Medicine Prices a new Approach to Measurement
Item
- Title
-
Medicine Prices
a new Approach to Measurement
- extracted text
-
-1wit |wit
ti^ti^ ti^ti^
®wMi
HHM iWWii
AfttM
. ............................
jWflfsW
. fMift
HiMttf
feMi® M®ti® M®ti® feMii feMi*
*ttMt itWitt HtMt iHMt
Mf*tf
MMi Mfet? HWiH
•
II V !! O H II O'
ft
ft
ft
ft
ft
ft
II O' II O'..........................................
HWiit mti*t mtut ww^f mt44t
•
•••-
•
O
••••
•
•
••••
•
•
•
&
••••
•
•
- ®t«tm *tsWt ifitm
•
•
•
•
•
•
*
®
••••
*
•
ft
&
@
&
e
ft
®
••••
«
•
•
•
•
•
•
iMttt
•••
ft
Medicine
Prices
a new approach to measurement
2003 edition
Working draft for field testing and revision
C-
iWorld Health Organization
Health Action International
© World Health Organization and Health Action International 2003
All rights reserved.
The designations employed and the presentation of the material in this publication do
not imply the expression of any opinion whatsoever on the part of the World Health
Organization or Health Action International concerning the legal status of any country,
territory, city or area or of its authorities, or concerning the delimitation of its frontiers
or boundaries. Dotted lines on maps represent approximate border lines for which there
may not yet be full agreement
The mention of specific companies or of certain manufacturers’ products does not imply
that they are endorsed or recommended by the World Health Organization or Health
Action International in preference to others of a similar nature that are not mentioned.
Errors and omissions excepted, the names of proprietary products are distinguished by
initial capital letters.
The World Health Organization and Health Action International do not warrant that the
information contained in this publication is complete and correct and shall not be liable
for any damages incurred as a result of its use.
Contents
Preface
1
Acknowledgements
3
Abbreviations and acronyms
5
1
WHY MEASURE THE PRICE OF MEDICINES?
Medicine prices and inequities in health
Why monitor the prices of medicines?
The need for a standard approach to measuring medicine prices
A new approach
Contents of the manual
2
OVERVIEW OF THE SURVEY
Steps in the survey
Survey planning and preparation
Collecting national pharmaceutical sector data
Identifying Sectors
Sampling
Selecting medicines
Training
Collecting data on the prices and availability of medicines
Identifying the components of medicine prices
Assessing affordability
Data entry
Data analysis and interpretation
Making international price comparisons
Identifying policy options
Reporting the survey findings
Repeating the survey
3
PLANNING
Personnel
Technical resources
Financial resources
Planning where to conduct the survey
Selecting a sample
Planning timeline
Seeking endorsements
7
7
8
9
10
11
13
13
14
14
14
15
15
16
16
17
17
18
18
18
18
19
19
20
20
22
22
23
24
26
26
4
DATA COLLECTION AT CENTRAL LEVEL
28
28
29
38
43
National Pharmaceutical Sector Form
Medicine Price Data Collection form
Components of medicine prices
Affordability
5
PREPARATION FOR DATA COLLECTION IN THE FIELD
Guidance for area supervisors
Sampling sites
Selecting data collectors
Training data collectors
Pilot testing
Medicine Price Data Collection forms
Planning the schedule of data collection visits
Letter of introduction
Checklist for area supervisors
Guidelines for data collectors
Coordinating meetings
6
DATA COLLECTION IN THE HELD
Fieldwork: Area supervisors
Fieldwork: Data collectors
7
DATA ENTRY
Using the computerized Workbook
Overview of the Workbook and its operations
Home page
International Medicine Reference Price Data page
Field Data Consolidation pages
Standard Treatment Affordability page
Price Composition: Cumulative Mark-ups page
Price Composition: Components of Price page
8
DATA ANALYSIS AND INTERPRETATION
Overview of data analysis
Data on the national pharmaceutical sector
Within-sector price analyses
Cross-sector price and availability comparisons
Analysing treatment affordability
Analysing price composition
..7
45
45
45
47
47
48
49
49
50
50
50
50
52
52
53
58
58
60
61
61
65
70
72
73
75
76
79
79
89
93
95
9
INTERNATIONAL PRICE COMPARISONS
Comparisons of the prices of individual medicines
Comparisons of the affordability of treatment
Comparisons of price composition
International comparisons of prices for a sample of medicines
10 EXPLORING POSSIBLE POUCY OPTIONS AND
UNES OF ACTION
Data from the survey and its interpretation
11 REPORTING
Survey report
Presenting the findings
Disseminating the findings
98
99
100
101
102
104
105
109
109
110
111
12 DEVELOPMENT OF THE MANUAL AND BEYOND
113
Glossary
115
nr
References
120
ANNEXES
123
1 Example of a letter of endorsement
125
2 National Pharmaceutical Sector form
126
3 Medicine Price Data Collection form
131
4 Example of a letter of introduction from the survey manager
135
5 Example of a survey report
136
CIMU)M
1 Full text of the manual in .pdf format
2 MS Excel computerized Workbook
3 Example of a letter of endorsement of the survey
4 National Pharmaceutical Sector form
5 Medicine Price Data Collection form
6 Example of a letter of introduction for data collectors
Preface
In developing countries, most medicines are paid out-of-pocket by individual
patients rather than being subsidized through social insurance. High prices are
a major barrier to the use of medicines and better health, yet too little is known
about the prices that people pay for medicines in low- and middle-income countries.
This manual and the accompanying Workbook and database provide a new
approach to measuring the prices of medicines. They result from the widely-felt
need for greater transparency on prices in the global medicines marketplace. The
work proposed can be carried out reliably and at low cost by consumer groups,
academic centres concerned with public health, government departments or
others.
The survey is focused on thirty key medicines covering the spectrum of the global
disease burden, particularly as it falls on low- and middle-income countries. The
results should raise questions about the relative prices of innovator brand
medicines and their generic equivalents, about prices in different parts of the
same country, about the relationship between procurement prices and final
prices to patients, about the affordability of treatment for ordinary people and
about international differences in prices for the same medicines.
The manual is the outcome of a technical project of the World Health Organization
(WHO)/Public Interest Nongovernmental Organizations Roundtable on
Pharmaceuticals, which was established in 1998 to strengthen collaboration
between WHO and civil society. Public interest nongovernmental organization
(NGO) participation is drawn from consumer, development, emergency relief, non
profit medicine supply and professional organizations. NGO coordination of the
Roundtable and of this project is undertaken by Health Action International (HAI)
Europe.*
After reviewing experiences of monitoring the prices of medicines. Roundtable
participants identified the need for the development of a standardized method
for the collection and analysis of medicine prices and price composition within
a country at a specific point in time and over time.
During 2001 and 2002, project members field tested the manual in nine countries
and four continents - in Armenia, Brazil, Cameroon, Ghana, Kenya, Peru,
Philippines, South Africa and Sri Lanka. Progress in the work was assisted by a
panel of highly experienced and widely recognized experts.
The outcome is the new approach, described in this manual, to measuring the
prices people have to pay for a selection of important medicines across local
sectors (public, private retail pharmacies and other medicine outlets). The manual
also outlines how to collect information on price composition, such as taxes,
‘Health Action International (HAI) is an independent, international network of groups and individuals
who believe that policies and health care systems should meet people’s needs. HAI seeks to
influence international and national policies and regulations to ensure that they protect and
promote public health. HAI’s focus is on the promotion of the essential drugs concept, equitable
access to quality medicines and the rational use of drugs.
i
mark-ups and fees, and assess the affordability and availability of medicines. To
facilitate data analysis, a software application for Microsoft Excel has been
designed to accompany this manual; this is provided on the CD-ROM in the inside
front cover.
The methodology has been designed primarily for use in low- and middle-income
countries, but should be applicable to all countries. All users are encouraged to
submit the results to the WHO Essential Drugs and Medicines Policy Department
(WHO/EDM) and Health Action International Europe so that they can be lodged
on the database that is specific to this initiative. This is accessible on HAI’s
website (www.haiweb.org/medicineprices ). The establishment of this database
is an important step towards greater transparency and availability of reliable
information on medicine prices in different settings.
Despite the considerable expertise and field testing that went into developing this
manual, WHO and Health Action International consider this first edition as a
starting point. The methodology will be kept under review with accumulating
experience and will be further developed as more surveys are undertaken.
Please contact the WHO Essential Drugs and Medicines Policy Department or
Health Action International Europe if you are contemplating undertaking a survey
of medicine prices. Please also contact us if you have any queries or comments,
particularly on aspects of the methodology that are unclear or prove to be difficult
to implement.>This is key to improving the methodology and, in turn, improving
the transparency of information on medicine prices.
World Health Organization
Essential Drugs and Medicines
Policy Department
1211 Geneva 27
Switzerland
E-mail: medicineprices@who.int
Health Action International Europe
Jacob van Lennepkade 334-T
1053 NJ Amsterdam
The Netherlands
E-mail: info@haiweb.org
2
Acknowledgements
WHO and Health Action International wish to thank the Netherlands Ministry of
Foreign Affairs and the Rockefeller Foundation for their generous support in
funding this project. Special thanks are due to the following people who contributed
much time and expertise in developing and testing the methodology, and managing
the project.
Project Management
Margaret Ewen, Health Action International Europe; Andrew Creese, Essential
Drugs and Medicines Policy Department, WHO.
Consultants
■ Kirsten Myhr, Ulleval University Hospital, Norway: principal author
■ Dennis Ross-Degnan, Harvard University, USA: Workbook development
■ Richard Laing, Boston University, USA: data analysis
t
■ Jeanne Madden, Harvard University, USA: review of pilot field data
■ Sadara, Sadaraintemetdiensten, Netherlands: database development
■ Jan Fordham, Open Learning Associates, UK: editing and production.
Advisory Group
K. Balasubramaniam, HAI Asia Pacific, Sri Lanka; Jorge Bermudez, National
School of Public Health, Brazil; Jerome Dumoulin, University of Grenoble, France;
David Henry, University of Newcastle, Australia; Aarti Kishuna, Public Health
Consultant, South Africa; Richard Laing, Boston University, USA; Barbara McPake,
London School of Hygiene and Tropical Medicine, UK; Zafar Mirza, The Network
for Consumer Protection, Pakistan; Elias Mossialos, London School of Economics,
UK; Dennis Ross-Degnan, Harvard University, USA.
Steering Group
Harry van Schooten, Netherlands Ministry of Foreign Affairs; Anthony So, Rockefeller
Foundation; Carmen Perez-Casas, Medecins Sans Frontieres; Mohga Kamal Smith,
Oxfam UK; Daphne Fresle, WHO.
Principal Investigators of Field Tests
Movses Aristakesyan, Armenia; Andre Luis de Almeida dos Reis, Brazil; Meinolf
Kuper, Cameroon; Charles Allotey, Ghana; Isaac Kibwage, Kenya; Javier Olivas
Peru; Aldrin Santiago, Philippines; Aarti Kishuna, South Africa; Rajitha
Wickremasinghe, Sri Lanka.
Translators
Simona Chorliet (French); Jose Antonio Valtueria (Spanish).
Administrative Support
Rose de Groot, Health Action International Europe.
3
MEDICINE
PRICES:
A
NEW
APPROACH
TO
MEASUREMENT
The project managers would like to express their appreciation to the Rockefeller
Foundation and the staff of the Bellagio Study and Conference Centre for the
use of the Centre. Jonathan Soverow, in particular, provided valuable assistance
for the project meeting in Bellagio.
NGO participants in WHO/public interest NGO Roundtables on
Pharmaceuticals (1998-2001)
ECHO International Health Services, Ecumenical Pharmaceutical Network (EPN),
Health Action Information Network (HAIN), Health Action International (HAI), Healthy
Skepticism, International Network for Rational Use of Drugs (INRUD), International
Society of Drug Bulletins (ISDB), Medecins Sans Frontieres (MSF), Mission for
Essential Drugs & Supplies (MEDS), Oxfam, Pharmaciens Sans Frontieres (PSF),
Save the Children Fund (SCF), Social Audit UK, The Network for Consumer Protection
in Pakistan, World Council of Churches (WCC) and World Vision International.
NGO members of the Roundtable are deeply indebted to Daphne Fresle, without
whose support and encouragement this medicine pricing project, and indeed the
Roundtable itself, may not have been realized.
4
Abbreviations and acronyms
ARV
Antiretroviral
BNF
British National Formulary
GIF
Cost, insurance and freight
EML
Essential medicines list
FOB
Free on board
HAI
Health Action International
HAART
Highly Active AntiRetroviral Therapy
IRP
International reference price
LPG
Lowest price generic equivalent
MPR
Median price ratio
MSG
Most sold generic equivalent
MSH
Management Sciences for Health
MSP
Manufacturer’s selling price
MUP
Manufacturer’s unit price
NA
Not available
NGO
Nongovernmental organization
OECD
Organization for Economic Co-operation and Development
PBS
Pharmaceuticals Benefit Scheme (Australia)
SMUP
Sector median unit price
TRIPS
Trade-Related Aspects of International Property Rights
WHA
World Health Assembly
WHO
World Health Organization
WHOEML
WHO Model List of Essential Medicines
WTO
World Trade Organization
5
Why measure the price of
medicines?
■ One-third of the world’s population lacks reliable access to the medicines
they need primarily because they cannot afford to purchase them
■ Little is known about the prices that people pay for medicines and how
these prices are set
■ Reliable information on the prices of medicine is needed in order that
more favourable purchasing agreements can be negotiated, domestic
distribution better managed and pricing policies monitored
■ This manual offers a new approach to the measurement and monitoring
of medicine prices
■ The methodology described in the manual is designed to assist
governments, nongovernmental organizations, international agencies,
health professionals and consumers in advocating for more equitable
access to essential medicines.
MEDICINE PRICES AND INEQUITIES IN HEALTH
One-third of the global population lacks reliable access to needed medicines,
according to estimates by the World Health Organization (WHO, 2000). The
situation is worse in the poorest countries of Africa and Asia where up to 50%
of the population are unable to obtain necessary medicines (WH0/WT0, 2001).
Up to 90% of the population in developing countries have to buy medicines
through out-of-pocket payments as opposed to around 20% in high income countries
(WH0/WT0, 2001). Less than 10% of the population of Africa is protected by
social insurance and publicly subsidized health services are both inadequate and
located primarily in and around principal urban centres.
Many direct and indirect pharmaceutical price regulations remain in effect in
OECD countries (Jacobzone, 2000). In many developing countries, however,
national medicine pricing policies are shifting from price controls to deregulation
under the influence of structural adjustment and reform programmes. It is not yet
clear how market forces affect medicine prices in this new environment. In the
short term, at least, they may increase costs for which policy adjustments may
be required.
7
MEDICINE
PRICES:
A
NEW
APPROACH
TO
MEASUREMENT
Duties, taxes, mark-ups, distribution costs and dispensing fees are often high,
regularly constituting between 30% and 45% of retail prices, but occasionally up
to 80% or more of the total (Bale, 2001; European Commission, 2003; Levison,
2003). Prices are also influenced by whether the country observes patents, the
level of domestic production of medicines, a lack of competition between
pharmaceutical manufacturers and weak or non-existent price controls.
Examples of inequalities in access to medicines
■ A full course of antibiotics to cure simple pneumonia in a low-income
country can cost one month’s wages for the lowest paid unskilled
government worker compared with two to three hours.’ wages in a highincome country (WHO, 2000)
■ To pay for one course of tuberculosis treatment in the private sector,
a Tanzanian would have to work for 500 hours in comparison with a
Swiss who would have to work only 1.4 hours (WHO, 2001)
■ In 2000, lamivudine, used in the treatment of HIV/AIDS, was found on
average to be 20% more expensive in real terms in Africa than in ten
advanced industrialized countries (Perez-Casas, 2000).
WHY MONITOR THE PRICES OF MEDICINES?
>V1
Medicines are not only unaffordable for large sectors of the global population, but
are also a major burden on government budgets. In high-income countries,
governments spend about 10% of their health budgets on medicines, while in lowincome countries, medicines account for 25% of government health budgets. In
most high-income countries, insurance covers the major part of medicine costs
to the patient but, in Africa and South Asia, surveys show that medicine costs
can dominate households’ health spending, at over 80% of the total. With shrinking
incomes and increased inequity, national policies and medicine pricing and
procurement strategies are required to ensure that medicines are affordable.
Policies are also needed to improve health infrastructures, improve financing and
ensure the rational use of medicines. But the price of medicines is one of the
most important obstacles to access. Equitable pricing-selling the same medicines
at different prices in different countries in accordance with people’s purchasing
power - is infrequently implemented by pharmaceutical companies. Changes in
trade regulations and particularly rules relating to intellectual property, such as
patent rights, may also affect the international prices and availability of medicines
(WHO, 1999). Prices thus need to be monitored. The approach outlined in this
manual offers a basis for monitoring prices across medicines, sectors and
countries as well as over time, and its future development is being closely
coordinated with a WHO project concerned specifically with globalization, TRIPS
and access to medicines (WHO, 2002).
The difficulty in finding reliable information on medicine prices, and therefore in
analysing their components, hinders governments from constructing sound
medicine pricing policies or evaluating their impact. It also makes it difficult for
governments to evaluate whether their expenditure on medicines is comparable
to that of other countries at a similar stage of development and those responsible
for purchasing medicines cannot negotiate cheaper deals because they have no
sound basis from which to start their negotiation. Even in countries where
8
WHY
MEASURE
THE
PRICE
OF
MEDICINES?
consumers and patients have greater purchasing power, governments, insurance
funds and hospitals often find it difficult to make decisions on the selection of
medicines because of a lack of information.
It is, of course, the responsibility of governments to ensure that the health care
needs of their populations are met through adequate funding of public sector
health care delivery systems. In many cases, this would mean substantially
enhancing the health budget. Steps can be taken to bring medicines within the
financial reach of low-income populations and prevent unnecessary disease and
death, but much more information is needed about medicine prices than is
known at present.
Some commonly used medicines have been found to be more expensive in
developing countries than in industrialized countries. The ex-manufacturer price
to countries may be confidential. Medicine price indicator guides (Management
Sciences for Health; WHOAFRO; UNICEF/UNAIDS/WHO-HTP/MSF) show the sales
prices from large wholesalers of generically equivalent medicines, but do not give
the price patients have to pay and often do not include new, essential but
patented medicines. The monitoring of prices and cross-country comparisons are
therefore important.
THE NEED FOR A STANDARD APPROACH TO MEASURING
MEDICINE PRICES
If medicines are to be affordable, an appropriate and well-informed medicine
pricing policy is required. This, in turn, requires a reliable analysis of medicine
prices. The methodology to measure medicine prices in low- and middle-income
countries, described in this manual, is a step in this direction.
Since 1999 the World Health Assembly has made a number of resolutions that
address medicine prices (WHO, 2000). Impetus to the discussion has also been
provided by the potential impact of the World Trade Organization (WTO) agreement
on Trade Related Aspects of International Property Rights (TRIPS) in 1998 which
requires stronger and prolonged patent protection of pharmaceuticals, resulting
in high prices for a longer period of time.
While medicine prices have been monitored and reported in a number of countries,
with varying objectives and success, the absence of a standard methodology has
been a stumbling block in reliable monitoring and comparisons of prices within
and between countries and overtime. Without reliable data, advocacy to promote
more equitable access to medicines will be ineffective.
This manual and the accompanying software application aim to build on the
strengths of earlier work by providing a methodology for measuring medicine
prices that avoids the limitations of previous approaches.
The methodology is intended to be a useful tool for
■ Governments:
- When monitoring the impact of policies relating to medicine pricing
and medicine tariffs, the impact of generic competition, local
production and the effects of patent protection
- When purchasing medicines and negotiating for equitable medicine
prices based on ability to pay (known as “differential" or “equity”
pricing)
9
MEDICINE
PRICES:
A
N EW
APPROAC H
TO
MEASUREMENT
■ NGOs, health professionals and consumers in identifying factors of
inequity and unaffordability when advocating for equitable access to
essential medicines
■ Governments and NGOs when measuring the affordabilrty and availability
of essential medicines globally, within countries, in different segments
of the health care sector and over time
■ Development agencies and researchers when assessing the effects of
policies on programmes.
A NEW APPROACH
The approach described in this manual has been designed for the collection and
analysis of medicine prices in a standardized way. It has been developed for use
by governments, nongovernmental organizations, international agencies,
researchers, health professionals and consumer organizations.
This new approach involves a systematic survey to collect accurate data and
reliable information on a selected number of medicines; it is characterized as
follows:
■ Standard list of medicines for comparison
■ Systematic sampling process
■ Use of international reference prices
■ Comparison of innovator brand and generically equivalent medicines
■ Sector comparisons: e.g. public, private for-profit, private not-for-profit
■ Affordability comparisons
■ Identification of the components making up the final price.
A completed study using this approach enables the following questions to be
answered:
■ What price do people pay for key medicines?
■ Do the prices and availability of the same medicines vary in different
sectors: public health facilities, private retail pharmacies and other
medicine outlets?
■ Do prices of the same medicines vary in different parts of a country?
■ What is the difference in prices of innovator brands and generically
equivalent medicines?
■ How do procurement prices compare with international reference prices
and with local retail prices?
■ What taxes and duties are levied on medicines and what is the level
of various mark-ups, which contribute to their retail prices?
■ How affordable are medicines for ordinary people?
A medicine price study using this methodology will enable the price of a medicine
to be followed from the point at which it leaves the manufacturer to the time it
reaches the consumer’s hands. It focuses on a limited number of medicines and
enables their prices to be investigated across health care sectors within individual
countries and also between countries. It is designed to measure medicine prices
at a certain point in time, but can also be used to monitor them over a period
of time. The methodology facilitates rapid and reliable data collection and should
be easily replicable.
10
WHY MEASURE THE PRICE OF MEDICINES?
The methodology requires a systematic survey of the prices of a core list of
medicines and allows for a supplementary list of medicines that are selected by
each country on the basis of their importance in treating major national health
problems. Data analysis, using the software application on the CD-ROM
accompanying this manual, will generate the following infomnation:
■ The prices of selected medicines in different sectors, geographical
areas, health facilities and pharmacies
■ The components of medicine prices
■ The affordability of the medicines
■ The availability of the medicines.
A database of results has been created by HAI. Each country undertaking a survey
using this methodology is encouraged to send the results to HAI Europe and
WHO/EDM so they can be shared with other countries; this will enable international
price comparisons to be made and increase transparency in medicine pricing.
These tools alone will not, of course, solve the problem of high medicine prices.
The studies proposed are small in scale and cover only a handful of medicines.
The findings of these surveys will, in most cases, serve to define the price
problem rather than to solve the challenge of making medicines affordable. That
task demands the engagement of many actors and resources beyond these
small-scale explorations. But work based on these tools should provide a systematic
and reliable set of basic data which will become increasingly widespread. Such
data provide reliable evidence for advocacy. Defining the problem is the first step
on the road to tackling high medicine prices.
CONTENTS OF THE MANUAL
The remainder of the manual contains the following chapters.
Chapter 2: Overview of the survey introduces the survey methodology and the
data that will be collected.
Chapter 3: Planning outlines the steps involved in conducting a medicine price
survey, considers the human, technical and financial resources that will be
required and explains the sampling process.
Chapter 4: Data collection at central level provides guidance on adapting and
completing the forms used for data collection at central level (the National
Pharmaceutical Sector form and the Medicine Price Data Collection form) and
collecting data on price components.
Chapter 5: Preparation for data collection in the field focuses on planning and
preparation for field work, including sampling sites, the selection and training of
data collectors, pilot testing and the finalization of the Medicine Price Data
Collection form used to collect price data from health facilities and pharmacies.
Chapter 6: Data collection in the field provides guidance for area supervisors
and data collectors on the data collection process and completing the Medicine
Price Data Collection form.
Chapter 7: Data entry describes how to enter data from the field into the
computerized Workbook accompanying this manual.
11
MEDICINE
PRICES:
A NEW APPROACH TO MEASUREMENT
Chapter 8: Data analysis and interpretation explains how to generate and
present summary results for each medicine in each sector included in the survey
and to analyse treatment affordability, availability and price composition.
Chapter 9: International price comparisons describes how survey data from
individual countries can be used to make cross-country comparisons of the prices
and affordability of medicines.
Chapter 10 : Exploring possible policy options and lines of action discusses
how data collected in the survey can be used to develop appropriate strategies
to influence the price and availability of medicines.
Chapter 11: Reporting provides guidance on reporting the findings of the survey
and suggests different forms in which the results can be presented in order to
achieve the most effective dissemination to different target audiences. An example
of a report is included in Annex 5.
Chapter 12: Development of the manual and beyond outlines how the manual
will be developed following the completion and evaluation of further surveys. The
next phase of the project is also outlined.
The manual also contains:
■ Glossary of terms
■ References.
r-.f
12
2
Overview of the survey
■ This survey has been designed to provide a comprehensive picture of
the prices of selected medicines in your country
■ You should follow the methodology in order to ensure that your data are
reliable and that international comparisons are possible
■ This chapter outlines the key steps in the process which are discussed
in detail in subsequent chapters
■ A computerized Workbook is provided for data processing
■ The survey should be repeated periodically in order to assess the
impact of policy changes on the prices of medicines.
If you, the commissioning organization (NGO, government, public health researcher,
etc.), are considering a medicine price survey, spend some time clarifying and
drafting the objectives. Be very clear about who you will direct the results and
recommended actions to and who else could work with you to achieve the
objectives. You will need to designate a survey manager. Most of this manual is
addressed to the survey manager. However, we recommend that the commissioning
organization should be thoroughly familiar with the survey procedures.
STEPS IN THE SURVEY
The survey of medicine prices involves the following steps.
1 Survey planning and preparation.
2 Gathering baseline information on the national pharmaceutical sector.
3 Identifying sectors for price comparisons.
4 Selecting geographical areas, health facilities, pharmacies and other
medicine outlets in the chosen sectors for sampling.
5 Finalizing the selection of medicines for inclusion in the survey.
6 Training of data collectors and data entry personnel.
7 Collecting data on the prices and availability of medicines in the chosen
health facilities and pharmacies.
8 Identifying the components of medicine prices.
9 Assessing affordability.
13
MEDICINE PRICES: A NEW APPROACH TO
MEASUREMENT
10 Data entry and processing.
11 Data analysis and interpretation.
12 Making international price comparisons.
13 Identifying policy options.
14 Reporting the survey findings and advocacy.
15 Repeating the survey.
All of these are discussed in detail in the following chapters.
SURVEY PLANNING AND PREPARATION
Careful planning and preparation are essential before data collection commences,
including:
■ Selecting survey personnel: the survey manager, area supervisors,
data collectors, data entry personnel and data analyst and the
appointment of an Advisory Group
■ Securing the technical and financial resources required
■ Selecting sectors and geographical areas for inclusion in the survey
■ Sampling health facilities, retail pharmacies and other medicine outlets
■ Preparing a survey schedule
■ Seeking endorsement for the survey.
Note: those undertaking a survey should periodically check the HAI website.
Updates, clarifications, tips from survey managers, examples of advocacy
documents, etc. will be added to the site as surveys and advocacy are undertaken.
COLLECTING NATIONAL PHARMACEUTICAL SECTOR DATA
The health care system and the organization of the pharmaceutical sector vary
widely between countries. Before beginning the survey, it is important to have a
clear understanding of how pharmaceutical services are organized and to determine
the relative contribution of various sectors to the procurement and distribution
of medicines. Additionally, the main distribution channels for pharmaceuticals
should be clearly identified. This will enable you to put medicine prices in a
countrywide context and will permit the identification of countries with similar
pharmaceutical characteristics, enabling a useful comparison to be made. These
data will enable you to take into account the relative importance of different
market segments and different financing arrangements, such as social insurance,
in making internal and international price comparisons. Check with the Ministry
of Health, National Statistical Office or WHO office whether a recent survey has
been undertaken for a national medicines policy review.
IDENTIFYING SECTORS
The survey measures medicine prices at procurement and in three sectors, as
follows:
■ Public sector: government, municipality or other local authority health
facilities, including:
14
OVERVIEW
OF THE
SURVEY
- Clinics and hospitals
- Health centres
- Pharmacies
- Central and/or regional medical stores
■ Private sector, including retail pharmacies and pharmacies in private
clinics and hospitals; note that health facilities operated by private
companies, such as mining companies, are excluded
■ “Other” sector, which you may define according to local circumstances,
such as:
- Health facilities run by nongovernmental organizations (NGOs)
including religious organizations, such as church missions, charitable
organizations and relief and development agencies
- Dispensing doctors
- Other non-pharmacy private medicine outlets.
Some of these facilities and sectors may not exist in your country.
SAMPLING
Data need to be collected in a systematic way in order to ensure that the findings
are representative of the country or region in which the survey is being conducted.
It is usually not feasible to collect data from a large number of health facilities,
pharmacies and other medicine outlets, so a small sample of facilities should
be selected in at least four geographical areas: the main urban centre and three
other administrative areas. Once these areas have been selected, a sample of
facilities and medicine outlets should be chosen for data collection. The sample
usually includes facilities in the public, private and “other” sectors.
SELECTING MEDICINES
Many different medicines are registered and available. A national essential
medicines list, which is often only applied in the public sector, normally contains
between 250 and 500 substances. In the private sector, however, several thousand
medicines may be available.
In order to make the survey manageable and to enable comparability, a short
“core” list of 30 medicines has been selected as the basis for data collection
and analysis. For each medicine, the core list contains one dosage form, one
strength, one recommended pack size and up to three products to measure: the
innovator brand, the most sold generic equivalent and the lowest price generic
equivalent.
Core list of medicines
It is important to use the core list of medicines as the basis for the survey as
this will enable you to compare your prices with those in other countries, where
they are available. The 30 medicines contained in the core list have been selected
because they meet the following criteria:
■ Global burden of disease: they are all used to treat common conditions,
acute and chronic, that cause significant morbidity and mortality, including
15
MEDICINE
PRICES:
A NEW APPROACH TO MEASUREMENT
cardiovascular diseases, diabetes, asthma, respiratory tract infections
and mental health
■ Availability: they are available in standard formulations and are widely
used in many countries
■ Importance: the majority are included in the WHO Model List of Essential
Medicines (WHOEML)
■ Patent status: they represent medicines that are both new and on
patent, and older medicines that are off patent. In some instances,
both new and older products for the treatment of the same condition
have been included.
Supplementary list of medicines
In addition to surveying the prices of medicines included on the core list, you may
wish to select up to twenty additional medicines that are commonly used in the
treatment of important national health problems, particularly if some medicines
on the core list are not available in your country. The supplementary list could
also include medicines that are pharmaceutically equivalent to ones on the core
list but that are more frequently used in your country, such as another ACEinhibitor, antidiabetic or antacid medicine.
International reference prices
■ 'T*'
Reference prices are used to facilitate national and international comparisons.
Summary measures of the medicine prices found during the survey will be
expressed as ratios relative to a standard set of reference prices. The Management
Sciences for Health (MSH) reference prices have been selected as the most
useful standard. The MSH reference prices are the medians of recent procurement
or tender prices offered by not-for-profit suppliers to developing countries for
multi-source products.
TRAINING
All personnel involved in data collection and data entry require training to ensure
the reliable and accurate completion of the data collection forms and their
transfer to the Workbook. It is recommended that a pilot test should be conducted
during the training of data collectors.
COLLECTING DATA ON THE PRICES AND AVAILABILITY
OF MEDICINES
The prices of medicines vary according to a number of factors, including:
■ The sector in which they are purchased: the price is often higher in the
private for-profit sector
■ The type of procurement agent: for example, different prices may be
paid for the same product by a public sector purchaser, such as the
Ministry of Health, the health facility that supplies the medicine to the
patient, and the individual who purchases the medicine
■ The distribution route: a patient who purchases a medicine at a public
hospital pharmacy, for instance, may have to pay more if the hospital
16
OVERVIEW
OF THE
SURVEY
pharmacy purchased the product from a local wholesaler than if it has
been purchased by tender and supplied through the public health
sector distribution system
■ The patent status: the price of patented medicines is often higher than
that of their generic equivalent, at least while the patent is in force.
If a medicine is under patent in a given country, only the innovator brand or a
licensed product will be on the market, unless measures are taken to allow the
penetration of generically equivalent products. If it is off patent, a number of
generically equivalent products are likely to be available. For each medicine, data
collectors are asked to record three prices on the Medicine Price Data Collection
form in each health facility and pharmacy included in the sample:
■ The innovator brand
■ The most sold generic equivalent in your country
■ The lowest price generic equivalent in the medicine outlets surveyed.
The methodology also measures the availability of the selected medicines. The
medicines included in the core list may not be the most frequently used in your
country and may not even be on your essential medicines list. In most cases,
there are pharmaceutically equivalent medicines that you may have chosen to
include on your supplementary list. The estimate of availability may therefore be
more accurate for the supplementary list. For both lists, however, it does provide
an indication of where action may be required.
IDENTIFYING THE COMPONENTS OF MEDICINE PRICES
The final price of a medicine paid by a government facility, a health insurer or the
patient reflects the manufacturer’s selling price (MSP), plus all intervening price
additions. These add-ons to the producer’s price are known as “price components”
and represent the cost of importation, distribution and dispensing. They consist
of local costs that may differ substantially from one country to another, within a
sector and even between medicines. They typically include:
■ Pharmaceutical import duties
■
■
■
■
Taxes
Mark-ups by importers, wholesalers and retail distributors
Distribution costs
Dispensing fees.
ASSESSING AFFORDABILITY
One of the best ways of illustrating the impact of medicine prices on the cost of
health care for individual patients and society is to compare the cost of treatment
with peoples’ income. For this survey, the daily wage of an unskilled government
worker is used for comparison. When price data are entered in the computerized
Workbook, the affordability of treatment for a selection of conditions will be
calculated automatically. This will enable you to identify the number of days an
unskilled government worker would have to work in order to afford the cost of a
defined course of treatment for these conditions.
17
I
MEDICINE PRICES: A NEW APPROACH TO MEASUREMENT
DATA ENTRY
Data entry and analysis generally take place at central level. A computerized
WHO/HAI International Medicine Price Workbook, which is a special application
for Microsoft Excel, is used to enter the data collected in the field, consolidate
and summarize results and print tables that serve as the basis for reports. The
Workbook, which is provided on the CD-ROM accompanying this manual, allows
rapid entry and analysis of data on the price and availability of medicines and
facilitates international price comparisons.
DATA ANALYSIS AND INTERPRETATION
The Workbook also provides automatic summaries of data to permit four types
of data analysis:
■ Price and availability comparisons within any one sector
■ Price and availability comparisons between different sectors
■ Treatment affordability
■ Price composition.
The Workbook automatically generates summary tables which compare the median
prices from your survey with international reference prices and which provide the
evidence base for your report.
MAKING INTERNATIONAL PRICE COMPARISONS
Comparisons of medicine prices with those in other countries can provide powerful
tools for advocacy and help to identify policy changes and possible lines of action
to reduce high prices. HAI has established a database on its website so that price
data collected using this methodology are accessible to all. All countries undertaking
a survey of medicine prices are encouraged to send the completed Workbook and
survey report for inclusion on this database to enable international comparisons
to be made of:
■ The prices of individual innovator brand or generically equivalent
medicines, from each defined sector, on the core list
■ The affordability of selected courses of treatment, measured against
the minimum wage for a government worker
■ The price composition of a medicine.
IDENTIFYING POUCY OPTIONS
The ultimate objective of the price survey is to bring about changes in national
medicines policies which will result in making medicines affordable for all people.
High medicine prices may be attributable to a number of factors; accordingly, an
understanding of the most important contributing causes is needed in order to
advocate for the most appropriate policy options and lines of action.
18
OVERVIEW OF THE SURVEY
REPORTING THE SURVEY FINDINGS
Reliable data and the accurate analysis and interpretation of data form the
foundation of the survey, but its effectiveness in stimulating policy changes to
reduce the price of medicines will, in part, be determined by the way in which the
findings are presented and the advocacy that follows.
The findings of the survey can be presented in a number of formats. To achieve
the maximum coverage and impact, they should be reported in the most appropriate
form for the various target audiences. An example of a survey report is included
as Annex 5. The survey report should be prepared and disseminated as quickly
as possible to avoid the findings becoming outdated.
REPEATING THE SURVEY
The prices of medicines do not remain static and need to be monitored at regular
intervals. In addition, the findings from one survey could lead to changes in policy
that should be monitored. The survey should, therefore, be repeated regularly,
preferably every one or two years. It is important to survey the same medicines
at the same sites as in the original survey in order to measure any changes in
prices as accurately as possible. You should also identify the price components
that have changed and determine further action that might be taken to reduce
the prices paid.
You may also want to include new products in a repeat survey. These should be
added to your supplementary list of medicines. Alternatively you may wish to
delete others if they are no longer widely available or commonly prescribed.
When surveys are repeated, external conditions such as inflation may influence
price stability and make comparison difficult. You may have to discuss their
impact with economists and get advice on how to adjust for these conditions.
19
3
Planning
■ Identify the personnel, technical and financial resources required to
conduct the survey before starting data collection and data processing
■ It is essential to follow the survey design and process, particularly in
relation to the sampling technique
■ The survey should take between six and eight weeks to complete,
including data collection, data entry, data analysis and report writing
■ An official letter of endorsement from the Ministry of Health and/or the
Pharmacy Association will facilitate data collection.
PERSONNEL
The survey will require the involvement of the following personnel:
■ Survey manager, supported by an Advisory Group
■ Area supervisors
■ Data collectors
■ Data entry personnel
■ Data analyst.
Survey manager
A survey manager should be designated to plan and coordinate the survey at
national level. For NGOs, this role will usually also include fundraising and advocacy.
Wherever possible, the survey manager should be a pharmacist with some
experience in conducting surveys. A familiarity with Microsoft Excel spreadsheets,
basic statistics (such as ratios, medians and percentiles) and interpreting data
is highly desirable. Successful communication of the survey results also requires
an understanding of the policy-making process and advocacy strategies. Where
the survey manager does not possess all these qualities, he or she should select
the Advisory Group members to ensure that the survey management team includes
pharmacy, survey, statistics, policy and advocacy skills.
Advisory Group
A group of carefully selected advisers should be useful in helping to plan and
support the survey and promote its findings. The membership should complement
20
PLANNING
the survey manager's skills in the areas above and include at least one medical
doctor as well as stakeholders, such as policy makers, health care providers,
relevant professional associations, public health institutions, academic institutions
and consumer organizations. It may be wise to include the data analyst and an
area supervisor to ensure that the Advisory Group understands local realities.
The role of the Advisory Group will include:
■ Determining the specific focus of the survey: i.e. national or regional
■ Identifying the sectors to be surveyed
■ Supporting the survey manager in setting up and conducting the study
■ Advising on any matters that arise during survey preparation, data
collection and data analysis, including how to solve any problems that
may be encountered
■ Assisting in preparing the survey report and making recommendations
on policy options and possible lines of action
■ Promoting the findings of the survey and advocating appropriate changes
in policy.
Area supervisors
In a small country or in a survey that is conducted in a single region of the country,
it may be possible for all field work to be undertaken by a central team. Experience
from conducting pilot studies has shown that in larger-scale studies, however, it
is advisable to designate a supervisor, preferably a pharmacist, in each of the
geographical areas that will be surveyed.
Area supervisors should be experienced in data collection and be familiar with
pharmaceutical terminology. They will be instrumental in gaining access to facilities
and in choosing local data collectors, if they are not sent from central level. If any
area supervisor is unfamiliar with their designated area, a local contact may be
needed to assist in identifying facilities and pharmacies.
Data collectors
Wherever possible, data collectors should:
■ Have previous experience of conducting surveys
■ Have some pharmaceutical training
■ Be familiar with the locality.
Ideally, data collectors should work in pairs so that they can make systematic
checks of entries in the Medicine Price Data Collection form. Each visit to a health
facility or pharmacy is likely to require about 1-2 hours plus transport time. In
practice, this means that a team of two data collectors can probably survey two
to four facilities per day.
Data entry personnel
Accurate data entry is vital to ensure the reliability of the results. Two data
processing personnel with experience in using Microsoft Excel are required: one
to enter the data and the other to re-enter the same data to check that the entries
are correct. The computerized Workbook has been designed to identify any
discrepancies in data entry using this “double-entry” process.
21
MEDICINE
PRICES:
A
NEW
APPROACH
TO
MEASUREMENT
Data analyst
Data analysis requires an understanding of the pharmaceutical sector and
experience in computer use and the interpretation of statistics. Where possible,
data analysis should be undertaken by the survey manager.
TECHNICAL RESOURCES
The computerized Workbook is a specially designed software application for
Microsoft Excel. In order to use it, a computer that meets the following minimum
requirements will be needed:
■ An IBM-compatible PC with a Pentium 3 or higher processor
■ Windows operating environment
■ 48 megabytes of system memory
■ Microsoft Excel Office 97 or later version
■ A CD drive or internet access, so that the Workbook can be loaded from
the CD-ROM supplied with the manual or downloaded from the HAI
website.
Very few other resources are needed to conduct the survey. Each area supervisor
should be supplied with a simple calculator to calculate unit prices.
Transport will be needed to take the data collection teams to health facilities and
pharmacies, and to the geographical sites selected, if the teams are not from
the local area.
HNANCIAL RESOURCES
When planning the survey, reporting and advocacy, it is essential to ensure that
there is an adequate budget for the following items:
■ Personnel:
- Survey manager
- Area supervisors
- Data collectors
- Data processing personnel
- Data analyst
■ Training:
- Training venue
- Daily allowance and accommodation
- Transport
- Materials
■ Data collection:
- Daily field allowance and accommodation for data collectors
- Transport
- Materials: pens, calculators
- Photocopying
■ Advocacy: for example, meetings, seminars, briefing materials
■ Communications
■ Overhead
■ Contingency.
22
PLANNING
PLANNING WHERE TO CONDUCT THE SURVEY
Defining the type of survey
Most medicine price surveys will involve examining prices and price variations in
an entire country or in a large region of a country. However, the methodology can
be adapted for different purposes such as to contrast prices in two geographic
areas or to monitor changes in prices in a sample of medicine outlets over time.
The ideal national survey would collect data from a large number of health
facilities and other medicine outlets scattered around the country. However this
would require a great deal of time and resources. To make the survey feasible,
therefore, it is based on small samples of geographic areas and medicine
outlets. Through careful selection, these study sites can adequately represent
the situation in the country as a whole.
If resources allow, increasing the numbers of geographic areas and medicine
outlets above the minimum numbers recommended below will increase the
accuracy of the survey. If you plan to increase the number of facilities surveyed,
increasing the number of geographic areas will provide a more representative
sample than simply increasing the number of medicine outlets surveyed in the
same geographic areas.
Selecting sectors
One key issue for the study planning team to decide is how many sectors to
include in the survey. Each sector represents a conceptually different source of
medicines or prices to be assessed and compared.
Most national surveys will examine at least three of the following four sectors.
1 Medicine Procurement Prices: prices that the government and other
purchasers pay to procure medicines.
2 Public Sector Patient Prices: if patients in public health facilities are
charged for medicines, these prices may be considered a second
sector, which can be compared to procurement prices. Even if medicines
are free in public facilities, most surveys will want to examine the
availability of the target medicines in the public sector.
3 Private Sector Retail Prices: prices that patients pay in private
pharmacies.
4 Other Sector Patient Prices: depending on the nature of the
pharmaceutical sector, there may be a fourth, “other” sector you may
wish to include in the survey. Examples include:
■ Health facilities run by church missions or other nongovernmental
organizations, such as charitable organizations or relief and
development agencies
■ Dispensing doctors
■ Other non-pharmacy private retail outlets that stock a reasonable
range of products.
The computerized Workbook is designed to measure prices in up to four sectors.
23
MEDICINE PRICES: A NEW APPROACH TO MEASUREMENT
Choosing study areas
Once a decision has been made on the number of sectors to be included, you
will need to determine where to collect data.
Procurement data can usually be collected centrally from the office of the
procurement officer or central medical stores.
Data on prices and availability in the public, private and “other” sectors are
obtained by data collectors in the field.
Collecting data in many areas increases the cost and complexity of a survey but,
if prices vary widely by area, sampling too few will bias results. Include at least
four geographic areas in a national or regional survey, as follows:
■ Select the major urban centre (usually the capital)
■ Select three other administrative areas (e.g. districts, municipalities,
counties) chosen randomly from a list of areas that can be reached in
one day from the urban centre.
In a large country, distant or remote areas will be under-represented in a sample
of this size. If you want to examine prices in a large country, it is preferable to
conduct multiple surveys in different regions, with each survey collecting data in
four geographic areas as above.
SELECTING A SAMPLE
Once geographic areas have been chosen, you will need to choose a sample of
medicine outlets in which to gather data. A typical survey includes public health
facilities, private pharmacies and one other type of medicine outlet. Generally,
lists of public health facilities are available at central level, so these facilities can
be selected centrally. However, accurate lists of private pharmacies, dispensing
doctors or other private medicine outlets may need to be compiled in the field.
The overall sampling approach is shown in Figure 3.1.
Figure 3.1 Sampling approach
Central data
collection
Local data collection:
major urban centre
Local data collection:
other administrative area 2
Local data collection:
other administrative area 1
Local data collection:
other administrative area 3
I
I
( Main public
k hospital
( Main public
hospital
Main public \
hospital )
Main public \
hospital )
uther public'
health facility
Other public'
health facility
Other public'
health facility
^Other public'
health facility
'Wher public'
health facility
Other public'
health facility.
Other public'
health facility
''Other public'
health facility
Other public'
health facility
Other public
health facility
Other public'
health facility
Other public'
health facility.
Other public'
health facility
Other public'
health facility
Other public'
health facility
Other public'
health facility
Retail pharmacies/medicine outlets in other sectors are selected according to their proximity to the public health facilities
24
PLANNING
Selecting public sector facilities
For convenience, public health facilities are used to anchor the sample, with
other types of medicine outlet chosen by their proximity to these facilities. You
will need to obtain lists of all public health facilities that have pharmacies or
dispensaries in each survey area that are within a three hour drive of the main
government hospital. Most countries have several levels of facilities, from hospitals
down to health centres or dispensaries. Lower level facilities are often more
widely dispersed than upper level ones. Generally, both upper and lower level
facilities should be included if they are expected to stock most of the medicines
included in the study.
Choose at least five public health facilities in each survey area, as follows.
1 Select the main public hospital in the area (district or regional hospital).
2 Select four facilities from the ones remaining on your list:
■ If there is only one level of facilities on the list, choose four at random
■ If there are two or more levels on the list:
- Divide the list by level (hospitals versus all other facilities)
- Select two facilities randomly from each level
■ If there are fewer than two facilities on any list, increase the number
selected from the other lists accordingly
■ If there are fewer than five public health facilities in any of the
administrative areas chosen for the survey, extend the lists to include
the closest facilities in a neighbouring area.
Selecting private pharmacies
Private pharmacies will be sampled by their proximity to the public health facilities
selected.
1 Obtain lists of pharmacies registered in each study area centrally if they
are available (e.g. from the Ministry of Health, Pharmacy Association
or business registry). The lists may be incomplete so they should be
checked and updated by the area supervisor in the study area by
consulting with local officials. These lists can help to guide the pharmacy
selection process.
2 Once the public health facilities have been selected, the pharmacy that
is closest to each facility should be selected by the area supervisor.
3 If there is no pharmacy within 5 km of a remote facility, another pharmacy
in the urban centre should be selected.
This process will result in a sample of at least five pharmacies in each survey
area.
The process of selecting private pharmacies in the field is described further in
Chapter 5.
Selecting other types of medicine outlet
Up to five outlets in each sample area will also need to be selected for the “other”
sector in your survey. The selection procedure will depend on the nature of the
sector. In your country, you may not have such sectors.
25
MEDICINE PRICES:
A NEW APPROACH TO MEASUREMENT
NGO health facilities
For a sector that includes NGO health facilities, the selection procedure is as
follows.
1 Create centrally a list of all facilities in each survey area by consulting
the proper administrative authorities.
2 From each list, choose the facility that is closest to each public health
facility in the sample.
3 If there is no facility on the list within 10 km of a given public health
facility, substitute another NGO health facility from the urban area.
4 If there are fewer than five facilities on the list, select all the facilities.
This process will result in a sample of up to five NGO health facilities in each
survey area.
Other medicine outlets
For other types of medicine outlet (e.g. dispensing doctors, non-pharmacy medicine
stores), the sample will usually have to be selected locally, as with pharmacies.
The process of selection is described in Chapter 5.
This process will result in a sample of up to five other medicine outlets in each
survey area.
Experience from pilot studies confirms the importance of following the survey
design and process described above and paying particular attention to the sampling
technique. Selecting a smaller sample size, for instance, weakens the validity of
the data.
PLANNING TIMEUNE
Once the sample has been selected, you will need to prepare a timetable of
activities. Experience from pilot field studies indicates that a survey should take
between six and eight weeks to complete, including data analysis and report
writing. Further time should be included for advocacy.
Figure 3.2 shows the main steps in the survey and indicates activities that need
to be undertaken at:
■ Central level
■ Field level.
Figure 3.2 also indicates the section of the manual in which each activity is
described in detail.
SEEKING ENDORSEMENTS
A signed, official letter endorsing the price survey can be of great help to all
involved in carrying out the survey. If the survey manager can approach the
relevant bodies with an example of the kind of letter that is sought, it may be
26
PLANNING
Figure 3.2 Steps in conducting the survey
Central/field level
Reference
Identify Advisory Group
Central
Hll in National Pharmaceutical Sector form
Central
pp. 20-21
pp. 28-29
Determine scope of survey (national/regional)
and identify sectors
Central
p. 23
Select geographic study areas
Central
p. 24
Prepare budget and secure funds
Central
p. 22
Seek endorsements
Central
pp. 26-27
Finalize list of medicines to be surveyed
Central
pp. 29-38
Identify health facilities
Central
pp. 24-26
Select and train area supervisors
Central
p. 45
Identify pharmacies and medicine outlets
Field
pp. 45-46
Select and train data collectors
Field
pp. 47-48
Prepare data collection forms
Held
p. 49
Prepare letter of introduction
Field
p. 50
Schedule survey visits
Held
pp. 49-50
Conduct survey
Held
Identify components of medicine prices
Central
Data entry
Central
Data analysis and interpretation
Central
Compare with survey data from other countries
Central
Identify policy options
Central
Write report
Central
Present findings and advocate for change
Central
pp. 52-57
pp. 3&43
pp. 58-74
pp. 76-97
pp. 98-103
pp. 104-108
pp. 109-110
pp. 110-112
Activity
Note: as an alternative, data collectors can be selected centrally and survey all geographic areas
easier for the Ministry of Health or the Pharmacy Association to provide such an
endorsement for the survey. An example of a letter of endorsement, shown in
Annex 1, is included as a Word file on the CD-ROM which you can modify locally,
as appropriate. WHO will also provide a letter of endorsement on request. Contact
the Essential Drugs and Medicines Policy Department by e-mail at
medicineprices@who.int.
27
4
Data collection at
central level
■ Standard survey forms are provided on the CD-ROM
■ The National Pharmaceutical Sector form should be completed before
data collection begins in the field
■ The Medicine Price Data Collection form should be reviewed, the core
list of medicines checked and the supplementary list added
■ For price comparisons between countries and for repeated surveys it
is of utmost importance not to divert from the selected medicines, their
strengths and dosage forms and to use the pack size recommended,
wherever possible.
Before data collection commences in the field, some data need to be collected
at central level.
NATIONAL PHARMACEUTICAL SECTOR FORM
The National Pharmaceutical Sector form is used to collect baseline information
on national medicines policy, procurement and distribution, government and
private sector price policy and financing of medicines. This will provide a good
overview of the pharmaceutical sector in your country which will help you in
interpreting the survey findings and identifying policy options.
This form should be completed by the survey manager at central level.
Completing the National Pharmaceutical Sector form
The National Pharmaceutical Sector form is shown in Annex 2.
1 Transfer the National Pharmaceutical Sector form to your computer.
You can do this by:
■ Copying the file from the CD-ROM that accompanies this manual
■ Downloading the latest file from the HAI website:
(http://www.haiweb.org/medicineprices ).
28
DATA COLLECTION AT CENTRAL LEVEL
2 As soon as you open the file, save it with a filename that indicates the
year of your survey so that you retain a clean form to use for future
surveys. For example, you might choose a filename such as NPS.03.xls.
3 Complete the whole form, ensuring that you record the following
information on the first page:
■ Daily wage of the lowest paid unskilled national government worker
■ Exchange rate.
This information will later need to be entered into the computerized
Workbook (see Chapter 7).
Information should be available from the Ministry of Health or the local WHO
office. In addition, the following sources may be useful:
■ WHO Medicines Database:
http://www.who.mednet.int (online registration required)
■ WHO/Euro country profiles:
http://www.euro.who.int/lnformationSources/Evidence/20010828_l
■ PAHO/AMRO country profiles:
http://www.paho.org/english/sha/profiles.htm
Wage level
The daily wage of the lowest paid unskilled national government worker will be
used to measure the affordability of medicines.
You may be able to obtain this information from the personnel office in the
Ministry of Health. If it is not available, contact a recently employed low-level
worker to find out the net salary:
■ After all compulsory deductions of charges and taxes
■ Excluding allowances: e.g. housing, travel, hardship, leave allowance.
Reduce the salary to a daily wage by dividing by 365, 30,14 or 7, depending on
the pay period.
Exchange rate
Enter the rate of exchange to US dollars. The exchange rate is the commercial
“buy” rate on the first day of data collection.
MEDICINE PRICE DATA COLLECTION FORM
The model Medicine Price Data Collection form should be used as the basis for
the Medicine Price Data Collection form used in the field to collect data on the
retail prices and availability of medicines. You will need to download this form
onto your computer and amend it so that it contains the medicines on the core
list and the supplementary list in your country. As with the National Pharmaceutical
Sector form, you can do this by:
■ Copying the file from the CD-ROM that accompanies this manual
■ Downloading the latest file from the HAI website:
http://www.haiweb.org/medicineprices.
As soon as you open the file, save it with a filename that indicates the year of
your survey, such as MPDC.03.xls.
29
MEDICINE
PRICES:
A NEW APPROACH TO MEASUREMENT
Core list of medicines
Figure 4.1 shows the core list of 30 medicines that should be included in the
survey if they are available in your country. This list appears in Column A of the
Medicine Price Data Collection form.
Figure 4.1 Core list of medicines to be surveyed
Generic name
Dose
Aciclovir
Amitriptyline
Dosage form
Medicine category
200 mg
tablet
Antiviral
25 mg
tablet
Antidepressant
Amoxicillin
250 mg
capsule/tablet
Antibacterial
Artesunate
100 mg
tablet
Antimalarial
Atenolol
50 mg
tablet
Antihypertensive
Beclometasone
50 mcg per dose
inhaler
Antiasthmatic
Captopril
25 mg
tablet
Antihypertensive
Carbamazepine
Antiepileptic
200 mg
tablet
Ceftriaxone
lg________
powder for injection
Antibacterial
Ciprofloxacin
500 mg
tablet
Antibacterial
Co-trimoxazole
(8 + 40) mg/mL
paediatric suspension Antibacterial
Diazepam
5 mg________
tablet
Anxiolytic
Diclofenac
25 mg
tablet
Antiinflammatory
Fluconazole
200 mg
tablet/capsule
Antifungal
Fluoxetine
20 mg
tablet/capsule
Antidepressant
Ruphenazine decanoate
25 mg/ml
injection
Antipsychotic
Glibenclamide
5 mg________
tablet
Antidiabetic
Hydrochlorothiazide
25 mg
tablet
Antihypertensive
Indinavir
400 mg
capsule
Antiviral
Losartan
50 mg
tablet
Antihypertensive
Lovastatin
20 mg
tablet
Serum lipid reducing
Metformin
500 mg
tablet
Antidiabetic
Nevirapine
200 mg
tablet
Antiviral
Nifedipine retard
20 mg
retard tablet
Antihypertensive
Omeprazole
20 mg
capsule
Antacid
Phenytoin
100 mg
tablet
Antiepileptic
Pyrimethamine with
sulfadoxine
(500t-25) mg
tablet
Antimalarial
Ranitidine
150 mg
tablet
Antacid
Salbutamol
0.1 mg per dose
inhaler
Antiasthmatic
Zidovudine
100 mg
capsule
Antiviral
Modified release formulations
Most tablets and capsules are designed so that the active ingredient(s) is
released immediately the medicine is taken. Others have modified release
characteristics. These are referred to using a number of terms including sustained
release (SR), slow release (SR), controlled release (CR), retard, modified release
(MR) or long acting (LA) tablets or capsules. These work by gradually releasing
30
DATA
COLLECTION
AT
CENTRAL
LEVEL
the active ingredient as the capsule or tablet moves down the gastrointestinal
tract. Some medicines are marketed in both immediate release and modified
release formulations. In Kenya, for example, nifedipine is available as 10 mg,
20 mg and 30 mg capsules, 10 mg and 20 mg tablets, 10 mg and 20 mg retard
tablets, 10 mg and 20 mg SR tablets, and 30 mg LA tablets. It is vital that you
collect the price of the medicine, dosage form and strength as stated on the form.
The only modified release preparation on the core list of medicines is nifedipine
retard 20 mg tablets. Collect data only on the 20 mg retard formulation, in tablet
form. Be aware that nifedipine is available in various forms and strengths.
Core list of medicines
The first step in preparing the Medicine Price Data Collection form is to prepare
the core list of medicines for your country and to amend the form, if necessary.
1 Review the list of 30 core medicines in Column A of the form.
2 If any medicines on the core list are unavailable in your country, delete
them from the core list on the form in the Word file. When data processing
begins, they will also need to be deleted from the core list in the
Workbook (see Chapter 7).
3 If a medicine is available in your country, but the stated dosage form
or strength differs from that on the core list, delete it from the core list
and include it in the supplementary list of medicines.
4 If a pharmaceutically equivalent medicine is widely used instead of a
medicine on the core list, you may wish to add it to your supplementary
list of medicines.
Some substances remain under patent in countries that observe medicine patents;
others are off patent or have never been patented. As patent status varies by
country and over time, this manual cannot identify the patent status of the core
medicines, but some new medicines are included that are still under patent in
the USA and/or Europe.
The core list should not be considered as a recommendation for inclusion in
national treatment guidelines.
Medicine quality
The availability and use of substandard and counterfeit medicines are serious
problems in some countries, particularly in those where there is a poor regulatory
framework or inadequate enforcement of relevant laws and regulations. In order
to ensure that information is not collected on substandard or counterfeit medicines,
all products included in the survey must be registered or have market authorization
in your country.
Supplementary list of medicines
The next step is to prepare the supplementary list of medicines for your country.
Up to 20 medicines supplementary to the core list may be selected for domestic
comparison and for monitoring trends over time. The supplementary list of
medicines should reflect national or local disease and treatment priorities, based
on criteria such as:
■ Burden of disease
■ Local production
31
MEDICINE
PRICES:
A
NEW
APPROACH
TO
MEASUREMENT
■ Availability of fixed dose combination products
■ Availability of an international reference price (MSH or other).
Examples of diseases with high prevalence in certain regions are tuberculosis,
malaria, sleeping sickness, trachoma, anaemia and parasitic diseases. If your
country has a high prevalence of HIV/AIDS and antiretroviral triple therapy is
available, you should include one of the fixed dosage combinations or the single
medicines constituting first line Highly Active Anti Retroviral Therapy (HAART), if
this is in use and if the medicines in the national guidelines differ from the ones
included in the core list.
In many countries, combination products are more common than products with
single agents. The WHO Essential Medicines List prefers to use products with
one single ingredient which allows more flexibility in prescribing and dosing,
although there is now an increasing move towards fixed dose combinations for
malaria, tuberculosis and HIV. This is also the policy of many regulatory authorities
and agencies that develop therapeutic guidelines. This may be one reason why
you may find few of the products on the core list of medicines. If so, you may
wish to include some combination products on your supplementary list of medicines
to better reflect the national situation. Be aware, though, that this may limit the
number of generically equivalent alternatives because different manufacturers
may use different combinations.
International reference prices
The medicine, dosage form and strength should have an international reference
price (see Chapter 7).
Wherever possible, only prescription medicines should be included on the
supplementary list of medicines.
Components of the Medicine Price Data Collection form
For each medicine, there are three rows and nine columns. Rows 1 and 2 of the
form should be completed at central level before the survey starts.
Row 1: The first row is for recording information on the innovator brand. It
may be changed to the brand name for the same product used by the
manufacturer in your country (see p. 34 and Chapter 6).
Row 2: The second row is for recording information on the most sold generic
product equivalent to the innovator brand (see p. 34 and Chapter 6).
Row 3: The third row is for recording information on the lowest price generic
product equivalent to the innovator brand. The data collectors will identify
this product in each medicine outlet surveyed and enter the information
onto the form (see p. 35 and Chapter 6).
For the purpose of this study, the following definitions are used:
■ Innovator brand: the originator pharmaceutical product
■ Generic equivalent: all products other than the innovator brand that
contain the same active ingredient (substance), whether marketed
under another brand name or the generic name.
See the Glossary for fuller definitions of innovator brand and generic equivalent.
32
DATA
COLLECTION
AT
CENTRAL
LEVEL
Rows 2 and 3 for each medicine can be identical if the most sold generic
equivalent is also the lowest priced. However, the product in Row 1 can appear
only in that row.
Figure 4.2 shows an extract from the Medicine Price Data Collection form. Note
that some cells are shaded grey. These cells should not be amended.
Figure 4.2 Extract from the Medicine Price Data Collection form: core list of medicmes
B
C
D
E
F
G
Generic name, dosage form,
strength
Brand name(s)
Manufacturer
Available
tick ✓ for
yes
Pack size
recommended
Pack
size
found
Price of
pack
found
Aciclovir tab 200 mg
Zovirax
GSK
A
H
I
Unit price
(4 digits)
25
/tab
Most sold generic equivalent
25
/tab
Lowest price generic equivalent
25
/tab
Amitriptyline tab 25 mg
Tryptizol
USD
Most sold generic equivalent
Lowest price generic equivalent
Amoxicillin caps/tab 250 mg
Amoxil
100
/tab
100
/tab
100
/tab
21
/tab
Most sold generic equivalent
21
/tab
Lowest price generic equivalent
21
/tab
SKB (GSK)
Comments
In public, private and “other” health facilities, there will generally be only one
product and hence only one price per medicine to collect. In private pharmacies,
a wider range of innovator brands and generic medicines is usually available so
the prices of all three (innovator brand, most sold generic equivalent and lowest
price generic equivalent) are likely to be collectable.
Supplementary list of medicines
Once the core list of medicines has been reviewed and, where necessary revised,
add your supplementary list of medicines to the Medicine Price Data Collection
form in the Word file. They should appear in the same form as on the core list,
and should state the dosage form and strength.
Figure 4.3 shows an example of a supplementary list of medicines in which the
brand name and manufacturer of the innovator brand have been added. Note that
Figure 4.3 Example of Medicine Price Data Collection form: supplementary list of medicines
B
C
D
E
F
G
Generic name, dosage form,
strength
Brand name(s)
Manufacturer
Available
tick ✓ for
yes
Pack size
recommended
Pack
size
found
Price of
pack
found
Albendazole tab 200 mg
Zentai
GSK
A
H
I
Unit price
(4 digits)
2
/tab
Most sold generic equivalent
2
flab
Lowest price generic equivalent
2
nab
60
/tab
Lamrvudine+zidovudine tab
150-»300mg__________________
Combivir
GSK
Most sold generic equivalent
60
/tab
Lowest price generic equivalent
60
/tab
Metronidazole tab 200 mg
Flagyl
Aventis
200
/tab
Most sold generic equivalent
200
/tab
Lowest price generic equivalent
200
/tab
21
/tab
Most sold generic equivalent
21
/tab
Lowest price generic equivalent
21
/tab
Amoxicillin+clavulanic acid tab
250»125mg__________________
Augmentin
GSK
33
Comments
MEDICINE
PRICES:
A
NEW
APPROACH
TO
MEASUREMENT
for each medicine, the innovator brand, most sold generic equivalent and lowest
price generic equivalent have the same recommended pack size.
To facilitate data collection, the core medicines and supplementary medicines can
be combined into one list in alphabetical order by generic name on the Medicine
Price Data Collection form.
When medicine names are entered into the computerized Workbook, the core
medicines and supplementary medicines will be combined automatically into one
list.
Row 1: Identifying the innovator brand product
For each medicine, the form lists the innovator brand name that is most commonly
used by the manufacturer in English-speaking countries. If the manufacturer uses
another brand name in your country, change the innovator brand name on the
form.
Row 2: Identifying the most sold generic equivalent
Row 2 for each medicine is used for measuring the price of the most sold generic
equivalent to the innovator brand that is listed in Row 1. Official figures may be
publicly available in your country on the most sold products in sales volume in
the private sector. Other sources include IMS Health, insurance companies,
customs and the government body responsible for the pharmaceutical sector.
Where such data are not available, it is recommended to undertake an initial
survey of large geographically dispersed pharmacies or wholesalers, perhaps by
telephone.
Enter the name of the product and the manufacturer on the form. Note that the
product may not be the most sold generic equivalent in all individual pharmacies.
The Medicine Price Data Collection form is modelled on the private sector which
will have the widest range of medicines and in which it will normally be possible
to find the innovator, most sold generic equivalent and lowest price generic
equivalent for each medicine.
In all sectors, there may be only one or two products for each medicine; if this
is the case, enter information as follows:
■ If there is no innovator brand, leave Row 1 blank
■ If there is only one generically equivalent product available, it will be
both the most sold and the lowest price generic equivalent: enter the
same infomnation in Row 2 and Row 3 and note this in the ‘Comments’
column (Column I)
■ If more than one generically equivalent product is available and the
most sold generic equivalent also has the lowest price, enter the
information for the most sold generic equivalent in both Row 2 and Row
3 and note this in the ‘Comments’ column (Column I).
The name of each most sold generic equivalent surveyed will be the same for all
pharmacies and other medicine outlets and should be entered at central level. The
price of the product may differ, however, and will be collected in each facility.
34
DATA COLLECTION AT CENTRAL LEVEL
Row 3: Identifying the lowest price generic equivalent
Row 3 is for collecting information on the lowest price generic product equivalent
to the innovator brand (Row 1) found in a pharmacy or other medicine outlet. The
product’s name and manufacturer is identified in each pharmacy and medicine
outlet surveyed. The data collectors will need to enter the following information
for each medicine listed on the form (see Chapter 6):
■ Column B: the name of the lowest price generic equivalent
■ Column C: the manufacturer of the lowest price generic equivalent.
The lowest price generic equivalent identified in each pharmacy may vary. The
name may also vary between pharmacies and other medicine outlets.
Column A: Name of medicine, dosage form and strength
Column A lists:
■ International Non-proprietary Name (INN) of the medicine
■ The dosage form of the medicine
■ The strength of the medicine.
Do not change Column A of the core list in the Medicine Price Data Collection form.
A medicine may be available in different dosage forms: tablet/capsule, mixture/
syrup, suspension, injection, cream/ointment and so on. Tablets and capsules
are normally considered equivalent, unless they are retard, SR, etc. (see p. 30).
Information should be collected only for the dosage form listed in Column A. The
oral form is used for most substances. Plain tablets or capsules should be used
for all oral dosage forms, with the exception of nifedipine.
Some medicines will be marketed in more than one strength: for example,
fluconazole may be marketed as 50 mg, 150 mg and 200 mg tablets/capsules.
The Medicine Price Data Collection form lists the strength selected for inclusion
in the survey; this is the only strength on which information should be collected.
If this strength is not marketed in your country, delete the medicine from the core
list on the form. If only other dosage forms or strengths are used, you may choose
to add the medicine to your supplementary list with the dosage form and strength
used in your country.
Column B: Brand name
The form lists the most common innovator brand name used in Anglophone
countries for each medicine. However, the manufacturer may not use the same
name worldwide; for example, omeprazole is called both Prilosec and Losec, and
fluoxetine is called both Prozac and Fontex. Other names may also be used. If
the innovator brand name used in your country differs from the one on the form,
you can change the name of the medicine on the core list, as long as the
medicine, the dosage form and strength are the same.
An innovator brand has been identified for all 30 substances on the core list of
medicines. If your supplementary list includes old medicines that were probably
never patented, choose the most expensive brand name product in the market
and enter the name in Column B and the manufacturer in Column C of the form.
35
MEDICINE PRICES: A
NEW APPROACH TO
MEASUREMENT
Column C: Manufacturer
In Row 1, this column contains the name of the innovator (patent holder). In Row
2, the manufacturer’s name for the generically equivalent product to be monitored
should be entered. The data collectors will complete Row 3 in each individual
pharmacy with the name of the manufacturer of the cheapest generic equivalent
found there (see Chapter 6).
Column D: Available
Medicine Procurement Prices
Column D should be completed at central level in the office of the procurement
officer or central medical stores to indicate all medicines on the list that are
available.
Public Sector Patient Prices, Private Sector Retail Prices and Other Sector
Patient Prices
This column will be completed by the data collectors in the field. They should
record that the innovator brand, most sold generic equivalent and lowest price
generic equivalent are available only if they actually see a pack of the medicine.
Column E: Pack size recommended
All the medicines on the core list are in oral solid form (tablet or capsule), with
the exception of:
■ Ceftriaxone injection
■ Co-trimoxazole paediatric suspension
■ Fluphenazine decanoate injection
■ Beclometasone and salbutamol inhalers.
There may be several pack sizes available, such as a box or pack of 30, 100,
250 or 1000 tablets or capsules, and single vials, 10 vials or 100 vials for
injection. Mixtures may be available in different volumes: e.g. 50 ml, 70 ml,
100 ml. The price per unit may vary between pack sizes. One pack size for each
medicine has been selected in order to facilitate comparisons between products,
sectors and countries.
Column E lists the recommended pack size to monitor; this is as close to
recommended treatment lengths as possible. Chapter 6 gives guidance on what
data collectors should do if that pack size is not available.
The public sector and “other” sector are likely to have less variety of products
and larger pack sizes. If the pack size of a medicine is standard and is known
centrally, amend the form before data collection begins.
Column F: Pack size found
This column should be completed by the data collectors in the field.
Column G: Price of pack found
This column should be completed by the data collectors in the field.
Column H: Unit price
This column should be completed by area supervisors after the data collectors
have returned their completed forms and these have been checked at the end
of the day in the field.
36
DATA
COLLECTION
AT
CENTRAL
LEVEL
Column I: Comments
Column I is used for recording any comments on the medicines included in the
core or supplementary lists, such as their unavailability in the country or their
temporary unavailability in a specific pharmacy. Comments may be added by the
survey manager, area supervisors or data collectors.
The core and supplementary lists of medicines should be reviewed following the
pilot test and, where necessary, revised before the survey begins.
Chapter 7 gives instructions on amending the core list of medicines, adding the
supplementary list in the Workbook and entering price and availability data.
Figure 4.4 shows an extract from a completed Medicine Price Data Collection form:
Medicine Procurement Prices in which the tender prices have been entered at
central level. In some countries, central and regional tender prices may vary. For
national surveys, use the central tender price. For regional surveys, use the regional
tender price. Aciclovir is not on the Essential Medicines List in this example and
price information is therefore not recorded for this medicine.
Figure 4.5 shows an extract from a Medicine Price Data Collection form: Private
Sector Retail Prices in which the brand name and manufacturer of the most sold
Figure 4.4 Extract from a Medicine Price Data Collection form: Medicine Procurement Prices, with information entered at
central level
C
B
A
Generic name, dosage form,
strength
Brand name(s)
Manufacturer
Aciclovir tab 200 mg
Zovirax
GSK
D
E
F
Available
tick / for
yes
Pack size
recommended
Pack
size
found
Most sold generic equivalent
Most sold generic equivalent
Lowest price generic equivalent
Amoxicillin caps/tab 250 mg
I
H
Unit price (4
digits)
25
/tab
25
/tab
25
/tab
Tryptizol
MSD
100
/tab
Awi^triptyUne/
Phamuo
100
1000
970.00
O.97OOriab
100
1000
970.00
O.97OOriab
Lowest price generic equivalent
Amitriptyline tab 25 mg
G
Price of
pack
found
✓
A mitrtpfylone^
Phcuyncu
Amoxil
SKB (GSK)
21
500
2W7.OO
500
2407.00
Most sold generic equivalent
ArnoieicMin/
Hatiopharwv
21
Lowest price generic equivalent
AmojcLcMun/
KatLopharm/
21
Comments
MotorvEML
Only 1
gejneric/fotund/
/tab
Onlyl
generiofoarwT
4.814Olab
Figure 4.5 Extract from a Medicine Price Data Collection form: Private Sector Retail Prices, with information entered at
central level
C
D
E
F
Generic name, dosage form,
strength
Brand name(s)
Manufacturer
Available
tick/for
yes
Pack size
recommended
Pack
size
found
Aciclovir tab 200 mg
Zovirax
GSK
25
/tab
Acivir
CCplo'
25
/tab
25
/tab
B
A
Most sold generic equivalent
Lowest price generic equivalent
Amitriptyline tab 25 mg
Most sold generic equivalent
Most sold generic equivalent
H
Unit price
(4 digits)
Tryptizol
MSD
100
/tab
AmityLpfyUne/
Connoy
100
riab
100
/tab
SKB (GSK)
21
/tab
'Dcvwcu
21
/tab
21
/tab
Lowest price generic equivalent
Amoxicillin caps/tab 250 mg
G
Price of
pack
found
Amoxil
MwcLcid/
Lowest price generic equivalent
37
Comments
Not cwoLiloble/
Ln/counity
MEDICINE
PRICES:
A
NEW
APPROACH
TO
MEASUREMENT
generic equivalent have been entered at central level. These cells are shaded
grey because they should not be amended by data collectors in the field.
COMPONENTS OF MEDICINE PRICES
Prices can be seen as links in a chain, stretching from the manufacturer to the
consumer. The computerized Workbook enables you to see how much is added
to manufacturers’ prices in the distribution process by comparing the median
final price for each medicine with the manufacturer’s unit price. This is known as
the cumulative mark-up.
The study will also help you to identify each individual link in the price chain to
give a full picture of the composition of the prices of one or two medicines.
The following components are commonly found in the medicines price chain:
■ Manufacturer’s import (selling) price (MSP) or procurement price
■ Cost, insurance and freight (GIF)
■ Import tax or duty
■ Port and inspection charges
■ Distribution margin/wholesale mark-up
■ Retail mark-up
■ Value Added Tax (VAT)/Goods and Services Tax (GST)
■ Dispensing fees.
Governments may not always have a complete picture of the price components
of medicines as different Ministries may be involved in their purchase and
distribution. However, accurate information on the various price components,
including the manufacturer’s selling price, is required for reliable international
price comparisons as well as to identify measures that can be taken to reduce
the prices paid for medicines.
Information on some price components, such as procurement prices, can be
obtained from official documents issued by the Ministry of Health, Finance,
Industry or Trade and should be known to the Chief Pharmacist; see the column
entitled “Possible sources of information” in Figure 4.6. For the private or “other”
sector, however, it may be advisable also to check prices with a wholesaler or
other sources to find out what they actually pay.
There may be special arrangements or exemptions from certain tariffs for some
medicines, particularly in the public sector. This is the reason why price components
should be identified in all sectors.
Procurement price or manufacturer’s selling price (MSP)
Information on the procurement price or manufacturer’s selling price (MSP) is
sometimes not available in the private sector, but the aim of this survey is to
identify it as accurately as possible. In the public and “other” sectors, it might
appear as one of the following:
■ The awarded tender price (if import, including GIF)
■ The import price, if freight charges are included (GIF)
■ The export price in the country the medicine is shipped from, if freight
charges are not included: i.e. free on board (FOB)
■ The price that the wholesaler or the public or private procurement
agency pays a local manufacturer.
38
DATA COLLECTION AT CENTRAL LEVEL
Figure 4.6 Possible medicine price components and sources off information
Tarifff/tax
Possible sources off information
Manufacturer’s selling price (MSP)
Manufacturer’s list prices (from wholesalers), public sector tenders, customs
declaration forms
GIF charge
Make a rough estimate: may vary or may not be included in tender price
Tenders, customs declaration forms
Port charges, clearance
Customs, medical stores, importers
Import duty
May vary by product and/or sector
Customs, Ministries of Health, Trade, Finance, medical stores, importers
Inspection
Medicines regulatory body
Fee to Pharmacy Council/Board
Ministries of Health, Trade, Finance, medical stores and/or statistics
Distribution margin/wholesale mark-up Vary by sector. Margins charged by medical stores should be recorded here
Wholesaler, medicines regulatory authority/Ministry of Health/Pharmacy Association/retailers
Retail mark-up
Applies to private sector
Retailers, medicines regulatory authority/Ministry of Health/Pharmacy Association
Value Added Tax/Goods and
Services Tax
Retailers
Dispensing fees
Pharmacies, Ministries of Health or Trade
For the private sector, the wholesaler(s), customs or the Ministry of Health will
often be able to provide information on the import price and/or its buying price
(import price + port charges).
Cost, insurance and freight (CIF)
For imported products, cost, insurance and freight is the price paid to the
manufacturer or wholesaler from whom the product is imported. This means that
the landing cost includes insurance and freight.
If insurance and freight are not included, the landing cost is FOB (free on board)
and the recipient will pay insurance and freight If these charges appear separately,
they should be recorded and added to the manufacturer’s selling price.
Import tax or duty
Import tax or duty can be quite substantial. If there is an import tax, it may apply
to some or all imported medicines. Possible exemptions include:
■ Some or all of the medicines on the essential medicines list
■ Medicines for public health programmes
■ Some or all of the medicines on the public tender
■ Medicines imported by NGOs
■ Donations.
Check whether the same level of tax or duty applies to all products. Exemptions
and deviations should be recorded: for example, if some of the medicines monitored
are exempt, others may be taxed. Note that import tax or duty may also apply to
imports of raw material for local production, but this should not be recorded here.
39
MEDICINE
PRICES:
A
NEW
APPROACH
TO
MEASUREMENT
Port and inspection charges
Other charges may apply to cover such costs as clearance, storage in port and
inspection. Governments may charge for documentation, such as data collection
for statistical purposes.
Distribution margin/wholesale mark-up
A mark-up is a certain percentage added to the purchasing price to cover the
costs and profit of the wholesaler or retailer.
It is common to find that a ceiling applies and the government allows a maximum
percentage to the wholesale mark-up. However, you may also find that pricing is
free: that is, the government does not restrict the margins and manufacturers,
wholesalers and pharmacies may charge what they wish.
The wholesale mark-up can also be recorded as the difference between:
■ The wholesaler’s buying price: the price paid to the manufacturer/
importer
■ The pharmacy’s buying price: the price paid to the wholesaler.
Retail mark-up
The retail mark-up is the percentage that retailers (pharmacies) add to covertheir
costs, including profit. It is common to find that a ceiling applies and the government
sets a maximum percentage mark-up. The government may also set a maximum
sales price and leave it to the wholesaler and retailer to agree on their respective
mark-ups (see Glossary: Rebate).
Pharmacies may charge different mark-ups on innovator brands and generically
equivalent products. In some countries, for example, the mark-ups are higher on
generic equivalents because they are considered to be very cheap. If this applies,
it should be recorded on the form even if the precise figures are unknown.
In some countries, there may be different maximum mark-ups for different price
bands: this is called “degressive mark-up” and means that a more expensive
medicine will have a lower mark-up. If this is the case, record both the lowest and
the highest mark-ups (e.g. 11% and 25%).
To ensure reliability, information on retail mark-ups should be collected on a
number of different medicines (three are recommended). This is particularly
important in countries where prices are not regulated or where regulations are
not enforced. If medicines are sold in the informal sector (medicine outlets), it
is recommended that information is collected from these facilities as well.
Value Added Tax (VAT)/Goods and Services Tax
The size of a Value Added Tax on goods varies considerably from country to
country, ranging from 2% up to 25% in some European countries, for instance.
VAT may also vary from state to state within a country, as in Brazil and the USA.
In many countries, however, medicines are exempted from VAT. VAT is normally
charged at all levels. Retailers pay cost plus VAT and add VAT to their selling
price. The VAT is then refunded to them so that each link pays VAT only once.
Only the VAT added to the final price (which is paid by the patient) should be
recorded.
In some countries, a Goods and Services Tax (GST) or other sales tax is charged
on medicines. As with VAT, only the tax added to the final price should be
recorded.
40
DATA
COLLECTION
AT
CENTRAL
LEVEL
Distribution charges
In the public sector and in parts of the “other” sector, such as the church mission
sector, medicines are distributed from a central warehouse directly to health
facilities or via regional and/or district depots. Depending on the financing
arrangements, a margin or fee may be charged per level to cover handling and
transport between the different levels of depot and lastly to the health facility.
All margins of this kind are components of the final price and should be recorded
for these sectors in the Price Composition: Components page in the Workbook.
Dispensing fees
Pharmacies may be allowed to charge a dispensing fee; this is normally a fixed
fee per prescribed item instead of, or in addition to, a percentage mark-up. The
fee more accurately reflects the work involved in handling a prescription; a
percentage mark-up makes profit dependent on the sale of expensive medicines.
Price components that should not be entered in the Price
Composition: Components page in the Workbook
The following components of the medicine price should not be entered in the
Price Composition: Components page in the Workbook.
Registration fees
The National Medicines Regulatory Authority or Medicines Control Agency may
charge a fee when a product is registered in the country plus an annual fee for
as long as the product is on the market. As these fees are charged only when
a market authorization is issued or as an annual fee per product, irrespective of
sales volume, they should not be included here as a price component, but should
be recorded on the National Pharmaceutical Sector form (Annex 2).
Patient co-payments and fees for service
Information on the following charges should be recorded on the National
Pharmaceutical Sector form (Annex 2):
■ Patient co-payments: payments by patients of a fixed amount per
prescribed medicine, even if reimbursement applies
■ Fees for services in addition to the cost of the medicine, such as the
doctor’s consultation.
Where a standard charge (e.g. fee for the consultation/fee for service, including
medicines) is set for all patients in public health facilities, data collection on
pricing at each individual facility is not necessary. The information should be
recorded on the National Pharmaceutical Sector form (Annex 2). However, data
on availability should still be collected in individual facilities.
Note on prices in the public and “other” sectors
One or both of these sectors may provide medicines free to patients or for a fixed
fee (see below). If patients do not pay the full price of the medicines, the
procurement prices (e.g. from a tender, if available) should be entered on the
form at central level. The data collectors should then simply record whether the
medicine is available or not in each facility they visit.
41
MEDICINE
PRICES:
A
NEW
APPROACH
TO
MEASUREMENT
Informal charges
There may also be informal charges about which no infomnation is publicly
available. The only way of measuring these charges is by household surveys
(interviewing patients at home) or exit interviews (interviewing patients when they
leave the pharmacy or doctor). Surveys of this kind are not covered here, but can
be developed as separate projects.
Collecting data on the components of medicine prices
Data on the components of medicine prices should be collected at central level
and entered directly into the Workbook. It is recommended that you select three
tracer medicines (i.e. three medicines on the core list of medicines) that are
widely used in all sectors in your country. You will need to add the price components
that apply in your country. Collect data on each product for each sector (i.e. a total
of up to 12 sets of data).
Chapter 7 describes how to enter data on price components in the Workbook.
Print this page from the Workbook and fill in the price components. The worksheet
contains eleven columns, as shown in Figure 4.7. Columns B-F identify the
medicine and the dispensed quantity and Columns G-K itemize the price
components and mark-ups, as follows.
B Name of the medicine.
C Medicine strength: this is entered automatically when the name of the
medicine is entered into the Workbook.
D Dosage form: this is entered automatically when the name of the
medicine is entered into the Workbook.
E Target pack size: this is entered automatically when the name of the
medicine is entered into the Workbook.
F Dispensed quantity.
G Type of charge: identifies the type of charge added to the GIF price of
the medicine. You should complete this according to your country’s
charging structure.
Figure 4.7
Extract from a Price Composition: Components page of the Workbook
I Describe sector and type of medicine
{
c
D
■
i
■
Example 1. Medicine name
.
E
|
G
F
H
I
J
K
;--~
Medicine
_:..j
Dosage
Strengfh
Form
Priceof
Target
Pack
Type of Charge
Cost, insuranco. freight (GIF)
price
42
Charge
BMis I CIWB.
NA
NA
Quantity
% Mark-up
0.00%
DATA COLLECTION AT CENTRAL LEVEL
H Charge basis: each individual type of charge will be either a percentage
addition or a flat rate fee. Identify the category that applies to each
charge.
I
Amount of charge: enter either the percentage add-on or the flat rate
amount.
J
Price of dispensed quantity: the Workbook automatically calculates the
price of the dispensed quantity at each point in the price chain.
K Cumulative % mark-up: this is calculated automatically by the Workbook,
based on all the preceding components. The last figure in this column
indicates the total value of local add-ons to the CIF price of the medicine.
AFFORDABILITY
Treatment course
Figure 4.8 lists nine preselected clinical conditions (ten medicines) for which the
cost of treatment, and hence its affordability, will be calculated by sector. These
conditions have been selected to facilitate international comparisons. However,
you may wish to include additional conditions and treatments in the Workbook
- or alternatives if some of the medicines are not included in your survey.
Figure 4.8
List of preselected conditions and medicines to determine affordability
Condition
Medicine,
strength,
dosage form
Daily dose
Treatment
duration
(days)
Total no.
units per
course of
treatment
References
Diabetes
Glibenclamide
5 mg tablets
2 tablets
30
60
WHO Model Formulary 2002;
BNF 43 (Mar 2002) Section 6.1.2.1
Hypertension
Hydrochlorothiazide
25 mg tablets
1 tablet
30
30
WHO Model Formulary 2002;
BNF 42 (Sept 2001) Section 2.2.1
Atenolol
50 mg tablets
1 tablet
30
30
WHO Model Formulary 2002;
BNF 43 (Mar 2002) Section 2.4
Amoxicillin
250 mg capsules/tablets
3 capsules/
tablets
7
21
WHO Model Formulary 2002;
BNF 43 (Mar 2002) Section 5.1.1.3
Respiratory tract Co-trimoxazole paediatric
infections: children suspension 40+200 mg/
6 months-5 years 5 ml
10 ml
7
70
WHO Model Formulary 2002;
BNF 43 (Mar 2002) Section 5.1.8
Gonorrhoea
Ciprofloxacin
500 mg tablets
1 tablet
1
1
WHO Model Formulary 2002;
BNF 43 (Mar 2002); Section 5.1.12
Arthritis
Diclofenac
50 mg tablets
Amitriptyline
25mg tablets
2 tablets
30
60
BNF 43 (Mar 2002); Section 10.1.1
3 tablets
30
90
WHO Model Formulary 2002;
BNF 43 (Mar 2002) Section 4.3.1
200 doses
(1 inhaler)
WHO Model Formulary 2002;
BNF 43 (Mar 2002) Section 3.1.1.1
60
BNF 43 (Mar 2002); Section 1.3.1
Respiratory tract
infections: adults
Depression
Asthma
Salbutamol inhaler
0.1 mg/dose
As needed
Peptic ulcer
Ranitidine
150 mg tablets
2 tablets
30
WHO Model Formulary 2002 is available electronically at http://www.who.int/medicines/organization/par/formulary.shtml
The British National Formulary is available electronically at http://bnf.vhn.net/home/
43
MEDICINE
PRICES:
A
NEW
APPROACH
TO
MEASUREMENT
The treatment courses for the medicines included in the core list are based on
guidelines in the WHO Model Formulary and the British National Formulary (BNF),
as in the following examples:
■ One dose for gonorrhoea
■ Seven days for an acute infection
■ 30 days for a chronic treatment in adults.
The WHO Model Formulary and the BNF have been selected because the
recommendations on dosages are well-known and accepted and because they
can both be accessed electronically. It is important to note that the courses of
treatment used in this manual are statistical or average measures that are used
to standardize the methodology and facilitate international comparisons. They
should not be regarded as recommendations on treatment courses; although
they are based on internationally accepted clinical guidelines, other guidelines for
treatment may be in use locally or nationally.
You are requested to use the treatment courses given in Figure 4.8 to enable
international comparisons to be made. However, if your country uses other
dosage schedules, these may be used for the national report. For your national
survey, you may also wish to make comparisons, such as between the affordability
of old and new medicines.
Chapter 7 explains how to use the computerized Workbook to enter data on
medicine prices. The treatment cost and affordability are calculated automatically
by the Workbook.
Benchmark
The benchmark of the daily wage of the lowest paid, unskilled national government
worker is regarded as the most reliable and accessible measure for judging
affordability. The information is also easily available and locally understandable.
A large proportion of the population will, of course, earn less than an unskilled
government worker, but a treatment that is not affordable to the lowest paid
government worker is definitely not affordable to those on incomes below that
level.
44
5
Preparation for data
collection in the field
■ The sampling and selection of public sector health facilities should be
completed before preparation for fieldwork begins
■ Careful selection and training of data collectors is required
■ A pilot test should be conducted during the training of data collectors
to give data collectors practice in collecting data and to identify any
amendments needed to the Medicine Price Data Collection form
■ A letter of introduction should be prepared for data collectors.
The success of the medicine pricing survey is dependent on the collection and
recording of accurate, reliable data by the data collectors in the field. This
requires careful planning and preparation for fieldwork. This chapter deals with
the issues that need to be addressed when preparing for the field survey. It builds
on information already discussed in the previous chapters.
GUIDANCE FOR AREA SUPERVISORS
Area supervisors should be thoroughly familiar with the contents of this manual
in order to ensure a consistent approach to the organization of data collection
in the field. In particular, the survey manager should highlight the following issues
during training:
■ Sampling private sector retail pharmacies and other medicine outlets
■ Gaining access to health facilities, pharmacies and other medicine
outlets
■ Preparing the Medicine Price Data Collection forms
■ Daily check of completed forms
■ Field supervision
■ Calculating the unit prices of medicines.
SAMPLING SITES
The selection of public health facilities for data collection should be made by the
survey manager at central level (see Chapter 3). However, most or all of the
private sector retail outlets will have to be identified locally by the area supervisors.
45
MEDICINE
PRICES:
A
NEW
APPROACH
TO
MEASUREMENT
Private sector retail pharmacies
The private pharmacies will be sampled by their proximity to the public health
facilities selected, so sampling will usually have to be done locally in the field by
the area supervisor. The sampling process will be easier if a list of pharmacies
registered in each study area is provided by the survey manager.
Once the public health facilities have been selected, the pharmacy that is closest
to each facility should be selected. If there are a number of pharmacies close
to each facility, one should be selected at random, using the list of registered
pharmacies obtained at central level. If there is no pharmacy within 5 km of a
facility, no pharmacy should be chosen for that facility, but another pharmacy in
the urban centre should be substituted.
This process will result in the selection of at least five pharmacies in each survey
area.
“Other” sector medicine outlets
The selection of medicine outlets in the “Other” sector will depend on the nature
of the sector chosen.
If the sector includes NGO health facilities, the sampling should have been
completed at central level (see p. 26). This will result in a sample of up to five
NGO health facilities in each survey area.
For other types of medicine outlet (e.g. dispensing doctors, non-pharmacy drug
stores), the sample will usually have to be selected locally, as with pharmacies.
Once the public health facilities have been selected, the medicine outlet that is
closest to each facility should be selected. If there are a number of medicine
outlets close to each facility, one should be selected at random. If there is no
medicine outlet within 5 km of a facility, no outlet should be chosen for that
facility, but another outlet in the urban centre should be substituted.
This process will result in a sample of up to five other medicine outlets in each
survey area.
Back-up facilities
In addition to the pharmacies and other medicine outlets selected for inclusion
in the survey, two back-up facilities should be identified in advance for each team
of data collectors each day. Data collectors should visit a pre-selected back-up
facility if:
■ Less than 50% of the medicines on the Medicine Price Data Collection
form are available
■ Health facility, pharmacy or medicine outlet managers will not give
permission for data collection, even after being shown the letter of
introduction and being assured of anonymity.
Where possible, two back-up facilities should be identified in advance for each
team of data collectors each day.
46
PREPARATION FOR DATA COLLECTION IN
THE
FIELD
SELECTING DATA COLLECTORS
Data collectors will need a basic knowledge of pharmaceuticals, some
understanding of the principles of sample surveys and an appreciation of the
logistical requirements for carrying out field studies. The survey methodology has
been designed to minimize as far as possible the need for a high level of
sophistication in these areas although in-depth follow-up activities will in many
cases require a higher level of technical expertise.
Criteria for selecting data collectors
Data collection can be tedious work and requires an aptitude for concentration
and attention to detail. The best data collectors combine the discipline of collecting
data in a standardized way with the flexibility to adapt procedures to the
requirements of unusual situations.
Data collectors should be familiar with pharmaceuticals and the different dosage
forms and pack sizes in order to be able to extract the required information, both
from health professionals and from written material such as packs and order
lists, and to record it accurately during observations.
The most effective data collectors are likely to be people with relevant experience
such as pharmacists, pharmacy technicians and nurses. However, other Ministry
of Health staff and temporary employees with some health-related experience
can be hired specifically to collect and record data. At a minimum, post secondary
school education is required. Familiarity with the local dialect will be advantageous.
The process of data collection is separate from data entry and processing which
will be undertaken at a later stage. Data collectors should be trained to record
only the information required.
Lessons from the field
In the field study in South Africa, regional pharmacists were recruited as data
collectors because they are known to the pharmacists and doctors in the area
and also know the facilities in the area.
TRAINING DATA COLLECTORS
Data collectors should be well trained to ensure the accuracy and reliability of the
data gathering procedure. Training should focus on teaching the participants:
■ The overall purpose of the survey
■ How to collect data
■ How to complete the Medicine Price Data Collection form.
Figure 5.1 on p. 48 shows an example of a training plan for data collectors.
The Medicine Price Data Collection form must be available during training sessions
so that the data collectors are made aware of the data to be collected and how
to complete the form.
Wherever possible, data collectors should work in teams of two. To ensure
consistency in results, it is preferable to train all data collectors together and then
allow them to practise together at the pilot sites. This is an important step that
will provide an opportunity to identify and solve unforeseen problems and help
47
MEDICINE
PRICES:
A NEW APPROACH TO MEASUREMENT
Figure 5.1 Example of a training plan
Day 1
Training activity
Time
General introduction
1 hour
Introduction of data collectors
General presentation:
■ Purpose of the sun/ey
■ Training objectives
■ Location of survey sites
■ Discussion on data collectors’ expectations and/or concerns
■ Work schedule and compensation
Day 2
Review of Medicine Price Data Collection form
2-3 hours
Role play in small groups to check reliability of data collection skills
1 hour
Pilot test visits to facilities to practise completing the Medicine Price
Data Collection form
2-3 hours
Debriefing on pilot testing and discussion on any revisions required
to the Medicine Price Data Collection form
2-3 hours
Allocation of data collectors to teams
3 hours
Planning of regular team meetings
General review and questions
Review of supervisory role with all area supervisors (if appointed)
1 hour
to identify “natural leaders” who can assist other data collectors in case of
difficulty. It will also enable realistic estimates to be made of the time required
for collecting data at each study site.
Duration of training
As shown in Figure 5.1, at least two days will be required for training, including:
■ Initial training: half day
■ Pilot test: each survey pair should survey at least 10 medicines in both
a public and private facility
■ Debriefing on practical details of the survey: half day
■ Allocation of data collectors into teams.
In addition, adequate time should be allocated for issues such as transport
planning, paying travel advances and providing the Medicine Price Data Collection
forms. When the survey is being undertaken for the first time, three days may be
required for training to ensure that the data collectors are adequately prepared.
It is generally safest to train a few more data collectors than are needed in case
any have to drop out of the survey.
PILOT TESTING
It is recommended that a pilot test should be conducted during the training of
the data collectors. All aspects of the survey should be pilot tested, including the
data collection process and the completion of the Medicine Price Data Collection
forms.
48
PREPARATION FOR DATA COLLECTION IN THE FIELD
The area supervisors should check the completed Medicine Price Data Collection
forms to identify any inaccuracies or other problems that indicate the need for
further action. They should then report their findings and recommendations to the
survey manager to identify whether:
■ Area supervisors or data collectors need further training to ensure the
accurate collection of reliable information
■ Revisions are needed to the core and supplementary lists of medicines
on the Medicine Price Data Collection form
■ Area supervisors or data collectors faced any constraints in sampling
or in collecting data.
Any issues that may affect the quality of data collection must be addressed by the
survey manager before the survey begins.
MEDICINE PRICE DATA COLLECTION FORMS
After the pilot test, the Medicine Price Data Collection forms should be reviewed
and revised, if necessary: for example, the core and supplementary lists of
medicines may need to be amended if a medicine is rarely available or is found
only in a different dosage form and strength.
Each data collection team should be given a set of the revised Medicine Price
Data Collection forms, preferably colourcoded for each sector.
Details of the facility should be added to the first page of each form by the area
supervisor before the visit.
Arrangements should be made for the safe storage of completed forms from
each sample site in secure conditions for an indefinite period in case any data
need to be checked at a later date.
PLANNING THE SCHEDULE OF DATA COLLECTION VISITS
Before data collection starts, a schedule of visits should be prepared with the
proposed dates for visits to each site. A written schedule should be provided for
each data collection team.
The number of days required to collect the data can be estimated on the basis
of the number of facilities to be visited in each geographical area, the distance
between them and the mode of transport available.
In general, 1-2 hours plus travelling time will be required for data collection in
each facility.
Making initial contact with health facilities
It is essential that good relations are established with the pharmacist/dispenser
in each facility to be surveyed since they will have to set aside considerable time
to provide information on the prices and availability of medicines. Area supervisors
should visit them personally in advance to seek their permission for data collection
in their facility or medicine outlet, avoiding peak periods when they may be busy
49
MEDICINE
PRICES:
A
NEW
APPROACH
TO
MEASUREMENT
with patients. They should show them the letter of endorsement, but should not
inform them about the specific medicines included in the survey. An appointment
should be made for data collection to take place on a date and at a time that
is convenient for the manager of each facility and medicine outlet.
This process may be time consuming, but it is important to invest in it since it
will facilitate data collection.
LETTER OF INTRODUCTION
A letter of introduction from the survey manager will be invaluable in introducing
area supervisors and data collectors to staff in the health facilities and pharmacies
being surveyed. The letter of introduction should include the following information:
■ The name of the organization conducting the survey and the contact
details of the survey manager
■ The purpose of the study
■ The names of the data collectors who will visit the facility
■ The time required for data collection in each facility.
The letter should also provide reassurance that the anonymity of the facility or
pharmacy will be maintained.
An example of a letter of introduction is included as Annex 4 and is provided as
a Word file on the CD-ROM for local adaptation, as appropriate.
It is advisable that data collectors should carry an identity document with a
photograph, wherever possible.
MS
CHECKLIST FOR AREA SUPERVISORS
Prior to going out into the field, the area supervisor must ensure that data
collectors have the necessary tools and information with them. An example of a
checklist for area supervisors is provided in Figure 5.2.
GUIDEUNES FOR DATA COLLECTORS
Written guidelines should be provided for data collectors on the procedure to be
followed during visits to health facilities and pharmacies. These should be
developed by the survey manager and distributed to the data collectors by the
area supervisors.
COORDINATING MEETINGS
As you plan, prepare, undertake the survey, enter the data, analyse and produce
the survey report, you will need to meet regularly with your key team members.
Schedule these meetings in advance.
Remember, the more you prepare, the smoother the survey will go.
50
PREPARATION
FOR
DATA
COLLECTION
IN
THE
FIELD
Figure 5.2 Example of checklist for area supervisors
Item
1
List of data collection teams
2 Contact details of the area supervisor and data collectors
3 Schedule of visits to survey sites
4 Contact details of the sites to be visited
5
Details of back-up facilities to be visited if scheduled visits are not possible or less than 50% of the
medicines are available
6 Copies of letter of endorsement and letter of introduction for data collection team
7
Guidelines for data collectors
8
Examples of completed set of Medicine Price Data Collection form
9
Medicine Price Data Collection forms for each team of data collectors
10 Medicine Price Data Collection forms for each back-up site
11 Pens and other supplies
12 Reid allowance for local expenses
51
6
Data collection in the field
■ Data collection must be accurate and reliable since it forms the basis
for the remainder of the survey
■ Data collectors will record data on the prices and availability of medicines
■ Area supervisors should supervise data collectors and check completed
Medicine Price Data Collection forms at the end of each day
■ Area supervisors should calculate the unit prices of all available
medicines.
FIELDWORK: AREA SUPERVISORS
Area supervisors are responsible for ensuring the accuracy and reliability of data
collection. This involves the following activities.
Held supervision
Area supervisors should meet with the data collectors at the end of each day to
get feedback on the data collection process and identify any problems. They
should go out into the field regularly with the data collection teams to ensure that
the agreed procedures are being followed. They should also return to randomly
selected facilities or pharmacies to collect the same data and check the accuracy
of the data collected earlier. Ideally, this validation should be performed for 10%
of the facilities. Any problems that cannot be resolved in the field should be
discussed with the survey manager.
Daily check of completed Medicine Price Data Collection
forms
It is essential that area supervisors review completed Medicine Price Data Collection
forms at the end of each day to check that the data are complete, consistent,
and legible. Once the team has left the field, it becomes difficult to verify information
that may be missing or incomplete.
The supervisors should highlight any missing or unreliable information on the
form and identify the source of the problem. If necessary, data collectors should
y <^-4
return to the facility to collect any further data required. The area supervisors Z ?7
should sign the first page of each form to record that it has been checked.
/
f <
F;
52
10446
3
)
J...
? ,r6/
/S'
DATA
COLLECTION
IN
THE
FIELD
Calculating the unit prices of medicines
After checking the completed Medicine Price Data Collection forms, the area
supervisors should calculate the unit prices of the medicines that have been
found, using the following procedure.
1 For each product, divide the Price of Pack Found (Column G) by the Pack
Size Found (Column F).
2 Retain at least four digits after the decimal point when calculating the
unit price.
3 Enter the calculated unit prices in Column H of the form and double
check the calculations.
Storing completed Medicine Price Data Collection forms
Completed forms should be stored in waterproof plastic bags in the field.
FIELDWORK: DATA COLLECTORS
Preparation for fieldwork
Before going out into the field each day, data collectors should check that they
have:
■
■
■
■
■
Contact details of the area supervisor
Schedule of visits to survey sites and contact details
A copy of the letter of endorsement and letter of introduction
Guidelines for data collectors
A Medicine Price Data Collection form for each site to be visited and
for each back-up site
■ Pens: pencils should not be used to record data.
Data collectors should avoid visiting the facility in peak hours and should telephone
before the visit, if possible, to confirm that the appointment is still convenient.
On arrival at the facility
On arrival at the health facility, pharmacy or other medicine outlet, data collectors
should:
■ Check that the information on the facility on the first page of the
Medicine Price Data Collection form is complete and correct and inform
the area supervisor if there are any inaccuracies
■ Enter the following information on the first page of the Medicine Price
Data Collection form:
- Name(s) or codes of the data collector(s)
- Name of the person in charge at the facility: e.g. the head of the
hospital pharmacy, pharmacist, pharmacy owner or medicine outlet
licence holder
- Name of the person(s) who provided information on medicine prices
and availability (if different from the person in charge).
53
MEDICINE
PRICES:
A
NEW
APPROACH
TO
MEASUREMENT
Data collection
Information on prices and availability should be entered with the aid of the person
in charge of the facility. The Medicine Price Data Collection form should not be
left at a facility or pharmacy to be collected later with the promise that it will be
filled in.
Completing the Medicine Price Data Collection form
Data collectors should complete a separate Medicine Price Data Collection form
for each health facility, pharmacy and other medicine outlet. They should follow
the procedure below.
Entering data
■ Complete Row 3 for each medicine:
- Enter the name of lowest price generic equivalent
- Enter the manufacturer of lowest price generic equivalent
Rows 2 and 3 for each substance can be identical, but the product
in Row 1 can appear only in that row (see p. 55)
■ Complete Columns D, E, F and, where appropriate, Column I
■ Do not complete Column H; unit prices will be calculated by the area
supervisor
■ Do not enter data in any other rows or columns.
Dosage form
A medicine may be available in different dosage forms, including tablets/capsules,
mixture/suspension, injection, cream/ointment and so on. Tablets and capsules
are considered equivalent (except for nifedipine retard tablets). Column A lists
the only dosage form on which information should be collected for a medicine.
If the dosage form listed in Column A is not found, do not complete the row.
Strength
Column A lists the only strength on which information should be collected for a
medicine. If the strength listed in Column A is not found, do not complete the
row
Collect data only for the dosage form and strength listed in Column A. Note: for
nifedipine, collect data only on the 20 mg retard formulation, in tablet form (see p. 31).
Column D: Available
Complete Column D for each medicine by ticking whether each of the following
are available:
■ Row 1: Innovator brand
■ Row 2: Most sold generic equivalent
■ Row 3: Lowest price generic equivalent.
Ask to see a pack of the product before recording that it is available.
54
DATA
COLLECTION
IN
THE
FIELD
In all sectors, there may be only one or two products for each medicine; if this
is the case, enter information as follows:
■ If there is no innovator brand, leave Row 1 blank
■ If you find only one generically equivalent product, it will be both the
most sold and the lowest price generic equivalent: enter the same
information in Row 2 and Row 3 and note this in the ‘Comments’
column (Column I)
■ If you find more than one generically equivalent product and the most
sold generic equivalent also has the lowest price, enter the information
for the most sold generic equivalent in both Row 2 and Row 3 and note
this in the ‘Comments’ column (Column I).
If a product is temporarily out of stock:
■ If price data are available, record the price and state that the product
was out of stock in Column I: Comments
■ If no price data are available, do not enter any data in the relevant row
■ Do not substitute an alternative product.
If several medicines listed on the form are unavailable:
■ Collect data for as many medicines as possible
■ If less than 50% of the medicines on the form are available:
- Visit an additional facility, identified in advance as a back-up, and
conduct the survey again
- Report the problem to the area supervisor.
Column F: Pack size found
In Column F for each medicine, enter the pack size actually found in the facility
for:
■ Row 1: Innovator brand
■ Row 2: Most sold generic equivalent
■ Row 3: Lowest price generic equivalent.
The pack size should be identical to the recommended size (Column E). If this
is not available, select the closest, larger pack size found. Select the same pack
size for innovator brand and generically equivalent products, whenever possible.
Collect the price for one pack size only for each medicine.
Column G: Price of pack found
In Column G, enter the price of the pack actually found, in the national currency
for:
■ Row 1: Innovator brand
■ Row 2: Most sold generic equivalent
■ Row 3: Lowest price generic equivalent.
Ask to see either the price list or price label on the product before entering the
price on the form.
55
PRICES:
MEDICINE
A
NEW
APPROACH
TO
MEASUREMENT
Record the price the patient pays. If part of the price is paid by insurance or
other means, record the full price the pharmacist charges the patient. For instance,
if the pharmacy is reimbursed 80% and the patient pays 20%, you should record
the full price (100%).
Do not record “special discounts” (discounts available only to certain group of
patients). However, you should record discounted prices if they apply to all
patients. Add a note in the comments column.
In the public sector, medicines are often distributed free of charge or for a fixed
fee for either the medicine or the visit:
■ If medicines are distributed free or for a fixed fee, record the price the
pharmacy/dispensary pays to its supplier
■ If the patient pays a different price, record this price.
Column I: Comments
Column I can be used for explanatory comments or any additional information,
such as:
■ Product temporarily out of stock
■ Percentage discounts offered.
Figure 6.1 shows an extract from a completed Medicine Price Data Collection
form: Public Sector Patient Prices which has been completed by data collectors
in the field. The unit prices have been entered by the area supervisor.
Figure 6.1
Extract from a Medicine Price Data Collection form: Public Sector Patient Prices, with data entered in the field
B
C
D
E
F
G
Generic name, dosage form,
strength
Brand namefs)
Manufacturer
Available
tick / for
yes
Pack size
recommended
Pack
size
found
Price of
pack
found
Aciclovir tab 200 mg
Zovirax
GSK
A
H
I
Unit price
(4 digits)
25
/tab
Most sold generic equivalent
25
/tab
Lowest price generic equivalent
25
/tab
Amitriptyline tab 25 mg
Amoxicillin caps/tab 250 mg
/tab
100
fhouona/
100
1000
1261.00
1.2610/tab Only 1
AwittrCptylLne/
Pharwico
100
1000
1261.00
1.2 610/tab
Amoxil
SKB(GSK)
21
21~
500
3129.00
6.2658/tab Only 1
21
500
3129.00
6.2 658/tab
Most sold generic equivalent AmPKicillLft’
Lowest price generic equivalent
Not awulable/
MSD
Tryptizol
Most sold generic equivalent Ainit>riptylin£'
Lowest price generic equivalent
Comments
AtnOKiciUuv
llatlopha^yn/
/tab
Figure 6.2 shows an extract from a Medicine Price Data Collection form: Private
Sector Retail Prices which has been completed by data collectors in the field. The
unit prices have been completed by the area supervisor.
Checking the Medicine Price Data Collection form
Data collectors should check that the form is accurate and complete before
leaving the facility and return completed forms to the area supervisor. They
should report any problems as soon as possible.
56
DATA
Figure 6.2
COLLECTION
I N
THE
FIELD
Example of Medicine Price Data Collection fonn: Private Sector Patient Prices, with data entered in the field
B
C
D
E
F
Generic name, dosage form,
strength
Brand name(s)
Manufacturer
Available
tick / for
yes
Pack size
recommended
Pack
size
found
Aciclovir tab 200 mg
Zovirax
GSK
25
25
5392.70
215.7080/tab
Acivir
Cipla
25
100
12396.90
123.9690/tab
VCruc£d^200
Aesti'
25
25
1600.00
64.oooo/tab
Tryptizoi
MSD
100
A
Most sold generic equivalent
Lowest price generic equivalent
Amitriptyline tab 25 mg
Most sold generic equivalent Amitriptyline
Lowest price generic equivalent
Cosmos
✓
G
Price of
pack
found
H
Unit price
(4 digits)
I
Comments
100
1OO
80.00
/tab Not
cuvaddble'
Ltv Coventry
0.8000/tab
100
100
80.00
0.8000/tab Soume/a*
21
IOO
776.00
7.7600/tab
100
413.00
4.1300/tab
1OOO
333*1.00
3.3400/tab
AinL£riptylLn&
Connoy
AmoxH
SKB (GSK)
Moxacid
Dawa
21
MedOvet
21
moitidd'
Amoxicillin caps/tab 250 mg
Most sold generic equivalent
Lowest price generic equivalent
/
57
7
Data entry
■ Data entry and analysis will generally take place at central level
■ The computerized Excel WHO/HAI Medicine Pricing Workbook that
accompanies this manual is used to enter the data collected in the
field, consolidate and summarize results, and print tables that will
serve as the basis for reports
■ The exchange rate must be entered in the International Medicine
Reference Price Data page
■ Medicine identification and medicine unit price data must be entered
in the Field Data Consolidation Pages for Procurement, Public Sector,
Private Sector or Other Sector Price Information
■ The Workbook will automatically summarize and compare the data by
sector and by medicine in the following pages:
- Sector Availability and Price Summary
- Medicine Availability and Price Summary
■ The daily wage of the lowest paid unskilled government worker must be
entered in local currency in the Standard Treatment Affordability page
■ Additional data can be entered to complete supplementary analyses in
the following pages:
- Treatment Affordability by Sector
- Price Composition: Cumulative Mark-ups
- Price Composition: Components of Price
■ You should have the Workbook open as you read this chapter.
USING THE COMPUTERIZED WORKBOOK
The specially-designed computerized WHO/HAI Medicine Pricing Workbook that
accompanies this manual allows rapid entry and analysis of medicine price data.
After data have been entered, the Workbook automatically generates summary
tables that form the basis of data analysis.
You will find it helpful to run the Workbook for the first time while reading this
chapter. If you have problems with the Workbook or discover any bugs, please
send an e-mail message describing the problem with the problem file attached
to Health Action International Europe (info@haiweb.org), which will try to respond
promptly.
58
DATA
PROCESSING
Getting started
1 Transfer the Workbook to your computer. You can do this by:
■ Copying the file from the CD-ROM that accompanies this manual
■ Downloading the latest file from the HAI website:
(http://www.haiweb.org/medicineprices).
2 Start Excel and open the file WHO-HAI Medicine Pricing Workbook.xls
that you copied onto your hard disk. Choose the option to “Enable
Macros” as the file is opening.
3 Do not save data in the original Workbook. As soon as you open the
file, save it with a filename that indicates the country and date of your
survey. For example, you might choose a filename such as
SouthAfrica.May2003.xls. In this way you retain a clean Workbook to
use for future surveys.
Moving between Workbook pages
You can use either of two methods to move between pages.
1 Use the movement buttons. From the Home Page, click a button with
the name of the desired page to go to that page. From any other
Workbook page, click the Go To Home Page | button to return to the
Home Page.
2 Click on the tabs at the bottom of each page to move between pages
of the Workbook.
Entering data
You can enter or edit data in any unshaded cell in a data entry form. Within the
Workbook, all shaded areas are “protected” from entering data and other areas
are “hidden” from view. These areas contain formulas or data that allow the
Workbook to carry out its calculations automatically. Errors in the Workbook’s
operation may result if you unprotect or reveal these areas. In order to guarantee
the integrity of the calculations, these cells should not be modified.
Within each Field Data Consolidation page, a double-entry function is provided.
While you do not have to use this feature, you are strongly advised to do so since
this procedure will improve the accuracy of data entry. More details about double
entry are given on pp. 69-70.
Ensuring accuracy
The quality of the information generated by the medicine price survey depends
on the accuracy of data collection and data entry. The survey manager has overall
responsibility for the quality of the data. The area supervisors and data entry staff
should receive regular supervision. Attention to the details of supervision will pay
off in the ease with which data entry and analysis occur.
The following steps will also help to ensure greater accuracy.
1 Establish procedures to check for data completeness, consistency,
plausibility and legibility in the field when it is still possible to correct
errors or to fill in missing information. The area supervisors should
59
MEDICINE PRICES: A NEW APPROACH TO MEASUREMENT
review data collection forms every day after completion of the field work
and resolve any problems before the next day of data collection.
2 Plan random checks to ensure the quality of data collection. The area
supervisor should return to randomly selected facilities or pharmacies
to collect the same data in order to check the accuracy of the data
collected earlier. Ideally, this validation should be undertaken for 10%
of the facilities.
3 Develop procedures for storing paper data collection forms safely and
securely. Forms should be stored in waterproof plastic bags in the field
and in secure filing cabinets or store rooms at the study office.
4 Identify the resources needed for data entry and checking before data
collection begins and plan data processing carefully. Ideally data entry
should take place at one site where the survey manager can supervise
the process. Information on the Medicine Price Data Collection forms
should be checked again for legibility and consistency during data
entry.
Saving and backing up your work
Save the Workbook periodically as you work to prevent data loss in the event of
power failure. Always make a back-up copy of the file on your hard drive or a
CD-ROM after adding a substantial amount of data. Since Excel files write over
the previous versions as they save, it is safest to retain intermediate versions
under different file names.
OVERVIEW OF THE Workbook AND ITS OPERATIONS
The computerized Workbook consists of the following pages:
1 Home Page
2 International Medicine Reference Price Data
3 Field Data Consolidation: Medicine Procurement Prices
4 Field Data Consolidation: Public Sector Patient Prices
5 Held Data Consolidation: Private Sector Retail Prices
6 Field Data Consolidation: Other Sector Patient Prices
7 Sector Availability and Price Summary
8 Medicine Availability and Price Summary
9 Standard Treatment Affordability
10 Price Composition: Cumulative Mark-up
11 Price Composition: Components of Price
60
DATA
ENTRY
HOME PAGE
The top section of the Home Page contains a box with action buttons that are
used to move to different parts of the Workbook. Click a button to jump to the
page indicated.
The lower section of the Home Page contains a box with action buttons that allow
you to erase previously entered data from the Workbook. It is generally easier to
start a new survey by opening and renaming the original master Workbook. In
some circumstances, however, it may be more efficient to erase parts of an
existing Workbook to start a new survey: for example, if you have collected data
on the same list of medicines from several provinces and use the same medicine
lists, defined treatments and so on for each province.
Click on a button to erase data on a specific page or on the Erase & Reset All Data |
button to erase all data in the Workbook. After clicking the button, you will be
prompted to confirm that you wantto erase the data indicated. Once you confirm, all
data you have entered on a page will be erased, so take care using this function.
Before erasing anything, you may want to save the entire Workbook under a
separate file name as a back-up in case you need to return to it later.
INTERNATIONAL MEDICINE REFERENCE PRICE DATA PAGE
The International Medicine Reference Price Data page contains important
information on the medicines in the survey that is used in subsequent pages.
This page must be completed first, preferably during survey preparation. Figure
7.1 contains a picture of the page as it appears in the Workbook.
Figure 7.1 International Medicine Reference Price Data page
a; b j_______ c
D
F
E
International
1
2 Medicine Reference Price Data
3
4
6
7
8
G
H
J
K
L
Exchange Rate: $US 1.00 in local currency =| 1.0000
Name of local currency:____________________
Date of exchange rate:____________________
Source of exchange rate:____________________
Source of Other Unit Price:
Go To Horne Page]
MSH/Other Prices |
Price Data Used = MSH
Price of
Reference
Target
Core
MSH Unit Other Unit Price of
Unit Price
List
Price
Price
Target
Pack (local
(local
(yes/no)
(SUS)
Pack (SUS) currency)
currency)
(SUS)
2002
10
11
12
J.1
di
16
17
18
J9
20
21
22
23
Med.
No.
Medicine Name
(Name must be unique)
1 Aciclovir_________________
2 Amitriptyline_____________
3 Amoxicillin_______________
4 Artesunate_______________
5 Atenolol_________________
6 Beclometasone inhaler
7 Captopril_________________
8 Carbamazepine___________
9 Ceftriaxone injection_______
10 Ciprofloxacin_____________
11 Co-trimoxazole suspension
12 Diazepam________________
13 Diclofenac
Medicine
Strength
Dosage
Form
200 mg_____
25 mg______
250 mg_____
100 mg_____
50 mg_______
0.05 mg/dose
25 mg_______
200 mg_____
1 g/vial______
500 mg______
8+40 mg/ml
5 mg________
25 mg
cap/tab
cap/tab
cap/tab
cap/tab
cap/tab
dose
cap/tab
cap/tab
gram
cap/tab
millilitre
cap/tab
cap/tab
Target
Pack
Size
___ 25
100
___ 21
___ 20
___ 60
200
___ 60
150
___ 1
___ 1
___ 70
100
100
61
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
$0.0854
$0 0070
$0.0178
$0.4942
$0.0082
$0.0163
$0.0264
$0.0193
$3.2468
$0.0357
$0 0042
$0.0029
$0.0043
$2.1350
$0.7000
$0.3738
$9.8840
$0.4920
$3.2600
$1.5840
$2.8950
$3.2468
$0.0357
$0.2940
$0.2900
$0.4300
2.1350
0.7000
0.3738
9.8840
0.4920
3.2600
1.5840
2.8950
3.2468
0.0357
0.2940
0.2900
0.4300
0.0854
0.0070
0.0178
0.4942
0.0082
0.0163
0.0264
0.0193
3.2468
0.0357
0.0042
0.0029
0.0043
MEDICINE
PRICES:
A NEW APPROACH TO MEASUREMENT
1 At the top of the page (cell J3), you must enter the current Exchange
Rate of your local currency in US dollars, which are the standardizing
currency for these surveys. Once you have entered the exchange rate,
you should not change it.
Note that there may be a buying rate and a selling rate. In some
countries, multiple rates may co-exist. For example, there may be an
official rate, a commercial rate, and a parallel or “black market" rate.
Use the commercial “buy” rate on the first day of the survey.
2 To document your decision, enter:
■ The name of your local currency (cell H4)
■ The date for which the exchange rate is valid (cell H5)
■ The source of the exchange rate you used (cell H6).
Medicine identifying information
The Workbook is supplied with a list of core medicines that should be monitored
in all studies in order to facilitate international comparisons. The following data
elements are already included in the Workbook for each medicine in the core list.
1 Medicine Name: Name (typically the INN or other generic name) of the
target product. These names must be unique for the Workbook to
function property. If an additional product with the same generic name
is to be included as a locally-selected supplementary medicine (see
below), different names must be used. For example, if amoxicillin
suspension is to be added as a supplementary medicine, it should be
called “amoxicillin suspension” and the name of the core medicine
should be changed to “amoxicillin capsule/tablet" to prevent confusion.
2 Medicine Strength: The strength of the target product, expressed as
the number of milligrams or grams of active ingredient per dosage form
(see item 3 below). Take special care in expressing the strength and
dosage form of inhalers, injections and suspensions to prevent confusion
in determining the unit price.
3 Dosage Form: The dosage form of the medicine for which the unit price
is to be determined. The dosage form will most commonly be “cap” or
“tab” for products administered as capsules or tablets. However, the
dosage form may be:
■ Millilitre (“ml”) for orally administered liquids and some injections
■ Gram (“g”) or International Unit (“IU”) for other injections
■ “Dose” for medicines administered through inhalers or nebulizers.
4 Target Pack Size: Different pack sizes are used in many countries and
unit prices vary by pack size. Field data collectors should try to find a
pack size identical to or larger than the target pack size. The Target
Pack Size is not used in Workbook calculations and is included for
reference purposes only.
5 Core List (Yes/No): Selected from a dropdown list that identifies
whether or not the medicine is on the core list. Core list medicines are
marked “Yes”. If you decide not to include one of the core list medicines
in your survey (for example, because it is not available in your country),
you can delete it from the list by deleting its name.
62
DATA ENTRY
International reference prices
Reference prices are used to facilitate national and international comparisons.
Summary measures of the medicine prices found during the survey will be
expressed as ratios relative to a standard set of reference prices. The Management
Sciences for Health (MSH) reference prices have been selected as the most
useful standard. The MSH reference prices are the medians of recent procurement
prices offered by not-for-profit suppliers to developing countries for multi-source
generically equivalent products. These prices are available on the Web at http:/
/erc.msh.org.
The 2002 MSH reference prices, which were current when this manual was
produced, are already entered in the Workbook. Before entering any price data,
find out if they are still current by checking the HAI website. If there is an updated
version of the Workbook with more recent MSH reference prices, download it and
use it for entering your survey data.
Note that these prices reflect the global wholesale prices of medicines from notfor-profit suppliers. The reliability of these reference prices generally depends on
the number of suppliers quoting for each product.
If you have medicines on your supplementary list for which there are no MSH
reference prices, you must use a different set of reference prices for all medicines
on the core list and supplementary list. As an alternative, you might consider
using the Australian Pharmaceutical Benefits Scheme (PBS) prices. These are
the reimbursement prices that the Government of Australia has agreed to pay for
the medicines it makes available in government-supported insurance programmes.
These are generally among the lowest reimbursement prices paid in developed
countries. The full list of PBS prices can be found on the Web at:
http://wwwl.health.gov.au/pbs/index.htm.
The MSN and PBS reference prices were chosen as the recommended standards
because they are updated frequently, are always available and are relatively
stable. However, note that the two sources are quite different:
■ MSH prices are wholesale not-for-profit procurement prices
■ PBS prices are reimbursement (similar to retail) prices, including
dispensing fee.
Many other reference price lists are now available and you may choose to use
an alternative set of reference prices for your own purposes (see WHO Medicine
Prices website at http://www.who.int/medicines). However, you should always
add the name of the reference price in the Workbook and include the following
information in the final report:
■ The name of the reference price list you chose
■ Your reasons for choosing it
■ The date on which you obtained the price data from the list
■ The dates for which the price list was reported to be valid.
Whatever reference price list is chosen, it is important to use the same reference
price list for the entire list of medicines in your survey.
Before beginning data entry for your survey, you should enter or check the
following reference price information for each of the core medicines.
63
MEDICINE
PRICES:
A NEW APPROACH TO MEASUREMENT
6 MSH Unit Price: The median price of the target core medicine in the
most recent MSH Medicine Price Indicator Guide. Even if another set
of prices is being used for your national analyses, entering the most
recent MSH prices will allow other countries to compare their data to
yours.
7 Other Unit Price: If another set of reference prices is being used for
the analysis, enter the appropriate unit price for each of the core
medicines. Take special care to use the correct dosage form price for
injections, inhalers and liquids. Note that these prices need to be
entered in USS equivalents. For example, if you use the PBS prices,
you should convert them to $US equivalents or the comparisons in the
Workbook that use these prices will not be correct. Enter the source
of the unit prices you used in cell H7.
Once you have entered an exchange rate, unit prices and target pack sizes, the
Workbook automatically calculates:
■ Price of Target Pack (US$)
■ Price of Target Pack (local currency)
■ Reference Unit Price (local currency). Tbe values in the Reference Unit
Price (local currency) column are used in calculating the price ratios.
You can switch between the two different sets of reference medicine prices by
clicking the MSH/Other Pricesn button at the top of the page.
Many Workbook calculations depend on the set of reference prices chosen. Switching
reference prices will change the calculations. If you wish to obtain reports using
both sets of prices:
1 Select the MSH prices.
2 Print all reports.
3
4
Switch sets of reference prices.
Print all reports a second time. All pages that depend on reference price
indicate the source used.
Adding supplementary medicines
Up to 20 locally-defined supplementary medicines can be added to the pricing
survey. If you wish to add supplementary medicines, you will need to enter the
same identifying information as for those on the core list.
1 Enter the Medicine Name to be added in the next available empty row.
Remember that each medicine name must be unique. After you press
“Enter” or move away from the cell, the Workbook will automatically
sort the medicine name you entered into alphabetical order.
2 Enter the Medicine Strength, Dosage Form and Target Pack Size as
described on p. 62 for the core medicines.
3 In the Core List column, select “No” from the dropdown list to indicate
that this is a supplementary medicine.
64
DATA
ENTRY
4 Enter the median MSH Unit Price for the medicine. Be sure to obtain
the median supplier price per unit (e.g. per tablet or per millilitre) from
the MSH price list.
5 If you plan to use a different set of reference prices for your national
report, enter the Other Unit Price for the medicine.
Save the Workbook frequently as you work. Click on the Go foHome Page | button
when you have finished work on this page.
Removing medicines from the medicine list
To delete a medicine from either the core list or supplementary list in the
Workbook, simply delete the medicine name. You will be prompted to confirm
deletion of the medicine. If you confirm the deletion, all information about the
medicine contained in the row will be deleted, and the empty row will be removed.
HELD DATA CONSOLIDATION PAGES
There are four Field Data Consolidation pages in the Workbook, allowing price
information from up to four sectors to be entered.
1 Medicine Procurement Prices
2 Public Sector Patient Prices
3 Private Sector Retail Prices
4 Other Sector Patient Prices: for example, prices from facilities in the
NGO sector, the church mission sector or the defence sector.
These pages are used to enter unit price data collected in the field using the
Medicine Price Data Collection forms. The sectors to be included in the survey
should have been selected before data collection started in the field (see
Chapter 3).
The lists of medicines on the Field Data Consolidation pages are derived directly
from the International Medicine Price Reference Data page, which must be
completed before data entry begins.
The unit prices entered on the Medicine Procurement Prices page should be
prices from recent medicine orders, usually from public sector centralized medicine
procurements.
For the Field Data Consolidation pages for the other three sectors, the prices
entered will be the medicine-specific patient or customer charges that were
collected at different facilities and medicine outlets in the survey.
Field Data Consolidation page sections
The Field Data Consolidation pages contain four sections. These sections can be
displayed in different ways by use of the action buttons in the upper left comer
of the page (described below). The sections of the page are:
65
MEDICINE
PRICES:
A NEW APPROACH TO MEASUREMENT
1 Medicine list: This list (columns A-C) is generated automatically from
the medicines listed on the International Medicine Price Reference List
page. The list contains three rows for the three different types of prices
obtained in the field for each medicine:
■ Row 1: Innovator brand
■ Row 2: Most sold generic equivalent
■ Row 3: Lowest price generic equivalent.
2 Summary ratios by medicine: This section has five columns (columns
D-H). These compare different summary measures that describe the
distribution of unit prices entered for each medicine with the medicine’s
reference unit price.
The five summary ratios that describe the distribution of unit prices are:
■ Median: i.e. the median of the unit prices entered divided by the
reference unit price
■ 25th percentile
■ 75th percentile
■ Minimum
■ Maximum.
The Medicine Procurement Prices page also computes (in column I) the
total number of procurement prices (orders) entered for each medicine.
The other three Field Data Consolidation pages compute the percentage
availability of each medicine, based on the number of unit prices
entered divided by the total number of outlets or facilities in the survey.
At the top of the summary ratio section is a blue area in which you enter
(cell GIO) the minimum number of unit prices required for each medicine
in order for summary measures to be computed:
■ A single procurement price may be sufficient
■ A minimum of four unit prices should be obtained from different
public health facilities or medicine outlets for the other three sectors.
3 Data entry grid: An empty data grid in which you enter information
about:
■ The source of each column of unit price data (Rows 7-9)
■ The unit prices found for each medicine (Rows 12-161).
The Medicine Procurement Prices page allows you to enter up to 10
sets of procurement prices for each medicine. To identify each set, you
specify:
■ An arbitrary Procurement ID (Row 7)
■ The Procurement Agency (Row 8)
■ The Procurement Date (Row 9).
The other three Field Data Consolidation pages allow you to enter data
from up to 60 public health facilities, private pharmacies and other
medicine outlets. For each set of prices, you specify:
■ An arbitrary Medicine Outlet Study ID (Row 7)
■ A code for the Region where the outlet was located (Row 8)
66
DATA
ENTRY
■ A measure of Distance From Population Centre (Row 9), which
allows you to classify facilities as urban or rural.
4 Summary table: A table that summarizes the results in each sector
across all medicines in the survey for all the summary measures. The
measures in the summary tables are explained in detail in Chapter 8.
Figure 7.2 on p. 68 shows part of the empty data entry section for the Field Data
Consolidation: Private Sector Retail Prices page with the summary ratios section
displayed, while Figure 7.3 shows the empty summary table for that page.
Action buttons
Each Field Data Consolidation page has a set of action buttons at the top that
control the way the page is displayed. There are four buttons in the upper left
comer (see Figure 7.2):
■ Go To Home Page | button.
Data/Summary | This button causes the page to display either the data
grid or the summary table. When the summary table is displayed, all
the action buttons in Row 5 are hidden.
■ Ratios On/Off | This button reveals or hides the columns that contain
the summary ratios (Columns D-l). Turning off the summary ratios
simplifies the process of data entry by displaying a greater number of
data columns.
■ Double Entry | Once data from the field have been entered the first
time, clicking this button displays a menu that allows you to carry out
the three steps required for double data entry. These steps are described
on pp. 69-70.
■
In addition to the page display buttons, there are four action buttons at the top
of the data entry grid (Columns K-O) that allow you to sort the columns in the
grid from left to right according to the identitying information entered in Rows
7-10. Sorting will allow you to select certain subsets of the data for analysis (see
Chapter 8). You can sort the columns on the Medicine Procurement Prices page
by:
(Row 7)
■
iD
■ Agency | (Row 8)
■
Date
(Row 9)
■
Number | (Row 11, the default sort order).
You can sort the columns on the other three Field Data Consolidation pages by:
■
ID | (Row 7)
■
■
Region | (Row 8)
D'rstanc^ (Row 9)
■
Number | (Row 11, the default sort order).
To the right of the data sorting buttons (at the top of Column Q-S), there is one
additional action button. During data analysis (described in Chapter 8), you can
choose to limit analysis to selected medicine orders (on the Medicine Procurement
Prices page) or selected outlets (on the other Field Data Consolidation pages) by
changing the “l"s in Row 10 to “0”s for all outlets to be excluded from analysis.
The Include All | button restores all the orders or outlets to the analysis by
replacing all “0”s with “l”s.
67
PRICES:
MEDICINE
NEW
A
APPROACH
TO
MEASUREMENT
Figure 7.2 Part of the data grid from the Field Data Consolidation: Private Sector Retail Prices page
I A
n
___________ B|
C
D
F
E
H
G
J
Field Data Consolidation:
Private Sector Retail Prices
2_|
4 I G° To Home Page)
Ratios On/Off
SJ
Data/Summary |
j
Double Entry
I
Data for Individual
7 i Medicines Outlet Study ID
8 Region__________________
~9 Distance From Population Centre
Summary Comparisons to Reference Prices
and Percent Availability in Outlets
10 Include outlet in analysis (1=yes,Ono)?
15
16
17
18
19
20
21
22
23
1 Aciclovir_____________
Aciclovir_____________
1 Aciclovir_____________
2 Amitriptyline_________
2 Amitriptyline_________
2 Amitriptyline_________
3 Amoxicillin__________
3 Amoxicillin__________
3 Amoxicillin___________
4 Artesunate___________
4 Artesunate__________
4 Artesunate
4
(Blank if found in <
Medicine
Type
11 No. _____ Medicine Name
12
13
14
ID
Sort by:
6 J
Median
(MPR)
25%ile
75%ile
outlets)
Min
% with
med.
Max
1
1
1
2
Brand______
Most sold
Lowest price
Brand_____
Most sold
Lowest price
Brand_____
Most sold
Lowest price
Brand_____
Most sold
Lowest price
Figure 7.3 Summary table from the Field Data Consolidation: Private Sector Retail Prices page
A| _______ B_____ __J___ C_
_1_
2
ZZZ’
4 I Go To Home Page}
165!
iseT
D
F
E
G
H
L
K
J
M
Field Data Consolidation:
Private Sector Retail Prices
[
Data/Summary |
Describe outlets included in this summary: |
1671
168
169
Private Sector Medicines Outlets (n=0 in survey)
170
Includes Core Medicines Only (n=30 on list)
Core Meds./AII Meds. |
Analysis Includes Only Medicines
171
With Prices Found for Both Types in Pair
Analysis Includes All Meds.
.1Z.2
Brand
173
Most
Sold
: Lowest
: Price
Brand j
Most
Sold
; Lowest
Brand ; Price
Most
Sold
Lowest
Price
Overall Percent Availability of Medicines on List in Outlets Included in Analysis
1
178
179
Median availability
25 %ile availability
75 %ile availability
Number of Listed Medicines For Which Prices Were Found in 4+ Outlets
No. of meds, included [
180
1
I
J85
0
0
0
]
0
0
I
0
0
0
0
Summary of Medicine-specific Median Price Ratios (MPRs) For Meds. Found in 4+ Outlets
Median MPR
25 %ile MPR
75 %ile MPR
Minimum MPR
Maximum MPR
Reference Price Data Used = MSH
68
]
DATA
ENTRY
How to enter data
All the Field Data Consolidation pages use the same procedures for entering
data. The following steps describe how to enter data on the Private Sector Retail
Prices page.
1 Use the action buttons on the Home Page to switch to the Private
Sector Retail Prices page.
2 If the summary table is displayed, click on the Data/Summary| button
to switch to the data entry grid.
3 If Columns D-l are visible, click on the Ratios On/Off | button to hide
them.
4 Enter the identifying information for the first medicine outlet:
■ Enter the Medicine Outlet Study ID in Cell J7
■ Enter the Region code in Cell J8
■ Enter the Distance from Population Centre in Cell J9. Distance
should be entered as the approximate number of kilometres from
the medicine outlet to the largest population centre in the region.
5 Starting at Cell J12 and proceeding down the column, enter the unit
prices for each of the medicines in the list You have calculated unit
medicine prices in Column H of the Medicine Price Data Collection
form. The unit medicine prices should always be entered in local currency.
6 Repeat steps 4-5 for each private sector retail outlet included in the
survey, using Columns K-BQ. You can enter data for up to 60 outlets.
To protect against data loss, save the Workbook periodically throughout the data
entry process and again when data from all medicine outlets have been entered.
After medicine unit prices from at least four medicine outlets have been entered
for a given medicine, summary statistics for the medicine will be calculated in
Columns D-l. You can view these summary statistics at anytime by pressing the
Ratios On/Off | button.
Double entry procedures
Entering detailed data such as long columns of the unit prices of medicines can
lead to substantial numbers of errors. The quickest and most efficient way to find
these data entry errors is to have a second person enter all data a second time
and then identify where the numbers entered disagree. The Workbook contains
a set of procedures to lead you through this process. Pressing the Double Entiy |
button will display the menu of double entry procedures, as shown in Figure 7.4.
The functions of the four action buttons on the menu are described below.
■ Step 1: Hide Current Data | Pressing this button will copy all the data in the
data entry grid to a hidden part of the Workbook; the data in the data grid
will then be erased. The identifying information for the facilities or outlets
will remain in Rows 7-9 to ensure that the same columns are used for the
second round of data entry.
69
MEDICINE
PRICES:
A
NEW
APPROACH
TO
MEASUREMENT
Figure 7.4 Menu of double entry procedures
Double Entry Procei
r
Hide current data
Compare current and hidden data
6
Correct errors
Cancel
T
■ Step 2: Compare current and hidden data] After you complete the
second round of data entry, pressing this button will generate an
automatic comparison of the data entered in the second round with the
data entered in the first (hidden) round. Any cells that do not agree will
be highlighted in red. If there are no errors, all the cells in the data entry
grid will remain clear with no red cells.
■ Step 3: Correct errors | Once any errors have been identified and
highlighted in red, you can return to the original data collection forms
to determine the correct values. Pressing this button will make the
Workbook:
- Proceed one by one through the highlighted errors
- Display a window that shows both the first and second values
entered
- Allow you to enter and save the final value to be used.
Ideally the survey manager should make all final determinations about
ambiguous data values.
■
Cancel | Pressing this button will exit the double entry menu without
making any changes.
STANDARD TREATMENT AFFORDABILITY PAGE
The Standard Treatment Affordability page defines standard treatments and
expresses the costs of the treatments in terms of:
■ Median treatment prices (using the median unit prices of the brand,
most sold generic or lowest price generic equivalent products from
each sector)
■ The number of days’ wages of the lowest paid government worker
(useful for inter-country comparisons).
Ten standard treatments, for nine conditions, have been entered on this page
(see Figure 4.8, p. 43 for the list of medicines and conditions).
If your survey did not include one of these medicines. Columns H to 0 will be
blank. You can replace it with another medicine from the core or supplementary
70
DATA ENTRY
list (see below). In addition to the ten standard treatments, space is provided to
enter two further standard treatments using survey medicines.
The standard treatment chosen would usually be one locally defined for a target
condition by the Ministry of Health, a professional association or an expert panel.
If there are no locally-defined standard treatments for a condition you wish to
include in the affordability analyses, you can use a standard treatment defined
by an international organization such as WHO or BNF.
Standard treatments would be entered as follows:
■ Acute conditions: full courses of therapy
■ Chronic conditions, where therapy continues indefinitely: monthly courses
of therapy.
Click on the Treatment Affordability | button on the Home Page to move to the
Standard Treatment Affordability page. There is space to analyse the affordability
of up to 12 standard medicine treatments. To define standard treatments:
1 First, in Cell J6 enter the daily wage of the lowest paid government
worker in local currency. (See p. 29 for a description of how to obtain
this figure.)
To define new standard treatments:
2 Enter the name of the standard treatment to be defined in Cell B68
(overwriting the default text “Enter Condition”). Type the name of a
selected condition and press “Enter”.
3 Enter in Cell B70 the Medicine Name of the medicine used in the
standard treatment. The medicine must be one included in the survey.
The easiest way to enter the medicine name is to move the cursor into
the cell and click on the selection arrow that appears to the right of the
cell. You will then see an alphabetical list of all medicine names in the
survey. Use your mouse or the arrow keys to select the medicine that
you want on the list, and click on it. Alternatively you can type in the
medicine name, but the spelling must be exactly the same as the name
of a medicine on the medicine list. After a medicine name is entered,
the Medicine Strength and Dosage Form will appear automatically in
Columns C-D.
4 In Column E, enter the Treatment Duration, which is number of days
for a typical course of therapy. For a chronic disease for which a
medication is taken daily, this would be 30 (to define a monthly
treatment), while for acute illnesses it would be the total duration of
therapy.
5 In Column F, enter the Total # of Units per Treatment, which is the
number of units of the medicine that would be given for the treatment
duration that you specified. For example, for omeprazole 20 mg, the
treatment duration might be 30 days and the number of units per
treatment might be 30 (capsules).
6 After the Medicine Name and the Total # of Units per Treatment have
been entered, the Workbook automatically calculates the Median
Treatment Price in local currency for each sector for all three medicine
types based upon the median unit prices of the data that you collected.
71
MEDICINE
PRICES:
A
NEW
APPROACH
TO
MEASUREMENT
It also expresses the treatment price in terms of Days’ Wages for the
wage rate specified in step 1.
7 Repeat steps 2-5 for additional treatments you wish to define. Further
space is provided, starting in Cell B74. Alternatively, you can replace
one (or more) of the preselected treatments that were not surveyed
(Columns H-0 will be blank). In this case, you will be overwriting the
name of the condition, Medicine Name, Treatment Duration and Total
# of Units per Treatment.
If a particular treatment requires more than one medicine, you can
enter the same treatment name in more than one block of data and
enter the information in separate blocks for the different medicines
required. In reporting the Median Treatment Price and Days’ Wages for
this condition, you would need to add together the information from all
medicines to get totals for the treatment.
Be careful when entering the units required for liquids, injections, or inhalers.
Note that for inhalers the unit is a single dose of inhalant, not the number of
inhalers. This would mean that you need to calculate and enter the total number
of doses required in a month in the Total # of Units per Treatment. Expressing
the dose of combination products can also be confusing. For co-trimoxazole, the
medicine unit is written as 8+40 mg/ml. The treatment regimen might be
2 doses of 5 ml per day for 7 days, which would amount to 70 ml (2 doses x
5 ml x 7 days) for the total treatment course.
PRICE COMPOSITION: CUMULATIVE MARK-UPS PAGE
The Price Composition: Cumulative Mark-ups page allows you to enter
manufacturers’ ex-factory package prices for packs of a given size. It then generates
information about how that price compares to an international reference price as
well as the overall mark-up over the manufacturer price in different sectors. Click
on the Price Composition: Mark-ups ] button on the Home Page to move to the
Price Composition: Cumulative Mark-ups page.
1 In Cell B7, enter the Medicine Name of the target medicine from the
survey. As on the Standard Treatment Affordability page, the easiest
way to enter the medicine name is to move the cursor into the cell, click
on the selection arrow to the right and select the medicine that you
want from the list displayed. The medicine name can also be typed in,
but the spelling must be exactly the same as the name on the medicine
list. After a medicine name is entered, the Medicine Strength and
Dosage Form will appear automatically in Columns C-D.
2 For each sector included in the survey, enter in Columns G, H and I the
Manufacturer Pack Price and the Manufacturer Pack Size (expressed
as the number of dosage forms) found in that sector for the brand,
most sold and lowest price items. The Workbook then calculates the
Manufacturer Unit Price (MUP) and the Ratio of Manufacturer Unit
Price to reference unit price.
In addition, the Sector Median Unit Price (SMUP) found for the sector
is inserted from the Field Data Consolidation pages and % Mark-up of
Sector Median Unit Price over Manufacturer Unit Price is calculated.
Note that this mark-up figure may include many components such as
72
DATA
ENTRY
taxes, duties and fees, as well as wholesale and retail mark-ups. These
different components are dealt with in the following Price Composition:
Components of Price page.
The sector-specific mark-ups can be calculated for up to ten different medicines
from the survey by repeating steps 1-2 for each medicine.
PRICE COMPOSITION: COMPONENTS OF PRICE PAGE
On the Price Composition: Components of Price page, the final page in the
Workbook, you can enter information about the different types of duties, charges,
or mark-ups that are applied to up to twelve medicines as they proceed from the
manufacturer to patient purchase in different sectors. If all medicines face the
same structure of duties, charges and mark-ups, you would need to enter only
one medicine. However, if different types of medicines face different duties (e.g.
originator medicines versus generic medicines, or imported medicines versus
locally manufactured medicines) in different sectors, you may wish to enter
several examples.
To get to the page, click on the Price Composition: Components] button on the
Home Page.
1 In Cell D6, enter a description of the type of medicine whose components
of price you will detail, and the sector (or sectors) to which these
components of price apply.
2 In Cell B9, enter the first Medicine Name using the dropdown list or
typing in an exactly spelled name as you have done for the two previous
sheets. The Workbook automatically inserts the Medicine Strength,
Dosage Form and Target Pack Size in the next three columns.
3 For charges and mark-ups that are percentages, any quantity can be
used as the base for calculations. However, some charges, such as
dispensing fees, may be charged as fixed fees when a medicine is
dispensed. For this reason, the components of price will be entered
and calculated in relation to a dispensed quantity of medicines rather
than a target pack size, which may contain more than the dispensed
amount.
■ In Column F, enter the typical Dispensed Quantity of the target
medicine to be used as the base for calculations.
■ In Column J, enter the GIF (ex-factory) Price of Dispensed Quantity
of this medicine when it is sold in the target pack size. This price
can be calculated as the dispensed quantity divided by the size of
the target pack times the price of the target pack.
4 In Column G, enter descriptions of all the different Types of Charge that
are added to the CIF price of the medicine as it moves through the
delivery system. These charges might include:
■ Port clearance charges
■ Stamp duties or other duties
■ Wholesale and/or retail mark-ups (as allowable or actual percentages)
■ Packing fees
73
MEDICINE
PRICES:
A NEW APPROACH TO MEASUREMENT
■ Various other levies: for example in Sri Lanka, a defence levy was
charged on all items at the time of the study
■ Taxes (sales or VAT)
■ Dispensing fees.
There may be different charges for the public or private sectors, so you
would use a second example to enter them. Be sure to enter the types
of charge in the order in which they are levied, since percentage charges
will be compounded on totals from previous charges
5 For each of the types of charge entered in Column G, indicate in Column
H the Charge Basis: either percent or fixed fee. Use the dro|>down
function to enter the type of charge that applies.
6 In Column I, enter the Amount of Charge.
If the charge is a percentage, enter the amount as a percentage (e.g.
“2.5%” or “0.5%”), not a decimal. Be sure to include the percent sign.
If the charge is a fixed amount, enter this in local currency using
numbers and decimals. Using the charge data entered, the Workbook
then calculates the Price of Dispensed Quantity and the Cumulative
% Mark-up.
A hypothetical example illustrating the entry of data for the components of price
analysis for a medicine is shown in Figure 7.5.
Figure 7.5 Hypothetical example of price components analysis
A
1
2
1
5
6
8
9
"io
11
12
B
|
C
Price Composition:
Components of Price
D
E
F
G
1
H
J
K
Go To Home Pagej
J
| Describe sector and type of medicine: [Most sold generic version of amoxicillin in private sector purchases
Example 1: Medicine
________ Name_______
Amoxicillin
Medicine
Strength
250 mg
Dosage
Form
tab
Target
Amount
Charge
of
Pack Dispensed
Basis
Size
Quantity _______ Type of Charge_______
Charge
Cost, insurance, freight (GIF) price
NA
NA
100
21
Port clearance________________ percent
3.0%
Import tax____________________ percent
8.0%
Stamp duty___________________ percent
I. 1%
Wholesale mark-up____________ percent
15.0%
VAT________________________ percent
II. 0%
Dispensing fee
fixed fee
5.0
Price of
Dispensed Cumulative
Quantity
% Mark-up
44.94
0.00%
46.29
3.00%
49.99
11.24%
50.54
12.46%
58.12
29.33%
64.52
43.56%
69.52
54.69%
...I?...
19
20
Note that if you have entered reasonable amounts for the various charges and
mark-ups, the final unit price of the dispensed quantity of the example medicine
should be approximately equal to the median unit price you observed for this
medicine in this sector when collecting data in the field.
74
8
Data analysis and
interpretation
■ Four main types of data analysis are possible:
- Price and availability comparisons within any one sector
- Price and availability comparisons between different sectors
- Treatment affordability
- Price composition
■ The Workbook automatically generates summary tables which compare
the median prices from your survey with international reference prices
■ The summary tables provide the evidence base for your report
■ This chapter shows how to examine, summarize and print your survey
data
■ It also makes suggestions on how to interpret and report your findings
■ You should have the Workbook open as you read this chapter.
Once the price data collected during the survey have been entered into the
Workbook, they can be used for different types of analyses. You can use the
summaries calculated automatically by the Workbook to analyse:
■ Medicine price levels and variations in different sectors, geographical
areas, medicine types and individual medicines
■ Treatment affordability in relation to the daily wage of the lowest paid
government worker
■ Components of the prices of medicines paid by purchasers and
consumers.
To carry out these analyses you will need to:
■ Examine and compare summary results on medicine availability, median
price and price variation:
- By sector
- Across sectors
- For different medicines
■ Examine overall treatment cost and affordability of standard treatments
for important clinical conditions in the sectors for which price data were
collected
75
MEDICINE PRICES: A
NEW APPROACH TO MEASUREMENT
■ Compare the final purchase prices for example medicines in different
sectors with import or manufacturers’ prices when these medicines
entered the market, and detail subsequent charges and mark-ops that
contribute to the final price in different sectors.
OVERVIEW OF DATA ANALYSIS
The Workbook simplifies the process of analysing data from the medicine pricing
survey. Once price data have been entered, automated summary tables compare
median prices:
■ With standard reference prices across different product types: innovator
brand, most sold generic and lowest price generic equivalents
■ In different sectors (procurement prices, public sector patient charges,
private retail prices, and patient charges in NGO/other facilities).
The median prices are also used to examine key aspects of treatment affordability
and medicine price composition.
Types of data analysis
The data in the pricing survey can be used for many different types of analyses
at both the national and international levels. This chapter focuses on national
level analysis. There are four basic types of analyses at the national level:
1 Wrttiin-sector analyses: Analyses of data from a single sector include
examining:
■ Median medicine price levels in relation to international standard
prices
■ Variations in price across medicine procurements or medicine outlets
■ Comparisons between innovator brand and generically equivalent
products
■ Product availability in medicine outlets.
2 Cross-sector comparisons: Overall medicine availability and prices can
be compared between the different sectors for which price data were
collected in the survey, both for individual medicines and median price
ratios across medicines.
3 Treatment affordability: Using standardized treatment regimens for
key health problems, affordability can be expressed in terms of treatment
cost for an episode of illness, as well as the number of days’ wages
of the lowest paid government worker required to pay for the cost of
treatment.
4 Price composition: Price composition analyses include:
■ Comparing final patient prices to ex-factory prices for a set of
medicines in different sectors
■ Examining the different charges and mark-ups that contribute to
final price.
Other types of analysis, such as comparisons by region or distance, are possible
from the data in your Workbook.
76
DATA
ANALYSIS
AND
INTERPRETATION
Before starting analysis, you should define the analyses and summary tables that
you will include in the survey report, assign appropriate personnel to each task
and prepare a time schedule for outputs. This will help to prevent delays in writing
up and releasing results. In countries with inflation, fluctuating currency exchange
rates or unstable prices, data need to be analysed and presented quickly to
ensure their relevance.
Understanding reference prices
The use of standard international reference prices facilitates comparisons of
price levels between sectors and across countries by providing a measurement
against which prices can be compared. By default, the reference prices used in
the Workbook are international not-for-profit supplier/tender prices listed in the
International Medicine Price Indicator Guide published by Management Sciences
for Health (MSH). However, you can choose to use another set of reference prices
for your analyses or switch between the two sets.
It is important to emphasize that MSH reference prices are international
not-for-profit supplier/tenderprices, not retail prices. While centralized procurement
prices or patient charges in public sector facilities may be fairly close to the MSH
prices, private retail prices and patient charges in other sectors (e.g. NGO or
private hospitals) are likely to be considerably higher. This is due to the charges
and profits added on to the procurement price of a medicine as it proceeds
through the distribution system. The extent to which these retail prices are higher
depends on the country and situation. If a medicine is rarely used, the price
differential is likely to be greater. Under some circumstances, medicines sold in
private sector outlets may cost as much as 100 times the MSH price or more.
For medicines with very large price differentials, your price component analyses
may reveal why the prices are so high.
Printing Summary Tables
Before starting analysis, you should print out the raw data you have entered for
each sector (medicine unit prices in local currency) in the Field Data Consolidation
pages. This will allow you to make a visual check that your data are broadly
correct and contain no obvious mistakes.
All pages in the Workbook are set up so that the relevant sections will print in
a convenient format when you use the Excel print functions. To see how a printed
page will appear, first go to the page using the buttons on the Home Page. For
a Field Data Consolidation page, be sure that the summary table and not the data
grid is displayed.
To preview how the page will look, you can:
■ Press the Print Preview icon (
) if it appears in the tool bar on the
top of your Excel screen or
■ Select File-Print from the Excel main menu, and press the
Preview
button when the print pop-up window appears.
Depending on your paper size and printer setup, you may need to adjust page
margins so that all columns in a summary table appear together on the same
page. Once you are satisfied with the layout, you can print the table by:
■ Using the Excel print icon (^g|) or
■ Pressing
OK | from the Print pop-up window.
77
MEDICINE
A NEW APPROACH TO MEASUREMENT
PRICES:
Selecting subgroups for analysis
National analyses using the complete sample of field data are the primary focus
of the pricing survey. However, you may also wish to assess or compare prices
in different subgroups within a sector. For example, you may wish to compare
prices in outlets from different regions, or outlets in urban versus rural areas, or
procurements by the central Ministry of Health versus regional procurement
agencies. To allow subgroup analyses, the Field Data Consolidation pages permit
you to exclude selected columns of data from analyses.
By default, analyses in the Workbook include all the columns of data you enter.
To make it easier to exclude certain columns, the Field Data Consolidation pages
allow you to sort procurements or outlets (left to right) by variables you entered
as identifying information (see Chapter 7). For the Medicine Procurement Prices
page, these identifying variables are:
■ ID number
■ Procurement agency
■ Procurement date.
For the other Field Data Consolidation pages, the variables are:
■ ID number
■ Region
■ Distance from the nearest population centre.
Pressing the
Number | button returns to the original sort order.
Selecting subgroups
To select subgroups, first sort the data (left to right) by any identifying variable
to make it easier to find the columns to exclude. Changing the “l”s in Row 10
to "0"s will exclude the columns from calculations. For example, Figure 8.1
shows prices from public sector outlets that have been sorted by region; in this
example, all outlets except those in the North region have been excluded. If you
were interested in the effect of distance, you could sort by distance and exclude
all columns above or below a target distance. To include columns again, either
change the “0”s back to “l”s, or press the Include All] button.
Figure 8.1 Selecting subgroups of outlets for analysis
__ A {__________ B_________ j____ C_
1
2
4
5
J
K
Sort by:
ID
L
M
N
0
P
Q
R
Field Data Consolidation:
Public Sector Patient Prices
Go To Home Pagej
Data/Summary |
Ratios On/Off
Double Entiy
|
|
I
£
L
Region | Distance | Number j
Include All 0
Data for Individual Medicines Outlets (Enter Medicine Unit Prices in Local Currency)
0__
B____ D____ C______ N______ A______
Medicines Outlet Study ID______________ C
F___
K__
East
East
East
North
North
North
North
South
8 Region_______________________________ East
9" Distance From Population Centre________
2 ______ 15 ______ 12 _____ 2\_
1
1
1
__ 9
6
1
1
1
1
1
1
10 Include outlet in analysis (1=yes,0=no)?
1
1
1
Medicine
Type
15
2
4
7
14___
3
6
11
1
11 No. ____ Medicine Name
15.0574
14.1615
14.1467
14 164 14.1838
12 1 Aciclovir____________
Brand_____
4.6037
4.1723
4.1626
4.1742
1 Aciclovir____________
Most sold
2.987
3.8134
14
1 Aciclovir
Lowest price
15 _ 2 Amitriptyline
Brand_____
19.62
18.15
19.88
16 2 Amitriptyline
Most sold
19.62
18.15
17
2 Amitriptyline
19.88
Lowest price
78
DATA
ANALYSIS
AND
INTERPRETATION
Comparing subgroups
To compare subgroups, first select the columns corresponding to one subgroup
and print out the summary table. Then change the selection and print out the
summary table for a different subgroup. On all summary tables, you are provided
with a space to describe the sample of data included in the analysis. Be sure
to complete this description before printing. You can then compare different
subgroups as you write your report.
Final word on data quality
The rest of this chapter explains how to use the Workbook to perform several
different analyses of medicine prices and how to interpret and report the results.
Errors in data collection, processing or entry may cause substantial errors in
summary results.
If the prices for one or several medicines appear to be quite different, you should
first check to be sure that the difference is not due to error. One common error
is incorrect calculation of the unit price. For example, the price of an entire
200 dose inhaler may have been entered in some data collection forms instead
of the unit price of a dose of inhalant. Ideally, most errors will be caught during
data processing, but surprising findings should be checked once again for errors
during data analysis and reporting.
DATA ON THE NATIONAL PHARMACEUTICAL SECTOR
In order to present some of the context within which your survey was conducted,
the survey includes the National Pharmaceutical Sector form (Annex 2 and on the
CD-ROM) to record basic descriptive information on your country’s health care
system and pharmaceutical sector. These data are not used in any of the actual
price analyses, but they can be helpful for explaining or interpreting findings. The
completed electronic form should be included as an annex to your report.
There are no specific procedures for analysing the data on the health care system
and the pharmaceutical sector. In an introductory section, it may be useful to
provide a brief overview of these data organized according to the different sections
on the data collection form. You may want to add additional information to your
summary on topics not included on the form to help readers understand the
survey setting and results.
WITHIN-SECTOR PRICE ANALYSES
Each survey can accommodate price data from up to four sectors, although not
all sectors need to be defined for a given survey. The Workbook automatically
produces analyses both within and between whichever sectors have been defined.
The possible sectors include:
1 Medicine Procurement Prices: Procurements would usually be
conducted by centralized public sector agencies, but data can also be
included from other public and private procurement systems.
79
MEDICINE
PRICES:
A
NEW
APPROACH
TO
MEASUREMENT
2 Public Sector Patient Prices: In some countries, patients pay for
medicines in public sector health facilities, often at subsidized prices,
and these charges can be examined in this sector. Even if patients do
not pay for medicines, this sector can also be used to examine medicine
availability at public facilities.
3 Private Sector Retail Prices: These prices usually come from a sample
of private retail pharmacies and other types of medicine outlet, although
private retail pharmacies at health facilities might also be included in
some settings.
4 Other Sector Patient Prices: This sector can be defined in various
ways to examine patient charge data from different care systems,
including mission or NGO hospitals, military hospitals and community
revolving medicine funds.
Although entry of the medicine price data from all four sectors is quite similar (see
Chapter 7), the analysis of medicine procurement price data differs somewhat
between the analysis of patient charge data and the other three sectors. The
following sections describe both types of analysis.
Analysing medicine procurement price data
The Feld Data Consolidation: Medicine Procurement Prices page is used to enter
medicine procurement price data: i.e. the amounts paid by large purchasing
agencies to obtain medicines from suppliers. Usually the purchasing agency will
be the central Ministry of Health purchasing unit although, in some countries,
there are regional public purchasing units or pooled purchasing systems that
supply medicines to NGO hospitals.
You may choose to enter and summarize prices from a single medicine order
only. However, the Workbook allows entry of up to ten different sets of procurement
data from different points in time or from different purchasing agencies. In your
report, remember to identity clearly the purchasing agency or agencies and the
period of time over which the procurements took place.
These procurement data may be the only public sector price data available in
systems where medicines in the public sector are distributed to patients at no
charge or for a fixed fee per medicine or per visit. If the fee that patients pay
varies by medicine or type of medicine, those variable fees should be entered in
the Field Data Consolidation: Public Sector Patient Prices page and analysed
separately.
Examining summary statistics on procurement prices for individual
medicines
After all the procurement prices collected during the survey have been entered
into the Workbook, you can begin analysis by examining the summary ratios for
individual medicines. These summary ratios appear on the Feld Data Consolidation
Ratios On/Off | to reveal
pages in Columns D-l. If they are not visible, press
them.
Figure 8.2 shows an example of the summary ratios for a few medicines after
all procurement data have been entered. Column D contains the median price
ratio (MPR) for individual products, which is the median procurement price observed
for each medicine divided by its international reference price (IRP). The median
price ratio for procurement data is a measure of purchasing efficiency.
80
DATA
ANALYSIS
AND
INTERPRETATION
In general, procurement prices for the most sold and lowest price generically
equivalent products should be fairly close to the MSH international supplier/
tender prices (that is, ratios up to 1.00). If the medians of the median price ratios
(median MPRs) are 20% above or below the MSH prices (i.e. ratios up to 1.20),
the procurement system is working very efficiently. The median price ratios for
innovator brand products may be much higher, since the MSH international
reference prices are prices for products procured in generically equivalent form.
The difference between the median price ratio for an innovator brand product and
the median price ratio for its lowest price generic equivalent is a measure of the
“brand premium” paid for purchasing innovator brand products.
Begin analysis by examining the median price ratios:
■ Across medicines
■ Across products within a medicine.
In the example table in Figure 8.2, the median price ratios (MPR) for ciprofloxacin
are between 26.20 and 39.29, which is a sign that this procurement system is not
obtaining very competitive prices. For co-trimoxazole suspension, the median price
ratio for the innovator brand version is many times higher than the most sold or
lowest price generically equivalent versions (that is, there is a very high brand
premium); for the other medicines, the innovator brand prices are somewhat closer.
When there are multiple procurement prices for each medicine (the number of
orders for each medicine is shown in Column I), you should also examine the
range between the 25th and 75th percentiles and between the Minimum and
Maximum to see if there are wide variations in procurement prices across orders.
In the example, the ratios across orders are reasonably stable. However, for
some products (e.g. innovator brand ciprofloxacin or generic co-trimoxazole
suspension), the price on at least one order was very much lower than the typical
price. You should examine such outliers carefully to see if they are errors. If not,
finding out how a low price was obtained in one order may point to ways to make
the procurement process more efficient.
Figure 8.2 Example of medicine-specific summary procurement statistics
A|
1
21
4
BB
1
C
Field Data Consolidation:
Medicine Procurement Prices
D
Go To Home Page)
Data/Summary |
Ratios Qn/Qff
Double Entry
|
E
F
G
H
I
j
5
6
Summary Comparisons to Reference Prices
7 Procurement ID_________________________
and Number of Orders per Medicine
8 Procurement Agency____________________
9 Date (Mon-YY as in Jan-02)_______________
orders)
_______ (Blank if med, has <
10 Include order in analysis 1=yes,0=no)?
1
Medicine Name
11 No.
36 _ 9 Ceftriaxone
37 _ 9 Ceftriaxone
38 _ 9 Ceftriaxone
39 10 Ciprofloxacin
40 10 Ciprofloxacin
41 10 Ciprofloxacin
42 11 Co-trimoxazole suspension
43 11 Co-trimoxazole suspension
44 11 Co-trimoxazole suspension
Medicine
Type
Brand______
Most sold
Lowest price
Brand______
Most sold
Lowest price
Brand______
Most sold
Lowest price
Median
(MPR)
4.86
2.92
2.71
39.29
33.64
26.20
20.71
3.81
3.18
25%ile
75%ile
4,86
2.85
2.62
4,86
39.20
33.64
26.20
20.41
3.50
2.70
39.37
33.64
26.20
20.77
81
2.99
2.80
3.84
3.72
Min
3.24
2.78
2.54
26.29
33.64
26.20
13.59
2.34
1.99
# orders
Max
4.87
8
3.06 _____2
J
K
Sort by:
ID
Data for Procureme
A_______ B_______
MQH
MQH
Jan-02
Feb-02
1
1
2
108.6796
93.16397
85.14276
2.88 _______ 2
39.58
__ 10 22.10729 14.8358
_____ 1_
33.64
26.20 _______ 1_
22.45 _______ 9
1
44.44268
4.63 ______ 10 11.40894 7.655847
10 8.028572 6.49056
3.84
MEDICINE PRICES: A
MEASUREMENT
NEW APPROACH TO
In your report, you may want to highlight examples where there are large differences
observed between the median price ratios for different types of products or where
the range of procurement prices varies widely across orders.
Producing a summary table of procurement price data
While data on the prices of individual medicines can be revealing, the main
purpose of the survey is to analyse the “typical” prices paid for an entire set of
medicines, both within and across sectors. Each Field Data Consolidation page
in the Workbook automatically creates a summary table that contains statistics
calculated across medicines from the median price ratios in Column D. The five
summary measures calculated are:
■ Median (mid-point) median price ratio of the medicines on the list
■ 25th percentile median price ratio
■ 75th percentile median price ratio
■ Minimum median price ratio
■ Maximum median price ratio.
To produce and print the summary table on the Medicine Procurement Prices
page, carry out the following steps.
1 If the data entry grid is displayed on the page, click on the Data/Summary |
button to make the summary table visible (as shown in Figure 8.3).
2 In Cell F166, enter a description of the procurements that are included
in this analysis, including the procurement agency and range of dates.
3 Decide whether you would like to display summaries only for the core
survey medicines (i.e. the set of 30 medicines recommended for
Figure 8.3 Example of summary table containing procurement price data
Z.A1..............bB..............
1
2
D
C
F
E
J.... I.... K
H
G
M
Field Data Consolidation:
Medicine Procurement Prices
Data/Summary [
4 Go To Home Page|
165
Describe procurements in this summary: [National public medicine procurements for 2001
166
167
168
Core MedsJAII Meds. |
169
Medicines Procurements (n=10 in survey)
170
171
Includes Both Core and Non-Core Medicines (n=30 on list)
Analysis Includes Only Meds. With 1+
Procurement Prices for Both Types in Pair
Analysis Includes All Meds.
With 1+ Procurement Prices
172
173
;
Brand
174
Most
[ Sold
Lowest
Price
Brand i
: Lowest
Most
Sold
Most
Sold
Brand | Price
■ Lowest
I Price
Number of Medicines For Which 1+ Procurement Prices Were Found
175
176
177
No. of meds, included [
21
23
|
19
17
17
;
17
|
18
18
[
18
|
18
18
Summary of Medicine-specific Median Price Ratios (MPRs) For Meds. With 1+ Procurement Prices
17§
f
II
Median MPR
25 %ile MPR
75 %ile MPR
Minimum MPR
Maximum MPR
8.96
3.69
25.48
0.33
84.68
I 74?
2.95
I 17.10 i 12.25
j 1.76 | 1.61
j 38,32 ; 34.51
j
5.63
12.23
5.46
31.97
1.84
84,68
I 3-17 [
5.63
2.92
11.90
1.76
38.32
Reference Price Data Used = MSH
82
14,30
5.86
31.54
1.84
84,68
4.03
2.83
11.26
1.61
34.51
6.80
3.08
17,57
1.76
38.32
5.84
2.83
12.68
1.61
34.51
|
DATA
ANALYSIS
AND
INTERPRETATION
international comparisons) or for all the medicines that you have studied
in the survey, both core and supplementary. Click Core Meds./AII Meds. |
to shift between the two sets of medicines.
4 Examine the summary table to be sure the data look sensible. Investigate
any values that look unusual to check they are not based on errors. After
previewing the printed version of the summary table (as described above),
print the table and use it as the basis for your report.
Interpreting the procurement price data summary table
First, note the table headings. The first heading contains data on the number of
different sets of procurement prices included in the survey. If only one set of
procurement prices has been entered, this heading would read “Medicine
Procurements (n=l in survey)”.
The next heading describes the medicines that are included in the table, either
core medicines only or all medicines (both core and supplementary). The heading
calculates the number of medicines listed on the International Medicine Reference
Price page that fall in whichever of these two categories has been selected. Note
that the set of reference prices used for comparisons (MSH or an alternative set
of prices) is indicated at the bottom of the table.
The third row of headings describes the two different types of summary data
contained in the table. On the left of the table are three columns of data
summarizing the median price ratios for medicines which had the minimum
number of procurement prices (usually 1). These three columns are for the three
product types (innovator brand, most sold and lowest price generic equivalents).
The first row of data in this section shows how many medicines of each product
type had the minimum number of procurement prices reported. In the example
table, for the 30 medicines in the survey, 23 innovator brand products had at
least 1 procurement price, while only 21 most sold and 19 lowest price generic
equivalents had at least one price.
The bottom section on the left calculates the five different summary measures
from the median price ratios for included medicines. In the example table, the
median of the median price ratio across the 23 innovator brand products for
which prices were found was 8.96, while the 25th and 75th percentiles of the
median price ratios for these medicines were 3.69 and 25.48 respectively.
Obviously, if prices were found for nearly all of the medicines within each product
type, the summary statistics on the left side of the table will be fairly representative
and comparisons across the three product types will be valid. However, if prices
for all medicines were not found, and especially if different medicines were found
for each product type, it is more valid to use the data in the six columns on the
right side of the table. On the right side, only medicines that “match" are
included; that is, each pair of columns limits analysis to medicines with prices
for both of the product types in the pair. In the sample table, 17 matching
medicines were found for the comparison between innovator brand and most
sold generic medicines, while 18 pairs were found for each of the other two
comparisons: innovator brand versus lowest price generic equivalent and most
sold versus lowest price generic equivalent. Unfortunately, if few pairs of prices
are found in a particular survey, the comparisons are less likely to be representative
of the broader medicine pricing situation in this sector. For government procurement
data, you may well find that a high percentage of prices are found only for lowest
price generically equivalent products, since the government may not purchase
innovator brands.
83
MEDICINE
PRICES:
A
NEW
APPROACH
TO
MEASUREMENT
Reporting summary results on procurement prices
The data in this table can be used to explore how efficiently the procurement
system is working. If the median of the median price ratio is much lower than
0.80, then (after checking your data for errors) congratulate your procurement
officer. If the median of the median price ratio for generic products is very high,
you should investigate the reasons. Reasons for high price ratios in comparison
to international reference prices may include:
■ Patent protection on innovator brand items
■ Lack of generic competition
■ Generic medicines priced by suppliers only slightly below the innovator
brand
■ Small quantities being procured
■ Lack of transparency in procurement
■ Inefficiency in procurement
■ Lack of price regulation.
Your survey will give you data to start such an assessment.
In your report, you should try to describe the overall situation regarding the
number of medicines procured and the levels and variability of the median price
ratios that you found for each product type. To the extent that product types have
enough common medicines to be compared, you should also compare median
price ratios across product types.
If a reasonably high percentage of products “matched” across sectors, then you
should base analyses on the right “paired” side of the table since these provide
fairer comparisons. You interpret these paired summaries in a similar way as the
unpaired ones on the left side, but you should explain that the statistics are for
matched pairs.
Analysing patient price and medicine availability data
Three Field Data Consolidation pages are used to summarize price data gathered
from the different types of facilities or medicine outlets that you included in your
survey. You can use the same approaches to summarize and analyse data from
each of these pages. The analysis process will be described in detail below using
example data from a set of 20 private sector retail pharmacies. Simply adapt and
repeat this approach to analyse data from the Public Sector Patient Prices or the
Other Sector Patient Prices pages.
Examining summary statistics on patient prices for individual medicines
As with the procurement price data, you should begin analysis of patient price
data by examining the summary statistics that appear in Columns D-l for individual
medicines. Figure 8.4 shows an example of these summary statistics after all
price data for a sample of 20 private sector pharmacies and medicine outlets
have been entered. The median price ratio in Column D is equal to the median
medicine price to patients across the included outlets divided by the medicine’s
international reference price. For patient price data, the median price ratio measures
the magnitude of price mark-up to end-users.
Begin analysis by examining the median price ratios:
■ Across medicines
■ Across product types.
84
DATA ANALYSIS AND INTERPRETATION
Figure 8.4 Example of medicinespecific summary medicine price statistics
ZIaT ________ B_________L
c
D
E
F
G
H
I
K
Sort by:
ID
J
Field Data Consolidation:
JLi
2 j___ Private Sector Retail Prices
4 I
5 1
Go To Home Page|
Data/Summary [
Ratios On/Off
Double Entry
|
j
6 [___________________________________
Data for Individual I
7 Medicines Outlet Study ID_____________
i
Summary Comparisons to Reference Prices
A______ B___
8 Region_____________________________
and Percent Availability in Outlets
South
North
1
9 jDistance From Population Centre_______
0
0
10 {Include outlet in analysis (1=yes,0=no)?
(Blank if found in <
4
outlets)
1
1
Medicine Median
% with
(MPR)
Type
med.
__________
11 -No.
Medicine Name
25%ile
75%ile
Min
Max
1____ 2___
33 j 8 Captopril___________
Brand_____
12.45
12.38
12.62
12.29
13.05 100.0%
3.7914
3.6733
34 j 8 Captopril___________
Most sold
5.01
4.94
5.12
4.90
5.23
95.0%
1.5214
1.5
35J_ 8 Captopril___________
Lowest price
4,15
60.0%
4.25
4.19
4,38
4.42
1.2894
36 j 9 Ceftriaxone_________
Brand_____
6.94
694
7.00
6.90
7.01
232.87
55.0%
37 j 9 Ceftriaxone_________
Most sold
0.0%
Ceftriaxone
38 | 9__________
Lowest price
0.0%
39 j 10 Ciprofloxacin
Brand_____
56.21
55.99
56.49
55.52
56.87
90.0% 31.6634
31.953
40 j 10 Ciprofloxacin
Most sold
0.0%
41 ; 10 Ciprofloxacin
Lowest price
0.0%
42 j 11 Co-trimoxazole suspension Brand_____
29.34
29.11
29.44
28.90
29.83
60.0%
96.68
5.01
4.99
5.16
4.89
5.50
85.0%
43 j 11 Co-trimoxazole suspension Most sold
17.83
___ 17
4.64
44 i 11 Co-trimoxazole suspension Lowest price
4.96
4.87
5.14
5.42
85.0% 16.99902
16.902
Note that the summary ratios for a product will be blank if fewer prices than the
minimum number specified in Cell GIO were found. Unlike procurement prices,
there are no easy rules of thumb for determining if the median price ratios for
patient prices are high, low or about right. A median price ratio of 2.00 would
mean that the final price of the product to a patient (after all intermediate charges
and distribution costs) was two times the international price. Generally, the
median price ratios for innovator brand products will be higher since the international
reference prices are for generically equivalent products; this measures the innovator
“brand premium” paid for purchasing innovator brand products.
In the example table, the median price ratios vary from moderately high (e.g. 4.25
for lowest price generic captopril, 4.96 for lowest price generic co-trimoxazole
suspension) to very high (e.g. 56.21 for innovator brand ciprofloxacin, 29.34 for
innovator brand co-trimoxazole suspension). This indicates that the relative prices
charged to patients for different medicines are not uniform when compared to
international prices. Examining either high or low prices may uncover interesting
medicine-specific factors that are helping to determine price. Very large innovator
brand premiums like that for co-trimoxazole suspension (29.34 median price
ratio for innovator brand vs. 4.96 for lowest price generic equivalent) are worth
noting.
You should also examine the range between the 25th and 75th percentiles and
between the minimum and maximum to see if there are wide variations in patient
prices in different outlets. In the example, the price ratios for the four medicines
shown appear to be quite stable in the 20 pharmacies included in the survey,
with no dramatic differences between the 25th and 75th percentiles. You should
examine outliers carefully to see if they are errors. If not, finding out why some
outlets charge lower or higher prices may point to strategies to lower price in this
sector.
85
MEDICINE
PRICES:
A NEW APPROACH TO MEASUREMENT
In your report, you may want to highlight specific examples where there are large
differences observed between the median price ratios for different types of
products or where the range of prices that patients pay varies widely across
outlets.
Producing a summary table of patient price data
Focusing too much on the observed price levels and differentials for individual
medicines can be misleading. The main purpose of the survey is to analyse the
“typical” prices that patients pay for an entire set of medicines. The summary
table of patient prices, which you can access by clicking the
Data/Summary |
button, contains statistics calculated across medicines from the medicine-specific
median price ratios in Column D. As for procurement prices, the five summary
measures calculated are:
■ Median (mid-point) median price ratio of the medicines on the list
■ 25th percentile median price ratio
■ 75th percentile median price ratio
■ Minimum median price ratio
■ Maximum median price ratio.
You can produce and print the summary tables for patient prices by following the
same steps outlined for the summary procurement price table in the previous
section. Remember to enter a description of the outlets included in the analysis
for each sector in Cell F166 before printing. Clicking the Core Meds./AII Meds. |
button will switch between a summary of medicines on the core list and a
summary of the entire list of medicines (core and supplementary) included in your
survey. Generally, your national report would be based on your entire list of
medicines, although comparisons with surveys in other countries should be
based on the core list to increase the validity of the comparisons.
Interpreting a patient price data summary table
Figure 8.5 shows an example of a summary table for patient price data for
20 pharmacies in the private sector. The structure of the table summarizing
patient price data is similar to the summary table for procurement price data
described above. The first table heading indicates the sector and the number of
medicine outlets included in the summary, while the second heading indicates
whether the summary covers core medicines only or all medicines surveyed,
along with the number of such medicines in the reference list. The set of reference
prices used in the analysis is indicated at the bottom of the table.
As with the procurement price summary, the main body of the table has two
sides. On the left of the table are three columns of data summarizing the findings
for medicines that had the minimum number of prices (usually four) found in the
outlets included in the analysis. The three columns are for the three product
types (innovator brand, most sold and lowest price generic equivalent). If the
minimum number of prices was found for a low percentage of medicines, and
especially if different medicines were found for each product type, it is more valid
to use the data in the six columns on the right side of the table. On the right side,
only medicines that “match" are included in comparisons between product types:
that is, each pair of columns limits analysis to medicines that had prices for both
product types in the pair.
86
DATA
INTERPRETATION
AND
ANALYSIS
Figure 8.5 Example of summary table containing patient price data
B
C
1|
c
ZIa]
TT Field Data Consolidation:
2J_ Private Sector Retail Prices
4 i Go To Home Page]
D
j
j
E
F
|
G
H
[
L
K
J
I
M
Data/Summary |
Mi
166
167
168
|Private sector retail pharmacies
Describe outlets included in this summary:
169
Private Sector Medicines Outlets (n=20 in survey)
170
Includes Both Core and Non-Core Medicines (n=30 on list)
Analysis Includes Only Medicines
With Prices Found for Both Types in Pair
171
Analysis Includes All Meds.
1Z.2
174
175
176'
177
178
179
180
181
.182
183
184
185
186
Most
Sold
Brand
173
core Meds./Aii Meds. |
i Lowest
j Price
: Lowest
Brand i Price
Most
Sold
Brand
Most
Sold
: Lowest
j Price
Overall Percent Availability of Medicines on List in Outlets Included in Analysis
Median availability
25 %ile availability
75 %ile availability
77.5%
51.3%
98.8%
;
j
■
80.0% j 40.0% ~
0.0% ■ 0.0%
95.0% j 83.8%
Number of Listed Medicines For Which Prices Were Found in 4+ Outlets
No. of meds, included |
24
18
18
|
|
16
|
16
|
17
|
17
|
17
|
T7"
Summary of Medicine-specific Median Price Ratios (MPRs) For Meds. Found in 4+ Outlets
Median MPR
25 %ile MPR
75 %ile MPR
Minimum MPR
Maximum MPR
12.37
5.33
32.26
0.47
118.66
I
9.46~
j 5.0i~
; 22.43
| 2.52
i 55.29
19.96
9.53
42.06
2.85
118.66
6.48
3.46
16,31
2.31
55.21
187”
9.46
462
19.20
2.52
55.29
17.39
7.99
41,01
2.85
118.66
7.59
3.20
16.50
2.31
55.21
8.00
5.01
16.63
2.52
55.29
7.59
4.25
16.50
2.50
55.21
Reference Price Data Used = M5H
The first section of data in the table summarizes overall medicine availability in
the private retail pharmacies included in the analysis. Three summary measures
are reported:
■ Median availability
■ 25th percentile availability
■ 75th percentile availability.
These are all calculated from the medicine-specific values labelled % with medicine
in Column I in Figure 8.4. (Note that all medicines are included in the statistics
in this first section regardless of how many times they were found.) In the
example table, median availability differs substantially by product type. Of the 30
medicines for which prices were sought, the median availability of innovator
brand products was 77.5%, with half of the medicines found in between 51.3%
and 98.8% of outlets. In contrast, generic medicines were less frequently available.
For the most sold generically equivalent products, median availability in these
outlets was 80.0%, while median availability of other lower price generic alternatives
was only 40%. More than a quarter of the generic products were not found in any
of the outlets (i.e. 25th percentile is 0.00).
The next section of data in the table shows how many medicines of each product
type obtained the minimum number of prices in the outlets included in the
analysis. Of the 30 core and locally-defined medicines in the survey, 24 innovator
brand products were found in at least four private sector retail pharmacies (of the
20 in the analysis), while only 18 most sold and 18 lowest price generically
equivalent products were found this frequently. Because of the low percentage
87
MEDICINE
PRICES:
A NEW APPROACH TO MEASUREMENT
of generic products meeting the minimum of four prices and the large differences
in the medicines that were found for each product type, the data on the right side
of the table are preferable when making direct comparisons between product
types. For paired comparisons in the example, both innovator brand and most
sold generically equivalent products were found the minimum number of times
for 16 medicines, while “matches” were found 17 times for the innovator brand
versus most sold generic equivalent and most sold versus lowest price generic
equivalent comparisons.
The final section of the table summarizes the median price ratios found in
Column D of Figure 8.4. In the sample table, the median of the median price ratio
across the 24 innovator brand products for which prices were found was 12.87,
but was quite variable (25th and 75th percentiles = 5.33, 32.26). On average, the
most sold generic equivalent (median = 9.46, 25th* and 75th* = 5.01,22.43) and
lowest price generic equivalent (median = 6.48, 25th* and 75th* = 3.46,16.31)
were much less expensive, but the prices relative to international reference
standards also varied across medicines. Limiting analysis to medicines for which
matching prices were found (on the right side of the table), innovator brand
products were over twice as expensive as their most sold generic equivalents
(19.96/9.46), and 2.3 times as expensive as lowest price generic equivalents
(17.39/7.59). Buying the lowest price generic product would save an average of
5% compared to the most sold generic equivalent (comparing 8.00 and 7.59).
Reporting summary results on patient prices
The data in this table can be used to explore whether patients are paying
reasonable prices for medicines in this sector and how much they would save
by purchasing generically equivalent products. Because there are no easy rules
of thumb for determining a “reasonable” price, you should be cautious in your
conclusions about price levels. However, medians of the median price ratios
much greater than 2.00 for generically equivalent products would generally be
cause for concern, since this is twice the price of these medicines if procured
by international tender.
If the median of the median price ratio for generically equivalent products seems
high, you should investigate the reasons. Some possible reasons for high patient
prices are similar to those for high procurement prices:
■ Innovator brand patent protection
■ Lack of generic competition
■ Suppliers of generic medicines pricing popular products only slightly
below the innovator brand version.
Additional reasons might include:
■ Excessive manufacturer profits
■ High government taxes and duties on medicines
■ Inefficient supply system
■ Excessive and variable wholesale or retail mark-ups.
Your survey will give you data to start such an assessment.
In your report, you should try to describe the overall situation regarding product
availability, and the levels and variability of the median price ratios that you found
for each product type. To the extent that product types have enough common
medicines to be compared, you should also compare median price ratios across
product types.
88
DATA ANALYSIS AND INTERPRETATION
CROSS-SECTOR PRICE AND AVAILABILITY COMPARISONS
After looking individually at each sector for which price data were collected, the
next stage in the analysis of the pricing survey is to compare results across
sectors, drawing contrasts between procurement data and whichever sectors of
patient data were included in the survey. It will be informative to analyse both
relative price levels (both procurement and patient prices) and product availability
(in medicine outlets).
As for within-sector analyses, there are two different types of cross-sector analysis:
■ Comparisons of the results for individual products
■ Comparison of the sector summary results.
There are two separate pages in the Workbook that automatically prepare summary
tables for these two types of analysis.
Individual medicine price comparisons
Begin cross-sectoral analysis by using the Summary: Medicine Comparison ] button
on the Home Page to go to the Medicine Availability and Price Summary page.
This page is divided into two sections. The left side contains results on medicine
availability for each surveyed medicine (Figure 8.6), while the right side contains
medicine-specific median price ratios (Figure 8.7 on p. 90). The data in this table
are identical to the information in Columns I and D in the summary ratio sections
of the individual Field Data Consolidation pages. They are collected here for easy
comparison. Both sections will automatically print in order when you use the
Excel print functions described above.
Interpreting medicine availability and price summaries
In this summary, medicine availability results are displayed for the three sectors
for which prices were collected from medicine outlets, while price results also
Figure 8.6 Example of summary comparing medicine-specific availability across sectors
__________ B__________
1_
2
c
D
E
F
H
G
J
K
L
Medicines Availability
and Price Summary
1
J
£
Medicines Availability in Outlets
6
7
Brand
8
ja
10
11
12
13
TT
15
16
17
18
19
Medicine Name
Aciclovir_____________
Amitriptyline_________
Amoxicillin___________
Artesunate___________
Atenolol_____________
Beclometasone inhaler
Captopril____________
Carbamazepine_______
Ceftriaxone injection
Ciprofloxacin
Core
List
(yes/no)
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
Most Sold
Lowest Price
Public Private Other Public Private Other Public Private Other
(n=18) (n=20)
(n=18) (n=20) (n=9) (n=18) (n=20) (n=9)
(n=9)
77 8%.; 100.0%: 66.7% 72.2%: 95.0% 55.6% 44.4%; 75.0%: 33.3%
88.9% j 100T3%j______
88.9% 100.0%i 100.0%j 88.9%
44.4% 100.0%; 90?0%T______
83.3%j 85,0%; 66.7% 72.2%j 100.0%i 77,8% 55.6%i 40.0%j 11,1%
0.0%j 0.0%j 0.0%
0.0%;
0.0%j
0.0%
o.o%; o.o%j o.o%
0.0%; 0,0%': 0.0%
o.o%i o.o%; o.o% o.o%; 0.0%; o.o%
83.3%j 95.0%; 88.9%
88.9%j 100.0%i 66.7%
21.2%; 85.0%: 66.7%
55.6%; 55.0%i 22.2%
100.0%: 90.0%
89
88.9%
94,4%; 95.0%; 88.9%
83.3%; 95.0%j 66.7%
83.3%j 90.0%; 77.8%
5.6%;
0.0%i
0.0%
5.6%
0.0%;
0.0%
94,4%; 95,0%; 88.9%
44.4%i 60.0%; 0.0%
44,4%; 75.0%: 0.0%
5.6% j 0.0%T 0.0%
5.6%: 0.0%| 0.0%
MEDICINE
PRICES:
A NEW APPROACH TO
MEASUREMENT
Figure 8.7 Example of summary comparing medicinespecific median price ratios across sectors
M | N I
Q |
P |
Q I
R j
S |
T
| ~U
___ b
r c
-4
11 Medicines Availability
2 I and Price Summary
V
1 w I
X
Zj
_5J
Medicines Median Price Ratios (MPRs) in Procurements and Outlets
__________________ 'Reference Price Data Used = MSH)
Pro- f
9 I
Medicine Name
10 Aciclovir____________
J.L! Amitriptyline_________
12 : Amoxicillin__________
Artesunate__________
33
14 I Atenolol____________
1
Beclometasone inhaler
Captopril____________
171 Carbamazepine_______
Ceftriaxone injection
19 I Ciprofloxacin
Core
List
(yes/no)
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
Lowest Price
Most Sold
Brand
8 ;
Pro- ;
;
cure- i
cure- ;
ment ■ Public ; Private; Other
ment I Public ; Private Other
(n=10) I (n=18) ; (n=20) (n-9) (n=10) I (n=18) | (n=20) i (n=9) (n=10) ; (n=18) | (n=20) i (n=9)
3.41; 4.86:
5.06;
12.23; 17.371 17.39i
17.36
3.621
5.12j
5.641 5.11
19.46j 27.17j 27.171 2426
43.14;
64.82; 64.67; 61,87
17.291 26.67 j 27.14j 24.26
16,37:
22.61; 22.61 j 22.47
7.98 j 10.95 i 10.921 10.85
7.28:
9.98; 10,32:
3.76j
8.96:
4.32;
4,86;
39.29;
Pro- :
cure- :
ment ; Public ; Private ; Other
5.37 j
12.45;
3.81;
6.94:
56.09;
5.39;
12.45:
5.22;
6.94;
56.21:
5.36
12.36
5.11
56.08
1,761
3.57
3.57 j
2.92j
33.64;
2.53t
5.01;
5.01;
2.52 j
5.01;
5.01 j
2.51
494
4.94
1.61|
3.28;
3.28 j
2.361
4.25;
4.25;
2.71 j
26.20 j
contain median price ratios for the procurement sector. There are several aspects
to evaluate during your analysis.
For the availability summaries, first look for availability issues for individual
medicines to highlight in your report. For example, in the example, no artesunate
or atenolol was found in any outlets, and the overall availability of ceftriaxone is
quite low. These examples may point to policy or supply system issues that can
be addressed to improve availability.
Next, examine the median price ratio data for issues to highlight. In your report,
you may want to give examples of medicines that have particularly high (e.g.
ciprofloxacin or amitriptyline in Figure 8.7) or low (e.g. beclometasone inhalers
or ceftriaxone) median price ratios in all sectors. Alternatively, you can highlight
examples of medicines that have a particularly high innovator brand premium in
all sectors (e.g. aciclovir). Again, these examples may lead to insights into how
the medicine supply system is working.
Sector-wide comparisons
To compare summary medicine availability and price results across sectors, click
the Summary: Sector Comparison ] button on the Home Page. This will bring you
to the Sector Availability and Price Summary page. Note that you can use the
Core MedsJAII Meds. | button to switch between analyses that report on core
medicines only and on all core and supplementary medicines.
There are two summary tables on the page. The first contains:
■ Overall summaries of medicine availability
■ The numbers of products with the minimum number of prices by product
type
■ The median of the median price ratios for all medicines with the minimum
number of prices (Figure 8.8).
These data are identical to the data in the summary tables on the individual Field
Data Consolidation pages. They are collected here for easy comparison.
90
2.50
4.25
4.25
2.51
I
DATA
ANALYSIS
AND
INTERPRETATION
Figure 8.8 Example of summary comparing overall medicine availability across sectors
.___H______ b_____________ j
Sector Availability
p;
G
E
H
J
K
_______ and Price Summary_________
3J Go To Home Page | Core Me ds./Al I Meds. |
A! ____ T_______ _________________________________________________
5 \ | Describe summary: [10 public procurements, private sector retail prices, and patient charges in public & NGO outlets
6 |
Summary of Medicines Availability and Median MPR by Product Type
Includes Both Core and Non-Core Medicines (n=30 on list)
TU]
Procure
ment
(n=10
orders
11 |
1
..IIJ
J5J
Public
Sector
(n=18
outlets)
Private
Sector
(n=20
outlets)
Other
Sector
(n=9
outlets)
Median Percent Availability
Brand
Most Sold
Lowest price
NA
NA
NA
75.0%
72.2%
77.5%
41.7%
40.0%
80.0%
66.7%
33.3%
5.6%
No. of Products With Minimum No. of Prices Obtained
..HJ
J8J
J9J
29J
.21J
22J
23j
24
25
.26|
27 |
if Prices Required
1
4
4
Brand
Most Sold
Lowest price
23
23
19
16
24
18
21
19
18
4
14
9
Median MPRfor Medicines With Minimum No. of Prices
Brand
Most Sold
Lowest price
8.96
12.45
5.63
4.41
8.55
8.10
12.37
9.46
6.48
12.36
5,50
5.00
Reference Price Data Used = MSH
Interpreting sector availability and price summaries
Begin your analysis by focusing on Figure 8.8, which summarizes medicine
availability and overall median of the median price ratios by innovator brand, most
sold and lowest price generic equivalent. These data will allow you to make
summary descriptions of the findings across sectors and to judge whether the
comparisons between individual sectors should use the “matched” analyses.
From the example in Figure 8.8, it is clear that innovator brand and most sold
generic equivalents are more widely available than lowest price generic equivalents
in all sectors. In public facilities, median availability was 75.0% for innovator
brand, 72.2% for most sold generic equivalent, and 41.7% for lowest price
generic equivalent. In private retail pharmacies, median availability was 77.5%,
80.0%, and 40.0% for the three types of products while, in NGO facilities, median
availability was 66.7%, 33.3%, and 5.6% respectively.
Public procurement prices were obtained for roughly equal numbers of innovator
brand (23), most sold generic (21) and lowest price generic (19) products, and
patient prices were determined for most of these products at public sector health
facilities. Retail prices in the private sector were obtained for about the same
numbers of medicines by product type (24,18, and 18). In the NGO sector, prices
were determined for nearly as many innovator brand products (21), but fewer
most sold (14) and lowest price generic (9) products. Because only about twothirds of the products had prices determined in each sector, it will be more
91
MEDICINE
PRICES:
A
NEW APPROACH T 0 MEASUREMENT
accurate to base inter-sector price comparisons on the “matched” analyses in
Figure 8.9 and not to use the median of the median price ratios listed at the
bottom of Figure 8.8.
The second section of the Sector Availability and Price Summary page compares
the medians of the median price ratios across sectors (Figure 8.9). To control for
differences in which medicines were found in each sector when comparing prices,
the comparisons in this section include only medicines for which the specified
minimum number of prices were obtained in both sectors. Each comparison
between sectors, involving one of the small tables, reports the median of the
median price ratios for the “matching” medicines by product type. To the right
of each small table are data on the number of matching medicines included, and
the ratio of the median of the median price ratio in the right column of the table
to the median of the median price ratio in the left column, expressed as a
percent.
Figure 8.9 Example of summary comparing medians of median price ratios across sectors
A
1
„2
_3_
B
|
C
|
D
E
G
F
J
H
K
L
Sector Availability
and Price Summary
Go To Home Page
|
Core Meds./AII Meds. |
4
s'
| Describe summary:
|l0 public procurements, private sector retail prices, and patient charges in public & NGO outlets
6
29
~-5tr
Comparisons of Median MPRs for Medicines With Prices in Both Sectors
Includes Both Core and Non-Core Medicines (n=30 on list)
31
32
33
34
as'
Brand
36
37
Most Sold
Lowest price
Procure
ment
(n=10
orders
Public
Sector
(n=18
outlets)
# of
Meds, in
Both
Sectors
Ratio
Public to
Procure
ment
8.96
5.63
5.84
12,45
8.10
8.55
23
19
16
138.9%
143.9%
146.4%
Procure
ment
(n=10
orders
Other
Sector
(n=9
outlets)
# of
Meds, in
Both
Sectors
Ratio
Other to
Procure
ment
8.96
3.96
3.18
12.36
5.50
5.00
21
14
9
137.9%
138.7%
157.3%
Public
Sector
(n=18
outlets)
Other
Sector
(n=9
outlets)
# of
Meds, in
Both
Sectors
Ratio
Other to
Public
12.45
5.67
4,87
12.36
5.50
5.00
21
14
9
99.3%
97.0%
102.8%
Brand
Most Sold
Lowest price
Procure
ment
(n=10
orders
Private
Sector
(n=20
outlets)
8.01
6.80
5.84
11.25
9.46
# of
Ratio
Meds, in Private to
Both
Procure
ment
Sectors
140.3%
139.1%
8.96
22
18
16
153.2%
Public
Sector
(n=18
outlets)
Private
Sector
(n=20
outlets)
# of
Meds, in
Both
Sectors
Ratio
Private to
Public
11.26
9.52
8.55
11.25
9.46
8.96
22
18
16
99.9%
99.4%
104.7%
Private
Sector
(n=20
outlets)
Other
Sector
(n=9
outlets)
# of
Meds, in
Both
Sectors
Ratio
Other to
Private
12.45
5.77
4,96
12.36
5.50
5.00
21
14
9
99.2%
95.3%
100.9%
38
39
40
41
42
Brand
Most Sold
Lowest price
Brand
Most Sold
Lowest price
43
44
45*
'46"
47
48
Brand
Most Sold
Lowest price
Brand
Most Sold
Lowest price
Reference Price Data Used = MSH
When comparing public procurement prices and medicine charges to patients at
public health facilities (upper left table of Figure 8.9), it is clear that government
facilities charge about a 40% mark-up on medicines (138.9), with mark-ups
slightly higher for generic medicines (143.9; 146.4). Medians of median price
ratios are high for all product types compared to reference prices. Innovator brand
premiums are roughly 40%-50% (based on the ratios of innovator brand to most
sold or lowest price generic equivalent prices).
92
DATA
ANALYSIS
AND
INTERPRETATION
The prices in private sector retail pharmacies are almost identical to charges in
public facilities (second table from top on right side of Figure 8.9), with ratios
between the median prices in the two sectors approximately equal to 100%
(99.9; 99.4; 104.7). Furthermore, the charges to patients in NGO facilities are
also nearly identical to both public and private sector prices (third row of tables
in Figure 8.9) for medicines where prices could be determined. The near equivalence
across sectors of prices paid by patients can have several different explanations:
■ The three sectors are all running with equal efficiency, with all paying
high prices compared to international standards
■ Prices and mark-ups are under heavy government control
■ There is a widespread price fixing across sectors, with prices set in
comparison to competitors.
These issues are examined further in the Price Composition analyses
(pp. 95-97). Hypotheses generated about the reasons for the similarities in
pricing can be the focus of future studies.
Reporting medicine availability and price summaries
The way in which you report inter-sector comparisons will vary considerably from
survey to survey, depending on the nature of the differences between sectors in
your setting and the actual results of the comparisons.
Begin by comparing product availability. You might expect that availability for
innovator brand items would be better in the private sector while generic alternatives
might be more widely available in the public sector. Your situation may be
different, however. If it is, check your data and investigate the reasons for these
differences.
For pricing analyses, you have the opportunity to compare median patient prices
in each sector to:
■ International reference prices, either from MSH or another set
■ Public procurement prices
■ Patient prices in other sectors.
Results may differ across sectors for innovator brand and generically equivalent
products. Depending on the findings, your report could go into great detail on
these comparisons, including references to individual products that reveal
interesting facts about the way in which pricing operates in your setting.
You do not need to quote all the comparison price ratios or percentages in the
text of your report, but you may wish to highlight important or particularly interesting
ones, while referring readers to tables with individual medicine or sector summary
results for more detailed examination of differences.
ANALYSING TREATMENT AFFORDABILITY
The affordability analysis expresses the survey results in a different way. Instead
of comparing medicine prices with an index price, the cost of a course of therapy
for important conditions can be compared with the daily wage of the lowest paid
government worker. This analysis is very valuable as an advocacy tool as it
expresses prices in relation to an individual’s ability to pay rather than to
international prices. It is much easier to explain to policy makers that the cost
of a month’s treatment for a specific condition with Medicine X would require
93
MEDICINE
PRICES:
ANEW
APPROAC H
TO
MEASUREMENT
10.5 days’ wages with innovator brand products and 6.3 days’ wages with a low
cost generic alternative. To the extent that standard treatments are similar
across countries, expressing results in this way also allows international
comparisons of price levels that are not affected as much by differences in
economic structures and exchange rates.
Click on the Treatment Affordability | button on the Home Page to go to the
Standard Treatment Affordability page. The process for defining and entering data
on days’ wages and on the standard treatments for individual conditions is
described in Chapter 7 (pp. 70-72). After you have completed this process, the
Workbook will automatically calculate the affordability measures in each sector
and for each product type for which you have sufficient price data in the Field Data
Consolidation pages. An example of affordability analysis for pneumonia is provided
in Figure 8.10.
Figure 8.10 Example of standard treatment and affordability data for pneumonia
___________ B___________ |
1
2
C
D
E
F
G
H
J
Standard Treatment
________ Affordability
3_
_ 4 J Go To Home Page|
~6~
25
26
27
28
29
Daily wage of lowest paid government worker (in loc >1 currency):
I
■
Adult resp. infects.
Select Medicine Name
Amoxicillin
------------ ---------
Public Procurement
Medicine
Strength
250 mg
30
Dosage
Form
tab
"IS]
Public P;
Median
Median
Treatment Total # of
Treatment Days' Treatment
Duration
Units per
Price
Wages
(in Days) Treatment Product Type
Price
69.85 '
7
21
Brand_______
50.59 ____ 3.4
33.83 '
Most Sold
24.65 ____ 1.6
30.83 ’
Lowest Price
1.5
22.49
Figure 8.10 (continued)
al currency):
Private Retail
Public Procurement
Public Patient
Other Patient
Median
Median
Median
Median
Treatment Days' Treatment Days' Treatment Days' Treatment Days'
Wages
Price
Wages
Price
Wages
Price
Wages
Price
69.84 ____ 4.7
69.43 ____ 4.6
50.59 ____ 3.4
69.85 ____ 4.7
33.83 ____ 2.3
33.74 ____ 22
24.65 ____ 1.6
33.52
2.2
1.5
30.83
21
31.88
2.1
22.49
To analyse the data, compare the median treatment price and number of days’
wages required across sectors and for different product types. In the example,
median treatment costs for pneumonia in public sector health facilities, private
pharmacies or NGO facilities are almost identical. To provide a full course of
therapy with innovator brand amoxicillin would require 4.7 days’ wages in public
facilities and private pharmacies and 4.6 days’ wages in NGO facilities. In contrast,
treating pneumonia with generic amoxicillin is less than half as expensive, requiring
2.3, 2.2, and 2.2 days’ wages respectively.
When analysing standard treatment data, be sure to examine the range of
variation in medicine prices within each of the sectors in the summary ratio
section of the Field Data Consolidation pages (see Figure 8.4). Treatments for
which the median prices are similar in two sectors may actually vary widely across
outlets within the sectors.
94
DATA
ANALYSIS
AND
INTERPRETATION
Remember that for standard treatments which require more than one medicine,
it will be necessary to enter each medicine separately and then add together the
data on Median Treatment Price and Days’ Wages for both medicines to get
correct summary information for the treatment as a whole.
The section on affordability in your report should highlight the findings for key
conditions of public health importance in your setting. Some conditions may be
within the ability of low-paid workers to pay, while others may be completely out
of their range. Try to describe the situation for both acute and chronic illnesses.
For chronic illnesses, you should express the treatment in monthly amounts,
which you would calculate by multiplying the daily dose by 30. If entering non
specified medicines in the Workbook, be sure to use the amount for a month’s
treatment for chronic conditions in the total # of Units per Treatment ] field.
ANALYSING PRICE COMPOSITION
Cumulative Mark-up by Sector
The Price Composition: Cumulative Mark-up page allows you to compare two
aspects of the overall pricing structure.
First, you can compare how the Manufacturer Unit Price relates to the International
Reference Unit Price of a medicine. This ratio measures the degree to which
manufacturers sell certain medicines for internationally competitive prices in your
setting.
Second, the cumulative mark-up analysis allows you to compare the Sector
Median Unit Price, which is the final unit price of the medicine in each sector,
with the manufacturer unit price. This ratio expresses the cumulative mark-up of
the medicine between initial purchase from the manufacturer and sale to the
patient. The components of this mark-up are differentiated in the next analysis.
The cumulative mark-up analysis allows you to identify whether the root cause
of high price levels for specific medicines in a given sector appears to be
manufacturers’ prices, supply chain mark-ups or both. The Workbook allows you
to examine these factors for government procurement prices and for patient
prices in three different sectors.
The procedures for entering mark-up data are described in Chapter 7. To begin
the analysis, click the Price Composition: Mark-ups | button on the Home Page.
Figure 8.11 on p. 96 shows a completed mark-up analysis for amoxicillin using
data from the sample survey.
Notice that the public sector pack sizes in Figure 8.11 are much higher than in
the private or NGO sector. It is not unusual that government procurement systems
and public sector facilities purchase bulk packages of medicines, while other
sectors buy smaller pack sizes. In general, the unit price should be lower with
larger packs.
First, compare the overall ratios of manufacturer’s unit price to international
reference price across sectors. In the example, manufacturers’ prices of amoxicillin
in all sectors are much higher than international reference prices, with median
ratios ranging from 4.44 to 7.98 for generic products and 10.01 to 16.38 for the
innovator brand product None of the sectors is obtaining internationally competitive
prices for this medicine, although the manufacturers’ prices obtained by private
retail outlets are slightly better.
95
MEDICINE
PRICES:
A
NEW
APPROACH
TO
MEASUREMENT
Figure 8dl Example of cumulative mark-up of medicine price by sector
B
2
C
j
D
F
E
Go To Home Page)
6 j
Select Medicine Name 1
7
Amoxicillin
id
|
Medicine
Strength
250 mg
Dosage
Form
ij
tab
Public Patient
Charge
~161
JZj
18"|
Private Retail
Price
23 j
24)
IS
26J
"271
28-
3d
30 |
H
Reference Price Data Used = MSH
Other Sector
Patient Charge
Manufacturer pack price_________
Manufacturer pack size (# of units)
Manufacturer unit price (MLIP)
Ratio: MUP to reference unit price
Sector median unit price (SMUP)
% mark-up: SMUP over MUP______
Manufacturer pack price_________
Manufacturer pack size (# of units)
Manufacturer unit price (MUP)
Ratio: MUP to reference unit price
Sector median unit price (SMUP)
% mark-up: SMUP over MUP______
Manufacturer pack price_________
Manufacturer pack size (# of units)
Manufacturer unit price (MUP)
Ratio: MUP to reference unit price
Sector median unit price (SMUP)
% mark-up: SMUP over MUP______
Manufacturer pack price_________
Manufacturer pack size (# of units)
Manufacturer unit price (MUP)
Ratio: MUP to reference unit price
Sector median unit price (SMUP)
% mark-up: SMUP over MUP
Most Sold
2409,000
1174,000
1000
1000
1.1740
2.4090
16.38
7,98
1.1739
2.4089
0.0%
0.0%
2409.000
1174.000
1000
1000
2.4090
1.1740
16.38
7.98
3.3261
1.6108
38.1%
37.2%
117,800
76.400
__ 80 _______ 100
1.4725
0.7640
10.01
5.19
3.3259
1.6067
125,9%
110.3%
128,500
82.200
______ 80
100
1.6063
0.8220
10.92
5.59
3.3060
1.5960
105.8%
94.2%
Next, examine the structure of the mark-ups for the different sectors. In public
health facilities, there is about a 37-38% mark-up over procurement price for all
amoxicillin products, representing delivery charges, administrative fees, and cost
recovery.
Private retail outlets and mission hospitals obtain substantially lower
manufacturers’ unit prices for all amoxicillin products despite purchasing in
smaller pack sizes. However, patients pay about the same prices for this medicine
in these sectors because mark-ups are much higher. In private retail outlets, the
observed mark-ups were 125.9% for innovator brand, 110.3% for most sold and
132.5% for lowest price generic amoxicillin. In NGO health facilities, the mark-ups
were 105.8% for innovator brand and 94.2% for most sold generic amoxicilllin
(there were not enough prices obtained for lowest price generic amoxicillin to
obtain a sector median unit price).
In your report, you should try to summarize the results for cumulative mark-ups
across a range of products. You may want to give the ranges of manufacturer’s
unit price to international reference price ratios for different types of medicines
in different sectors or to average the cumulative manufacturer’s unit price to
Sector Median Unit Price mark-ups.
Components of price
The Medicine Price Components form is used to collect data on the various
components of price mark-ups for several surveyed medicines. The Price
Composition: Components of Price page is used to enter and analyse these data.
The most revealing analyses will compare medicines that are likely to have
different price structures, such as:
96
IZZI
|
Brand
_______
Sector
Public
Procurement
10 .
J1J
G
Price Composition:
Cumulative Mark-ups
Lowest
Price
1071,000
1000
1.0710
7.28
1.0712
0.0%
1071,000
1000
1,0710
7.28
1.4682
37.1%
65.300
100
0.6530
4,44
1.5181
132.5%
69.840
100
0.6984
4.75
■ Imported versus locally manufactured medicines
■ Medicines still on patent versus medicines recently off patent versus
older medicines.
For each medicine for which price components are determined, the final price
paid by patients in a specific sector is compared to the import or manufacturer’s
price. Data on the individual components of the overall price mark-up are entered
in this worksheet, either as percentage mark-ups or fixed amounts, as appropriate.
Because mark-ups are sometimes charged as fixed fees at the point of dispensing
(e.g. a dispensing fee), the mark-ups are calculated on a typical dispensed
quantity of the medicine.
The Price Composition: Components of Price page has five tables, each
summarizing the mark-up structure for one medicine in a specific sector. Click on the
Price Composition: Components ] button on the Home Page to get to this page.
The process for entering price components data is described in Chapter 7
(pp. 72-74). Figure 8.12 shows an example of a completed price components
table.
Figure 8.12 Example of table detailing the components of price
B
£C
D-.J E ]. .F... ,L_
if
Id
G
H
J
K
Price of
Dispensed
Quantity
44.94
46.29
49.99
50.54
58.12
64.52
69.52
Cumulative
% Mark-up
0.00%
3.00%
11.24%
12.46%
29.33%
43.56%
54.69%
Price Composition:
Components of Price
3 i
Go To Home Page)
4 j
5 i ___________________________________________________________________________________________
6 i I Describe sector and type of medicine: [Most sold generic version of amoxicillin in private sector purchases
..Z...|
"idi
I
J5J
J6j
_
Example 1: Medicine
________ Name_______
Amoxicillin
Medicine
Strength
250 mg
Dosage
Form
tab
Target
Amount
Pack Dispensed
Charge
of
Size
Quantity _______ Type of Charge_______
Basis
Charge
21
Cost, insurance, freight (GIF) price
NA
NA
100
Port clearance________________ percent
3.0%
Import tax____________________ percent
8.0%
Stamp duty___________________ percent
I, 1%
Wholesale mark-up____________ percent
15.0%
VAT_________________________ percent
II. 0%
Dispensing fee
fixed fee
5.0
17 i
J.8..
To analyse price components, examine the total mark-up structure to identify the
factors that contribute the greatest amount to the total cost for each medicine.
In the example, the wholesale mark-up of 15% adds the single largest amount
to the total mark-up, followed by the 11.0% VAT and the 8% import tax. In total,
government taxes add 24.83% to the dispensed cost of this medicine, while
wholesale and retail mark-ups add another 29.86%. If fees differ by medicine
type or by sector, use an example to illustrate these differences and their policy
implications.
In your report, you should summarize the mark-up structures for all medicines for
which you have entered price components, and highlight differences across
medicine types.
97
9
International price comparisons
■ International price comparisons can provide valuable tools for advocacy
■ Comparisons can be made of:
- The prices of individual medicines, from manufacturer to patient
- The affordability of treatment
- Price composition
■ Countries undertaking a survey are encouraged to send their results to
HAI which will lodge them on the website so that they can be shared
with other countries.
Comparisons of medicine prices in different countries can provide powerful tools
for advocacy. Reliable evidence that the populations of two similar countries are
paying very different prices for the same medicine provides an opportunity for
advocates and policy makers in the higher price country to examine the underlying
reasons and to identify ways of obtaining lower prices. Chapter 10 offers some
suggestions about how price differences can give clues to possible lines of action
to bring prices down.
International comparisons must be undertaken carefully so that valid similarities
and differences between like products in like sectors can be identified. The data
that you, and others using this manual, have collected are designed to enable
international comparisons to be made of:
■ The prices of individual innovator brand or generic medicines, from
each defined sector, on the “core" list
■ The affordability of selected courses of treatment, measured against
each country’s public sector minimum wage
■ The way in which the retail price of a medicine is composed in different
countries.
Composite comparisons, where the prices of a sample of medicines (rather than
individual items) are compared between countries, require special statistical
methods and skills, as well as additional data. They have been used to determine
whether medicines are more expensive in general in one country than another.
Guidance on such comparisons is not given here, although some recent studies
and methods are identified at the end of this chapter.
The HAI website has a section dedicated to the storage of country price data
collected in accordance with the procedures suggested in this manual. It will
allow you (and others) to compare your data with those from other countries in
98
INTERNATIONAL PRICE COMPARISONS
which similar price surveys have been carried out. You are strongly encouraged
to send your completed Workbook to HAI so that it can be checked and entered
in this publicly accessible database.
COMPARISONS OF THE PRICES OF INDIVIDUAL MEDICINES
Figure 9.1 below shows how you can use your data and data from other countries
to compare the median price ratio (your local median price for a medicine,
converted at current exchange rate into in USS, compared to the MSH reference
price) for the same medicine in several countries. Figure 9.1: Private sector price
ratios for ranitidine in five countries shows that, while the innovator brand premium
in all countries except South Africa is less than 30 times the international
reference price, countries’ prices differ markedly from the international benchmarks.
South Africa’s private sector price for the innovator brand is over 30 times the
international reference price and over twenty times higher for the generic equivalent.
Comparable ratios in Sri Lanka are 5.6 (innovator brand) and 2.2 (generic).
Figure 9.1 Ratio of local price to international reference price for innovator brand and generic
ranitidine in five countries, 2001
35.0
30.0
I Innovator brand
25.0
I 20.0
1 15.0
is Most sold generic
eqiivatent
10.0
5.0
0.0
S. Africa
Kenya
Sn Lanka
Annema
You can, of course, further simplify this by (for example) comparing only the
innovator brand price ratios between countries, as in Figure 9.2. Similar formats
will be needed for the private or “other” sectors, where these data exist.
Figure 9.2 Ratio of local price to international reference price for innovator brand furosemide
(40 mg tablets) in five countries, 2001
120.0
109
107.9
100.0
I
80.0
i 60.0
1
40.0
24.4
20.0
3.7
6.1
Sri Lanka
Annenia
0.0
S. Africa
Kenya
99
Brazil
| Innovator brand
MEDICINE PRICES:
A NEW APPROACH TO MEASUREMENT
Each of the surveys using this approach uses the same set of reference prices
for all studies conducted in a given year, so the median price ratio for innovator
brand ranitidine or furosemide in Sri Lanka can be compared directly to its
equivalent in South Africa or any other country. Remember, a median price ratio
of 1 means that the medicine’s price is exactly equal to the international reference
price; a median price of 10 means that it is 10 times more expensive than the
international reference price, and so on.
You should not add up or average these median prices across different medicines
as, for reasons mentioned above, the development of reliable composite price
indices requires different methods and additional data. However, it might be
useful to identify the four or five highest and lowest priced medicines in each
country. Where these “Top Five" and “Bottom Five” lists differ widely between
countries, local mark-ups, duties and taxes may be more important than
manufacturers’ selling prices in explaining the differences. Where the same
items recur in the Top and Bottom Five, the manufacturers’ selling prices may
be the major component in retail price. Further investigation of price composition
will probably be necessary to ascertain this, before the focus of policy is turned
on to manufacturers’ selling prices.
COMPARISONS OF THE AFFORDABILITY OF TREATMENT
International comparisons of affordability can be made by transferring the data
on the number of days’ wages required to pay for a course of treatment (see
‘Analysing Treatment Affordability’ on pp. 93-95) to a crosscountry comparison
chart, as in the example in Figure 9.3.
Figure 9.3 Inter-country comparison of affordability: number of days’ wages needed for purchase
of 30 days of treatment with ranitidine
Peru
I N/A
Philippines
I
Cameroon ______
Ghana
m Most sold
:
I
I N/A
I Innovator brand
generic
equivalent
I
S. Africa
Sri Lanka
Armenia L
Brazil
Kenya
0
10
20
30
40
50
Days’ wages
60
70
80
The figure shows that ulcer treatment with ranitidine in Ghana, where no generic
was found, costs over two months’ of income for a person on the lowest government
wage, while the same treatment course in Sri Lanka or South Africa would cost
the equivalent of about a week’s wages. A course of treatment with the generic
medicine in Sri Lanka, Cameroon or Kenya costs about half as much as with the
originator product, although it is still likely to be unaffordable for much of the
population.
Once again, sectors should be compared separately.
100
INTERNATIONAL
PRICE
COMPARISONS
COMPARISONS OF PRICE COMPOSITION
An awareness of how local retail prices are built up is essential information for
understanding the significance of differences between the reference prices, which
are not retail prices, and the local price. The Manual and Workbook offer you two
ways of doing this.
International comparisons of mark-ups on innovator brand
and generic equivalent for a single medicine
The first approach is to make a broad-brush comparison of cumulative mark-ups
by comparing retail prices with manufacturers’ prices, as described in Chapter
8. Obviously, you can make this relationship the basis of comparisons between
countries for individual medicines. Figure 9.4 gives a fictitious comparison of the
cumulative percentage mark-up reflected in the median unit retail price for
amoxicillin in the public and private sectors of two countries. The innovator brand
and most sold generic equivalent are compared.
Figure 9.4 Cumulative percentage mark-up (sector median unit price as a percentage off the
manufacturer’s unit price)
120.0
I
100.0
I
80.0
ElfeS Most sold generic
equivalent
I Innovator brand
60.0
as
40.0
20.0
0.0
Country 1
Private
Country 1
Public
Country 2
Private
Country 2
Public
Private sector mark-ups are much higher in the private sector of Country 2 than
in Country 1. The mark-ups on innovator brand and generic equivalents are
identical in Country 2, whereas they are slightly higher on the innovator brand in
country 1.
International comparisons of price components
The second approach is to look in greater detail at the individual components in
the price chain between the manufacturer and the point of sale. In the pilot study
of this approach in Sri Lanka, the team developed a format similar to the one
shown in Figure 9.5 to summarize the components of retail price. This gives the
percentage additions to the imported (CIF: manufacturers’ selling price plus
insurance and freight costs) price or the local ex-manufacturer price and also
shows them cumulatively. This format is now recommended for all investigators
using this approach. Information on price composition from other countries can
be found on the price information section of the HAI website:
http://www.haiweb.org/medicineprices.
Again, the public sector and others should be compiled separately. The following
section gives some guidance on interpreting these data.
101
MEDICINE
Figure 9.5
PRICES:
A
NEW
APPROACH
TO
MEASUREMENT
Example of comparison of price components between two countries
Country 1
■
:
Price of
Type of Charge
Cost insurance, freight
(GIF) price ___ __ ____
Defence levy___________
Overhead mark-up_______
SPG mark-up___________
Wholesale mark-up______
Retail mark-up
Charge
Basis
Amount of
A^IIIUUIIL
VI
Dispensed Cumulative %
m
--zx.Quantity
—Mark-up
Charge
NA
percent
percent
percent
percent
percent
____ NA
5%
18%
9%
7%
12.5%
609.00
639.45
754.55
822.46
880.03
990.04
0.00%
5.00%
23.90%
35.05%
44.50%
62.57%
Country 2
Type of Charge
i^ranee, freighl
Import duty_____________
Port charges____________
Wholesale mark-up______
Retail mark-up__________
VAT___________________
Dispensing fee
Charge
Basis
Price of
~
Amount of Disused
Cumulative
%
Charge
NA
25%
5%
NA
percent
percent
percent
percent
percent
fixed fee
40%
15%
12%
200
Quantity
609.00
761.25
799.31
1119.04
1286.89
1441.32
1641.32
Mark-up
0.00%
25.00%
31.25%
83.75%
111.31%
136.67%
165.91%
INTERNATIONAL COMPARISONS OF PRICES FOR A
SAMPLE OF MEDICINES
To find out whether medicine prices systematically differ between countries,
some analysts have undertaken comparisons of a representative sample of
medicines in different countries. The governments of Australia and the United
States have commissioned such comparative work in recent years (Productivity
Commission, 2001; United States General Accounting Office, 1994).
A simple average of prices in the sample means that every medicine in the
sample is given equal weight. If some medicines are more important than others
(for example, if some account for a very large share of the market and others a
very small share), a simple average will understate the share of the more important
medicines in the total. To get around this problem, statisticians assign a weight
to the price of each item in the sample to reflect its relative importance. An
average is then calculated of the weighted prices; this is called an index price.
This procedure is common with price indices which measure retail prices, for
instance. A price index recognizes that some medicines are more important than
others, perhaps because of consumption patterns or local disease epidemiology,
and it entails assigning relative weights to each item in the sample.
The methodology for such studies requires both statistical skills and data which
go beyond the scope of the approach described in this manual to price sampling
and comparison. Readers who are interested in the details of more ambitious
international comparisons are recommended to read the US and Australian
studies mentioned above. An introduction to the methodology of such comparisons
is given in Economics of the Pharmaceutical Sector (Schweitzer, 1997). A more
detailed methodological discussion is contained in Danzon and Chao (2000).
102
'Pl'i- Hi 1_
1 lj -t 4 G po 2
------
INTERNATIONAL
PRICE
COMPARISONS
For the reasons given above, it is recommended that cross-country comparisons
should be limited to comparing the costs of individual medicines, expressed as
ratios of national prices compared to the MSH reference prices and expressed
in days’ wages. The differing mark-ups may also be compared. Finally, comparing
the top five and bottom five medicines in terms of cost compared to reference
prices or affordability may be more than enough to support your conclusions and
recommendations.
Comparing overall combined ratios may leave you open to criticism that you are
not comparing like with like and could discredit your report. People who may be
exposed and made to look bad by the findings of the study may prefer to attack
the methods used in the study rather than addressing the results. By limiting
yourself to individual medicines, as distinct from composite comparisons, you
can be confident that your results are totally defensible.
103
10
Exploring possible policy
options and lines of action
■ A number of factors can cause high medicine prices
■ This chapter illustrates a menu of possible policy instruments which
may be relevant in different circumstances of high prices
■ It is important to identify the factors that are the principal causes of
high prices and/or of price variations in your setting.
The underlying purpose of the price survey is to bring about changes that will
result in lower prices to patients and, hence, increased access to needed
medication. Chapter 8 has shown how to generate and present summary results
from the survey for each individual medicine and each sector, as well as how to
analyse treatment affordability and price composition. This chapter shows some
of the linkages between the price and availability information you can now present,
and a range of possible policy actions that will greatly improve regular access to
essential medicines at prices affordable to all.
The potential for change varies dramatically between countries and can also
change over time. The ability to build a case and a constituency of support on
a particular issue also depends very much on local circumstances. In many
instances it may be necessary to collect additional information before identifying
and promoting a particular change. Because the local context is of overriding
importance in determining the most appropriate lines of action to follow a price
survey, this manual can only give general guidance. The previous chapters give
clear directions on how to proceed with the design, execution and analysis of the
price survey, but this chapter simply identifies possibilities, leaving it to the
survey manager/commissioning organization to research and judge which, in the
context of local institutions and politics, are the most appropriate actions to
follow. In the second phase of this joint project (2003-2004), WHO and HAI plan
to support irvdepth studies of price issues in several countries and to synthesize
and publish the resulting policy implications and actions.
Findings from the survey, for example, may suggest that the prices of individual
medicines in the public sector are five, ten or even forty times higher than the
MSH reference prices. Even with the analysis of price composition, however, it
may be unclear how much of this price difference is due to high manufacturers’
prices and how much to inefficient procurement practices or other price elements
in the national system, such as mark-ups and taxes. Each of these possible
104
EXPLORING
POSSIBLE
POLICY
OPTIONS
AND
LINES
OF ACTION
causes will need to be addressed by a different line of action and will incur
support and opposition from different stakeholder groups. A more systematic
examination of the different possible contributory factors will always be necessary
to ensure that the principal cause is correctly identified.
DATA FROM THE SURVEY AND ITS INTERPRETATION
To recapitulate from Chapter 8, your survey results allow four different types of
price and availability comparison.
Type 1: Individual medicine price comparisons
■ For every medicine and in each sector, comparison with international
reference price benchmarks and, as they become available, against
the relevant prices in other country surveys
■ For any innovator brand medicine, comparison with the most sold and
lowest price generic equivalents, and comparison of availability
■ For every medicine, public and private sector prices and, where
appropriate, prices at NGO, church mission or other health facilities
■ Comparison of the manufacturers’ price or the procurement price with
the international reference price and with the retail price for any medicine
in each sector.
Type 2: Availability comparisons
■ Availability of innovator brand medicines compared with generic
equivalents in up to four sectors, separately and compared.
Type 3: Affordability comparisons
Treatment costs in relation to local wages compared by:
■ Condition (nine recommended)
■ Treatment affordability by sector public, private and other sectors
■ Treatment affordability by medicine type: innovator brand, most sold or
lowest price generic equivalent
■ When available, treatment cost for a given condition compared with the
cost of the same treatment in other countries.
Type 4: Price composition comparisons
■ Price components of locally made medicines compared with imported
medicines
■ Manufacturer’s price or tender price compared with retail price
■ Comparison of relative size of mark-ups (wholesale and retail), taxes,
duties, tariffs, etc. in final price
■ Comparison of price composition of essential (EML) medicines with
norvessential medicines, if applicable.
In looking for lines of action and policy, it is important to focus on comparisons
that show big differences between local and international prices, between sectors,
between innovator brand medicines and generics, between wage levels and
treatment costs and on the major components of mark-ups. Differences suggest
the possibility that prices can be brought down: the bigger the difference, the
greater the scope for change.
105
MEDICINE
PRICES:
A NEW APPROACH TO MEASUREMENT
Some of the different manifestations of price differences or problems detected
will, of course, originate in the same cause. The affordability of treatment for
pneumonia may be a problem and prices for innovator brand amoxicillin high in
relation to international reference prices, for example, simply because the innovator
sets a high price. If procurement is also inefficient, and distribution arrangements
are expensive because of high mark-ups by wholesalers and retailers, and no
generics are available, the price problem could be attacked with several prongs.
Better procurement, price negotiation, parallel importation, reform of prescribing
and dispensing incentives and thus practices, generic promotion, or consideration
of a compulsory licence or use of any other legal safeguards in national legislation
that may facilitate the availability of cheaper generic versions of medicines under
patent in the country, may all be needed.
Where the analysis of price composition suggests that local factors, such as
tariffs, taxes and distribution mark-ups contribute importantly to final price, a
general review of distribution costs may be necessary. Among other things, this
might consider whether essential medicines are exempt from import duties and
other taxes, how distribution costs, particularly mark-ups, compare in the different
domestic systems (public, NGO and private), and how medicines distribution
costs compare with those of other commodities, such as perishable foods and
beverages.
Where local addons and distribution costs appear to be less important contributors
to final price, but prices are high relative to international benchmarks, there may
be a need to examine the efficiency of national and sub-national procurement
processes in getting the best possible prices. A supportive national policy on
generic medicines, particularly in the selection, procurement, promotion, prescribing
and dispensing processes outlined in Figure 10.1, is needed to underpin price
regulation. Pooling procurement, ensuring competitive tendering and use of
information about prices in other markets may all help. Where innovator brand
prices appear to be high relative to prices in other countries, you may wish to
consider negotiating for differential prices with the manufacturer or explore the
possibility of parallel importation from a lower price country. Compulsory licence
strategies may be considered for key limited source medicines of major public
health importance, in addition to the preceding measures and other approaches
to allow the marketing of less expensive generic equivalent medicines. Fairer
financing schemes for medicines can improve access through employment or
community-based insurance and social security schemes and other forms of
prepayment, and through exemptions in fee systems to minimize the price barrier
for poor people.
It is important to provide empirical data to policy makers on the need for policy
change and to develop a close understanding of why the differences exist before
selecting the line of action and making suggestions regarding the direction of
government policy. Broadly speaking, it may be helpful to think in terms of
policies concerned with getting better prices from manufacturers or intermediaries,
on the one hand, and those designed to keep prices as close to the manufacturers’
prices, through cost containment measures, on the other.
A wide range of policy measures exists to deal with price and availability problems.
Figure 10.1 summarizes some of the possible policy actions to influence price,
based on the WHO publication How to Develop and Implement a National Drug
Policy (WHO, 2001).
In conclusion, bear the following messages in mind about linking the survey
findings to lines of policy action:
106
EXPLORING
POSSIBLE
POLICY
OPTIONS
AND
LINES
OF ACTION
Figure 10.1 Controlling price as part of an integrated medicines policy
Component of medicines policy
Examples of actions to influence price and availability
1 Selection of essential medicines
■ Formulation/updating of essential medicines lists
■ Development of qualityassured therapeutic substitution policy
■ Development and use of Standard Treatment Guidelines
2 Procurement/purchasing
■ Competitive tender with price transparency
■ Use of pharmacoeconomics or international reference prices
as guidelines
■ Pooled procurement with other national/intemational buyers
■ Examine purchasing in other sectors to ensure best practice
■ Create incentives and education for making procurement
savings; give margin of preference for local suppliers
■ For single source products, press for differential price or
explore possible parallel imports
■ Use national Patent Law flexibilities, where possible, to
stimulate generic penetration
■ Ensure price monitoring and public information
3 Distribution system
■ Analyse for efficiency, probity, competitiveness and intervene
to correct e.g. by contracting to private and not-for-profit
logistics and security organizations
■ Monitor mark-ups
4 Generic competition
■ Ensure effective quality assurance capability and substitution
incentives at all levels
■ Promote generic acceptance by professionals and patients
■ Prequalify generic manufacturers
■ Fast-track regulatory approval of generic medicines
5 Prescribing and dispensing
■ Ensure consumers, private sector and NGOs are informed
and involved
■ Build incentives to prescribe and dispense generic
medicines, encourage separation of prescribing and
dispensing, ensure consumer information
■ Monitor
6 Financing
■ Encourage pooled and prepaid financing of medicines: e.g.
through employment-based or social insurance schemes
■ Support community-based insurance initiatives focused on
improved access to essential medicines
■ Ensure exemptions or differential fee systems to protect
access by the poorest
■ Monitor prices and access
■ Any individual price problem may have several contributing causes and
may require action on several fronts.
■ It is important to be sure about which are the most important contributing
causes before deciding on a strategy to change policy. It is
counterproductive to employ cost-containment strategies when the
problem lies with manufacturers’ prices, and vice-versa. Ascertaining
this may require more research and technical support. Look for help
from international experience with similar problems, such as mark-up
levels and regulation.
■ Analyse the relevant stakeholder positions, strengths and weaknesses
carefully before deciding how to formulate a plan for change. Build your
coalition of support carefully and selectively.
107
MEDICINE PRICES: A
NEW APPROACH TO
MEASUREMENT
■ Use your judgement about whether, when and how to involve the mass
media.
■ Meet with Ministry of Health officials and ascertain what procurement
barriers they may be experiencing. Consider a multi-sector approach:
e.g. including officials from the Ministries of Health, Finance and Trade.
■ Consider facilitating cohesive policy making: e.g. a roundtable with
Ministry of Health officials from your region.
■ Lower medicine prices require much greater transparency in transactions
at all levels; more openness and better public information will help to
create a constituency for change. Change is possible.
108
11
Reporting
■ The purpose of the survey is to stimulate action to make medicines
more affordable to the whole population; this requires accurate reporting
and effective dissemination and advocacy
■ The survey findings should be presented in the most appropriate way
for the various audiences and disseminated both generally and to
specific audiences
■ The Workbook, report and related documents should be e-mailed to HAI
or WHO Essential Drugs and Medicines Policy Department.
The ultimate objective of conducting the medicine price survey is to contribute
to making medicines affordable so that the entire population can have access
to them when they need them. Conducting the survey, analysing and interpreting
the data are important stages, but the final use of the results will depend on the
effectiveness of a further three important steps:
■ Reporting
■ Dissemination
■ Advocacy.
Without these steps, the survey will be an interesting but futile exercise.
SURVEY REPORT
As the tool will be used by various stakeholders for various purposes, the way
in which the survey resuits are reported depends on who is reporting to whom,
and the objectives of the report.
A report prepared by a consumer organization advocating for affordable medicine
prices, for example, will differ from that prepared by a medicine policy section of
a Ministry of Health reporting on the impact of pricing tariffs. Different analyses
and tables are likely in the survey report and, correspondingly, different
recommended actions. However, information on many aspects of the survey
need to be included in reports, irrespective of the reporter or objective. All reports
need to state:
■ Executive summary
■ Who undertook the survey
■ Its purpose
109
MEDICINE
PRICES:
A NEW APPROACH TO MEASUREMENT
■ When the survey was conducted
■ Information on the national medicines situation relevant to prices
■ Outline of the methodology used, such as:
- Sectors surveyed
- Sampling method
- Sites surveyed
- Medicines surveyed
■ Ethical issues, including:
- Confidentiality
- Endorsements
- Possible conflicts of interest
■ Results, with national and international comparisons
■ Discussion
■ Recommendations.
Chapters 8 and 9 give guidance on analysing and interpreting the data and
making international comparisons. Chapter 10 outlines possible lines of action.
This guidance is intended to assist you when drafting the sections in your report
on the results, discussion and recommendations.
To further assist you, an example of a national survey report is included as
Annex 5. Note that in the example survey report, annexes are indicated but not
included. The report was developed from the perspective of a local NGO advocating
for affordable medicines and is intended merely as an illustration. You will need
to draft your report as you see fit.
To heighten awareness of variations in medicine prices, you are encouraged to use
actual prices in local currency in addition to the ratios in, for example, comparing
innovator brand with most sold and lowest price generic equivalents.
It is strongly recommended that the survey report should be drafted, reviewed,
finalized and disseminated as quickly as possible, preferably within one month
of completing the survey. The survey findings could otherwise become outdated
by policy or market changes, such as inflation, fluctuating currency exchange
rates or price changes.
PRESENTING THE FINDINGS
A meeting of key national managers and policy makers should be held after the
report has been prepared to brief them on the findings of the survey. You should
outline:
■ The purpose of the survey and the process of data collection
■ A summary of the results and comparison with data from previous
national or international price surveys
■ Medicine prices by sector, identifying the five or ten highest priced
medicines
110
REPORTING,
DISSEMINATION
AND
ADVOCACY
■ The overall findings and the reasons for any observed differences
■ Issues that need to be addressed through national policy and strategy
on medicine procurement.
Experience shows that the findings of medicine price surveys are invariably
questioned and criticised. Be prepared for such situations.
The findings of the survey can be presented and reported in a number of formats;
indeed, in order to achieve the maximum coverage and impact, it is advisable to
present them in the most appropriate form for the target audience.
Survey report
The example of a survey report in Annex 5 is presented in both descriptive and
tabular form. This form of technical report would be particularly useful for Ministries
of Health, researchers and academics. An executive summary at the beginning
of the report highlighting key findings and recommendations will be welcomed.
Policy briefing paper
The survey findings and recommendations can be reported as bullet points on
a one page policy brief for busy government ministers, cabinet members and
members of parliament. Accompany the briefing paper with the full report for
those who want detailed information.
Journal articles
The survey report will provide the basis for an article for publication in the
specialist press, such as a medical journal. If the survey has been conducted by
a consumer organization or a health related NGO, consumer magazines may be
willing to publish an article.
Media
The national media are always interested in good stories and may be willing to
report on the findings of the survey, particularly if they receive a press release
or article presenting the information in a reader-friendly form.
DISSEMINATING THE FINDINGS
In orderto achieve wide coverage, the findings of the survey should be disseminated
both generally and to targeted audiences.
Targeted dissemination of the survey report should include, where relevant:
■ Medicine policy section of the Ministry of Health
■ Ministry of Finance
■ National bureau of statistics
■ National public health and medical associations
■ National medical research council
■ National pharmacy association
■ Consumer organizations (national and international)
111
MEDICINE PRICES: A NEW APPROACH TO
MEASUREMENT
■ Health related NGOs (national and international)
■ Bilateral donors
■ WHO (country offices, regional offices and headquarters)
■ Associations of pharmaceutical companies (multinational and national)
■ Individual pharmaceutical companies (multinational and national)
General dissemination should include:
■ Ministry of Health officials other than those directly related to medicine
policy and procurement
■ Ministries of Trade and Commerce
■ Academic and research institutions, public health institutions
■ Members of Parliament (with briefing paper)
■ Media (along with press release and article for publication in the press)
■ Medical journals (along with a journal article).
The survey report, press release, policy briefing paper and so on should be lodged
on the website of the organization that undertook the survey. The press release
and key findings should be e-mailed to listservs such as e-drug and ip-health (see
p. 122 for information on subscribing to these listservs). Note that these listservs
do not accept attachments. Instead, you can include a hyperlink to the full survey
report on your website.
Reporting to Health Action International and the World
Health Organization
In order to enable international comparisons of medicine prices to be made, all
survey results need to be sent to the European office of Health Action International
(located in Amsterdam, the Netherlands) and the WHO Essential Drugs and
Medicines Policy Department HAI and WHO/EDM will be monitoring the database.
The results will be reviewed before being lodged in the database of medicine
prices on HAI’s website. In addition to look-ups on national medicine price ratios,
affordability and price component data, each survey will be individually profiled.
The name and contact details of the survey manager will be given, along with the
completed Workbook, survey report and any associated documents. Data on
individual facilities will be deleted so that confidentiality is assured. Requests for
this data will be forwarded to the survey manager.
Please e-mail the following documents for the website to HAI (info@haiweb.org)
and to WHO/EDM (medicineprices@who.int):
■ Name and contact details of the survey manager
■ Computerized Workbook
■ Survey report
■ Training materials
■ Policy briefing paper, journal articles, media articles.
WHO/EDM and HAI welcome feedback on improving the manual and database.
E-mail your comments to HAI in the first instance. They will be discussed by the
project’s Advisory Group during the further development of the manual.
112
12
Development of the manual
and beyond
The development of a standard methodology to measure medicine prices poses
a number of challenges.
The nine pilot field studies identified numerous issues that the project advisory
group had to address in developing the Manual and Workbook. Most of these
issues reflected the diversity of national medicine markets. For example, selecting
an appropriate list of core medicines was problematic as countries have different
medicines on the market, in varying dosage forms, strengths and pack sizes. In
addition, usage varies to such an extent that a medicine used as first-line therapy
in one country may rarely be used to treat the same condition in another country.
Other aspects of non-uniformity included the varying sectors that are involved in
medicine dispensing. These can range from only two sectors (public sector and
private retail pharmacies) to numerous sectors (public sector, private sector, the
NGO sector, employer-provided health facilities, dispensing doctors, etc.) There
were also other issues that required pragmatic solutions; for example, how could
an NGO with limited funds and time select a representative sample of pharmacies
to visit in a country the size of Brazil? The work undertaken to date included
addressing this issue and many others.
In short, the challenge was to ensure that the methodology was relevant for
national (or provincial) surveys, but could also be the basis for valid, albeit
limited, international comparisons of the prices of medicines. The methodology
therefore had to be designed with flexibility in mind. But more surveys need to
be conducted to ensure it is suitable in diverse medicine markets. For this
reason, the manual remains in development pending the evaluation of further
surveys.
During 2003 and 2004, governments, NGOs and others are encouraged to
undertake country-specific surveys using this manual and the accompanying
Workbook. Sub-regional or regional workshops are planned to support these
studies. Investigators are also encouraged to submit their survey results to HAI
for lodging on the website and to participate in an evaluation of the manual. In
order to further develop the manual, it is vital that investigators provide feedback
on what went well and, most importantly, what was problematic.
113
MEDICINE PRICES: A NEW APPROACH TO
MEASUREMENT
It is intended that the development of the methodology will also include:
■ Testing its reliability by undertaking simultaneous surveys in a country
■ Validating the sample size and methods
■ Validating medicine prices by conducting a surrogate patient survey
■ Assessing factors to take into account in time series analyses.
Following the evaluation of national surveys and these activities, the manual will
be updated (planned for late 2004).
The methodology is designed to provide much needed information on the prices
people pay for medicines. It does not prejudge the causes of high prices and
significant price variations. Further investigation and dialogue are necessary to
determine causes and suitable lines of response. The second phase of this
project will therefore include in-depth investigations into medicine price
discrepancies and policy options for reducing prices.
As stated at the beginning of this manual, unaffordably high prices are a major
barrier to the use of medicines and better health. It is hoped that this manual,
even in its first stage of development, will provide much needed transparency and
information about the prices that people pay for medicines.
114
Glossary
Active pharmaceutical ingredient (API)
The chemical substance responsible for a product’s effect. In this manual, it is
called “substance”.
Affordability
The cost of treatment in relation to peoples’ income. In this survey, the daily wage
of the lowest paid unskilled national government worker is used for comparison
with the cost of a defined course of treatment for a specific condition.
Brand name
Name given to a pharmaceutical product by the manufacturer: e.g. Valium is the
innovator brand name (also called trade name) for diazepam. The use of this
name is reserved exclusively to its owner as opposed to generic names: e.g.
diazepam. In this manual, if it is the innovator’s product it is called “innovator
brand”.
Brand names may also be used for generic products; they are then often called
“branded generics”. These brand names are different from innovator brand names.
See Generic medicine.
Cost, insurance, freight (CIF)
Shipping term meaning the seller must pay the costs, insurance and freight
charges necessary to bring the goods to the port of destination.
Dispensing fee
Normally a fixed fee that pharmacies are allowed to charge per prescribed item
instead of or in addition to a percentage mark-up. The fee more accurately
reflects the work involved in handling a prescription; a percentage mark-up makes
profit dependent on the sale of expensive medicines.
Dosage form
The administration form of the completed pharmaceutical product: e.g. tablet,
capsule, mixture, injection. Also called dose form or dosing unit.
Drug
See Medicine.
Essential medicines
Essential medicines are intended to be available within the context of functioning
health systems at all times, in adequate quantities, in the appropriate dosage
forms, with assured quality and adequate information, and at a price the individual
and community can afford. The WHO Model List of Essential Medicines (WHOML)
is intended to be flexible and adaptable to many different situations; the precise
115
MEDICINE
PRICES:
A
NEW
APPROACH
TO
MEASUREMENT
definition of the medicines that are regarded as essential remains a national
responsibility.
Free on board (FOB)
Shipping term meaning the buyer must pay all costs and insurance against risks
of damage once goods are loaded for shipping.
Generic medicine
A pharmaceutical product usually intended to be interchangeable with the innovator
brand product, manufactured without a licence from the innovator manufacturer
and marketed after the expiry of patent or other exclusivity rights.
Generic medicines are marketed either under a non-proprietary name (INN), for
instance diazepam or occasionally another approved name, rather than under a
proprietary or brand name. However, they are also quite frequently marketed
under brand names, often called “branded generics”. In Kenya, for example,
there are six different generic products with brand names for diazepam (in
addition to Valium).
The manual Marketing Authorization of Pharmaceutical Products with Special
Reference to Multi-source (Generic) Products (WHO/DMP/RGS/98.5) defines
and uses the term “multi-source pharmaceutical product” for generic products.
This includes even an innovator brand for which the patent has expired. This
definition of a generic is used in some countries, but this manual distinguishes
between innovator brand, regardless of its patent status, and generic equivalents.
Innovator brand premium
The difference in retail price between the innovator brand and a generic equivalent.
Innovator pharmaceutical product/innovator brand
Generally the product that was first authorized world wide for marketing (normally
as a patented product) on the basis of the documentation of its efficacy, safety
and quality, according to requirements at the time of authorization: e.g. Valium.
The innovator product always has a brand name; this may, however, vary between
countries.
Some substances are so old that no innovator can be identified and patent was
probably never claimed. This is the case with such substances as penicillin V,
prednisolone and isoniazid. This manual recommends using the highest cost
brand as the innovator brand in those cases.
International Non-proprietary Name (INN)
A common, generic name selected by designated experts for the unambiguous
identification of a new pharmaceutical substance. The selection process is based
on a procedure and guiding principles adopted by the World Health Assembly.
INNs are recommended for worldwide use. This manual uses INNs.
The system was introduced by WHO in 1950 as a means of identifying each
pharmaceutical substance or active pharmaceutical ingredient by a unique name
that is universally accessible as public property (non-proprietary). It is often
identical to the generic name: e.g. diazepam. A brand name (trade name) should
not be derived from the INN name.
116
GLOSSARY
A comprehensive list of names for radicals and groups updated per 2002 can
be found in the document International Nonproprietary Names (INN) for
pharmaceutical substances (WH0/EDM/QSM/2003.1).
Interchangeable pharmaceutical products
Products within a therapeutic class, but with different active ingredients are
interchangeable if they have equivalent therapeutic effect.
Mark-up
A certain percentage added to a purchasing price to cover the cost and profit of
the wholesaler or retailer.
Marketing authorization
An official document issued by a competent medicines regulatory authority for the
purpose of marketing or free distribution of a product after evaluation for safety,
efficacy and quality. “Registration” is another term used for this purpose.
Median
There are three ways of expressing the average value: mean, median and mode.
The mean is simply the sum of the values divided by the number of values. The
median is the value that divides the distribution in half. If the observations are
arranged in increasing order, the median is the middle observation. The median
is a useful descriptive measure if there is an asymmetrical distribution of the data
or there are one or two extremely high or low values, which would make the mean
unrepresentative of the majority of the data.
The median is correctly used with the interquartile range to summarise markedly
non-normally distributed (asymmetrical) data. See “Percentile”.
Medicine
Any dosage form containing a substance approved for the prevention and treatment
of disease. The term “medicine” is increasingly used to distinguish it from a drug
as a substance that is misused. See also Pharmaceutical product.
Medicine outlet
A term sometimes used to describe a shop that is not owned or run by a
pharmacist and that has a limited licence. However, in this survey "medicine
outlet” is used more broadly to identify any place in which medicines are sold,
including pharmacies/dispensaries in public and NGO health facilities, private
hospitals, etc.
MSH (Management Sciences for Health) reference prices
The MSH issues an annual International Price Indicator Guide (http://erc.msh.org).
It has two sections. The first section lists procurement prices offered by not-forprofit suppliers to developing countries for multi-source generically equivalent
products. The second section lists tender prices offered to procurement agencies
in developing countries. The number of suppliers listed for each product may vary.
For each product, a mean and a median unit price is calculated. The median price
is used in this manual as the international reference price. The tender price
section is used only for products that have no procurement price.
117
MEDICINE PRICES:
ANEW APPROACH TO
MEASUREMENT
Multi-source product
See Generic medicine.
Originator pharmaceutical product (brand)
See Innovator pharmaceutical product/innovator brand.
Patent
A title granted by the public authorities that confers a temporary monopoly for the
exploitation of an invention upon the person who reveals it, furnishes a sufficiently
clear and full description of it and claims this monopoly.
Patient co-payments
Payments by patients of a fixed amount per prescribed medicine, even if
reimbursement applies.
Percentile
The range of values containing the central half of the observations: that is, the
range between the 25th and 75th percentiles (the range including the values that
are up to 25% higher or down to 25% lower than the median) is called the
interquartile range. It is used with the median value (instead of the mean ±
standard deviation) to report data that are markedly non-normally distributed.
(Standard deviation: a measure describing the range of the data when using the
mean.)
Pharmaceutical equivalence
Medicines with identical amounts of the same active ingredient in the same
dosage form and route of administration, that meet the standards of strength,
quality, purity, and identity.
Pharmaceutical product
Any medicine intended for human use, presented in its finished dosage form that
is subject to control by pharmaceutical legislation (registered). A product may be
sold under a brand name (e.g. Valium) or under the generic name (e.g. diazepam).
Procurement price
The price paid by the government, wholesalers and other purchasers to procure
medicines. Different prices may be paid for the same product by a public sector
purchaser, such as the Ministry of Health, the health facility that supplies the
medicine to the patient, and the individual who purchases the medicine.
Rebate
Pharmacies may receive a bulk refund from the wholesaler, based on sales of
a particular product. This is a discount on the retailer acquisition cost. It does
not affect the price the patient pays, but the retailer mark-up will be higher.
Retailer
A company that sells goods to consumers. In the pharmaceutical sector, the
retailer is the pharmacy or any other medicine outlet.
Many low- and middle income countries have at least two different types of shops
in which medicines can be purchased: pharmacies with a registered pharmacist
118
REFERENCES
and drug stores, chemists or medicine outlets with paramedical staff or lay
people (often called the informal sector).
Retail mark-up
A percentage added to the purchasing price to cover the retailer’s costs and
profit.
Substance
See Active pharmaceutical ingredient.
Trade name
See Brand name.
Trade-Related Aspects of Intellectual Property Rights (TRIPS)
An agreement annexed to the World Trade Organization convention aimed at
strengthening and harmonizing aspects of the protection of intellectual property
at the global level. It includes trademarks and patents as well as other forms on
intellectual property.
Wholesaler
A company that buys goods from a manufacturer or importer and sells it to
retailers.
The number of wholesalers in the pharmaceutical sector varies between countries,
from one state wholesaler to more than 500. The wholesaler may be an agent
for one company only or deal with products from several companies. Manufacturers
may also be wholesalers for their own products. In some countries, pharmacies
may also have a wholesaler licence.
Wholesale mark-up
A percentage added to the purchasing price to cover the wholesaler’s costs and
profit.
119
References
Bala K, Lanza 0, Kaur SL (1998) Retail drug prices: The law of the jungle.
Hainews, 100, Apri 1:2-4, 13-16 and inserted table.
Bala K, Sagoo K (2000) Patents and prices. Hainews, 111, April/May.
http://www.haiweb.org/pubs/hainews/April 2000.html
Bale HE Jr (2001) Consumption and Trade in Off-patented Medicines. CMH
Working Paper Series. Paper no WG 4:3. May
http://www3.who.int/whosis/cmh/cmh_papers/e/pdf/wg4_paperO3.pdf
British National Formulary.
http://bnf.vhn.net/ (free access for health personnel)
Chaulet P (1992) The supply of antituberculosis drugs and national drug policies.
Int J Tuberc Lung Dis, 73:295-304.
Danzon PM, Chao L-W (2000) Cross-national price differences for pharmaceuticals:
how large, and why? Journal of Health Economics, 19:159-195.
European Commission (2002) Duties and Taxes on Essential Medicines Used in
the Treatment of the Major Communicable Diseases. European Commission,
Directorate-General for Trade, Brussels.
http://europa.eu.int/comm/trade/issues/global/medecine/docs/
wtosub_100303. pdf
Jacobzone S (2001) Pharmaceutical Policies in OECD Countries: Reconciling
social and industrial goals. OECD. (Labour Market and Social Policy Occasional
Papers, No. 40).
http://www.olis.oecd.org/0US/2000D0C.NSFc5ce8ffa41835d64cl25685d005
300b0/cl25685b0057c558cl2568c400331ale/$FlLE/00075948.pdf
Laing RO, McGoldrick K. Tuberculosis Drug Issues: Prices, fixed dose combination
products and second line drugs.
http://dcc2.bumc.bu.edu/richardl/wor1d_TB_Day/TB_Drug_lssues/summary.htm
Management Sciences for Health (2002) International Drug Price Indicator Guide
2002. MSH.
http://erc.msh.org
Myhr K (2000) Comparing Prices of Essential Drugs between Four East African
Countries and with International Prices. MSF Conference, Nairobi.
http://www.accessmed-msf.org/prodpublications.asp?scntid=392001
2349208&contenttype=PARA&
Perez-Casas C et al. (2000) HIV/AIDS Medicines Pricing Report. Setting objectives:
is there a political will? MSF July 6, 2000; update December 2000.
http://www.accessmed-msf.org/prodpublications.asp?scntid=49200113585
& contenttype=PARA&
120
REFERENCES
Productivity Commission (2001) International Pharmaceutical Price Differences.
Research Report. Australia: July 2001.
http://www.pc.gov.au/study/pbsprices/finalreport/index.html
Schweitzer, S (1997) Pharmaceutical Economics and Policy. Oxford University
Press, New York.
UNICEF/UNAIDS/WHO-HTP/MSF (2002) Sources and Prices of Selected Drugs
and Diagnostics for People Living With HIV/AIDS. Joint Project of UNAIDS/UNICEF/
WHO-HTP/MSF, May 2002. WH0/EDM/PAR/2002.2.
http://www.who.int/medicines/library/par/hivrelateddocs/prices-eng.pdf
United States General Accounting Office (1994) Prescription Drugs: Companies
Typically Charge More in the United States than in the United Kingdom. GAO/
HEHS-94-29, Washington DC.
World Health Organization (1998) Marketing Authorization of Pharmaceutical
Products with Special Reference to Multi-source (Generic) Products, WHO/DMP/
RGS/98.5. WHO, Geneva.
World Health Organization (1999) Globalization and Access to Drugs: Perspectives
on the WTO/TRIPS Agreement, WHO/DAP/98.9 revised, 1999. WHO, Geneva.
http://www.who.int/medicines/library/dap/whQdap-98-9-rev/whodap-98-9.htm
World Health Organization (2000) Core Indicators on Country Pharmaceutical
Situation. Draft October 2000. WHO, Geneva.
World Health Organization Regional Office for Africa (2000) Essential Drugs Price
Indicator (2nd edn), December 2000. WHO-AFRO.
World Health Organization (2001) How to Develop and Implement a National Drug
Policy (2nd edn). WHO, Geneva.
http://www.who.int/medicines/library/par/ndp
http://www.who. int/medicines/l ibrary/par/ndpengl ish. pdf>_engl ish. pdf
World Health Organization/World Trade Organization (2001) Background Paper
for the WH0-WT0 Secretariat Workshop on Differential Pricing and Hnancing of
Essential Drugs. H0sbj0r, Norway, 8-11 April 2001.
http://www.who.int/medicines/docs/pagespublications/doclist.htm
World Health Organization/World Trade Organization Secretariats (2001) Report
of the Workshop on Differential Pricing and Financing of Essential Drugs. Norwegian
Foreign Affairs Ministry, Global Health Council. 8-11 April 2001, H0sbj0r, Norway.
http://www.who.int/medicines/library/edm_general/who-wto-hosbjor/
wholereporthosbjorworkshop-fin-eng.pdf
World Health Organization (2002) WHO Model List of Essential Medicines
(12th ed.). WHO, Geneva.
http://www.who.int/medicines/organization/par/edl/edl2002core.pdf
World Health Organization (2002) Network for Monitoring the Impact of Globalization
and TRIPS on Access to Medicines, WH0/EDM/PAR/2002.1. WHO, Geneva.
http://www.who.int/medicines/library/par/whQedm-par-2001-l/networktrips.pdf
World Health Organization (2003) International Nonproprietary Names (INN) for
pharmaceutical substances, WH0/EDM/QSM/2003.1. WHO, Geneva.
121
MEDICINE PRICES: A NEW APPROACH TO MEASUREMENT
Listservs
iphealth: to subscribe, go to http://lists.essential.org/mailman/listinfo/ip4iealth
e<irug: to subscribe, go to http://www.essentialdrugs.org/edrug/subscribe.php
or write to majordomo @usa.healthnet.org and in the body of the message type:
subscribe edrug
122
Annexes
1 Example of a letter of endorsement
2 National Pharmaceutical Sector form
3 Medicine Price Data Collection form
4 Example of a letter of introduction from the survey manager
5 Example of a survey report
Annex 1
Example of
endorsement
a
letter
of
To whom it may concern
Medicine price survey
Mr/Ms/Dr
(title and name of survey manager) of
(organization) will be undertaking a survey of medicine prices in
(area or districts) in
(month in which study will be undertaken).
This requires the collection of price information at a sample of retail pharmacies
and other medicine outlets, as well as the collection of information on price
composition at different points in the supply chain, from manufacturer to consumer.
The survey follows methods promoted by the World Health Organization and
Health Action International and is designed to help identity ways of improving the
affordability of medicines in
(name of country). Supporting
(survey manager) in this work are
(Advisory Group
member names and designations).
We understand that the results will be publicly available by
(likely
date for completion of report) and that complete anonymity of individual pharmacies
and medicine outlets will be assured. A prior appointment will be made with each
pharmacy to be visited at a date and time convenient to staff.
On behalf of
(Ministry of Health or Pharmacy Association), I would
be grateful if you would provide full access to the information needed for this
survey.
Signed
Designation
Place
Date
125
Annex 2
National Pharmaceutical Sector
form
Date
Population
Daily wage of lowest paid government worker
Rate of exchange (commercial “buy” rate)
to US dollars on the first day of data collection
Sources of information
126
General information on the pharmaceutical sector
Is there a formal National Medicines Policy document covering both the
public and private sectors?
□ Yes
□ No
Is an Essential Medicines List (EML) available?
□ Yes
□ No
Is there a policy for generic prescribing or substitution?
□ Yes
□ No
Are there incentives for generic prescribing or substitution?
□ Yes
□ No
□ Yes
□ No
If yes, state total number of medicines on national EML:
If yes, year of last revision:
If yes, is it (tick all that apply):
□ National
□ Regional
□ Public sector only
□ Both public and private sectors
□ Other (please specify):
If yes, is the EML being used (tick all that apply):
□ For registration of medicines nationally
□ Public sector procurement only
□ Insurance and/or reimbursement schemes
□ Private sector
□ Public sector
Public procurement1
Is procurement in the public sector limited to a selection of
essential medicines?
If no, please specify if any other limitation is in force:
Type of public sector procurement (tick all that apply):
□ International, competitive tender
□ Open
□ Closed (restricted)
□ National, competitive tender
□ Open
□ Closed (restricted)
□ Negotiation/direct purchasing
1 If there is a public procurement system, there is usually a limited list of items that can be procured. Products procured on
international tenders are sometimes registered in the recipient country only by generic names. Import permits to named
suppliers are issued based on the approved list of tender awards. An open tender is one that is publicly announced; a closed one
is sent to a selection of approved suppliers.
127
Are the products purchased all registered?
Yes
No
Is there a local preference?2
Yes
No
Are there public health programmes fully implemented by donor
assistance which also provide medicines? (e.g. TB, family planning, etc.)
Yes
No
Yes
No
Yes
No
If yes, please specify:
Distribution3
Is there a public sector distribution centre/warehouse?
If yes, specify levels:
Are there private not-for-profit distribution centres:
e.g. missions/nongovemmental organizations?
If yes, please specify:
Number of licensed wholesalers:
Retail
Urban
Rural
Overall
Number of inhabitants per pharmacy (approx.)
Number of inhabitants per qualified pharmacist (approx.)
Number of pharmacies with qualified pharmacists
Number of medicine outlets with pharmacy technician
Number of other licensed medicine outlets
Private sector4
Are there independent pharmacies?
Yes
No
Number:
Are there chain pharmacies?
Yes
No
Number
Do doctors dispense medicines?5
Yes
No
If yes, approximate coverage or % of doctors who dispense:
Are there pharmacies or medicine outlets in health facilities?
Yes
No
2 A local preference means that local companies will be preferred even if their prices are not the cheapest. Local preference is
normally in the range of 10-20%.
3 The public sector often has a central storage and distribution centre which may have at least one sublevel. Ihe private not-forprofit sector may be dominated by one type of NGO (e.g. church missions), but may also comprise others such as Bamako
Initiative type projects, Red Cross or Red Crescent Society, Medecins Sans Frontieres.
4 Retail outlets may be called pharmacies, medicine outlets, drug stores, chemists, etc. They may be run/owned by a qualified
pharmacist (with diploma) or another category: e.g. pharmacy technician, or a lay person with short training.
5 Many countries allow doctors to dispense and sell medicines.
128
Financing
(Give approximate figures, converted to US dollars at current exchange rate: commercial “buy” rate
on the first day of data collection)
Type of expenditure
Approximate annual budget
(US dollars)
National public expenditure on medicines including
government insurance, military, local purchases in
past year
Estimated total private medicine expenditure in past
year (out of pocket, private insurance, NGO/mission)
Total value of international medicine aid or donations
in past year
What percentage of medicines by value are imported?
%
Government price policy
Is there a medicines regulatory authority?
Yes
No
Is pricing regulated?
Yes
No
Is setting prices part of market authorization/registration?
Yes
No
■ Innovator brand and generic equivalents
Yes
No
■ Imported and locally produced medicines
Yes
No
Yes
No
Yes
No
Yes
No
Do registration fees differ between:
Public sector
Are there margins (mark-ups) in the distribution chain?
■ Central medical stores%
■ Regional store
%
■ Other store (specify)
%
■ Public medicine outlet
%
Are there any other fees or levies?
If yes, please describe:
Private retail sector
Are there maximum profit margins?
If yes (if they vary, give maximum and minimum):
■ Wholesale%
■ Retail
%
129
Is there a maximum retail price (sales price)?
(If it varies, give maximum and minimum)
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
■ Maximum
■ Minimum
Do patients pay professional fees (e.g. dispensing fee)?
If yes, please describe:
“Other” sector
Are there maximum profit margins?
If yes (if they vary, give maximum and minimum):
■ Wholesale%
■ Retail
%
Is there a maximum sales price?
Insurance, risk-sharing or prepayment schemes
Are there any health insurance, risk-sharing or
prepayment schemes or revolving medicine funds?
If yes, please describe:
Are all medicines covered?
If no, state which medicines are covered (e.g. EML, public health programmes):
Yes
No
Yes
Yes
No
No
Are there official user charges/patient co-payments/fees?
Yes
No
Are all medicines supplied free at hospitals?
Yes
No
Yes
No
Are some patients / groups of patients exempted, regardless
of insurance coverage? (e.g. children < X years, war veterans)
If yes, please specify:
Estimated percentage of population covered
%
Is it official policy to supply all medicines free at primary health care level?
If no, are some free?
If yes, tick all that apply:
Tuberculosis
Malaria
Oral rehydration salts
Family planning
Others, please specify:
If no, are some free?
If yes, please specify:
130
Annex 3
Medicine Price Data Collection form
Use one form for each health facility and pharmacy
Area number
Date
Name of town/village/district
Name of health facility/pharmacy (optional)
Health facility/pharmacy ID (mandatory)
Distance in km from nearest town (population > 50 000)
Type of health facility:
Private retail pharmacy
Public
Other (please specify):
___________________
Type of price in public and private not-for-profit sector.
Price the patient pays
Procurement price
Name of manager of the facility
Name of person(s) who provided information
on medicine prices and availability (if different)
Data collectors
Verification
To be completed by the area supervisor at the end of the day
Signed
Date
131
MEDICINE PRICE DATA COLLECTION FORM
Most sold: determined nationally
Lowest price: determined at facility
C
________________ A________
Generic name, dosage form,
strength
_______ B
Brand name(s)
Manufacturer
Aciclovir tab 200 mg
Zovirax
GSK
T ryptizol
Most sold generic equivalent
Lowest price generic equivalent
Amoxicillin caps/tab 250 mg
Amoxil
MSD
Most sold generic equivalent
Lowest price generic equivalent
Atenolol tab 50 mg
Tenormin
SKB (GSK)
H
Unit price
(4 digits)
/tab
100
/tab
21
/tab
21
Sanofi
Lowest price generic equivalent
Beclometasone inhaler 50 mcg/ dose
Becotide
AstraZeneca
GSK
Lowest price generic equivalent
BMS
Most sold generic equivalent
Lowest price generic equivalent
Carbamazepine tab 200 mg
Tegretol
Novartis
60
/tab
1 inhaler:
200 doses
1 inhaler:
200 doses
1 inhaler:
200 doses
60
60
60
100
/dose
/tab
/tab
ioo
Most sold generic equivalent
Lowest price generic equivalent
Ceftriaxone inj 1 g powder
Rocephin
Most sold generic equivalent
/tab
60
60
Most sold generic equivalent
Capoten
20*
20*
20*
Most sold generic equivalent
Lowest price generic equivalent
G
Price of
pack
found
21
Lowest price generic equivalent
Artesunate tab 100 mg
Arsumax
Captopril tab 25 mg
F
Pack size
found
ioo
wo
Most sold generic equivalent
K>
E
Pack size
recom
mended
25
25
25
Most sold generic equivalent
Lowest price generic equivalent
Amitriptyline tab 25 mg
D
Available
tick
for yes
100
Roche
1 vial
1 vial
1 vial
/vial
_________ l_
Comments
C
________________ A________
Generic name, dosage form,
strength
_______ B
Brand name(s)
Manufacturer
Ciprofloxacin tab 500 mg
Ciproxin
Bayer
Lowest price generic equivalent
Co-trimoxazole paed suspension
Bactrim
(8+40) mg/mL______________________
Most sold generic equivalent
Lowest price generic equivalent
Diazepam tab 5 mg
Valium
Roche
/tab
100 mL
/ml
100
/tab
Novartis
100
100
100
/tab
Pfizer
30
/tab
Lowest price generic equivalent
Diflucan
Most sold generic equivalent
Lowest price generic equivalent
30
30“
Prozac
Lilly
30“
/tab
”^0
Most sold generic equivalent
Lowest price generic equivalent
Modecate
Sanofi-Winthrop/
BMS
Most sold generic equivalent
30
1 ampoule
/mL
1 ampoule
Lowest price generic equivalent
1 ampoule
Daonil
HMR
Most sold generic equivalent
Lowest price generic equivalent
Hydrochlorothiazide tab 25 mg
H
Unit price
(4 digits)
100 mL
Roche
Lowest price generic equivalent
Glibenclamide tab 5 mg
G
Price of
pack
found
Too
Too
Diclofenac tab 25 mg
Voltarol
Most sold generic equivalent
Fluphenazine decanoate inj 25 mg/mL
F
Pack size
found
100 mL
Most sold generic equivalent
Fluoxetine caps/tab 20 mg
E
Pack size
recom
mended
“T
1
Most sold generic equivalent
Fluconazole caps/tab 200 mg
D
Available
tick
for yes
60
/tab
60
60
Dichlotride
MSD
30
/tab
30“
Most sold generic equivalent
30-
Lowest price generic equivalent
Crixivan
MSD
/caps
Lowest price generic equivalent
Cozaar
Losartan tab 50 mg
Most sold generic equivalent
180
180
180
MSD
30
30
/tab
Indinavir caps 400 mg
Most sold generic equivalent
Lowest price generic equivalent
30
_________ l_
Comments
C
________________ A________
Generic name, dosage form,
strength
_______ B
Brand name(s)
Manufacturer
Lovastatin tab 20 mg
Mevacor
MSD
Most sold generic equivalent
Lowest price generic equivalent
Metformin tab 500 mg
Glucophage
Merck
Most sold generic equivalent
Lowest price generic equivalent
Nevirapine tab 200 mg
Viramune
Boehringer I
Most sold generic equivalent
Lowest price generic equivalent
Nifedipine Retard tab 20 mg
Adalat Retard
Bayer
Most sold generic equivalent
2
Lowest price generic equivalent
Omeprazole caps 20 mg
Losec
AstraZeneca
Most sold generic equivalent
Lowest price generic equivalent
Phenytoin caps/tab 100 mg
Epanutin
Pfizer
Most sold generic equivalent
Lowest price generic equivalent
Pyrimethamine with sulfadoxine tab
Fansidar
(25+500) mg_______________________
Most sold generic equivalent
Lowest price generic equivalent
Ranitidine tab 150 mg
Zantac
Roche
GSK
GSK
Lowest price generic equivalent
Most sold generic equivalent
Lowest price generic equivalent
Retrovir
F
Pack size
found
G
Price of
pack
found
H
Unit price
(4 digits)
/tab
/tab
/tab
/tab
/caps
/tab
/tab
3““
Most sold generic equivalent
Zidovudine caps 100 mg
E
Pack size
recom
mended
60
60
60
100
100
100
60
60
60
100
100
100
30
30
30
100
100
WO
3
3
Most sold generic equivalent
Lowest price generic equivalent
Salbutamol inhaler 0.1 mg per dose
Ventoline
D
Available
tick
for yes
GSK
60
60
60
1 inhaler:
200 doses
1 inhaler:
200 doses
1 inhaler:
200 doses
100
100
100
/tab
/dose
/caps
* Based on treatment of malaria in an adult around 70 kg with artesunate as single treatment: 4 mg/kg for 7 days (WHO Model Formulary, 2002)
_________ l_
Comments
Annex 4
Example of a letter of introduction
from the survey manager
To whom it may concern
Medicine price survey
(place and dates)
By this letter I would like to introduce to you
(name of area
supervisor) and his/her team (details attached), as they begin to collect information
from registered pharmacies and other sources on the price of selected medicines
in your area.
This work is in accordance with methods promoted by the World Health Organization
and Health Action International and endorsed by
(Ministry of
Health and/or Pharmacy Association). The results will be made publicly available
and the anonymity of individual pharmacies and individual respondents will be
strictly maintained.
This work should contribute to better knowledge about retail price differences,
both in the country and internationally. It should also help us to understand how
these prices are determined and how we might better control them. As you are
aware, the price of medicines is of great importance to all people.
The survey team’s work consists of interviewing staff at a preselected sample
of pharmacies about the prices and availability of 30 to 50 important medicines.
Each pharmacy visit will probably take about two hours and we will try to ensure
that the timing of the visit is convenient for you and your staff. Interviewers have
specifically been asked to avoid arriving at peak times, when the pharmacy is
busiest.
Should you need further information or have questions about this survey, please
contact me directly. I would be grateful for every assistance you can provide to
(area supervisor) and his/her team in carrying out their work.
Signed
Designation
Place
Date
Attachments:
Full contact details of survey manager and commissioning organization
Names of all data collectors in survey area
Planned schedule of dates and times of visits to pharmacies
Full contact details of survey manager
Names and designations of Advisory Group members
Copy of letters) of endorsement
135
Annex 5
Example of a survey report
The prices people have to pay for medicines in
Utopia
The Medicines in Utopia Network (MUN)
November 2002
Contents
Acknowledgements
Executive summary
1 Introduction and background
2
3
4
5
Methods
Data collection
Results and discussion
Recommendations
Annexes1
I Questionnaire on the pharmaceutical sector in Utopia
II List of medicines surveyed
III Analysis of price data
IV Affordability of 10 treatments
V Price components of three medicines
Acknowledgements
Permission to undertake this survey was given by the Ministry of Health and the Utopia
Pharmacy Association. Each health facility and pharmacy was given a number to ensure
anonymity.
We wish to thank all the people who gave their precious time to provide data and the area
supervisors and data collectors. We also wish to express our thanks to the Advisory Group:
Dr Lembu Kalala, Chief Pharmacist, Ministry of Health
Dr Talia Tumun, Utopia Medical Association
Ms Heni Surono, Utopia Pharmacy Association
Mr Ovia Taboro, Director, Central Medical Stores
Dr Subardan Aziz, District Medical Officer
Ms Mai Owino, Survey Area Supervisor, Ira District
Mr James Mpenda, Survey Data Analyst
1 Note: In this example, Annexes are indicated but not included.^
136
Executive summary
The Medicines of Utopia Network has carried out a field study to measure the prices of
medicines in Utopia using an international standardized methodology. Data on prices for 35
medicines were collected in the public and private for-profit sector in the capital, Tata, and
in the three districts of Ira, Baya and Nona. The availability of the medicines was also
measured. The cost of treatment was calculated for ten medicines and compared to the daily
wage of the lowest paid government worker. In addition, we also identified the components
of medicine prices.
The results showed that in Utopia, where 80% of the population live on less than one US
dollar per day, the prices of medicines are high, making essential medicines unobtainable
for many. Even in the public sector, there is a charge of around 30%. Because the prices
obtained by public procurement are reasonable, however, the resulting price to the patient
is much lower than in the private sector. Private sector prices are considerably higher and
prescribers in this sector possibly use innovator brands more extensively, resulting in
unaffordable treatment for most people. The prices of innovator brands are considerably
higher than the prices of their generic equivalents. The prices of generic medicines also vary
and the cheapest product is not always the most sold.
For a basic monthly treatment for diabetes, for example, the price may be as high as 7.4 days’
wages for an innovator brand. Part of the problem is relatively high duties, tariffs and mark
ups.
Summary of Recommendations
1 The government should carefully consider a policy favouring the use of generic
medicines by stimulating generic prescribing, increasing consumer awareness and
acceptance of generic equivalents and introducing incentives for pharmacists to
comply with a policy on generics.
2 The government should take steps to reduce the burden of duties, taxes and mark
ups. One option would be to replace an uncontrolled percentage mark-up with a
fixed dispensing fee and a fixed, lower mark-up. Introducing and enforcing compliance
with maximum mark-ups in the private sector is a further measure that could be
undertaken.
3 The central medical stores should be made a wholesaler of essential medicines
also for the private sector for example, by transforming it into an autonomous state
wholesaler.
4 The government should use the findings of this study for more in-depth reviews of
policy options.
1 Introduction and background
During the months of October and November 2002, a field study on measuring the prices
of medicines was carried out in Utopia. The goal of the study was to document and compare
the prices of medicines in the different parts of the health sector and to compare them with
those in other countries.
The field work carried out is based on a methodology developed by the World Health Organization
(WHO) and Health Action International (HAI) using a short list of medicines to compare the
prices of medicines in different health sectors. The methodology, which is described in the
manual, Medicine Prices: A new approach to measurement (WHO/HAI, 2003), has been
designed for the collection, analysis and interpretation of medicine prices in a standardized
way. It also enables the composition of medicine prices to be investigated.
137
The objectives of our study were to answer the following questions:
• How are medicines priced in Utopia?
• What is the difference in the prices of innovator brand products and generic
equivalents?
• What taxes and duties are levied on medicines and what is the level of the various
mark-ups that contribute to the retail price of medicines?
• How affordable are medicines to low-income people in Utopia?
The study was carried out by the Medicines in Utopia Network with permission from the
Ministry of Health. The resulting report is distributed to the Ministries of Health and Finance,
the Utopia Pharmacy Association and the Utopia Medical Association.
Country data
Utopia has a population of 20 million, 65% of whom live below the poverty line. The GNP per
capita is 200 US dollars. Public health services cover an estimated 80% of the population,
but services are not completely free; there is, for example, a fee per prescription which goes
into a revolving medicines fund. There is no public insurance, but people over the age of 65
and children below 5 years receive free health services.
There are an estimated 500 private pharmacies, mainly in the larger cities. Doctors are
allowed to dispense medicines, but the size of the “market” is not fully known. There are a
few small nongovernmental organizations in the health sector. In the public sector, there is
an Essential Medicines List and medicines are procured by use of international tenders. There
is currently no patent law. The national medicines policy is still in draft form. The information
gathered on the health and pharmaceutical sectors during this survey is attached as
Annex I.
2 Methods
MUN decided to look at the prices of a number of essential medicines in the public sector
and private pharmacies. A total of 35 substances were included in the survey. Of these, 30
medicines were preselected as core medicines for international comparison and five were
added by us as a supplementary list. The list is attached as Annex II.
For each substance, up to three products were monitored, namely:
• Innovator brand
• Most sold generic equivalent
• Lowest price generic equivalent.
The prices were measured centrally and in health facilities and pharmacies in the capital,
Tata, and in three randomly selected districts: Ira, Baya and Nona. We also looked at two
prices in the public sector
• Procurement prices
• Prices charged to patients.
In all sectors we also measured the availability of the medicines at the time of data collection.
The use of an international reference price for standardized international comparison is
explained under “Results”. All prices were converted to US dollars using the exchange rate
(buying rate) on 1 November 2002, the first day of the survey.
We also identified the components of medicine prices in order to make an estimate of the
manufacturers’ prices.
138
Finally, in order to find out what prices of medicines mean to the ordinary citizen, we measured
the costs of some common treatments and compared them with the daily wage of the lowest
paid government worker.
Sampling
In order to obtain the data, we used the sampling method described in the WHO/HAI manual
for selecting a representative number of public health facilities and pharmacies. A total of 20
public sector health facilities and 20 pharmacies in Tata and the three randomly selected
districts were included. This sample would ensure that a sound statistical analysis could be
performed if the selected medicines were widely available.
The methodology described in the manual allows for more sectors to be included, such as
the private not-for-profit (NGO) sector. We decided not to include this sector because it is small
and fragmented in Utopia.
Finalizing the list off medicines
The 30 medicines on the core list do not correspond very well with the Essential Medicines
List of Utopia which sometimes recommends other pharmaceutically equivalent substances
or other strengths. For this reason and because we also wanted to monitor some medicines
used for treating parasitic infections, we added the following substances:
• Amoxicillin tab 500 mg (different strength from the one on the core list)
• Amoxicillirbclavulanic acid tab 250+125 mg (more commonly used than amoxicillin)
• Enalapril tab 20 mg (on the Utopia Essential Medicines List instead of captopril)
• Albendazole tab 400 mg
• Metronidazole tab 250 mg.
3 Data collection
We found data on public procurement prices (tender prices) and availability at the Central
Medical Stores. At the public health facilities, we checked the availability of the list of
medicines and the prices patients had to pay. The prices in private pharmacies were obtained
by visiting the selected pharmacies. Price components were identified by interviewing relevant
bodies. A standardized data collection form was used and data collectors were trained in a
twoday workshop to ensure the reliability and reproducibility of the survey. A small pilot study
was also undertaken.
The survey team consisted of health related representatives from the capital and the three
districts included in the survey. Each team (one per district) had one supervisor. Data
collection was completed in three weeks.
4 Results
The following analysis will be presented.
4.1 Median medicine price ratios for innovator brands and generic equivalents, in
the private-for-profit sector in comparison with international reference prices.
4.2 Median medicine price ratios in the public sector in comparison with international
reference prices.
4.3 The comparative medicine price ratios in the public and private for-profit sectors.
4.4 Price variations in Utopia.
139
4.5 The availability of the medicines on the day of data collection.
4.6 The affordability for low-income people of treatment regimens from the public
and private-for-profit sectors for selected common conditions with innovator
brand, most commonly sold generic and lowest price generic medicines.
4.7 The cumulative level of domestic duties, taxes and mark-ups as it adds on to
the ex-manufacturer’s price and which people have to pay in the form of the final
retail medicine price.
4.8 Medicines prices in Utopia in an international perspective.
Most of the results will be presented as comparison with international reference prices (IRP).
There will be a summary of the median price ratios of all medicines monitored (median of the
median price ratios) and the size of the variation between facilities. The size of the difference
between the price representing 25% of the median price and the price representing 75% of
the median price will indicate the price variability between facilities.
The international reference price used is the median price for generic medicines quoted from
one or more international non-profit wholesalers to public or non-profit procurement agencies.
The source for these prices is the Management Sciences for Health database. The price is
FOB (free on board). With efficient public procurement, our public net price ratios (no patient
charge added) should be around one: i.e. close to the international reference price.
The report will also highlight some findings relating to individual prices in the different sectors
monitored as well as between the prices of innovator brand medicines, most sold generic
equivalents and lowest price generic equivalents in the facilities monitored. The reason for
measuring both the most sold and the cheapest generic equivalents is to highlight any
significant differences between what people would have paid if the lowest price generic
equivalent had been prescribed and the one that is the most prescribed. In the public sector,
generally only one price for each substance was found.
4.1
Medicine prices in the private for-profit sector (private pharmacies)
Table 1 Summary of median price ratios, private for-profit sector, all 35 medicines
In the private for-profit sector, when medicine prices were compared with the international
reference prices for generic medicines, the 35 innovator brand products were found to be
priced at 16 times the international reference prices. Fifty percent of the innovator brand
medicines surveyed were in the range of 8.2 to 36.3 times the reference prices.
Median
No. of substances
found (availability) price ratio
Innovator brand
Most sold generic equivalent
Lowest price generic equivalent
30 (85%)
25 (71%)
22 (63%)
15.90
3.65
1.63
25"’
percentile
75B1
percentile
8.22
36.30
6.37
1.48
1.39
3.61
For the generically equivalent products, the difference in price between the most sold and the
cheapest was not so large; some substances were not available as more than one generic
product and have, for the sake of analysis, been entered both as the most sold and lowest
price generic equivalents. The median price of the most sold generic equivalents was 3.7
times the international reference price, with 50% of the medicines being sold in the range of
1.5 to 6.4 times the reference prices. The median of the median price ratio of the lowest price
generic equivalents was 1.6 times the international reference price, with 50% of the medicines
being sold in the range of 1.4 to 3.6 times the reference prices.
140
Table 2 Examples of medicine price ratios
Median
price
ratio
250'
percentile
75th
percentile
Innovator brand
14.11
13.63
16.06
Most sold generic equivalent
2.02
1.95
2.21
Lowest price generic equivalent
1.72
1.53
Innovator brand
22.38
22.35
Most sold generic equivalent
10.78
10.78
2.04
22.48
10.88
Lowest price generic equivalent
Innovator brand
9.92
48.56
9.91
44.64
10.36
53.65
Most sold generic equivalent
7.83
6.27
7.83
Lowest price generic equivalent
Innovator brand
7.83
38.70
6.27
11.61
7.83
46.44
Most sold generic equivalent
6.39
5.32
7.74
Lowest price generic equivalent
6.39
5.32
7.74
Generic name
Amitriptyline 25 mg
Amoxicillin 250 mg
Diclofenac 25 mg
Glibenclamide 5 mg
For a number of medicines, there was very little variation in price when comparing the most
sold or lowest price generic equivalents. In general, however, the innovator brand product was
about 2 to 4 times the price of the most sold generic equivalent and, in some cases, was
as high as 10 times.
When comparing the prices of all the medicines (Annex III), the cheapest and most expensive
items were found to be 2.3 times and 126 times the international reference price respectively.
The lowest price generic equivalent was found to be 1.5 times the international reference
price, while the most expensive generic equivalent was 8 times the same reference price.
4.2 Medicine prices in the public sector
Table 3 Examples of price ratios and summary price ratios in the public sector
(procurement and facility prices to patients)
Procurement
price ratio
On Essential
Medicines
List
Price to
patients ratio
Availability in
facilities
Amoxicillin 250 mg
1.54
yes
3.37
no
1.31
1.72
90%
Ceftriaxone 1 g inj
Glibenclamide 5 mg
4.84
1.29
yes
5.19
35%
90%
55%
1.64
38%
Summary price ratio/
average availability
A summary ratio of 1.29 in public sector procurement (i.e. 29% above the international free
on board (FOB) reference price) is reassuring for procurement officers as the comparison is
between an FOB price and a price which includes cost, insurance and freight (GIF).
The median of the summary of price ratios of prices charged to patients (1.64) compared
with the summary ratios of the tender prices (1.29) indicates that the average mark-up and
taxes in the public sector amounts to around 30%.
141
4.3 Comparative medicine price ratios in the public and private sectors
Table 4 Summary data
Public
Median price
ratio
For-profit
Median price
ratio
3.37
(1 item)
15.90
Most sold generic equivalent
1.64
Lowest price generic equivalent
1.64
4.65
2.63
Innovator brand
vs Public
283.8%
99.0%
As only one innovator brand product was found in the public sector, the comparison of innovator
brands between the sectors becomes irrelevant and we have compared only the prices of generic
equivalents.
For the public sector, the overall price of the generic medicines surveyed was 29% above the
international reference price. However, the median of private sector innovator brand prices was
16 times the international reference price. The prices charged for the most sold generic
medicines in the private sector were almost three times the prices in the public sector, while
the prices of the lowest price generic equivalents were less than double the public sector patient
prices.
When comparing the prices that patients pay in each sector, it is clear that the prices are lowest
in the public sector. In the private sector, even the cheapest generic medicines cost 60% more
than the prices paid by patients in the public sector. It was beyond the scope of this survey to
identify whether innovator brands or the most sold generic equivalents are the most widely
sold products in the private sector.
The examples in Tables 5 and 6 are included to illustrate the situation by using data on individual
medicines. Price ratios are used in Table 5; in Table 6 (opposite), actual prices are given in
Riras (R) and the different products are listed by their sales names. Again, the data reveal
large differences between the two sectors, but also between innovator brand products and
generic equivalents in the private pharmacies.
Table 5 Comparing price ratios between the two sectors for individual products
Generic name
Type______________________
Private
Public
Diclofenac 25 mg
Innovator brand
NA
Most sold generic equivalent
48.56
7.83
4.27
Lowest price generic equivalent
3.15
4.27
Innovator brand
Most sold generic equivalent
38.70
6.39
5.19
Lowest price generic equivalent
6.39
5.19
Glibenclamide 5 mg
NA
4.4 Availability
The average availability of medicines was 38% in the public sector and 85% on innovator
brands and 71% on the most sold generic medicines in the private sector. One explanation
for low availability in the public sector is that Utopia has an Essential Medicines List which
does not correspond fully with the core list used in the survey. Although a few essential
medicines have been added by use of the supplementary list, average availability remains low.
Stock-outs caused by poor estimations of consumption or cashflow problems are other
possible explanations, although it has to be remembered that our estimate is based on a one
point in time investigation.
142
Table 6 Comparing actual prices between the two sectors for 100 units of individual products
Generic name Type
Product
name
Private
Diclofenac
25 mg
Innovator brand
Voltaren
6347.00
NA
Most sold generic
equivalent
Dicloren
1021.00 Diclofenac
Pharma
555.00
Lowest price generic
equivalent
Diclofenac
Ratio
957.50 Diclofenac
Pharma
555.00
Innovator brand
Daonil
3870.00
NA
Most sold generic
equivalent
Glibenclamide
Celsius
639.00 Glibenclamide
Medifarm
519.00
Lowest price generic
equivalent
Glibenclamide
Celsius
639.00 Glibenclamide
Medifarm
519.00
Glibenclamide
5 mg
Product
name
Public
In Utopia, the public sector is said to cover 80% of the population, but the survey identified
problems of availability. It means that many people will either have to go without treatment
or to spend considerably more to purchase medicines in the private sector.
4.5 Affordability
A full list of the 10 conditions for which the affordability of treatment was measured is
included as Annex IV. The monthly salary of the lowest paid government worker was R8000:
i.e. R267 per day. Table 7 illustrates the affordability of treatment in the public sector and
the private sector for one acute and one chronic condition.
Table 7 Cost of treatment for pneumonia and diabetes
Treatment
Type
Public sector
Median
price
Pneumonia:
Amoxicillin
250 mg x 3 for 7
days
Diabetes:
Glibenclamide
5 mg x 2 for 30 days
Days'
wages
Private
pharmacies
Median
price
Days'
wages
2510.00
9.4
Innovator brand
NA
Most sold generic
equivalent
106.80
0.4
1201.00
4.5
Lowest price generic
equivalent
106.80
0.4
1121.00
4.2
2322.00
8.7
Innovator brand
NA
Most sold generic
equivalent
311.40
1.2
383.40
1.4
Lowest price generic
equivalent
311.40
1.2
383.40
1.4
143
For a course of innovator brand amoxicillin to treat pneumonia, a patient would need to pay
the equivalent of 0.4 days’ wages of the lowest paid government worker to purchase a course
of therapy from public sector health facilities. In the private-for-profit sector, the cost expressed
in days’ wages would be 9.4 for the innovator brand and 4.5 or 4.2 days’ wages for the two
forms of the generic equivalent. It is important to bear in mind that these costs refer only to
the medicine component of the total treatment costs. Consultation fees and diagnostic tests
may mean that the total cost to the patient is considerably higher. For a one month course
of glibenclamide to treat diabetes, a patient would need to pay 1.2 days’ wages in the public
sector. In the private phamnacies, the cost expressed in days’ wages would be 8.7 days for
the innovator brand and 1.4 days for the generically equivalent product.
4.6 Price components and cumulative mark-up
We measured price components for medicines in the public and private sectors, both imported
and locally produced products, to study differences in mark-ups and to assess the impact of
tariffs, taxes and markups on the price the patient pays. Table 8 presents the price components
of an imported product in the private sector and a locally produced generic equivalent
purchased on the public tender. The result is given both as percentage addons and cumulatively.
Annex V shows the price components of three medicines.
Table 8 Price components and cumulative mark-up for one imported and one locally
produced medicine
Component
Imported product
private sector
Locally produced
generic equivalent,
public sector tender
%
%
100.00
100.00
Import price (index price)
Import duty
10%
Port charges
Clearance and freight
1%
2%
Pre-shipment inspection
1.2%
Pharmacy Board fee
2%
Wholesale mark-up
22%
Retail mark-up
35%
VAT
3%
110.00
111.10
113.32
114.68
116.97
137.22
185.25
198.43
1.2%
2%
5%
15%
101.20
103.22
108.38
3%
128.38
124.64
Sales price
198.43
128.38
Total add-ons
98.43
28.38
For imported innovator brands and generic medicines, the price components are the same;
the addons to the import price (Free On Board) almost double the price. The first three
charges (13%) would not be included in the price of locally produced generic medicines in the
private sector (not shown in the table), but the price would still increase by 75%. The mark
ups are lower in the public sector so the addons constitute less than 30% of the final price.
A value added tax is applied, but this does not make a large impact as it is only 3%. There
is no ceiling on wholesale and retail mark-ups. The 22% and 35% figures for wholesale and
retail mark-ups respectively are estimations based on interviews and data for selected
medicines.
The questionnaire on the national pharmaceutical sector indicates that there is no policy of
tax exemption for essential medicines in either the public or private sectors. The main
difference between sectors is the size of the mark-ups. The public sector distribution fees
amount to 5% charged at the central level and 15% at local level.
144
4.7 National prices in an international perspective
Table 9 Price ratio for aciclovir in private sector in Utopia compared to three
comparable developing countries and one industrialized country
Aciclovir
Median price ratio
Utopia
Distopia
Myopia
Xenopia
Faropia
(OECD)
Innovator brand
53.05
31.30
NA
42.00
7.85
42.10
Most sold generic equivalent
42.70
6.30
12.30
21.20
Only the innovator brand is on the market in Utopia. Table 9 shows the price to be higher
than in countries with the same level of GNP per capita, but where there is more generic
competition. In the industrialized country (Faropia), the considerably lower price can be
attributed to price control mechanisms and generic competition. If compared to purchasing
power, the difference will increase more than 10-fold.
Table 10 shows the prices of two medicines in the private sector, with real prices converted
to US dollars for comparison. Whilst Utopia and comparable countries come out favourably
for glibenclamide, the prices of diclofenac are considerably higher than in an industrialized
country. Again, if compared to purchasing power, the differences would increase more than
10-fold.
Table 10 Prices in US dollars for 100 units of glibenclamide and diclofenac in the
private sector in Utopia compared to three comparable countries and one
industrialized country
Utopia
Distopia
Myopia
Xenopia
Faropia
(OECD)
Daonil
12.72
11.63
11.35
10.30
14.62
Most sold generic equivalent
2.11
5.12
3.72
3.17
6.73
Voltaren
20.88
18.05
17.81
19.52
7.30
Most sold generic equivalent
3.36
3.60
3.82
2.95
4.39
Generic name/type
Glibenclamide
Diclofenac
Discussion
Our survey of medicines prices in Utopia shows large differences in the prices of the same
generic substance between the public and the private for-profit sectors and between innovator
brand products and their generic equivalents. This is a common finding in poor countries with
unregulated or poorly regulated pharmaceutical sectors. The differences in price between
innovator brand products and generic equivalents were found to be as high as 10 times; one
item was found to be as high as 126 times that of the international reference price. Prices
in the public sector are consistently lower than in the private sector, but availability is low
and will force patients to use the more expensive private sector.
The low availability of medicines in the public sector is not uncommon in developing countries,
but is still unacceptable as this is the sector where poor people would hope that some, if
not all, of the cost would be covered. The cause of this low availability should be investigated.
Can this be explained by the use of different therapeutically equivalent medicines in Utopia?
Other factors must be considered, however, since there was also low availability of the
medicines on the supplementary list, which contained some of the medicines on the Utopian
Essential Medicines List. Possible explanations include inefficiency in the public sector or a
lack of funding.
145
U -
Measured in terms of affordability, the cost to the patient would vary considerably:
there is, for example, a 20-fold difference between the price of the innovator brand
in the private sector and the most sold generic equivalent in the public sector for
the antibiotic amoxicillin and 8-fold for the antidiabetic glibenclamide.
As indicated earlier, prices varied considerably between the public and private
sectors and between innovator brands and generic medicines. The findings so far
suggest that prices also vary considerably between private pharmacies, as indicated
by the 25th and 75th percentiles.
When compared with other countries, the findings of this survey suggest that the
prices of medicines are high in Utopia, even in comparison with other low-income
countries. The comparison also supports findings from other studies that
manufacturers do not price their medicines according to countries’ purchasing
power and that they do not regard low-income countries as interesting markets in
which they could achieve increased sales through lower prices.
The low availability of the medicines included in the study, particularly in the public
sector but also in some private sector pharmacies, affects the reliability of the
data. It may therefore be suggested that the study does not give an accurate picture
of the situation in Utopia. However, the price variations are so large that the main
conclusions are not affected to any noticeable degree.
Utopia has a small and fragmented private not-for-profit sector that we decided
not to monitor. We are of the opinion that this will only marginally affect the results.
Of more concern are dispensing doctors in the private sector. The size of this sector
and the prices charged are not known and should be studied using exit interviews
or household surveys.
One limitation to medicine price studies, such as the present one, is the quality of
the products surveyed. In the present study, all products were registered in Utopia
so we assume they were of acceptable quality. However, since no quality control
testing was performed, we cannot say whether any of the products were
substandard. If the quality of medicines is considered a possible problem, it could
be addressed in any follow up to the study.
The pharmaceutical sector is a difficult sector to manage in many countries. In
contrast to other markets, the pharmaceutical sector will be different because the
person prescribing the treatment is different from the payer. The payer, who in
developing countries is often the patient, therefore depends on decisions made
by people who are either not interested in prices or are interested in making as
much money as possible. This is why most countries regulate the sector through
appropriate laws and regulations and ensure enforcement through such
mechanisms as inspections.
5 Conclusions and recommendations
The principal conclusions of the study are as follows.
• Utopia’s public health sector is relatively efficient in procurement and
charges reasonably low prices to patients
• The availability of medicines in the public sector is far from optimal,
however, and many people are forced to use the expensive private sector
or go without treatment
• Prices are considerably higher in the private sector and innovator brands
are possibly used more extensively as there are no incentives to prescribe
and sell generic equivalents, resulting in treatment being unaffordable
for most people
14«
• The prices of innovator brands are considerably higher than the prices
of their generic equivalents
• The prices of generic medicines also vary and the cheapest generic
equivalent is not always the most sold
• The current medicines policy is taxing the poor. The taxes, tariffs and
mark-ups are relatively high and contribute to making many medicines
unaffordable for the majority of patients.
On the basis of the findings of the study, the following recommendations are made
to the Government of Utopia.
1 The findings of this study should be used to adjust the draft national
medicines policy.
2 An extended survey should be undertaken to ascertain the reasons for
the low availability of medicines in the public sector.
3 An irydepth study of the private sector should be initiated to investigate:
• Prescribing practice, including whether innovator brands are more
frequently prescribed than the most sold generic equivalents
• Any discrepancies between private sector retail prices measured in
this survey, based on information from pharmacists, and the prices
people actually pay, based on exit interviews or household surveys
• The size of the “dispensing doctors” sector.
4 Steps should be taken to reduce the burden of duties, taxes and mark
ups on medicines. Policy options include:
• Replacing an uncontrolled percentage mark-up with a fixed dispensing
fee and a fixed, lower mark-up
• Introducing and enforcing compliance with maximum mark-ups in the
private sector, both wholesale and retail.
5 A policy favouring the use of generic medicines should be introduced.
Policy options include:
• Promoting generic prescribing
• Introducing incentives for pharmacists to comply with a generics policy
by replacing some of the percentage mark-op with a dispensing fee
• Introducing price control mechanisms to reduce price variations in
pharmacies
• Increasing consumer awareness and acceptance of the availability
of generic medicines as prescription only medicines are often also
sold without prescription.
6 High manufacturers’ prices in the private sector should be reduced. Policy
options include making the Central Medical Stores a wholesaler of
essential medicines for the private sector as well as the public sector
for example, by transforming it into an autonomous state wholesaler.
7 The impact of policy changes should be measured by regular surveys of
medicine prices.
Such a study using basic indicators cannot give a complete picture of the
pharmaceutical sector in Utopia. However, it is the hope of the Medicines in Utopia
Network that the findings and recommendations of this report will be studied and
form the basis for an in-depth examination of the pharmaceutical sector in Utopia
in order to improve access to and affordability of medicines for all.
147
- Media
10446.pdf
Position: 1802 (5 views)