Policy options for pharmaceutical pricing and purchasing: issues for low- and middle-income countries

Abstract

Pharmaceutical expenditure is rising globally. Most high-income countries have exercised pricing or purchasing strategies to address this pressure. Low- and middle-income countries (LMICs), however, usually have less regulated pharmaceutical markets and often lack feasible pricing or purchasing strategies, notwithstanding their wish to effectively manage medicine budgets. In high-income countries, most medicines payments are made by the state or health insurance institutions. In LMICs, most pharmaceutical expenditure is out-of-pocket which creates a different dynamic for policy enforcement. The paucity of rigorous studies on the effectiveness of pharmaceutical pricing and purchasing strategies makes it especially difficult for policy makers in LMICs to decide on a course of action. This article reviews published articles on pharmaceutical pricing and purchasing policies. Many policy options for medicine pricing and purchasing have been found to work but they also have attendant risks. No one option is decisively preferred; rather a mix of options may be required based on country-specific context. Empirical studies in LMICs are lacking. However, risks from any one policy option can reasonably be argued to be greater in LMICs which often lack strong legal systems, purchasing and state institutions to underpin the healthcare system. Key factors are identified to assist LMICs improve their medicine pricing and purchasing systems.

Efficacy of international approaches to medicine price regulation and control: A scoping review

“…The medicine pricing is most hotly debated issue internationally among policy makers, and advocacy groups and thus pressure has increased on pharmaceutical industry to decrease the prices of newly produced medicines, especially the EM (Gregson et al, 2005). If the medicines are affordable, only then can these offer a simple, cost-effective solution to many health problems (Pecoul;Chirac, 1999) and can decrease the expenditure on medicines (Gray, 2009).…”

Medicine Procurement in hospital pharmacies in Nepal: A qualitative study based on the Basel Statements

“…According to the WHO, the restricted tender procedure, open for only prequalified suppliers, is considered the best procurement model for small countries like Nepal [48]. A small minority of hospital pharmacies adopted a competitive-procurement model, similar to other low-and middle-income countries like India and those in the Western Pacific region [49]. However the open tender system without pre-/postbidding evaluation of suppliers is not in accordance with WHO recommendations [48].…”

Pharmaceutical Pricing Policies in Vietnam

“…Using this approach, the Vietnam government could create an opportunity for pharmaceutical suppliers to set the highest price from the comparable countries for each medicine, potentially resulting in higher average prices in Vietnam than in the comparator countries. Taking the lowest price in the set or averaging the prices of the medicine among comparator countries is much more commonly used by other countries with experience in external reference pricing system (Nguyen et al 2014;Espin et al 2011). In addition, the use of category comparisons could also pose dilemmas of definition.…”