Many essential medicines in India are priced higher than estimated price, reveals WHO study

The affordability of medicines has long been a concern for developing countries, but today it is also a global one. Each year, 100 million people fall into poverty because they have to pay for medicines out-of-pocket. In India, it is estimated that over 70% of the medical expenditure is an out-of-pocket expenditure

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  • Lowest current prices of 40% essential medicines available in India were priced higher than the estimated generic prices.
  • This fact has been highlighted in the assessment report by the World Health Organisation (WHO) on essential medicines.
  • Estimated prices were compared with the lowest globally available prices for HIV/AIDS, tuberculosis and malaria medicines, and current prices in the UK, South Africa and India.

For the study, a generic price estimation formula was developed by reviewing published analysis of the cost of production for medicines and assuming manufacture in India, which included costs of formulation, packaging, taxation and a 10% profit margin.

At a global forum on fair pricing and access to medicines, delegates from governments and civil society organisations called for greater transparency around the cost of research and development as well as the production of medicines, to allow buyers to negotiate more affordable prices.

The forum, co-hosted by the World Health Organization (WHO) and the Government of South Africa, aimed to provide a global platform for a frank discussion among all stakeholders, including governments, civil society organizations and the pharmaceutical industry, in order to identify strategies to reduce medicine prices and expand access for all.

“Medical innovation has little social value if most people cannot access its benefits,” said Dr Mariângela Simão, WHO Assistant Director-General for Medicines and Health Products.  “This is a global human rights issue – everyone has a right to access quality healthcare.”

On the other hand, health authorities belonging to high-income countries’ are increasingly having to ration medicines for cancer, hepatitis C and rare diseases. The problem extends to older medicines whose patents have expired, such as insulin for diabetes.

A report commissioned by WHO in 2017 showed that the cost of production of most medicines on WHO’s Essential Medicines List was a small fraction of the final price paid by governments, patients or insurance schemes.

There was a consensus that countries can take an initial step towards fostering greater transparency by sharing price information.

Countries from the so-called Benelux network have already joined forces to share such information, and the results have been promising. The data highlights discrepancies in what different countries are paying and can serve as a powerful tool to negotiate reduced prices. WHO’s a database on vaccine markets and shortages – MI4A – was also highlighted at the forum as a useful tool to achieve competitive vaccine prices.

The event highlighted other successful examples of countries’ collaboration around achieving more affordable medicine prices; these include pooled procurement and voluntary sharing of policies.

If several countries in the same region purchase medicines as a block, they can negotiate reduced prices due to the larger volume of medicines purchased.

And European countries led by Austria have been sharing different policies to expand access to medicines through the WHO-supported PPRI (Pharmaceutical Pricing and Reimbursement Policies).

Industry bodies at the forum expressed support for the goal of access to medicines for all, and expressed their commitment to the Sustainable Development Agenda, which calls for partnership with the private sector to address global challenges such as access to medicines.

The WHO will launch a public online consultation in the coming weeks to collect views and suggestions for a definition of what actually constitutes a ‘fair price’ from relevant stakeholders.