Lead Author: Jaime Espin
Organization: Andalusian School of Public Health
Price is an important variable that determines better access to and availability of medicines. A medicine’s price should be determined by variables such as its therapeutic value and its production cost, but in the current system, the international reference pricing mechanism is causing drug prices to be determined by the drug’s price in other countries, which makes it hard for many middle and low income countries to access new drugs.
My contribution proposes a measure that the United Nations Secretary General’s High-Level Panel on Access to Medicines could collaborate on to improve access to medicines in many countries: creating a global drug-pricing database. This database wouldn’t just include the price of drugs in the countries where they’re marketed, it would also contain important variables that affect access to them: whether a drug is reimbursed/financed or not, the therapeutic value compared to competing drugs, sales volumes, what the price would be if we adjust for GDP per capita for purchasing power parity, etc.
An imbalance in available information is a key variable that determines whether a market is competitive or not. In the pharmaceutical market, where a large number of drugs are under patent, the lack of competition is evident, which results in access and availability problems in many countries around the world, especially low and middle income countries.
Policies to regulate drug prices aim to improve access, but the lack of transparency in the procedures, in the assessment and in the result make it hard know the final outcome: the price of the drug.
A public drug-pricing database would achieve greater market competition and better access. There have been several international experiences demonstrating that it is possible to implement a database of this nature.
Bibliography and References
Espin J., Rovira J., Olry de Labry A. Review series on pharmaceutical pricing policies and interventions: Working paper 1: External reference pricing. WHO Policy Review 2011.
Kanavos P., Nicod E., Espin J., van den Aardweg S. Short- and Long-Term Effects of Value-Based Pricing vs. External Price Referencing, (European Medicines Information Network –EMINET- 2011). DG Enterprise and Industry. European Commission.
Rovira Forns, Joan; Espin Balbino, Jaime. Acceso, Financiacion y Regulacion Economica de los Medicamentos (En Medicamentos. Entre la Salud y el Mercado). Icaria 2009. [Access, Financing and Economic Regulation of Medicines (In Medicines: Between Health and the Market)]