be key to realizing UHC in LICs.

Community purchases of antimicrobials during the COVID-19 pandemic in Uganda: An increased risk for antimicrobial resistance

Self-Medication (SM) involves the utilization of medicines to treat self-recognized symptoms or diseases without consultation and the irrational use of over-the-counter drugs. During the COVID-19 pandemic, the lack of definitive treatment led to increased SM. We aimed to estimate the extent of SM for drugs used to treat COVID-19 symptoms by collecting data from pharmacy sale records. The study was conducted in Kampala, Uganda, where we extracted data from community pharmacies with functional Electronic Health Records between January 2018 and October 2021 to enable a comparison of pre-and post-COVID-19. The data included the number of clients purchasing the following drugs used to treat COVID-19 and its symptoms: Antibiotics included Azithromycin, Erythromycin, and Ciprofloxacin; Supplements included Zinc and vitamin C, while Corticosteroids included dexamethasone. A negative binomial model was used to estimate the incident rate ratios for each drug to compare the effect of COVID-19 on SM. In the pre- COVID-19 period (1st January 2018 to 11th March 2020), 19,285 customers purchased antibiotics which included; Azithromycin (n = 6077), Ciprofloxacin (n = 6066) and Erythromycin (n = 997); health supplements including Vitamin C (430) and Zinc (n = 138); and Corticosteroid including Dexamethasone (n = 5577). During the COVID-19 pandemic (from 15th March 2020 to the data extraction date in October 2021), we observed a 99% increase in clients purchasing the same drugs. The number of clients purchasing Azithromycin increased by 19.7% to 279, Ciprofloxacin reduced by 58.8% to 96 clients, and those buying Erythromycin similarly reduced by 35.8% to 492 clients. In comparison, there were increases of 170%, 181%, and 377% for Vitamin C, Zinc, and Dexamethasone, respectively. The COVID-19 pandemic underscored the extent of SM in Uganda. We recommend future studies with a representation of data from pharmacies located in rural and urban areas to further study pandemics' effect on antimicrobials prescriptions, including obtaining pharmacists' perspectives using mixed methods approaches.

Determinants of drug prices: a systematic review of comparison studies

OBJECTIVE

In this systematic review on drug price comparison studies, we report on recent determinants of drug prices in a national and international context to facilitate regulation of drug prices by purchasers and policymakers worldwide. Determinants of drug prices were divided into non-modifiable and modifiable and were categorised as pertaining to a country's income level, pharmaceutical market system and its policies and government.

PRIMARY OUTCOME

Determinants of drug prices or price variance.

DESIGN

We systematically searched PubMed, EMBASE, Web of Science and Cochrane Library for peer-reviewed articles published between 2004 and 22 July 2020 that reported an association of the primary outcome with one or more determinants. We performed a best-evidence synthesis of these associations for determinants covered in at least three studies.

RESULTS

31 publications were included. Only one publication described net drug prices and 30 described retail drug prices. Five modifiable determinants were associated with lower retail prices: generic market portion, discounts, tendering policies, central (governmental) purchasing and pricing regulation schemes. The originators market portion and a system in which mark-ups are common were associated with higher retail prices. Retail prices were highest in the USA, even compared with other high-income countries. A positive association between national income level and drug retail prices could not be established among middle-income and high-income countries. Retail prices were highest in low-income countries when adjusted for purchasing power parity.

CONCLUSIONS

Literature on determinants of net drug prices is extremely sparse. Various healthcare system interventions, market-specific and governmental regulations are consistently associated with lower retail prices. Some interventions are easily implementable in developing or middle-income countries, such as tendering, central purchasing and fixed pricing regulation schemes. Net drug price comparison studies are needed to overcome the lack of price transparency and to quantify the effectiveness of policy measures on net drug prices.

Setting health care services tariffs in Iran: half a century quest for a window of opportunity

BACKGROUND

The process of medical tariffs setting in Iran remains to be a contentious issue and is heavily criticized by many stakeholders. This paper explores the experience of setting health care services tariffs in the Iranian health care system over the last five decades.

METHODS

We analyzed data collected through literature review and reviews of the official documents developed at the various levels of the Iranian health system using inductive and deductive content analysis. Twenty-two face-to-face semi-structured interviews supplemented the analysis. Data were analysed and interpreted using 'policy triangle' and 'garbage can' models.

RESULTS

Our comprehensive review of changes in the medical tariff setting provides valuable lessons for major stakeholders. Most changes were implemented in a sporadic, inadequate, and a non-evidence-based manner. Disparities in tariffs between public and private sectors continue to exist. Lack of clarity in tariffs setting mechanisms and its process makes negotiations between various stakeholders difficult and can potentially become a source of a corrupt income. Such clarity can be achieved by using fair and technically sound tariffs. Technical aspects of tariff setting should be separated from the political negotiations over the overall payment to the medical professionals. Transparency regarding a conflict of interest and establishing punitive measures against those violating the rules could help improving trust in the doctor-patient relationship.

CONCLUSION

Use of evidence-informed models and methods in medical tariff setting could help to strike the right balance in the process of health care services provision to address health system objectives. A sensitive application of policy models can offer significant insights into the nature of medical tariff setting and highlight existing constraints and opportunities. This study generates lessons learned in tariffs setting, particularly for low- and middle-income countries.

The Impact of Pharmaceutical Policies on Medicine Procurement Pricing in Indonesia Under the Implementation of Indonesia's Social Health Insurance System

BACKGROUND

Indonesia's social health insurance (Jaminan Kesehatan Nasional, JKN) has been implemented since 2014. To support medicine provision, the government launched policies reform on medicine pricing, procurement and reimbursement; hence, the system might affect medicine prices in the country.

OBJECTIVE

To evaluate the effects of the pharmaceutical policies reforms on medicine procurement prices.

METHODS

This was a pre-post observational study. Medicine price data were collected retrospectively from the 2013 Ministry of Health procurement price list, the 2017 e-catalogue procurement system, and the procurement departments at 2 hospitals in Jakarta and Cilegon (both categorized as region I). The 2013 national procurement price was compared with the 2017 e-catalogue price. The hospitals' procurement prices were collected from the data 3 years before and 3 years under Indonesia's social health insurance JKN (2011-2016), and the data were used to assess the medicine procurement prices in real conditions. The outcome measure was the difference in procurement prices before and under the JKN.

RESULTS

The results showed that the procurement prices of 429 (79.6%) of 539 medicines listed in the 2017 e-catalogue decreased, of which 210 items (39.0%) showed over a 50% decrease. Nevertheless, the procurement prices of 104 items (19.3%) increased, especially those that were still under patent or those with a few brands registered in Indonesia. The procurement prices in public and private hospitals showed a similar trend, that is, a significant decrease. Interestingly, non-e-catalogue medicine prices also decreased quite steeply, although the prices of the branded generic category in the private hospital remained unchanged.

CONCLUSION

The pharmaceutical policies under the JKN implementation had a profound impact on decreasing medicine procurement prices in Indonesia.

Association between medicine Price declaration by pharmaceutical industries and retail prices in Malaysia's private healthcare sector

Background

As part of the initiatives to increase price transparency for consumers, pharmaceutical industry in Malaysia have been encouraged to declare the wholesale and recommended retail prices (RRP) of medicines to the Pharmaceutical Service Department (PSD) yearly. However, the relationship between the voluntary price reporting practices and consumers’ retail medicine price is unknown. Therefore, this study aims to evaluate the effect of the voluntary price reporting practice of pharmaceutical industry on retail medicine prices, factors that may affect consumer medicine prices in Malaysia’s private healthcare sector, and the retail medicine pricing trend over 2011–2015.

Methods

A yearly correlation test for a 5-year period was performed to investigate the association between the wholesale and RRP medicine prices declared by the pharmaceutical industry from 2011 to 2015 on the one hand and the consumer wholesale and retail medicine price database on the other hand. The median price ratio (MPR) was calculated by comparing the consumer retail medicine price to its international reference price. The Krukal Wallis test was used to analyse the pricing trend throughout the 5-year period, and factors that might elevate the MPR above 2.5 were modelled using binary logistic regression.

Results

A total of 2527 medicine price data were analysed. There was a strong significant association between medicine prices declared to the PSD and the retail medicine prices in every year of the 5-year period. Moreover, there was no significant increase in retail medicine prices throughout the 5-year period. The medicine types, retail location, type of manufacturer, medicinal indications, declared wholesale and RRPs significantly influenced the consumer MPRs that where > 2.5.

Conclusion

The declared medicine price was found to have a significant association with the consumer retail medicine price. Thus, it may be a useful reference for consumers purchasing medicines in private healthcare settings. However, the government of Malaysia must develop strategies to increase medicine price transparency for price-control mechanisms in the private healthcare sector.

Electronic supplementary material

The online version of this article (10.1186/s40545-019-0176-z) contains supplementary material, which is available to authorized users.

Corruption practices in drug prescribing in Vietnam - an analysis based on qualitative interviews

BACKGROUND

Results from a previous study showed that 40 to 60% of the price of off-patent medicines in Vietnam was typically spent to induce prescribers to use the medicines, and to persuade procurement officers within hospitals to buy them. In this article we examine how and why inducements were paid by the pharmaceutical industry to health care providers in Vietnam.

METHODS

We use a theoretically informed analysis to understand pharmaceutical companies' account of giving inducements and prescribers' account of taking them, elicited through in-depth interviews.

RESULTS

Analysis of the emergent concepts derived from our qualitative data led to viewing the constructs from the theoretical framework of opportunities; pressures; and rationalization within a hierarchy of systemic factors and individual factors. Economic survival pressures in an imperfectly competitive market reportedly encouraged pharmaceutical companies and prescribers to be linked financially. Although individual factors such as professional ethics and personal values influenced doctors' responses to corrupt practices, entrenched systemic issues, including lack of transparency, accountability, poor enforcement of legislation and prevalence of corruption emerged as important factors supporting corrupt practice or even making it very difficult for individuals to opt out of corrupt practices.

CONCLUSIONS

Our theoretically informed analysis of inducements provides an in-depth understanding of an angle of corruption in Vietnam's health sector, showing the need for multifaceted strategies in the fight against corruption in the health sector. Remedial strategies need to address both systemic and individual factors including interventions to relieve dependencies for survival of health care services on the corrupt system.

Market for Artemether-Lumefantrine to treat childhood malaria in a district of southern Mozambique

Malaria is one of the leading causes of death in sub-Saharan Africa. Artemisinin-based combination therapies are used as first-line treatment drugs, but their market is far from competitive. Market failures include limited availability, low quality, lack of information, and high costs of access. We estimated the theoretical demand for one of the most common artemisinin-based combination therapies, artemether-lumefantrine (AL), and its determinants among caregivers of children with malaria seeking care at public health facilities, thus, entitled to receive drugs for free, in southern Mozambique (year 2012). The predicted theoretical demand was contrasted with international and local private market AL prices. Respondents stated high willingness to pay but lower ability to pay (ATP), which was defined as the theoretical demand. The ATP was on average of 0.94 USD for the treatment of a malaria episode. This implied an average gap of 1.04 USD between average local private prices and theoretical demand. Predicted ATP decreased by 14% for every additional malaria episode that the child had suffered during the malaria season. The market price was unaffordable for a large share of our sample, highlighting an unequal welfare distribution between suppliers and potential consumers, as well as issues of inequity in the private delivery of AL.

Performance of private sector health care: implications for universal health coverage

Although the private sector is an important health-care provider in many low-income and middle-income countries, its role in progress towards universal health coverage varies. Studies of the performance of the private sector have focused on three main dimensions: quality, equity of access, and efficiency. The characteristics of patients, the structures of both the public and private sectors, and the regulation of the sector influence the types of health services delivered, and outcomes. Combined with characteristics of private providers-including their size, objectives, and technical competence-the interaction of these factors affects how the sector performs in different contexts. Changing the performance of the private sector will require interventions that target the sector as a whole, rather than individual providers alone. In particular, the performance of the private sector seems to be intrinsically linked to the structure and performance of the public sector, which suggests that deriving population benefit from the private health-care sector requires a regulatory response focused on the health-care sector as a whole.

Determinants of price setting decisions on anti-malarial drugs at retail shops in Cambodia

Background

In many low-income countries, the private commercial sector plays an important role in the provision of malaria treatment. However, the quality of care it provides is often poor, with artemisinin combination therapy (ACT) generally being too costly for consumers. Decreasing ACT prices is critical for improving private sector treatment outcomes and reducing the spread of artemisinin resistance. Yet limited evidence exists on the factors influencing retailers’ pricing decisions. This study investigates the determinants of price mark-ups on anti-malarial drugs in retail outlets in Cambodia.

Methods

Taking an economics perspective, the study tests the hypothesis that the structure of the anti-malarial market determines the way providers set their prices. Providers facing weak competition are hypothesized to apply high mark-ups and set prices above the competitive level. To analyse the relationship between market competition and provider pricing, the study used cross-sectional data from retail outlets selling anti-malarial drugs, including outlet characteristics data (e.g. outlet type, anti-malarial sales volumes), range of anti-malarial drugs stocked (e.g. dosage form, brand status) and purchase and selling prices. Market concentration, a measure of the level of market competition, was estimated using sales volume data. Market accessibility was defined based on travel time to the closest main commercial area. Percent mark-ups were calculated using price data. The relationship between mark-ups and market concentration was explored using regression analysis.

Results

The anti-malarial market was on average highly concentrated, suggesting weak competition. Higher concentration was positively associated with higher mark-ups in moderately accessible markets only, with no significant relationship or a negative relationship in other markets. Other determinants of pricing included anti-malarial brand status and generic type, with higher mark-ups on cheaper products.

Conclusions

The results indicate that provider pricing as well as other key elements of anti-malarial supply and demand may have played an important role in the limited access to appropriate malaria treatment in Cambodia. The potential for an ACT price subsidy at manufacturer level combined with effective communications directed at consumers and supportive private sector regulation should be explored to improve access to quality malaria treatment in Cambodia.

Electronic supplementary material

The online version of this article (doi:10.1186/s12936-015-0737-9) contains supplementary material, which is available to authorized users.

Health Product Supply Chains in Developing Countries: Diagnosis of the Root Causes of Underperformance and an Agenda for Reform

Abstract-Well-functioning supply chains to deliver medicines, vaccines, and other health products form the backbone of the health system. Health product supply chains in developing countries are fraught with many problems. Ineffective supply chains weaken the overall health system's ability to respond to the healthcare needs of the population and put treatment programs at risk. This article provides an overview of the structure of health product supply chains in developing countries and outlines the main challenges and their root causes. It aims to identify key areas of reform to ensure that supply chains enable-or at least do not impede-achieving the targeted health outcomes from the increased investments in global health.

Beyond the bedside: A review of translational medicine in global health

Translational research is a broad field of medicine with several key phases moving from scientific discovery to bench research and the hospital bedside, followed by evidence-based practice and population-level policy and programming. Understanding these phases is crucial when it comes to preventing and treating illness, especially in global health. Communities around the world struggle with a variety of health problems that are at some times similar and at others quite different. Three major world health issues help to outline the phases of translational research: vaccines, human immunodeficiency virus and acquired immunodeficiency syndrome, and non-communicable diseases. Laboratory research has excelled in many of these areas and is struggling in a few. Where successful therapies have been discovered there are often problems with appropriate use or dissemination to groups in need. Also, many diseases would be better prevented from a population health approach. This review highlights successes and struggles in the arena of global health, from smallpox eradication to the impending epidemic of cardiovascular disease, in an attempt to illustrate of the various phases of translational research.

Patient access to health care and medicines across low-income countries

This study explores the issue of demand for health care and medicines in low-income country settings. Using the World Health Survey, multivariate analysis of cross-sectional household data from 35 low-income countries found that when ill, patient demand for health care to visit a clinic or hospital is inelastic ranging from -0.19 to 0.11. The main determinants of health seeking behaviour include having insurance, having a chronic condition, high household expenditure, and marital status. Women, the educated and those living in urban settings are more likely to seek care in a clinic. These findings suggest low-income patients will experience access problems, raising important policy implications to improve access to health care and medicines in these settings.

Analysis of prices paid by low-income countries - how price sensitive is government demand for medicines?

BACKGROUND

Access to medicines is an important health policy issue. This paper considers demand structures in a selection of low-income countries from the perspective of public authorities as the evidence base is limited. Analysis of the demand for medicines in low-income countries is critical for effective pharmaceutical policy where regulation is less developed, health systems are cash constrained and medicines are not typically subsidised by a public health insurance system

METHODS

This study analyses the demand for medicines in low-income countries from the perspective of the prices paid by public authorities. The analysis draws on a unique dataset from World Health Organization (WHO) and Health Action International (HAI) using 2003 data on procurement prices of medicines across 16 low-income countries covering 48 branded drugs and 18 therapeutic categories. Variation in prices, the mark-ups over marginal costs and estimation of price elasticities allows assessment of whether these elasticities are correlated with a country's national income.

RESULTS

Using the Ramsey pricing rule, the study's findings suggest that substantial cross-country variation in prices and mark-ups exist, with price elasticities ranging from -1 to -2, which are weakly correlated with national income.

CONCLUSIONS

Government demand for medicines thus appears to be price elastic, raising important policy implications aimed at improving access to medicines for patients in low-income countries.

Negotiating markets for health: an exploration of physicians' engagement in dual practice in three African capital cities

Scarce evidence exists on the features, determinants and implications of physicians’ dual practice, especially in resource-poor settings. This study considered dual practice patterns in three African cities and the respective markets for physician services, with the objective of understanding the influence of local determinants on the practice. Forty-eight semi-structured qualitative interviews were conducted in the three cities to understand features of the practice and the respective markets. A survey was carried out in a sample of 331 physicians to explore their characteristics and decisions to work in public and private sectors. Descriptive analysis and inferential statistics were employed to explore differences in physicians’ engagement in dual practice across the three locations. Different forms of dual practice were found to exist in the three cities, with public physicians engaging in private practice outside but also inside public facilities, in regulated as well as unregulated ways. Thirty-four per cent of the respondents indicated that they worked in public practice only, and 11% that they engaged exclusively in private practice. The remaining 55% indicated that they engaged in some form of dual practice, 31% ‘outside’ public facilities, 8% ‘inside’ and 16% both ‘outside’ and ‘inside’. Local health system governance and the structure of the markets for physician services were linked to the forms of dual practice found in each location, and to their prevalence. Our analysis suggests that physicians’ decisions to engage in dual practice are influenced by supply and demand factors, but also by how clearly separated public and private markets are. Where it is possible to provide little-regulated services within public infrastructure, less incentive seems to exist to engage in the formal private sector, with equity and efficiency implications for service provision. The study shows the value of analysing health markets to understand physicians’ engagement in professional activities, and contributes to an evidence base for its regulation.

With the help of a foreign ally: biopharmaceutical innovation in India after TRIPS

This article investigates the implications of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which reached full-fledged implementation in 2005, for the patenting activity of Indian biopharmaceutical companies. The Indian biopharmaceutical industry is well-known for its generic producers, whose business models capitalize on the opportunity to reverse-engineer patented compounds and produce them at low costs through process innovation. By strengthening intellectual property rights, TRIPS determined a major regulative change, which presents the characteristics of an institutional shock. The examination of the patenting and alliance activity of 123 Indian biopharmaceutical firms between 1999 and 2009 reveals two important insights. First, the innovation outcome of Indian biopharmaceuticals has sharply increased during the transition to TRIPS-compliant regulation, suggesting that Indian companies have been capable and willing to transit from an imitation-based to an innovation-based business model. Second, those biopharmaceutical firms holding cross-border alliances to foreign partners have proved significantly more successful at enhancing their innovative capability. This research delivers a multifold contribution to the policy debate surrounding the enforcement of TRIPS in emerging economies. First, it suggests that such regulatory change may have encouraged biopharmaceutical innovation in India, despite the sceptical voices who did not foresee any benefits because of inherent inertia of the industry. Second, by arguing and testing the advantages of foreign partnerships, this research highlights that the much feared return of pharmaceutical foreign companies to India could instead favour adaptation to institutional change. Implications for Indian public health are particularly critical. The impact of TRIPS on drug pricing and on the capability--and willingness--of Indian biopharmaceuticals to invest in local health conditions are two crucial points of discussion.

Examining characteristics, knowledge and regulatory practices of specialized drug shops in Sub-Saharan Africa: a systematic review of the literature

BACKGROUND

Specialized drug shops such as pharmacies and drug shops are increasingly becoming important sources of treatment. However, knowledge on their regulatory performance is scarce. We set out to systematically review literature on the characteristics, knowledge and practices of specialized drug shops in Sub-Saharan Africa.

METHODS

We searched PubMed, EMBASE, WEB of Science, CAB Abstracts, PsycINFO and websites for organizations that support medicine policies and usage. We also conducted open searches using Google Scholar, and searched manually through references of retrieved articles. Our search included studies of all designs that described characteristics, knowledge and practices of specialized drug shops. Information was abstracted on authors, publication year, country and location, study design, sample size, outcomes investigated, and primary findings using a uniform checklist. Finally, we conducted a structured narrative synthesis of the main findings.

RESULTS

We obtained 61 studies, mostly from Eastern Africa, majority of which were conducted between 2006 and 2011. Outcome measures were heterogeneous and included knowledge, characteristics, and dispensing and regulatory practices. Shop location and client demand were found to strongly influence dispensing practices. Whereas shops located in urban and affluent areas were more likely to provide correct treatments, those in rural areas provided credit facilities more readily. However, the latter also charged higher prices for medicines. A vast majority of shops simply sold whatever medicines clients requested, with little history taking and counseling. Most shops also stocked popular medicines at the expense of policy recommended treatments. Treatment policies were poorly communicated overall, which partly explained why staff had poor knowledge on key aspects of treatment such as medicine dosage and side effects. Overall, very little is known on the link between regulatory enforcement and practices of specialized drug shops.

CONCLUSIONS

Evidence suggests that characteristics and practices of specialized drug shops differ across rural and urban locations, and that these providers are highly responsive to client demand. However, there is a dearth in knowledge on how regulatory enforcement influences their characteristics and practices, and what strategies can be employed to strengthen the governance of the retail pharmaceutical sector.

Policies to promote use of generic medicines in low and middle income countries: a review of published literature, 2000-2010

OBJECTIVE

Review the literature on the impact of policies designed to enhance uptake of generic medicines in low and middle income countries (LMICs).

METHODS

We searched for publications related to generic medicines policies (January 2000-March 2010) and did a bibliometric, descriptive analysis of the dataset in addition to an analysis of studies evaluating the impact of pro-generic policies. We repeated a subset of this larger search in January 2012.

RESULTS

Of the 4994 articles screened, 315 (6.3%) full-text publications were related to generic medicines policies. Of these 315, 236 (75%) dealt with generic medicine policies in high-income countries, and 79 (25%) with policies in LMICs. In total, we found only 10 evaluation studies looking at the impact of competition, trade, pricing and prescribing policies on generic medicine price and/or volume. Key barriers to implementing generic medicine policies in LMICs are negative perceptions of stakeholders (e.g., generics are of lower quality) plus perverse private sector financial incentives to sell products with the highest profit margin. Other relevant barriers are legal/regulatory, such as the absence of generic substitution regulations. There also exists a general difficulty in promoting generics due to a lack of transparency in the pharmaceutical supply and distribution system, for example, a lack of price information provided by health care provider organizations to physicians.

CONCLUSION

There is little policy evaluation to determine which pro-generic policies increase generic medicines utilization in LMICs. Ensuring a functioning medicines regulation authority, creating a reasonably robust market of generic medicines and aligning incentives for physicians, consumers and drug sellers are necessary prerequisites for increasing the uptake and use of generic medicines.

High medicine prices and poor affordability

PURPOSE OF REVIEW

In developing countries, most people who need medicines have to pay for them out of their own pockets. This review focuses on publications to explore the affordability gap of medicines and ways to close it.

RECENT FINDINGS

Cardiovascular medicines were unaffordable in low-income to middle-income countries, whereas dementia medicines were only affordable in regions of wealth. In urban Mozambique, local mark-ups are up to two-thirds of final price in private pharmacies, whereas some governments consistently paid higher prices above the international reference prices to procure a number of medicines. Generics competition from India made an originator brand manufacturer of a AIDS drug willing to supply the drug at a cheaper rate to poorer countries, whereas a Brazilian national program to produce nonprofit generics against protected patent of originator brand products to provide free AIDS drugs had cut the number of people dying by half and hospitalization by 80%, which saved about half a billion US dollars, making the program almost fund itself.

SUMMARY

Although lowering the manufacturer's price has a greater effect on the cost, policies to eliminate duties and taxes on medicines and regulate mark-ups are practical strategies to avoid excessive add-on costs.

Balancing medicine prices and business sustainability: analyses of pharmacy costs, revenues and profit shed light on retail medicine mark-ups in rural Kyrgyzstan

BACKGROUND

Numerous not-for-profit pharmacies have been created to improve access to medicines for the poor, but many have failed due to insufficient financial planning and management. These pharmacies are not well described in health services literature despite strong demand from policy makers, implementers, and researchers. Surveys reporting unaffordable medicine prices and high mark-ups have spurred efforts to reduce medicine prices, but price reduction goals are arbitrary in the absence of information on pharmacy costs, revenues, and profit structures. Health services research is needed to develop sustainable and "reasonable" medicine price goals and strategic initiatives to reach them.

METHODS

We utilized cost accounting methods on inventory and financial information obtained from a not-for-profit rural pharmacy network in mountainous Kyrgyzstan to quantify costs, revenues, profits and medicine mark-ups during establishment and maintenance periods (October 2004-December 2007).

RESULTS

Twelve pharmacies and one warehouse were established in remote Kyrgyzstan with < US $25,000 due to governmental resource-sharing. The network operated at break-even profit, leaving little room to lower medicine prices and mark-ups. Medicine mark-ups needed for sustainability were greater than originally envisioned by network administration. In 2005, 55%, 35%, and 10% of the network's top 50 products revealed mark-ups of < 50%, 50-99% and > 100%, respectively. Annual mark-ups increased dramatically each year to cover increasing recurrent costs, and by 2007, only 19% and 46% of products revealed mark-ups of < 50% and 50-99%, respectively; while 35% of products revealed mark-ups > 100%. 2007 medicine mark-ups varied substantially across these products, ranging from 32% to 244%. Mark-ups needed to sustain private pharmacies would be even higher in the absence of government subsidies.

CONCLUSION

Pharmacy networks can be established in hard-to-reach regions with little funding using public-private partnership, resource-sharing models. Medicine prices and mark-ups must be interpreted with consideration for regional costs of business. Mark-ups vary dramatically across medicines. Some mark-ups appear "excessive" but are likely necessary for pharmacy viability. Pharmacy financial data is available in remote settings and can be used towards determination of "reasonable" medicine price goals. Health systems researchers must document the positive and negative financial experiences of pharmacy initiatives to inform future projects and advance access to medicines goals.