Public ARV Procurement Data: Using Information to Obtain Lower Prices Brenda Waning March 6, 2008 Open Society Institute Seminar Kiev, Ukraine Funded by.

Public ARV Procurement Data:Using Information to Obtain Lower

Prices

Brenda WaningMarch 6, 2008

Open Society Institute SeminarKiev, Ukraine

Funded by United Kingdom Department of International Development,Medicine Transparency Alliance (MeTA) Project

Background to Procurement Practices

Countries typically struggle with medicine

procurement– Unreliable suppliers, unknown medicine quality– Insufficient funds and financial systems– Unsure of fair, market price(information asymmetry)– Result is enormous variation in price and across countries

Global Fund (GF) Offers Level Playing Field– “Sufficient” financing– Public posting of prices paid by all recipients– Limited # pre-qualified ARVs and suppliers– Expect little price variation in this environment

Reality and Remedy Extreme price variation exists for

identical ARV products across countries

2 Publicly available databases can provide price information historically impossible to obtain– Global Fund Purchase Price Report– WHO Global Price Reporting Mechanism

Public ARV Procurement Databases

Global Fund Purchase Price Report– ARV procurement transactions reported by

GF principle recipients

WHO Global Price Reporting Mechanism– Includes GF data PLUS ARV procurements

reported by international procurement agencies (IDA, UNICEF), WHO country offices, John Snow, MSH, etc.

Both available on the web in Excel format

Using Existing Data to Assess ARV Prices

Merged GF & Global Price Reporting Mechanism (GPRM) Data Sets– Country– Date of order– Generic name– Strength– Dosage form– Total # units– Price per unit– Type of package– Manufacturer– Country of manufacturer– INCO term

Expanded data set created at Boston University– Price per unit calculated– Year of procurement– WHO Region of country – World Bank Income of

country– ARV drug class– Fixed-Dose Combination– Generic/Brand– PEPFAR country– Clinton Foundation eligible– Differential Price eligible– WHO 1st/2nd line regimens

2003 & 2006 guidelines– Daily doseFinal Data Set: 9,731 procurements

July 02 – Oct 07 103 countries $636 million

ExtensiveData Cleaning

nevirapine 200mg

0

10

20

30

40

50

60

70

80

90

100

0,00

0,07

0,14

0,21

0,28

0,35

0,42

0,49

0,56

0,63

0,70

0,77

0,85

0,92

0,99

1,06

1,13

1,20

1,28

1,35

1,42

1,63

1,78

1,87

2,05

2,20

2,43

2,70

2,91

3,30

3,61

4,32

4,99

6,84

11,2

524

,03

stavudine 15mg

0

2

4

6

8

10

12

14

16

18

20

stavudine 15mgGuyana high outlierprices verified

High price outliers: screens to assess efficiency, policy, governance

nevirapine 200mgRussia 20x times more expensive than median price

lamivudine 150mg

0

20

40

60

80

100

120

140

160

lamivudine 150mg76 similar highprice outliersremoved

price per tablet

volu

me

price per tablet price per tablet

volu

me

volu

me

Extreme Price VariabilityHighest Price/Lowest Price

0

10

20

30

40

50

60

70

EF

V 5

0mg

EF

V 2

00m

g

EF

V 6

00m

g

NV

P 2

00m

g

d4T

+3T

C+N

VP

30+1

50+2

00m

g

d4T

+3T

C+N

VP

40+1

50+2

00m

g

IDV

400

mg

NF

V 2

50m

g

LP

V/r

133.

3/33

.3m

g

RT

V 1

00m

g

NNRTI & FDC PI

Hig

hes

t p

rice

pai

d/L

ow

est

pri

ce p

aid

Generic Version

Brand Version

Percentile Definition & Comparisons

25th percentile– 25% of prices paid for that particular ARV were

equal to or less than the price you paid

75th percentile– 75% of prices paid for that particular ARV were

equal to or less than the price you paid

If we compare each procurement made by a country with the global price distribution for that exact same product, the desire is to be in the <25th percentile (few countries paid less than you)

Country Benchmarking% of Country Procurements Across

Quartiles of Global Price Distribution*

Country (#) <25th

percentile

25th-50th

percentile

51st -75th

percentile

>75th

percentile

Armenia (19) 5.3% 10.5% 15.8% 68.4%

Belarus (14) 7.1% 42.9% 14.3% 35.7%

Estonia (11) 0% 0% 0% 100%

Georgia (15) 20% 20% 20% 40%

Kazakhstan (7) 28.6% 28.6% 0% 42.9%

Russian Fed. (32)

0% 6.3% 0% 93.8%

Tajikistan (9) 22.2% 22.2% 22.2% 33.3%

Ukraine (47) 17% 19.1% 34% 29.8%

Uzbekistan (8) 0% 0% 50% 50%Prices for July 2006-June 2007

Amount of Money Spent in Excess of Global Median Price (7/06-

6/07)*Country (# procurements)

Amount Spent Above Median

Armenia (19) $18,252 Belarus (14) $148,216 Estonia (11) $1,075,273 Georgia (15) $33,483 Kazakhstan (7) $74,208 Russian Federation (32) $12,399,841 Tajikistan (9) $3,773 Ukraine (47) $3,615,215

Uzbekistan $79,804

% Generic ProcurementsCountry Total #

Procurements

# Generic (%)

Armenia 19 4 (21%) Belarus 14 7 (50%) Estonia 11 0 (0%) Georgia 15 9 (60%) Kazakhstan 7 5 (71%) Russian Federation

32 0 (0%)

Tajikistan 9 9 (100%) Ukraine 47 22 (47%)

Uzbekistan 8 7 (88%)

stavudine 40mgGlobal Median Price =

$0.05/tabletEstonia Russian

Federation

Ukraine Uzbekistan

3.03*3.17*

0.69* 0.040.05

2.89*

July 2006 - June 2007

*Brand Name ARV

efavirenz 600mgGlobal Median Price =

$0.65/tabletEstoni

aKazakhsta

nRussia

n Feder-ation

Tajikistan

Uzbekistan

$2.07* $0.21 $0.65*$0.98*

$0.67 $0.92

July 2006 - June 2007

*Brand Name ARV

zidovudine 300mg/lamivudine 150mg

Global Median Price = $0.19/tablet

Estonia

Kazakh-stan

Russia

Ukraine

Tajiki-stan

Uzbeki-stan

$4.32* $0.38 $1.33*$1.71*

$0.16$0.18$0.21

$0.21 $0.23

July 2006 - June 2007

*Brand Name ARV

TJ: $151 pp/yearKZ: $274 pp/yrRussia: $958 pp/yr

lopinavir 133mg/ritonavir 33mg

Global Median Price = $0.33/tabletKazakhstan Russian

FederationUkraine

$1.95* 1.87*$1.44*

$0.52*$1.12*

July 2006 - June 2007

*Brand Name ARV

Comparison of WHO 2003, 2006, and 2008 ART Guidelines

WHO 2003 ART Guidelines– 12 ARVs– 10 regimens: 4 first line, 6 second line

WHO 2006 Revised ART Guidelines– 23 ARVs – 108 regimens: 24 first line, 84 second line

WHO 2008 2nd Line Prioritization– 20 ARVs (1st and 2nd line)– 42 2nd line regimens (10 Urgent, 22 High,

10 Important)

0

100

200

300

400

500

600

700

1 2 3 4

Regimens

Ann

ual C

ost

($U

S)

GenericBranded

0

200

400

600

800

1000

1200

1400

1600

1 2 3 4 5 6 7

Regimens

An

nu

al

Cos

($U

S)

GenericBranded

2003 WHO regimensGeneric: $170-$431Brand: $500-$619

WHO First line regimens: generic price < brand(Median Prices July 2005-June 2006)

2006 WHO regimens Generic: $170-$1,234Brand: $431-$1,393

Low range of cost of brand regimens is higher than upper end ofcost generic regimens

Upper end of cost of generic regimens is 3 times higher than 2003

2006 STG big potential $ impact, even for 1st line

WHO 2nd line regimens: generic price > brand (Median Prices July 2005-June 2006)

0500

10001500200025003000350040004500

1 2 3

Regimens

Ann

ual C

ost

($U

S)

GenericBranded

0500

10001500200025003000350040004500

1 2 3 4 5 6

Regimens

Ann

ual C

ost

($U

S) GenericBranded

2003 WHO regimensGeneric: $2,913 - $4,117Brand: $1,714 - $2,351

2006 WHO regimensGeneric: $948 - $4,245Brand: $865 - $2,577

Mostly due to price of protease inhibitors

WHO 1st and 2nd line RegimensMedian Prices Paid July 2006-June

2007 Prices changing dramatically Decisions about country adoption MUST

involve price, among other things– Median 1st line prices

Generics range $102-$730 pp/year Brand range $595-$1,015 pp/year

– Median 2nd line prices range Generics range $540-$6231 pp/year Brands range $880-$2,044 pp/year

Generic PIs more competitive with brands, except Lop/r

Multiple Regression to Examine Predictors of Price

Regression model included 7 variables: – volume (divided in tertiles)– year of procurement– INCO terms – generic/brand – CHAI-eligible – Differential price-eligible – Country World Bank income stage

Higher Volume does NOT mean Lower Price

High Volum

e

Middle Volume

Low Volume

Efavirenz 600mg

Ref 3.75% 6.85%

Lop+rit 133.3+33.3mg

Ref 12.18% 23.87%

Sta+lam+nvp 40+150+200mg

Ref 12.87% 19.03%

Zidovudine 300mg

Ref 4.57% 2.00%Only 4 of 24 dosage forms showed volume-price association

Remaining 20 Dosage FormsNo Price-Volume Association

Abacavir 300mgDidanosine 100mgDidanosine 200mgDidanosine 400mgEfavirenz 50mgEfavirenz 200mgIndinavir 400mgLamivudine 150mgNelfinavir 250mgNevirapine 200mg

Ritonavir 100mgStavudine 20mgStavudine 30mgStavudine 40mgSta+lam 30+150mgSta+lam 40+150mgSta+lam+nvp

30+150+200mgTenofovir 300mg

Zidovudine 100mg

Zid+lam 300+150mg

CHAI Generic Prices Compared to Non-CHAI Generic Prices

11 comparisons– 1 (EFV 600mg) CHAI 22% less expensive Non-

CHAI– 4 ARVs CHAI 8-13% less expensive Non-CHAI– 6 ARVs CHAI price was <5% less than non-

CHAI

CHAI Inferences: CHAI Setting Market Prices for All?

0

5

10

15

20

25

Date ARV was added to CHAI list

% p

rice

dif

fere

nce

, C

HA

I an

d

no

n-C

HA

I g

ener

ic

Oct 2003 Jan 2006

Differential Prices (DP)

19 ARVs available under DP scheme– Most less expensive than brand prices

when DP not available 7 of the 19 DP-ARVs compared to

generic prices– 5 of these 7 DP ARVs more expensive

than generics

DP Offers little savings over generics for most ARVs

Summary & Conclusions Transparency of medicine prices using

electronic databases can potentially lead to increased access to medicines

Knowledge can be power– BUT only if information is accurate,

comprehensive (this data represents ~40-50% of all GF procurements),

High level political commitment needed from donors to mandate data be reported – No Policy from World Bank or PEPFAR to

report (although SCMS is voluntarily reporting)

Summary & Conclusions (2) Databases have potential to inform and

create accountability – donors, countries, and programs– Rapidly changing market place; requires

constant monitoring Need to understand how data can be most

useful to implementers– User-friendly interfaces– Accessible in low resource settings– Incorporate into procurement system

Acknowledgements:– Funding: United Kingdom Department for

International Development– Michael Borowitz (DFID)– Research team: Warren Kaplan, Matthew Fox,

Alexis King, Danielle Lawrence, Richard Laing, Bert Leufkens, Rose Radin, Sapna Mahajan

Thank you!

Brenda Waning: [email protected]