National experiences of regular price monitoring Klara Tisocki , WHO/HAI medicine price project Towards equitable and affordable medicine prices policy in Jordan, Dead Sea, Jordan, 4 - 5 December 2007
Mar 27, 2015
National experiences of regular price monitoring
Klara Tisocki , WHO/HAI medicine price project
Towards equitable and affordable medicine prices policy in Jordan, Dead Sea, Jordan, 4 - 5 December 2007
OutlineWhy monitor medicine prices
Practical approach to price monitoring
National price monitoring - Results from Malaysia and Kenya
Lesson learnt
Critical elements for MPS
Failings of “free markets” for medicines
A “perfect” free market (where supply - demand set prices) requires perfect information, direct interchange between buyer and seller, no barriers to going into business.
Pharmaceutical markets are imperfect - they “fail” because: -information asymmetry: companies > doctors > patients
- competition failure: market power due to patents, brand loyalty, etc.
- externalities: treating your tuberculosis also helps me
Often essential state interventions are needed for pharmaceuticals because failings of free markets
Examples of interventions to correct free market failings for medicines
Need for price monitoring Regulatory frameworks
a) Supporting evidence informed decision/policy making to achieve national health goals
b) Monitoring adherence to price regulations, if exist
c) Measuring impact of policy changes
Supply chain management
d) Creating price transparency to increase competition/ negotiation power and procurement efficiency
Consumer protection
e) Protection from excessive prices
f) Increasing public access to price information – Correcting price information asymmetry
g) Providing evidence for advocacy
Increasing price transparency along the supply chain
Ex–factory or Ex-Manufacturer price
Wholesale prices (private distribution - Catalogue/List price vs. discounted price/ rebates/ free goods)
Procurement price (public procurement centralized vs. local)
Contract prices with purchaser i.e. insurer social health/ private health insurance(
Reimbursement prices claims/ co-payments
Public health facility patient prices
Pharmacy Retail price / Dispensing doctor price
Not-for-profit access point price (non-governmental, or faith-based not-for-profit health facilities)
How to get all these price information ?
Massive amount of data is required to fully understand price structures/ changes
Objective of price monitoring system must be clear on priorities of what need to be monitored
Developing countries
- patients often pay full cost out of pocket ,
- the final patient price - main target
Practical approach to price monitoring
WHO/HAI medicine price surveys –post survey recommendation: need for price
monitoring
Need for simple, low cost, low tech, sustainable methodology to monitor prices
The WHO/HAI Medicine Price Monitoring Method
Design: longitudinal study
Facilities: Systematic sampling of
-40) 20 private + 20 public (facilities in urban and
-40) 20 private + 20 public (facilities in rural areas
Indicator medicines:
30 locally commonly used medicines in specified dosage form and strength, recommended (or other) package size
Price of lowest cost product physically available at the facility is collected
Data collected in every 3 months, 4 data point/year
Data analysis: Pre-programmed Excel workbook, for data entry and analysis
Output: Regular Price report containing Median Unit Price, Max. Min, price variations over time, availability and affordability
Results from pilot countries
KENYA UGANDA MALAYSIA
KENYA - method
Geographical Areas, 4 regions
96 facilities surveyed in the 4 regions. 8 facilities from each sector (Public, Private, Mission) in each region
Private pharmacies and mission facilities are 10km from the public facilities
34 medicines monitored – patient prices only
Data collection quarterly
Data collectors-Pharmacists/Pharmacy technicians/consumers based at the regional levels
Kenya results
Overall private sector medicines prices were 36% higher than prices in the public health facilities ,
Overall mission sector prices were 31% higher than those in the public sector.
Urban vs. rural comparisons revealed the following:
a) Prices in urban mission facilities were 50% higher than those in rural mission facilities
b) Prices in rural private pharmacies were 35% higher than those in rural mission facilities
. Trends in availability April, July, October 2006 and January 2007 in the public sector facilities surveyed
2835
21 18
3 4
68
91
6 40
5
28
50 50
59
5042
54
6456
65 6468
75
8579
95
0
10
20
30
40
50
60
70
80
90
100
Apr-06 Jul-06 Oct-06 Jan-07
Month
Perc
enta
ge a
vaila
bilit
y
Amoxicillin/clavulanic 125/31mg/mL Artemether/lumefantrine 20/120mgAtenolol 50mg Metformin 500mgLamivudine/stavudine/nevirapine 150/40/200mg Omeprazole 20mgSulfadoxine/pyrimethamine 500/25mg
Trends in availability April, July, October 2006 and January 2007 in the mission sector facilities surveyed
31
40 3844
3136
58 61
23
32
21
39
5864 63
39
50
68
58
67
23
4
25 28
73
96
63
83
0
10
20
30
40
50
60
70
80
90
100
Apr-06 Jul-06 Oct-06 Jan-07
Month
Per
cent
age
avai
labi
lity
Amoxicillin/clavulanic 125/31mg/mL Artemether/lumefantrine 20/120mgAtenolol 50mg Metformin 500mgLamivudine/stavudine/nevirapine 150/40/200mg Omeprazole 20mgSulfadoxine/pyrimethamine 500/25mg
Malaysia -methodMedicine selectionGroup 1- 30 medicinesCommonly used medicines for the treatment of prevalent conditions (except psychotropics) included in either MOH formulary or WHO/HAI core monitoring list
Group 2 – 28 medicinesNewly registered patented medicines before & after inclusion into MOH Drug Formulary
Group 3 – 10 medicinesSpecialized single source products that are usually expensive & used in government hospitals with specialists, university & private hospitals
Patient and procurement prices collected
Malaysia – results Availability of commonly used medicines
High availability of commonly used medicines in both sectorsPublic sector- 92%Private sector- 83%
Public sector stocks only few original products (33%) and relies mainly on generics (82%)
Private pharmacies stock both original products and generics with good availability in both West (66%) and East (66%) Malaysia
Gross retail prices of selected commonly used medicines in the private sector were found to be generally high at the median of 4 times higher than IRP11 while in the public sector, medicine prices were reasonable at the median of 1.3 times higher than IRP.
17
Price Variation between East and West Malaysia
Medicine Prices are slightly higher in East than West Malaysia
1 % higher for public sector
9% higher for private sector
Sector
Median Price Ratio (MPR)Between East and West Malaysia
MinimumMedianMaximum
Public (Wholesale)0.381.011.03
Private (Retail)0.931.095.85
18
Wholesale Price Variation between Public and Private: LP, APPL & Tender
• Local Purchase (LP) prices in public sector are generally 63% cheaper than wholesale price in private sector
• APPL & Tender prices in public sector are generally 60% cheaper than wholesale price in private sector
Medicines bought by LP
Median Price Ratio (MPR) Between Public (Wholesale) and Private (Wholesale)
MinimumMedianMaximum
Overall0.120.370.56
Original Brand0.530.550.56
Generics0.120.200.37
APPL & Tender
Median Price Ratio (MPR) Between Public (Wholesale) and Private (Wholesale)
MinimumMedianMaximum
Overall0.090.400.96
Original Brand0.180.180.96
Generics0.090.410.86
Lessons learntSetting up a national price monitoring system requires high degree of customization – no uniform method to fit all
Setting objectives clearly is a critical step
Sampling strategy of medicines and data collection method will highly depend on settings + objectives
Operationalizing data collection into routine work can help with sustainability
Where to start ?What are your specific objectives and desired outputs ?
Is there a policy/ regulation in place mandating specific price monitoring activities, giving authority/responsibilities ?
What resources are available to sustain on long term a national MPMS ?
What capacity to collect and analyse medicine prices and provide accurate, reliable price statistics is already in place
in your country?
If no previous analysis has been done what data is available, how can it be accessed what resources needed for correct
collection and analysis?
Product selection
Main principle: Prices of a fixed representative basket of medicines monitored
Sampling: non-probability sampling with selection criteria
public health importance/therapeutic value, “best-sellers or high consumption items, highest value (expenditure/ procurement value) based on ABC analysis, prescription or non-prescription status, innovator brands or generic ,
Sample size: may depend on type of basket
Product description elements, INN name, brand name, strength, dosage form, type, package size,
manufacturer’s name etc .
Data sources selection and sampling
Central data sources: i.e. manufacturer importation or release price, procurement price, wholesale prices, health insurance claim database
Outlet-based i.e. point of purchase data collection in retail pharmacies, government health facilities, dispensing doctors surgery, mission hospitals etc.
Data source sampling: Probability sampling is recommended
Should consider urban rural geography, regionsUse relevant sampling frames like registry of private retail pharmacies, list of government health facilities, registry of dispensing doctors, etc.
What prices to monitor ?
Ex –factory or Ex-Manufacturer price
Procurement price
Wholesale price
Reimbursement prices
Pharmacy Retail price
Prices paid by patients at other access points (not for profit access)
.
Price collection methodFrequency: monthly ----------- annually
Collection procedure:
-central data collection: from manufacturers, procurement agencies, data submitted in pre-formatted spreadsheets, by fax, letters, by e-mail or online
automated systems .
- outlets based data collection: trained price collectors and physical check of price tags or invoices/receipts is the most accurate way of recording
actual prices paid by patients .
-alternative techniques: price collection by letter, over the phone, by e-mail, fax, and sms text messages, submitted by outlets on-line via secure website, from controlled national retail price lists or price list issued for
government facilities -
Must be verified by random visits to actual pharmacy or medical outlets .
Data analysis and construction of a price index, when trends analyzed
Input of qualified price index statistician needed
Different mathematical formulae can be employed in construction of price index
calculations .Lowe indices
Laspeyres index
Paasche index
Young index, etc.
Publishing and information dissemination on medicine price changes
What results to report (level of details)Who are the audiences
Which presentation format to use
What dissemination techniques to use (media, electronic internet, free bulletin, restricted reports etc.)
Timeliness
Access to data by different stakeholders (confidentiality)
Medicine Price Index can attract high publicity if it has credibility and regularly available
SummaryNational price monitoring system
Should be placed in a regulatory/policy framework (operationalized for sustainability i.e. mandate, authority to collect prices, budget to support)
Should have clear objectives and desired outputs
If possible, should be based on analysis of existing data (central data collection/automation)
Should have a well designed, robust method for data collection and analysis that can provide reliable information in a consistent manner