Drug pricing in international markets

DRUG PRICING IN INTERNATIONAL

MARKETS

PRESENTED BY :PREETI GULATIKUNAL GUPTAGURSIMRAN SINGH

CASE INSIGHTS

• This Case is All about the Pricing Decisions in International Markets & What are the other Factors which affect the pricing decisions in International Markets .

• Cross Country Comparison of Drug prices.• HIV /AIDS Drugs Pricing Variation • Controlling Bodies of Drugs Pricing in

International Market• Conclusion

FACTORS AFFECTING INTERNATIONAL PRICING

CROSS COUNTRY COMPARISON OF DRUG PRICES

TABLE ANALYSIS

From the Table we can easily analyse that • Price of Diclofenac Sodium in the USA is 193

times its price in India .• Ciproflaxin HCL costs Rs 29 in India but Rs

2353 in USA . • The Price Difference between the Two

Countries is 81 Times

Effects of patents on the price of medicines

•   Prices of branded, patented products are often far higher than the prices of similar medicines produced by alternative or generic sources. For example, the Indian generic producer, Cipla, is able to offer its AIDS combination medicines for US$150-300 per year per patient, compared with the US$10,000-15,000 being sold by the MNCs.

    In countries where alternative or generic medicines are available, the price of a branded product usually falls as a result of the competition it faces from low-priced alternatives. The same brand is sold at a higher price in countries where there is no competition from generic producers

DRUG PRICING IN INDIA

NPPA- is the National Pharmaceutical Pricing Authority which is an organization constituted by the government of India. This organisation's responsibility is to fix and revise the prices of controlled bulk drugs and formulations. Its objective is to enforce low prices and good availability of pharmaceuticals in India.The retail price formulations are worked out as per the formula of DPCO.R.P= [M.C. + C.C. + P.M. +P.C.]X [1+MAPE. /100]E.D.R.P. = Retail Price.M.C. = Material Cost.C.C. = Conversion Cost.P.M. = Cost of Packing Material.M.A.P.E. = Maximum Allowable Post- Manufacturing Expenses.E.D. = Excise Duty.

DRUG PRICING IN USA• USA is a big player in the innovation of drugs. The US market is

based on competitive structure and is thoroughly supported by insurance companies. It is not strictly controlled by regulations. IPR protection is high.

Here companies are allowed to price their own products without interference from the Government. Drug prices are determined bya. Cost of R&Db. Marketing and Distributionc. Demand for the product

CONTROLLING AUTHORITIES IN COUNTRIES

USA - (USFDA) US Food & Drug AdministrationINDIA-(NPPA) National Pharmaceutical Pricing

AuthorityPAKISTAN – (DRAP) Drug Regulation authority of

Pakistan UK - National Institute of Clinical Excellence and

the Health Technology Board

CONCLUSIONS We would like to summarize by saying that when we

make a comparison of the prices of medicines in different countries, we arrive at the following conclusions:1. Drug prices are dictated by the overall income level of the people of the country.2. Drug prices depend on how much control the government is exercising on the pharmaceutical manufacturers.3. How much research and development is taking place in the field of pharmaceuticals and what is the cost of this R& D.4. How much the government and the society are concerned about protection of intellectual property rights.

• India is a country where the drugs of high quality and low price are made and the world is exploiting this fact by importing drugs on a large scale, this is especially true with anticancer and anti AIDS drugs.

• There is medical and health tourism in India. People from USA and UK come to Mumbai and Chennai not only to enjoy India's oriental attractions but also to undergo major surgeries because of the fact that prices of healthcare in India is very low compared to advanced countries.