Author byline as per print journal: Mohammad Bashaar, PhD; Professor Mohamed Azmi Hassali, PhD; Fahad Saleem, PhD
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Abstract: |
Submitted: 5 September 2017; Revised: 18 September 2017; Accepted: 27 September 2017; Published online first: 10 October 2017
Our health is important and access to medicines is a basic human right that should be exercised without discrimination [1, 2]. Medicines are important tools for preventive, curative and rehabilitative health care [3]. To ensure that everyone receives the medicine they need, the concept of ‘essential medicines’ was introduced by the World Health Organization (WHO) in 1975. This was followed by the first model of the essential medicines list (EML) in 1977 and the inclusion of essential medicines as one of the eight components of primary health care in 1978 [4]. The overall aim of the EML is to ensure equal access to medicines [5]. Essential medicines, as defined by WHO, are those that ‘satisfy the healthcare needs of the majority of the population’ and should therefore ‘be available at all times in adequate amounts’ [6]. Essential medicines are intended to be available within the context of functioning health systems at all times, in adequate amounts, in the appropriate dosage forms, with assured quality and adequate information, and at a price the individual and the community can afford [7]. In principal, ‘access’ may also mean that healthcare services are available whenever and wherever the patient needs them [8, 9].
The concept of essential medicines has been adopted by many international organizations, including the United Nations Children’s Fund (UNICEF) and the Office of the United Nations High Commissioner for Refugees (UNHCR), as well as by non-governmental organizations and international non-profit supply agencies. Many of these organizations base their medicine supply system on the model list. List of essential medicines also guide the procurement and supply of medicines in the public sector, schemes that reimburse medicine costs, medicine donations and local medicine production, and furthermore, are widely used as information and education tools by health professionals. In addition, health insurance schemes and companies are increasingly using the EMLs of respective countries for reference purposes [10].
Between 1975 and 2015, much has been done with respect to promoting and implementing the concept of essential medicines, approximately 100 countries have National Medicine Policies (NMPs) and more than 156 countries have national or provincial EMLs [11]. Today, more than 135 countries have their own therapeutic manuals and national formularies [11], more than 83 countries are involved in global monitoring of adverse drug reactions (ADR), and more than 33 countries have collected information on medicine prices and availability by conducting almost 70 rapid sample surveys [12]. In addition, India and China have emerged as generics manufacturers with highly specialized manufacturing capabilities which cover almost the entire range of modern medicines [13].
One year after the introduction of the first model of the EML in 1977, the Alma-Ata conference in 1978 reaffirmed that health is a fundamental human right and that the attainment of the highest possible level of health is an important worldwide social goal whose realization requires the action of social and economic sectors, in addition to the health sector [14]. The conference further supported the primary healthcare principles of equality, social justice, health for all, community participation, health promotion and appropriate use of resources [15]. The essential medicines policies outlined have since made an important contribution to primary health care [15]. As the essential medicine concept is now understood worldwide, brand substitution has been encouraged, which has ensured the penetration of quality assured generic medicines into healthcare systems across the globe. To increase the access to essential medicines in developing countries, large pharmaceutical companies have become engaged in reducing the price of selected medicines. National governments are also active, playing their part in ensuring equal access to medicines for all. For example, the Indian Government recently reduced the prices of 440 essential medicines by including them in their national EML [16]. Even for patented medicines, governments can decrease prices by parallel importing [17, 18], as is done in Sweden [19]. Similar steps could and should be taken in developing countries.
Major health reforms and remarkable efforts were made in 1977 with adoption of the WHO model EML [20]. However, there are still gaps when it comes to regular access to medicines [21] and basic health services [22]. In the Alma-Ata Declaration, it was stated that all people would have access to health by 2000, denoted ‘Health for all’. Nevertheless, after more than 15 years, children under five years of age still die every day from dehydration, undernourishment and preventable diseases due to a lack of adequate access to medicines [23]. According to WHO, almost two billion people – one-third of the global population – do not have regular access to essential medicines [24], with large gaps in the availability of medicines in both the public and private sectors [25]. According to WHO, access to treatment is heavily dependent on the availability of affordable medicines and a benchmark of 80% is now set for medicine availability [6]. Based on the World Medicine Situation 2011 Report the availability of generic medicines in the public sector is less than 60% across WHO regions [26]. According to the report, the BRICS countries (Brazil, Russian Federation, India, China and South Africa), which are major emerging national economies, are facing healthcare challenges, which include access to health services and medicines, and the growing cost of health [27]. Of these countries, India has shown the least improvement in public funding for health [28].
As per recent reports, 79% of people with tuberculosis (TB) do not have access to treatment [29]. These figures are supported by research, stating that ‘only 23% of the world’s population have access to the WHO tuberculosis control strategy’ [30].
It appears that more effort is required to achieve global access to medicines as advocated by WHO. In a 2002 report, Hans Hogerzeil, Professor of Global Health at Groningen University, The Netherlands, reported that: ‘irrational drug use remains a widespread hazard to health.’ He further added that ‘half of all countries have no regulation of drug promotion, 75% of antibiotic use is inappropriate, finance, delivery and other constraints still limit the access to essential drugs. These concerns, coupled with the fact that new essential medicines are expensive, reinforce the importance of ongoing and concerted actions being taken in relation to enhancing access to and use of pharmaceuticals’ [29].
Even in its third version (2011), the list of essential medicines for children, remains incomplete and certainly unsatisfactory as there is still a lack of appropriate medicines for children worldwide [31], and this overall lack of medicine formulations suitable for children is a global concern [32].
The soaring cost of medicines and health expenditure affects both developing and developed countries. Pharmaceutical expenditure in the US rose by 18% in 1999, 16% in 2000, and 17% in 2001. In Canada, the average cost per prescription rose by 93% between 1987 and 1993 [33].
Reasons for the lack of access to medicines
There are multiple cost and non-cost related barriers to essential medication access for patients. These include: high cost, irregular availability at health clinics, lack of prescribing and dispensing skills of healthcare workers, inadequate funding, a lack of incentives for maintaining stocks, inability to forecast needs accurately, inefficient purchasing/distribution systems and the leak of medicines from the public to private sector for resale [34]. According to Bigdeli et al., ‘barriers to access to medicines are complex and occur at multiple levels of the health system’ [35]. Access to medicines can be hindered by policy that restricts technical and resource-related aspects which further hampers the adaptation of health systems to the changing epidemiological profile of their populations [36].
Implications of a ‘lack of access to medicines’
Due to poor infrastructure in developing countries, medicines are not always available in the local drug stores. Low-income patients also cannot afford to spend a day travelling to receive or purchase the medicine they need. Even if a clinic or pharmacy is nearby, the medicine they need may not be available or could be out of stock [37]. Access to treatment has a close association with the availability of affordable medications; the cost of medicines is one of the major factors limiting access, as it forces the patients to pay out of their own pockets and limits their access to treatment [38]. This situation has wide implications for low-income countries where the majority are unwilling and/or unable to pay for their medication. Recently, a great deal of social, political and economic attention has been given to the high cost of prescription medications [39], as the high prices of medicines are key barriers to access to treatment in many low- and middle-income countries [34, 40–44]. When patients have no access to medicines, it leads to a change in the form of disease from acute to chronic, promotes non-adherence to treatment and causes increased costs to the healthcare system, in the form of unnecessary hospitalizations.
Ensuring access to medicines involves recording and understanding the reasons for the price of medicines [38]. In Afghanistan, one of the poorest countries in the world, pharmaceutical expenditure levels are high and the presence of a ‘free market economy’ means that costs are often double what they could be. Malaysia also practices a ‘free market economy’ together with a ‘price deregulation system’ in which manufacturers, distributors and retailers set medicine prices without government control. In Malaysia, medicine prices have been reported to rise even faster than prices in the developed world, and are higher than overall international prices causing high pharmaceutical expenditure [45].
Economic costs of medicines for households and government
The burden of pharmaceutical expenditure continues to increase globally, especially in the least developed countries. The amount of money spent on purchasing pharmaceuticals is high, with approximately 40–60% of the total public health budget of any country going towards buying medicine [17], which is catastrophic [46]. However, despite this high proportion of spending, one-third of the world’s population lacks access to essential medicines [47]. The economic burden of illness and limited access to pharmaceuticals has a significant negative impact on patient groups and their families [48]. To a great extent, pharmaceutical expenditure undermines national economic development, especially in countries with low gross domestic products (GDPs) and a dependent economy [49]. Even in countries where medicines are provided for free through the public sector, they can often be unavailable [34]. As such, patients are forced to pay out of their own pockets when they are ill, especially in developing countries [50]. Countries which rely heavily on out-of-pocket (OOP) payments are not likely to achieve universal health coverage [51]. It is reported that, in Afghanistan, more than 75% of patients pay OOP, of which 98.4% of the payments constitute purchasing medicines [52]. In Moldova, the OOP payments account for 45% of total health expenditures [51]. In Bangalore, India, it was reported that 69.6% of households made OOP payments for outpatient care for chronic conditions during a 30-day period [53]. According to Kumar et al., each year approximately 7% and 8% of the population in China and India, respectively, are in poverty due to out-of-pocket health expenditure (OOPHE) [54]. In Uganda, 38% of households experience catastrophic OOPHE due to limited access to affordable medicines [55].
Additionally, the high prices of medicines and OOP is paving the way for health shocks in poor countries via the emergence of unpredictable illnesses that may weaken the health status of households [56].
Recommendations: how to better ensure access to medicines
Access to affordable medicines is a basic human right and considered a fundamental goal of any welfare state [54]. Below are a series of recommendations necessary to achieve the goal of global access to medicines.
Gaining full access to medicines widens treatment options and brings many advantages to patients and healthcare systems. Now, the question is how to bridge the ‘lack of access’ gap and ensure that people have access to this basic human right. If we hope to halt the development of acute to chronic diseases, and prevent diseases progressing with fatal consequences, more needs to be done to ensure all people across the globe have access to essential medicines. We must not wait another 40 years for the situation to get worse and illness costs to go beyond the household’s budget, especially for households in rural environments in the developing world. All WHO Member States should intensify efforts to ensure that everyone within the scope of their responsibility promotes access to affordable medicine without delay. Policies that are directed at low-income individuals must be considered to address issues surrounding soaring medicine prices and inadequate access. Each Member State should eliminate or minimize duties and taxes on medicines to ensure adequate access. All issues preventing access to medicines for all need to be explored and addressed if we are to ensure that there is universal access to this human right.
Competing interests: The authors declare that there is no conflict of interest in regards to the publication of this manuscript.
Provenance and peer review: Not commissioned; externally peer reviewed.
Mohammad Bashaar, PhD
Share Naw, between Hanzala Masjid and Blossom Hospital, Street # 01, House # 50, Kabul, Afghanistan
Professor Mohamed Azmi Hassali, PhD
Discipline of Social and Administrative Pharmacy, School of Pharmaceutical Sciences, Universiti Sains Malaysia, 11800 Minden, Penang, Malaysia
Fahad Saleem, PhD
Chairperson, Department of Pharmacy Practice, University of Baluchistan, Quetta 87300, Pakistan
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Author for correspondence: Mohammad Bashaar, PhD, Share Naw, between Hanzala Masjid and Blossom Hospital, Street # 01, House # 50, Kabul, Afghanistan |
Disclosure of Conflict of Interest Statement is available upon request.
Copyright © 2018 Pro Pharma Communications International
Permission granted to reproduce for personal and non-commercial use only. All other reproduction, copy or reprinting of all or part of any ‘Content’ found on this website is strictly prohibited without the prior consent of the publisher. Contact the publisher to obtain permission before redistributing.
Source URL: https://gabi-journal.net/40th-anniversary-of-essential-medicines-a-loud-call-for-improving-its-access.html
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Abstract: |
Submitted: 3 June 2015; Revised: 19 June 2015; Accepted: 24 June 2015; Published online first: 7 July 2015
Generics substitution is an act of switching from a brand innovator medicine to an equivalent, i.e. same active ingredient, dosage, form; generic drug product for the drug product prescribed [1–3]. Generics substitution can be implemented on either a voluntary or a mandatory basis. Generics substitution has been implemented in many European countries as part of demand-side policies to improve the utilization of generics [4]. In fact, mandatory generics substitution has resulted in medicine price reductions of 10–15% [4]. However, this is not a common scenario in low- and middle-income countries (LMICs).
Absence of a generics substitution policy in LMICs is a challenge to promoting the use of generics [5]. Some countries do not have a generics policy or have not positioned their generics policy as an integral part of their medicines policy [6]. Examples of such countries include Malaysia, Thailand and Vietnam [6, 7]. In addition, lack of clarity in legal regulations might prevent effective generics substitution [5]. For example, Malaysia had formulated a generics substitution policy as part of its National Medicines Policy in 2007. However, to date, there is still a lack of implementation and enforcement through legislation [8].
Another major challenge for substitution of generics in LMICs is the lack of evidence-based data/guidelines about bioequivalent or interchangeable medicines. Bioequivalence forms the basis of generics substitution [2]. In fact, concerns about bioequivalence and interchangeability of generics were the main factors affecting healthcare stakeholders’, i.e., physicians, pharmacists and patients, attitudes towards generics substitution [4]. Therefore, evidenced-based guidelines could be useful to assist healthcare professionals to appropriately perform generics substitution. Examples of such guidelines are the Orange Book in the US, the British National Formulary (BNF) in the UK, the Schedule of Pharmaceutical Benefits in Australia, and the list of interchangeable medicines in Finland and Sweden [7].
A functioning and reliable medicines regulatory authority is also important in ensuring the quality of generics [5]. Formulation or implementation of generics substitution policy in LMICs will be difficult unless stakeholders believe generic medicines are quality medicines [5]. Therefore, communication between medicines regulatory authorities in LMICs and healthcare professionals and medicine consumers is important to increase awareness of generics regulatory approval requirements and improve confidence in generics [7].
In addition, the characteristics of generics substitution policies can differ from country to country. In some countries, physicians may oppose, i.e. the level of justification for opposition varies across countries, and patients may refuse generics substitution or both scenarios may occur [4]. Therefore, adequate know ledge and positive perceptions among physicians and patients towards generics substitution is a prerequisite for developing effective generics substitution policies in LMICs. However, the literature shows that misconceptions still exist among these two important healthcare stakeholder groups [9, 10]. Therefore, educational interventions targeted to improve healthcare stakeholders’ knowledge about generics are needed.
In conclusion, the many challenges to developing effective generics substitution policies in LMICs include the absence of generics substitution policies, lack of enforcement, lack of evidence-based data about bioequivalence and lack of acceptance by physicians and patients. Adequate focus should be given to formulation/implementation of existing generics substitution policies in LMICs that includes the provision of adequate bioequivalence data that improves healthcare stakeholders’ confidence and acceptance of generics.
Competing interest: None.
Provenance and peer review: Not commissioned; internally peer reviewed.
Professor Mohamed Azmi Hassali, PhD
Discipline of Social and Administrative Pharmacy, School of Pharmaceutical Sciences, Universiti Sains Malaysia, 11800 Minden, Penang, Malaysia
Zhi Yen Wong, BPharm (Hons), MSc (Pharmaceutical Policy), RPh Pharmacist/Researcher, Pharmacy Department, Hospital Teluk Intan, 36000 Jalan Changkat Jong, Teluk Intan, Perak, Malaysia
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2. Alrasheedy AA, et al. Is there a need for a formulary of clinically interchangeable medicines to guide generic substitution in Saudi Arabia? J Young Pharm. 2013;5(2):73-5.
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6. Nguyen TA, Hassali MA, McLachlan A. Generic medicines policies in the Asia Pacific region: ways forward. WHO South East Asia J Public Health. 2013;2(1):72-4.
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Author for correspondence: Zhi Yen Wong, BPharm (Hons), MSc (Pharmaceutical Policy), RPh, Pharmacist/Researcher, Pharmacy Department, Hospital Teluk Intan, 36000 Jalan Changkat Jong, Teluk Intan, Perak, Malaysia |
Disclosure of Conflict of Interest Statement is available upon request.
Copyright © 2015 Pro Pharma Communications International
Permission granted to reproduce for personal and non-commercial use only. All other reproduction, copy or reprinting of all or part of any ‘Content’ found on this website is strictly prohibited without the prior consent of the publisher. Contact the publisher to obtain permission before redistributing.
Source URL: https://gabi-journal.net/challenges-of-developing-generics-substitution-policies-in-low-and-middle-income-countries-lmics.html
Author byline as per print journal: Omotayo Fatokun, PhD; Professor Mohamed Izham Mohamed Ibrahim, PhD; Professor Mohamed Azmi Hassali, PhD
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Abstract: |
Submitted: 25 October 2016; Revised: 15 November 2016; Accepted: 21 November 2016; Published online first: 28 November 2016
Due to the rising costs of pharmaceuticals and a prevailing economic crisis, the availability of generic equivalents of trademark innovator medicines has become crucial to the Malaysian healthcare system. In 2003, Malaysia became the first country in Asia to issue a compulsory licence for the importation of generic versions of patented antiretroviral medicines, following the adoption of the World Trade Organization (WTO) Doha declaration on the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement and public health. [1, 2]. This action was taken to increase access to affordable antiretroviral medicines, patented forms of which were highly priced. As a result of the licence, the average treatment costs per HIV-infected patient per month in public hospitals declined by up to 83% and there were widespread reductions in the prices of innovator patented antiretroviral products [1, 3]. Nevertheless, issues surrounding pharmaceutical patents mean medicine accessibility and generics availability continue to be a challenge in Malaysia [2].
The summary of the findings from a study on generic medicines entry into the Malaysian pharmaceutical market is presented in this paper. The determinants and characteristics of generic medicines entry following the patent expiration of innovator drug products in Malaysia were investigated. The sources of data used for the work included 22 policy documents, a survey of 13 key informants, a cross-sectional questionnaire of 14 generic medicines manufacturing industries, and panel data analysis of the 12 best-selling single entity prescription drug products that experienced loss of patent protection and subsequent generics entry in Malaysia between January 2001 and December 2009 [4].
The study began with analysis of policy documents, followed by semi-structured interview and qualitative questionnaire survey. The policy analysis included analysis of policy content, outputs and processes. The documents were restricted to publicly available and nationally-applicable official documents from government sources (print or Internet-based). These documents include laws, regulations, rules, policies, administrative orders, directives, guidelines, reports and other documented statements issued by the government, ministries, departments and agencies that were intended to directly or indirectly affect the production, distribution, prescribing, dispensing and the use of medicines in Malaysia. The key informants’ survey consisted of semi-structured interviews and self-completed qualitative questionnaire. The potential key informants were selected using a purposive non-probabilistic sampling, i.e. on the basis of their key position, professional expertise and good knowledge of the generic medicines environment in Malaysia. The 13 key informants were from seven organizations, i.e. the Malaysian Organization of Pharmaceutical Industries, generic medicines importers, Malaysian Medical Association, Malaysian Pharmaceutical Society, Federation of Malaysia Consumers Associations, Malaysian Pharmaceutical Services Divisions, and National Pharmaceutical Control Bureau. Cross-sectional national surveys of a self-completed questionnaire were used among generic drug manufacturers. The final study design was the panel data analysis on ‘best-selling’ single entity prescription International Nonproprietary Name (INN) drug products that lost patent protection and experienced subsequent generics entry. The drugs selected in this study were based on the empirical justification that post-patent entry of generic medicines is driven by the sales value of the patented drug molecule before patent expiration. Initially, 64 INN drug products were selected and screened to determine their registration status. The registration status of the drug products were obtained from the list of approved products and the drug products registration database of the Malaysian National Pharmaceutical Control Bureau.
Fourteen categories of policies and regulatory measures with varying effects on generics entry in Malaysia were identified. The major factors driving generics development and market entry in Malaysia were the prepatent expiration market value of innovator products, the cost of generics development and approval, and compatibility with pharmaceutical firms’ existing product ranges. The innovator product’s prepatent expiration market value was also a significant entry driver, but more so for domestic generics firms than export-oriented companies.
The major barriers to generic medicine development and market entry identified were patent clustering by innovator firms and the earlier market entry of imported generics. Government policies and regulations were perceived by respondents to be fairly effective in promoting generic medicines in Malaysia. The majority of respondents were dissatisfied with generics prescribing and generic medicines understanding among healthcare professionals, but satisfied with generics dispensing.
For the 12 best-selling prescription drug products, a total of 154 generics entries occurred over the eight-year period under study. The highest proportion of the sample belong to the cardiovascular class of drugs, followed in equal proportions by respiratory and nervous system drug products, which reflects the burden of disease among the Malaysian population. The occurrence of market entry for these drugs is characterized by a sequential quadratic curvilinear trend. The time to entry of generics was significantly longer than the hypothesized time to entry of one day following the basic patent expiration of an innovator product. This hypothesis is based on the TRIPS-compliant regulatory exception provision (also known as the early working exception or Bolar provision), and is used to enable the development of generic medicines before innovator product patent expiration [5, 6]. Competition among 28 off-patent drugs, the majority of which had been on the market for several years, showed that increased generics availability reduces drug prices in the off-patent pharmaceutical market. These findings illustrate the importance of the unhindered entry of generic medicines following the patent expiration of innovator drug products.
In sum, the presence of a variety of government policies have had varying effects on the entry of generic medicines to the Malaysian pharmaceutical market. These policies are those related to intellectual property rights; medicines regulation and registration; pharmaceutical pricing and competition; and the demand-side policies measures on generics prescribing, dispensing and consumptions. Market entry was found to be determined by the prepatent sales value of innovator products, the cost of generics development, market entry competition and the existence of patent-related entry barriers. The pattern of generics entry was characterized by a sequential curvilinear trend, and the time to generics entry was found to be significantly delayed beyond the expiration of the equivalent innovator product’s basic patent.
To improve generic medicines entry into the Malaysian pharmaceutical market, it is recommended to: (i) increase coherence between intellectual property rights and health policies; (ii) improve the patent administration system and ensure strict adherence to the patentability criteria of novelty; (iii) discourage any linkage between drug marketing approval and patents, including requests for listing of patent information with the drug regulatory authority; (iv) make trade-related policy coherent with regard to market entry of imported generic medicines vis-a-vis locally produced generic medicines; (v) enhance domestic capacity in bioequivalence testing and manufacturing to ensure more cost-efficient production of generic medicines; (vi) implement policies relating to generic medicines consistently across both the public and private sectors of the Malaysian healthcare system; and (vii) increase education and awareness of generic medicines among healthcare professionals and the public to promote generics prescribing, dispensing and consumption [7, 8].
Competing interests: None.
Provenance and peer review: Not commissioned; internally peer reviewed.
Assistant Professor Omotayo Fatokun, PhD
Department of Clinical Pharmacy, Faculty of Pharmaceutical Sciences, UCSI University, No. 1 Jalan Menara Gading, Cheras, 56000 Kuala Lumpur, Malaysia
Professor Mohamed Izham Mohamed Ibrahim, PhD
Professor of Social and Administrative Pharmacy
College of Pharmacy, Qatar University, Al Tarfa, PO Box 2713, Doha, Qatar
Professor Mohamed Azmi Hassali, PhD
Discipline of Social and Administrative Pharmacy, School of Pharmaceutical Sciences, Universiti Sains Malaysia, 11800 Minden, Penang, Malaysia
References
1. Ling CY. Malaysia’s experience in increasing access to antiretroviral drugs: exercising the ‘government use’ option. Penang: Third World Network; 2006.
2. Smith RD, et al. Trade, TRIPS, and pharmaceuticals. Lancet. 2009;373(9664):684-91.
3. World Health Organization. Commission on Intellectual Property Rights, Innovation and Public Health (CIPIH). Musungu SF, Oh C. The use of flexibilities in TRIPS by developing countries: can they promote access to medicines? 2006 [homepage on the Internet]. [cited 2016 Nov 15]. Available from: http://www.who.int/intellectualproperty/studies/TRIPSFLEXI.pdf
4. Fatokun O. Assessment of policies, determinants and characteristics of generic medicines entry into the Malaysian pharmaceutical market [dissertation]. Universiti Sains Malaysia; 2014.
5. De Joncheere K, Rietveld AH, Huttin C. Experiences with generics. Int J Risk Saf Med. 2002;15(1):101-9.
6. European Commission. Pharmaceutical sector inquiry final report [homepage on the Internet]. [cited 2016 Nov 15]. Available from: http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/staff_working_paper_part1.pdf
7. Kaplan WA, Wirtz VJ, Stephens P. The market dynamics of generic medicines in the private sector of 19 low and middle income countries between 2001 and 2011: a descriptive time series analysis. PLoS One. 2013;8(9):e74399.
8. Benjamin D, Swartz M, Forman L. The impact of evidence-based education on prescribing in a psychiatry residency. J Psychiatr Pract. 2011;17(2):110-7.
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Author for correspondence: Professor Mohamed Izham Mohamed Ibrahim, PhD, Professor of Social and Administrative Pharmacy, College of Pharmacy, Qatar University, Al Tarfa, PO Box 2713, Doha, Qatar |
Disclosure of Conflict of Interest Statement is available upon request.
Copyright © 2016 Pro Pharma Communications International
Permission granted to reproduce for personal and non-commercial use only. All other reproduction, copy or reprinting of all or part of any ‘Content’ found on this website is strictly prohibited without the prior consent of the publisher. Contact the publisher to obtain permission before redistributing.
Source URL: https://gabi-journal.net/generic-medicines-entry-into-the-malaysian-pharmaceutical-market.html
Copyright ©2024 GaBI Journal unless otherwise noted.
Strategies for pricing of pharmaceuticals and generics in developing countries
Abstract:
Dr Brian Godman and Professor Mohamed Azmi Hassali review Rida et al. regarding pricing strategies for pharmaceuticals in developing countries.
Submitted: 15 March 2017; Revised: 22 March 2017; Accepted: 24 March 2017; Published online first: 6 April 2017
Rida and Ibrahim are to be congratulated on their extensive review of ongoing pricing strategies in developing countries [1], also referred to as lowerand middle-income countries (LMICs). These include advocating policies regarding markups for pharmaceuticals, pricing formulae for medicines, external reference pricing, as well as encouraging greater use of generics [2–4]. However, there are concerns over external reference pricing (ERP), especially for new medicines where pharmaceutical companies are potentially delaying launch or not launching in some countries to maintain high prices [5]. There are also concerns over the ability to rapidly obtain low prices for generics if prices under ERP systems are only reviewed annually or biannually. Aggressive pricing policies in The Netherlands, including quarterly tendering, led to prices of generic omeprazole and simvastatin dropping to just 2% of the originator price in a short time period [6]. In Sweden, compulsory generics substitution with the lowest priced generic drug also led to rapid price erosion following generic availability. Prices fell further following the instigation of monthly auctions where the cheapest generic drug was guaranteed a substantial proportion of the market the following month [7, 8].
The prices of pharmaceuticals are a particular issue in LMICs, where medicines can account for up to 60% of total healthcare expenditures, and where up to 90% of the population purchase medicines through copayments [9, 10]. High co-payments impact on adherence of non-communicable diseases (NCDs) as well as on access to biologicals to treat immunological diseases [11–13]. This is a concern with NCDs as for example, currently three out of four patients with hypertension live in LMICs [14]. As mentioned by Rida and Ibrahim, promoting generics is a major way to reduce prices and enhance access to appropriate medicines [1, 10, 15, 16]. Although things are changing [10, 16], to date, there have only been a limited number of policy evaluations surrounding generics in LMICs [17]. There is also a comparative lack of strategies in place to combat the activities of pharmaceutical companies who are promoting their branded medicines negatively impacting on the use of generics [18]. The lack of promotion of generics can often be coupled with a lack of formal pricing strategies for generics [8]. This can be a major concern for countries and patients with NCDs, as generics for NCDs can be manufactured and distributed for as little as US$1 per patient per month [19, 20].
The lack of formal pricing strategies in place for generics in LMICs contrasts sharply with European countries where there are multiple formal pricing policies. These can be collated under three main themes [10, 21, 22] and include [8]: regulated systems (prescriptive pricing) where there are established rules for the pricing of generics, as seen in Belgium, Croatia, France, Hungary, Norway and Poland; free pricing – where manufacturers are (relatively) free to set prices of generics, as seen in Germany, The Netherlands, Sweden and the UK; however, typically there are programmes in place to obtain low prices; or a mixed approach – which is a combination of the two different approaches, as currently seen in Austria [10, 23–26].
As a result of the different pricing policies, there can be substantial price differences for generics [8, 22, 27]. Overall, generics prices can vary by up to 36 fold across countries depending on the pricing policies [28], with prices generally lower in countries with higher consumption of generics [29]. This is independent of the size of the country [30, 31]. Different countries across Europe and other parts of the world have also used a variety of other approaches to promote the use of generics. These include educational approaches, financial incentives and laws. Laws include compulsory generics substitution, as seen in Sweden, or compulsory International Nonproprietary Name (INN) prescribing, as seen in Lithuania [7, 30].
Despite the efforts being made, there are still a number of barriers that need to be addressed to enhance the prescribing and dispensing of generics, especially in LMICs [10, 32, 33]. These include addressing fears associated with generics substitution that are enhanced by concerns over the efficacy and safety of generics [34, 35]. Such fears resulted in Hassali et al. developing a list of requirements that should be met to enhance successful substitution [36]. Educational needs include encouraging high INN prescribing which is advocated by the World Health Organization (WHO) for non-controversial products, as seen in Scotland where rates are close to the 100% [8, 37]. Financial incentives include greater patient co-payments for branded products of the same molecule, which is typically practised across Europe [22]. Potential initiatives can also include reducing financial disincentives to the prescribing of generics, as currently seen in China. Here, both hospitals and physicians need to prescribe branded products with associated procured discounts to enhance their incomes [38]. This is in addition to the measures mentioned in Table 1 by Rida and Ibrahim [1].
It is important that appropriate care is taken when introducing pricing policies for generics. In 2012, the South Korean Government set the same maximum reimbursement price for originators and generics in an attempt to make the market more competitive [39], building on earlier reforms mentioned in Table 1 by Rida and Ibrahim [1]. However, given the concerns that still exist among physicians in Korea regarding generics, the opposite was achieved. The price dispersion between different generics significantly decreased and originator utilization significantly increased [39]. A similar situation was seen when compulsory INN prescribing was introduced in Abu Dhabi, United Arab Emirates. Implementation of this policy did not achieve the desired results as physicians were not incentivized to preferentially prescribe the generic medicines and pharmacists’ remuneration was not altered to preferentially dispense the cheapest INN product [40].
Many countries have also implemented a variety of approaches to the pricing and reimbursement of new medicines. Whilst all countries use critical appraisal techniques to assess the level of health gain with new medicines as part of pricing negotiations, some countries use this as a basis for pricing negotiations, e.g. Austria, France and Germany. Others use this information to develop economic para meters, such as the extent of an increase in quality adjusted life years (QALYs) with the new medicine with or without a budget impact analysis [41–43]. One concern is that most countries that utilize QALYs do not set thresholds, which can be exploited by pharmaceutical companies, especially in emotive disease areas, such as cancer and orphan diseases [41, 44, 45].
There is also growing use of risk-sharing arrangements brought about by the everincreasing prices of new medicines and issues of affordability in European countries [42, 46, 47]. This contrasts sharply with LMIC countries where there are currently few formal pricing approaches for new medicines, as discussed by Rida and Ibrahim [1]. Examples of pricing strategies that could be considered by LMICs when funding new medicines include those currently instigated in Austria [42, 48]. This is in addition to ERP as advocated by WHO [4]. In Austria, new medicines that are similar to existing standards are expected to be priced lower than the current standard prices for reimbursement [49]. New medicines that have added benefit can potentially command up to 10% more than the current standard prices, with prices for new medicines that are deemed to have substantially more added value, being allowed to have prices similar to European countries endorsed by health economic evaluations [49]. In the case of LMICs, this would mean prices similar to other LMICs with similar economic situations, as seen in Europe [3]. With only a few new medicines typically seen as innovative, this means that most new medicines will be priced below or just above current standards [42, 48], greatly increasing affordability and access.
In conclusion, Rida and Ibrahim’s research has been extensive. They have highlighted the need for LMICs to develop suitable pricing strategies for medicines to enhance access to affordable medicines. This is essential given rising rates of NCDs and other diseases. There is an opportunity for LMICs to learn from other countries, such as those in Europe who are developing strategies to cope with growing resource pressures on healthcare systems and the need to maintain equitable and comprehensive health care for all [8, 42].
Competing interests: None.
Provenance and peer review: Commissioned; externally peer reviewed.
Authors
Brian Godman1,2,3, BSc, PhD
Professor Mohamed Azmi Hassali4, PhD
1Strathclyde Institute of Pharmacy and Biomedical Sciences, University of Strathclyde, G4 0RE Glasgow, UK
2Department of Laboratory Medicine, Division of Clinical Pharmacology, Karolinska Institutet, Karolinska University Hospital Huddinge, SE-14186 Stockholm, Sweden
3Health Economics Centre, University of Liverpool Management School, Liverpool, UK
4Discipline of Social and Administrative Pharmacy, School of Pharmaceutical Sciences, Universiti Sains Malaysia, MY-11800 Minden, Penang, Malaysia
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Author for correspondence: Brian Godman, BSc, PhD, Strathclyde Institute of Pharmacy and Biomedical Sciences, University of Strathclyde, G4 0RE Glasgow, UK; Division of Clinical Pharmacology, Karolinska Institutet, Karolinska University Hospital Huddinge, SE-14186 Stockholm, Sweden
Disclosure of Conflict of Interest Statement is available upon request.
Copyright © 2017 Pro Pharma Communications International
Permission granted to reproduce for personal and non-commercial use only. All other reproduction, copy or reprinting of all or part of any ‘Content’ found on this website is strictly prohibited without the prior consent of the publisher. Contact the publisher to obtain permission before redistributing.
Source URL: https://gabi-journal.net/strategies-for-pricing-of-pharmaceuticals-and-generics-in-developing-countries.html