Balancing Medicine Prices and Business Sustainability: Analyses of Pharmacy Costs, Revenues and Profit Shed Light on Retail Medicine Mark-Ups in Rural Kyrgyzstan

BACKGROUND: Numerous not-for-profit pharmacies have been created to improve access to medicines for the poor, but many have failed due to insufficient financial planning and management. These pharmacies are not well described in health services literature despite strong demand from policy makers, implementers, and researchers. Surveys reporting unaffordable medicine prices and high mark-ups have spurred efforts to reduce medicine prices, but price reduction goals are arbitrary in the absence of information on pharmacy costs, revenues, and profit structures. Health services research is needed to develop sustainable and "reasonable" medicine price goals and strategic initiatives to reach them. METHODS. We utilized cost accounting methods on inventory and financial information obtained from a not-for-profit rural pharmacy network in mountainous Kyrgyzstan to quantify costs, revenues, profits and medicine mark-ups during establishment and maintenance periods (October 2004-December 2007). RESULTS: Twelve pharmacies and one warehouse were established in remote Kyrgyzstan with 100%, respectively. Annual mark-ups increased dramatically each year to cover increasing recurrent costs, and by 2007, only 19% and 46% of products revealed mark-ups of 100%. 2007 medicine mark-ups varied substantially across these products, ranging from 32% to 244%. Mark-ups needed to sustain private pharmacies would be even higher in the absence of government subsidies. CONCLUSION: Pharmacy networks can be established in hard-to-reach regions with little funding using public-private partnership, resource-sharing models. Medicine prices and mark-ups must be interpreted with consideration for regional costs of business. Mark-ups vary dramatically across medicines. Some mark-ups appear "excessive" but are likely necessary for pharmacy viability. Pharmacy financial data is available in remote settings and can be used towards determination of "reasonable" medicine price goals. Health systems researchers must document the positive and negative financial experiences of pharmacy initiatives to inform future projects and advance access to medicines goals.United States Agency for International Development through the Child and Family Applied Research Project at the Boston University School of Public Healt

A lifeline to treatment: the role of Indian generic manufacturers in supplying antiretroviral medicines to developing countries

<p>Abstract</p> <p>Background</p> <p>Indian manufacturers of generic antiretroviral (ARV) medicines facilitated the rapid scale up of HIV/AIDS treatment in developing countries though provision of low-priced, quality-assured medicines. The legal framework in India that facilitated such production, however, is changing with implementation of the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights, and intellectual property measures being discussed in regional and bilateral free trade agreement negotiations. Reliable quantitative estimates of the Indian role in generic global ARV supply are needed to understand potential impacts of such measures on HIV/AIDS treatment in developing countries.</p> <p>Methods</p> <p>We utilized transactional data containing 17,646 donor-funded purchases of ARV tablets made by 115 low- and middle-income countries from 2003 to 2008 to measure market share, purchase trends and prices of Indian-produced generic ARVs compared with those of non-Indian generic and brand ARVs.</p> <p>Results</p> <p>Indian generic manufacturers dominate the ARV market, accounting for more than 80% of annual purchase volumes. Among paediatric ARV and adult nucleoside and non-nucleoside reverse transcriptase inhibitor markets, Indian-produced generics accounted for 91% and 89% of 2008 global purchase volumes, respectively. From 2003 to 2008, the number of Indian generic manufactures supplying ARVs increased from four to 10 while the number of Indian-manufactured generic products increased from 14 to 53. Ninety-six of 100 countries purchased Indian generic ARVs in 2008, including high HIV-burden sub-Saharan African countries. Indian-produced generic ARVs used in first-line regimens were consistently and considerably less expensive than non-Indian generic and innovator ARVs. Key ARVs newly recommended by the World Health Organization are three to four times more expensive than older regimens.</p> <p>Conclusions</p> <p>Indian generic producers supply the majority of ARVs in developing countries. Future scale up using newly recommended ARVs will likely be hampered until Indian generic producers can provide the dramatic price reductions and improved formulations observed in the past. Rather than agreeing to inappropriate intellectual property obligations through free trade agreements, India and its trade partners - plus international organizations, donors, civil society and pharmaceutical manufacturers - should ensure that there is sufficient policy space for Indian pharmaceutical manufacturers to continue their central role in supplying developing countries with low-priced, quality-assured generic medicines.</p

Assessing the population health impact of market interventions to improve access to antiretroviral treatment

Despite extraordinary global progress in increasing coverage of antiretroviral treatment (ART), the majority of people needing ART currently are not receiving treatment. Both the number of people needing ART and the average ART price per patient-year are expected to increase in coming years, which will dramatically raise funding needs for ART. Several international organizations are using interventions in ART markets to decrease ART price or to improve ART quality, delivery and innovation, with the ultimate goal of improving population health. These organizations need to select those market interventions that are most likely to substantially affect population health outcomes (ex ante assessment) and to evaluate whether implemented interventions have improved health outcomes (ex post assessment). We develop a framework to structure ex ante and ex post assessment of the population health impact of market interventions, which is transmitted through effects in markets and health systems. Ex ante assessment should include evaluation of the safety and efficacy of the ART products whose markets will be affected by the intervention; theoretical consideration of the mechanisms through which the intervention will affect population health; and predictive modelling to estimate the potential population health impact of the intervention. For ex post assessment, analysts need to consider which outcomes to estimate empirically and which to model based on empirical findings and understanding of the economic and biological mechanisms along the causal pathway from market intervention to population health. We discuss methods for ex post assessment and analyse assessment issues (unintended intervention effects, interaction effects between different interventions, and assessment impartiality and cost). We offer seven recommendations for ex ante and ex post assessment of population health impact of market intervention

Intervening in global markets to improve access to HIV/AIDS treatment: an analysis of international policies and the dynamics of global antiretroviral medicines markets

<p>Abstract</p> <p>Background</p> <p>Universal access to antiretroviral therapy (ART) in low- and middle-income countries faces numerous challenges: increasing numbers of people needing ART, new guidelines recommending more expensive antiretroviral (ARV) medicines, limited financing, and few fixed-dose combination (FDC) products. Global initiatives aim to promote efficient global ARV markets, yet little is known about market dynamics and the impact of global policy interventions.</p> <p>Methods</p> <p>We utilize several data sources, including 12,958 donor-funded, adult first-line ARV purchase transactions, to describe the market from 2002-2008. We examine relationships between market trends and: World Health Organization (WHO) HIV/AIDS treatment guidelines; WHO Prequalification Programme (WHO Prequal) and United States (US) Food and Drug Administration (FDA) approvals; and procurement policies of the Global Fund to Fight AIDS, Tuberculosis, and Malaria (GFATM), US President's Emergency Plan for AIDS Relief (PEPFAR) and UNITAID.</p> <p>Results</p> <p>WHO recommended 7, 4, 24, and 6 first-line regimens in 2002, 2003, 2006 and 2009 guidelines, respectively. 2009 guidelines replaced a stavudine-based regimen ($88/person/year) with more expensive zidovudine- ($154-260/person/year) or tenofovir-based ($244-465/person/year) regimens. Purchase volumes for ARVs newly-recommended in 2006 (emtricitabine, tenofovir) increased >15-fold from 2006 to 2008. Twenty-four generic FDCs were quality-approved for older regimens but only four for newer regimens. Generic FDCs were available to GFATM recipients in 2004 but to PEPFAR recipients only after FDA approval in 2006. Price trends for single-component generic medicines mirrored generic FDC prices. Two large-scale purchasers, PEPFAR and UNITAID, together accounted for 53%, 84%, and 77% of market volume for abacavir, emtricitabine, and tenofovir, respectively, in 2008. PEPFAR and UNITAID purchases were often split across two manufacturers.</p> <p>Conclusions</p> <p>Global initiatives facilitated the creation of fairly efficient markets for older ARVs, but markets for newer ARVs are less competitive and slower to evolve. WHO guidelines shape demand, and their complexity may help or hinder achievement of economies of scale in pharmaceutical manufacturing. Certification programs assure ARV quality but can delay uptake of new formulations. Large-scale procurement policies may decrease the numbers of buyers and sellers, rendering the market less competitive in the longer-term. Global policies must be developed with consideration for their short- and long-term impact on market dynamics.</p

25 years of the WHO essential medicines lists: progress and challenges.

The first WHO essential drugs list, published in 1977, was described as a peaceful revolution in international public health. The list helped to establish the principle that some medicines were more useful than others and that essential medicines were often inaccessible to many populations. Since then, the essential medicines list (EML) has increased in size; defining an essential medicine has moved from an experience to an evidence-based process, including criteria such as public-health relevance, efficacy, safety, and cost-effectiveness. High priced medicines such as antiretrovirals are now included. Differences exist between the WHO model EML and national EMLs since countries face varying challenges relating to costs, drug effectiveness, morbidity patterns, and rationality of prescribing. Ensuring equitable access to and rational use of essential medicines has been promoted through WHO's revised drug strategy. This approach has required an engagement by WHO on issues such as the effect of international trade agreements on access to essential medicines and research and development to ensure availability of new essential medicines

Market penetration of Xpert MTB/RIF in high tuberculosis burden countries: A trend analysis from 2014 - 2016 [version 1; referees: 4 approved]

Background: Xpert® MTB/RIF, a rapid tuberculosis (TB) molecular test, was endorsed by the World Health Organization in 2010. Since then, 34.4 million cartridges have been procured under concessional pricing. Although the roll out of this diagnostic is promising, previous studies showed low market penetration. Methods: To assess 3-year trends of market penetration of Xpert MTB/RIF in the public sector, smear and Xpert MTB/RIF volumes for the year 2016 were assessed and policies from 2014-2016 within 22 high-burden countries (HBCs) were studied. A structured questionnaire was sent to representatives of 22 HBCs. The questionnaires assessed the total smear and Xpert MTB/RIF volumes, number of modules and days of operation of GeneXpert machines in National TB Programs (NTPs). Data regarding the use of NTP GeneXpert machines for other diseases and GeneXpert procurement by other disease control programs were collected. Market penetration was estimated by the ratio of total sputum smear volume for initial diagnosis divided by the number of Xpert MTB/RIF tests procured in the public sector. Results: The survey response rate was 21/22 (95%). Smear/Xpert ratios decreased in 17/21 countries and increased in four countries, since 2014. The median ratio decreased from 32.6 (Q1:14.3, Q3: 58.9) in 2014 to 6.0 (Q1: 1.6, Q3: 17.0) in 2016. Nineteen countries (19/19; 100%) were not using GeneXpert machines to their full capacity, however seven countries (7/19; 37%) were running tests for other diseases on their NTP-procured GeneXpert systems in 2017, such as HIV, hepatitis-C virus (HCV), Chlamydia trachomatis, and Neisseria gonorrhoeae. Five (5/15; 33%) countries reported GeneXpert procurement by HIV or HCV programs in 2016 and/or 2017. Conclusions: Our results show a positive trend for Xpert MTB/RIF market penetration in 21 HBC public sectors. However, GeneXpert machines were under-utilized for TB, and inadequately exploited as a multi disease technology

A lifeline to treatment: the role of Indian generic manufacturers in supplying antiretroviral medicines to developing countries

Background: Indian manufacturers of generic antiretroviral (ARV) medicines facilitated the rapid scale up of HIV/ AIDS treatment in developing countries though provision of low-priced, quality-assured medicines. The legal framework in India that facilitated such production, however, is changing with implementation of the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights, and intellectual property measures being discussed in regional and bilateral free trade agreement negotiations. Reliable quantitative estimates of the Indian role in generic global ARV supply are needed to understand potential impacts of such measures on HIV/AIDS treatment in developing countries. Methods: We utilized transactional data containing 17,646 donor-funded purchases of ARV tablets made by 115 low- and middle-income countries from 2003 to 2008 to measure market share, purchase trends and prices of Indian-produced generic ARVs compared with those of non-Indian generic and brand ARVs. Results: Indian generic manufacturers dominate the ARV market, accounting for more than 80% of annual purchase volumes. Among paediatric ARV and adult nucleoside and non-nucleoside reverse transcriptase inhibitor markets, Indian-produced generics accounted for 91% and 89% of 2008 global purchase volumes, respectively. From 2003 to 2008, the number of Indian generic manufactures supplying ARVs increased from four to 10 while the number of Indian-manufactured generic products increased from 14 to 53. Ninety-six of 100 countries purchased Indian generic ARVs in 2008, including high HIV-burden sub-Saharan African countries. Indian-produced generic ARVs used in first-line regimens were consistently and considerably less expensive than non-Indian generic and innovator ARVs. Key ARVs newly recommended by the World Health Organization are three to four times more expensive than older regimens. Conclusions: Indian generic producers supply the majority of ARVs in developing countries. Future scale up using newly recommended ARVs will likely be hampered until Indian generic producers can provide the dramatic price reductions and improved formulations observed in the past. Rather than agreeing to inappropriate intellectual property obligations through free trade agreements, India and its trade partners - plus international organizations, donors, civil society and pharmaceutical manufacturers - should ensure that there is sufficient policy space for Indian pharmaceutical manufacturers to continue their central role in supplying developing countries with low- priced, quality-assured generic medicines

Assessing the population health impact of market interventions to improve access to antiretroviral treatment

Despite extraordinary global progress in increasing coverage of antiretroviral treatment (ART), the majority of people needing ART currently are not receiving treatment. Both the number of people needing ART and the average ART price per patient-year are expected to increase in coming years, which will dramatically raise funding needs for ART. Several international organizations are using interventions in ART markets to decrease ART price or to improve ART quality, delivery and innovation, with the ultimate goal of improving population health. These organizations need to select those market interventions that are most likely to substantially affect population health outcomes (ex ante assessment) and to evaluate whether implemented interventions have improved health outcomes (ex post assessment). We develop a framework to structure ex ante and ex post assessment of the population health impact of market interventions, which is transmitted through effects in markets and health systems. Ex ante assessment should include evaluation of the safety and efficacy of the ART products whose markets will be affected by the intervention; theoretical consideration of the mechanisms through which the intervention will affect population health; and predictive modelling to estimate the potential population health impact of the intervention. For ex post assessment, analysts need to consider which outcomes to estimate empirically and which to model based on empirical findings and understanding of the economic and biological mechanisms along the causal pathway from market intervention to population health. We discuss methods for ex post assessment and analyse assessment issues (unintended intervention effects, interaction effects between different interventions, and assessment impartiality and cost). We offer seven recommendations for ex ante and ex post assessment of population health impact of market interventions