The WHO/Health Action International Project on Medicine Prices and Availability was a partnership between the World Health Organization and Health Action International. It developed a system and methodology for measuring the price, availability and affordability of medicines. The project surveyed over 50 countries. It also created guidance for low-and-middle-income countries to help their governments and associated health organisations to implement policies on drug prices.[1]

Survey medicines

A price survey may look at up to 50 medicines. There are 14 global core medicines that enable international comparisons, 16 regional core medicines that enable regional comparisons, and 20 supplementary medicines that are locally important. When comparing prices, one dosage form and strength is specified for each medicine. To calculate affordability, a typical treatment schedule is specified.[2]: 36 : 95 

The 14 global medicines[2]: 95 
DrugIndicationUnit strength/formQuantityTreatment Schedule
AmitriptylineDepression25 mg tablet90 tabletsThree times a day for a month
AmoxicillinAdult respiratory tract infection500 mg tablet21 tabletsThree times a day for a week
AtenololHigh blood pressure50 mg tablet30 tabletsOnce a day for a month
CaptoprilHigh blood pressure25 mg tablet60 tabletsTwice a day for a month
CeftriaxoneAdult respiratory tract infection1 g/vial for injection1 injectionOnce
CiprofloxacinAdult respiratory tract infection500 mg tablet14 tabletsTwice a day for one week
Co-trimoxazolePaediatric respiratory tract infection8+40 mg/ml suspension70ml5ml twice a day for one week
DiazepamAnxiety5 mg tablet7 tabletsOnce a day for a week
DiclofenacArthritis50 mg tablet60 tabletsTwice a day for a month
GlibenclamideDiabetes5 mg tablet60 tabletsTwice a day for a month
OmeprazoleStomach ulcer20 mg tablet30 tabletsOnce a day for a month
ParacetamolPaediatric pain and inflammation24 mg/ml suspension45ml5ml three times a day for three days
SalbutamolAsthma0.1 mg/dose inhalerOne inhaler200 doses
SimvastatinHigh cholesterol20 mg tablet30 tabletsOnce a day for a month

International reference price

For each medicine surveyed, the local price is compared with an international reference price. This is usually drawn from MSH's International Medical Products Price Guide. This guide contains, for each drug, a set of prices from suppliers to developing countries and also a set of prices agreed by buyers such as government departments of health. The median of the supplier prices is preferred and even a single supplier price is superior to multiple buyer prices. The quality of the international reference price depends on the number of suppliers quoting for that product. For example, a single high supplier price may skew the survey results.[2]: 41 

Methodology

The purpose of external reference pricing is to allow for a systematic comparison of medicine prices, both nationally and internationally.[2] The World Health Organization and Health Action International (WHO/HAI) made a conjoint effort to systematize the methodology of medicine price surveys and ERP usage, first publishing the WHO/HAI methodology in manual in 2003,[3]: 195  which is frequently used in price studies in unregulated prices context often found in low and moderate income countries (LMICs),[2][4]: 257  but it was also used in high-income countries.[5]: 226  This methodology was devised to improve price transparency and ultimately medicines availability and affordability,[5]: 226  and is the basis of most medicine price studies in the LMICs.[3]: 189 

This methodology advises that the same provider of international reference unit price "must be used for all medicines surveyed – global, regional and supplementary", to ensure a consistent basis for comparison,[2]: 38  such as the International Medical Products Price Guide.[5]: 220 [2] The WHO/HAI mention the possibility of using different reference price providers in the same study, but this is challenging and no methodology is provided.[5]: 223  The comparison of the prices of individual medicines, instead of an arbitrary clusters of medicines (eg, using ATC levels), is considered the most robust method,[5]: 223  although avoiding clustering then restricts the comparison to a subset of medicines available in all the surveyed countries since imputing may produce more bias.[3]: 193–195 [6] Survey medicines need to be described with a specific strength and dose form.[3]: 197 

The reference basket is the set of countries where reference prices are sampled from.[7] It is advised to select countries with similar income status as the target one,[8]: 9 [2] as including countries with higher income can lead to higher reference prices.[8]: 7  However, it may not always be possible due to lack of data, prices being better documented in high-income countries.[9]: 14  Increasing the number of reference countries in the basket has an important effect for decreasing prices when using ERP for drug price regulation.[10]: 105–106 

The final price of medicines is impacted by several price components at various stages of the supply chain,[5]: 221–222  with later stages likely increasing the medicine's price.[11]: 189  The WHO/HAI provide the following 5 stages taxonomy of the medicines prices in the supply chain:[5]: 221–222 [11]: 190 

  1. Manufacturer's selling price plus insurance and freight: the price charged by the pharmaceutical manufacturer, including the cost of insurance and shipping the medicines to the countries of destination.
  2. Landed price: medicine cost after importation in a country, after clearing customs and import requirements and then supplied to the main distributor.
  3. Wholesale selling price for private providers, or central medical stores price for public providers: medicine price including the landed price plus any wholesale markup and regional or state taxes, and transport costs from the wholesaler to the retailer.
  4. Retail price (private sector) or dispensary price (public sector): wholesale price plus the retail markup added by pharmacies and other retailers to cover their costs, including their profit. Local or town taxes may be levied at this stage.
  5. Dispensed price: retail price plus sales taxes such as value-added tax (VAT) or a general sales tax (GST) and (dispensing) fees that are collected when the medicine is dispensed.

The WHO later developed another taxonomy in 2018, the MWPP price taxonomy:[11]: 189 

  1. Ex-factory price (synonym of manufacturer's selling price): the industrial price of the medicine as charged by a pharmaceutical manufacturer.
  2. Wholesale price (synonym of pharmacy purchase price): price charged by wholesalers to the retailers, usually community pharmacies. It includes the ex-factory price plus any remuneration for pharmaceutical wholesale (i.e., wholesale markup or wholesale margin).
  3. Pharmacy retail price net (synonym of consumer or public price): price charged by community pharmacies to the general public. This includes the wholesale price plus any pharmacy remuneration (i.e., pharmacy markup, pharmacy margin or dispensing fee), but without including taxes such as value-added tax (VAT).
  4. Pharmacy retail price gross: same as pharmacy retail price net plus taxes such as VAT.

Although the two taxonomies have strong similarities, the MWPP taxonomy relates to high-income countries with price regulation, whereas the WHO/HAI taxonomy includes more stages for non-price regulated settings, the major difference being the specification of landed price as a separate price component for the different intermediaries.[11]: 190 

The ex-factory/manufacturer's price is considered more accurate and thus preferable for international price comparisons.[3]: 194 [6] The WHO recommends the use of the median supplier price[5]: 215  for the reference countries of the target medication in the International Medical Products Price Guide for all studies.[5]: 223 [2]: 41  Although the manufacturer's price is advised for prices analyses, it is advisable, or even key, for the design of pharmaceutical pricing policies[5]: 223 [11]: 190  to calculate ERPs at different stages of the medicine prices according to the WHO/HAI, to examine the contribution of each stage in the supply chain to the final price and isolate them from the manufacturer's selling price.[5]: 223  Multi-countries prices comparisons should be done using the same price type.[4] The International Medical Products Price Guide usually does not include insurance or transportation charges.[5]: 220 

The choice of the database(s) to use is also crucial and should not be solely made on considerations of availability, although this is an important factor.[4] Adjustments to inflation/deflation are advised when comparing multiple years.[5]: 224 

The HAI maintains a regularly updated database of worldwide drug price surveys following the WHO/HAI methodology,[2]: 7 [12] which is a method that offers data collection tools to obtain medicine price and availability information in countries or settings where access to price information is not accessible in a centralized manner, such as in low-or-moderate-income countries.[5]: 210 

Connex measures

The external reference prices allow to derive connex measures, such as the median price ratio or the affordability. Affordability is "the number of days’ wages required by the lowest-paid unskilled government worker to purchase 7 days’ supply of a medicine to treat an acute condition, and 30 days for a chronic condition, based on standard treatment regimens".[5]: 220 [13]: 20  Affordability allows to express medicine costs as the ability of an individual's ability to pay for it, which is more relatable for the general public and "serves as an advocacy tool".[5]: 221  Cross-country comparisons of affordability are possible.[5]: 223 

The same methodology can be applied to evaluate medicines availability, compared to a basket of reference countries.[5]: 223 [2]

References

  1. ↑ "WHO/Health Action International Project on Medicine Prices and Availability". WHO. Retrieved 2 January 2020.
  2. 1 2 3 4 5 6 7 8 9 10 11 Measuring medicine prices, availability, affordability and price components. World Health Organization & Health Action International. May 2016. pp. 123, 289. Mirror: 2008 original publication by WHO.
  3. 1 2 3 4 5 6 Vogler, Sabine (2019). "Chapter 6 - Review of Methodologies to Conduct Price Studies". Medicine Price Surveys, Analyses and Comparisons. Academic Press. pp. 187–207. ISBN 978-0-12-813166-4.
  4. 1 2 3 Vogler, Sabine; Schneider, Peter (1 January 2019). "Chapter 8 - Medicine Price Data Sources". Medicine Price Surveys, Analyses and Comparisons. Academic Press: 247–268. doi:10.1016/B978-0-12-813166-4.00014-0. ISBN 9780128131664. S2CID 170052588. If medicine prices are not regulated, they tend to vary between dispensaries and retailers of a country. To survey medicine prices in these contexts, the WHO/HAI methodology was developed, and it was frequently used for conducting price studies.
  5. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Raju, Priyanka Konduru Subramani (2019). "Chapter 6.2 - WHO/HAI Methodology for Measuring Medicine Prices, Availability and Affordability, and Price Components". Medicine Price Surveys, Analyses and Comparisons (Monograph). Academic Press. pp. 209–228. ISBN 978-0-12-813166-4. Retrieved 27 November 2019.
  6. 1 2 Danzon, PM; Kim, JD (1998). "International price comparisons for pharmaceuticals. Measurement and policy issues". PharmacoEconomics (Review). 14 Suppl 1: 115–28. doi:10.2165/00019053-199814001-00014. PMID 10186473. S2CID 46985002.
  7. ↑ Saeed, Amna; Li, Zongjie; Kabba, John Alimamy; Yang, Caijun; Fang, Yu (2019). "External Reference Pricing and Medicines". Encyclopedia of Pharmacy Practice and Clinical Pharmacy. Academic Press. ISBN 978-0-12-812736-0.
  8. 1 2 Rida, Nada Abdel; Ibrahim, Mohamed Izham Mohamed; Babar, Zaheer-Ud‐Din; Owusu, Yaw (2017). "A systematic review of pharmaceutical pricing policies in developing countries". Journal of Pharmaceutical Health Services Research (Systematic review). 8 (4): 213–226. doi:10.1111/jphs.12191. ISSN 1759-8893. S2CID 80486443.
  9. ↑ Espin, J; Rovira, J; De Labry, AO (May 2011). "WHO/HAI project on medicine prices and availability-Working paper 1: external reference pricing" (PDF). Health Action International. WHO/HAI. Retrieved 28 November 2019. In all of the case study countries, a manufacturer submitting a new product for pricing is obliged to provide the price of the product in the reference countries. Failure to do so or to provide false information could lead to fines and penalties.
  10. ↑ Toumi, Mondher; Rémuzat, Cécile; Vataire, Anne-Lise; Urbinati, Duccio (2014). "External reference pricing of medicinal products: simulation based considerations for cross-country coordination" (PDF). European Commission. Retrieved 27 November 2019.
  11. 1 2 3 4 5 Vogler, Sabine (2019). "Pharmaceutical Pricing Policies". Encyclopedia of Pharmacy Practice and Clinical Pharmacy. Academic Press. pp. 188–201. ISBN 978-0-12-812736-0.
  12. ↑ "Database of medicine prices, availability, affordability and price components". www.haiweb.org. Health Action International.
  13. ↑ Wirtz, VJ; Hogerzeil, HV; Gray, AL; Bigdeli, M; de Joncheere, CP; Ewen, MA; Gyansa-Lutterodt, M; Jing, S; Luiza, VL; Mbindyo, RM; Möller, H; Moucheraud, C; Pécoul, B; Rägo, L; Rashidian, A; Ross-Degnan, D; Stephens, PN; Teerawattananon, Y; 't Hoen, EF; Wagner, AK; Yadav, P; Reich, MR (28 January 2017). "Essential medicines for universal health coverage". Lancet. 389 (10067): 403–476. doi:10.1016/S0140-6736(16)31599-9. PMC 7159295. PMID 27832874.
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