Still Taxed to Death: An Analysis of Taxes and Tariffs on Medicines, Vaccines and Medical Devices

This paper examines the role that tariffs, domestic taxes, and regulatory requirements pose on access to essential drugs, vaccines and devices for the diseases that afflict the developing world. While aid has increased in recent years and the price of many drugs has fallen, access to medicines, vaccines and devices has not increased greatly. There are numerous reasons for this, notably the paucity of medical professionals in the poorest countries. The major one discussed in this paper is the barrier imposed by recipient countries themselves. For example the combined domestic tax and import tariff barrier in India until recently was over 60% and in Morocco it currently stands at 38%. Only just over a third of Indians have access to essential drugs and it is likely that a reduction of these financial impediments would increase access. Removal of these barriers would therefore likely save thousands of lives across the developing world. Southern African countries generally have fewer tariff barriers. But if South Africa removed its 14% sales tax, HIV patients could afford more food, and many are currently malnourished. Furthermore, many Southern African countries, such as Namibia, impose regulatory constraints (expensive and time consuming registration of products already approved in US/EU), which reduce access to essential medicines.Health and Safety, Regulatory Reform

Does Price Reveal Poor-Quality Drugs? Evidence from 17 Countries

Focusing on 8 drug types on the WHO-approved medicine list, we constructed an original dataset of 899 drug samples from 17 low- and median-income countries and tested them for visual appearance, disintegration, and analyzed their ingredients by chromatography and spectrometry. Fifteen percent of the samples fail at least one test and can be considered substandard. After controlling for local factors, we find that failing drugs are priced 13.6-18.7% lower than non-failing drugs but the signaling effect of price is far from complete, especially for non-innovator brands. The look of the pharmacy, as assessed by our covert shoppers, is weakly correlated with the results of quality tests. These findings suggest that consumers are likely to suspect low quality from market price, non-innovator brand and the look of the pharmacy, but none of these signals can perfectly identify substandard and counterfeit drugs. Indeed, many cheaper non-innovator products pass all quality tests, and are genuine generic drugs.

Pharmaceuticals and the Worldwide HIV Epidemic: Can a Stakeholder Model Work?

The worldwide HIV-AIDS epidemic has generated intense criticism of pharmaceutical drug prices, a natural consequence of the industry's unique cost structure. A number of persons have proposed that the industry adopt what might be called a stakeholder model in place of the traditional profit-driven model. But the rapid drop in HIV drug prices, combined with generic entry and de facto abandonment of patent rights, has revealed the extremely limited role played by drug prices and access in the face of fundamental problems in infrastructure, prevention, and other essential elements in battling HIV-AIDS. Adoption of a stakeholder approach is likely to undermine essential R&D while doing little to curtail the HIV-AIDS epidemic.Health and Safety, Regulatory Reform, Other Topics

Pilot Study of Essential Drug Quality in Two Major Cities in India

BACKGROUND: India is an increasingly influential player in the global pharmaceutical market. Key parts of the drug regulatory system are controlled by the states, each of which applies its own standards for enforcement, not always consistent with others. A pilot study was conducted in two major cities in India, Delhi and Chennai, to explore the question/hypothesis/extent of substandard and counterfeit drugs available in the market and to discuss how the Indian state and federal governments could improve drug regulation and more importantly regulatory enforcement to combat these drugs. METHODOLOGY/PRINCIPAL FINDINGS: Random samples of antimalarial, antibiotic, and antimycobacterial drugs were collected from pharmacies in urban and peri-urban areas of Delhi and Chennai, India. Semi-quantitative thin-layer chromatography and disintegration testing were used to measure the concentration of active ingredients against internationally acceptable standards. 12% of all samples tested from Delhi failed either one or both tests, and were substandard. 5% of all samples tested from Chennai failed either one or both tests, and were substandard. Spatial heterogeneity between pharmacies was observed, with some having more or less substandard drugs (30% and 0% respectively), as was product heterogeneity, with some drugs being more or less frequently substandard (12% and 7% respectively). CONCLUSIONS/SIGNIFICANCE: In a study using basic field-deployable techniques of lesser sensitivity rather than the most advanced laboratory-based techniques, the prevalence of substandard drugs in Delhi and Chennai is confirmed to be roughly in accordance with the Indian government's current estimates. However, important spatial and product heterogeneity exists, which suggests that India's substandard drug problem is not ubiquitous, but driven by a subset of manufacturers and pharmacies which thrive in an inadequately regulated environment. It is likely that the drug regulatory system in India needs to be improved for domestic consumption, and because India is an increasingly important exporter of drugs for both developed and developing countries. Some poor countries with high burdens of disease have weak drug regulatory systems and import many HIV/AIDS, tuberculosis and malaria drugs from India

Drug procurement, the Global Fund and misguided competition policies

In an effort to increase competition and decrease price, the Global Fund to Fight AIDS, Tuberculosis and Malaria recently began asking some grant recipients to use international competitive bidding processes for certain drug purchases. Unfortunately, for countries like Kenya, this request has caused more harm than good. After awarding the tender for its annual supply of the anti-malarial artemether-lumefantrine to the lowest bidder, Ajanta Pharma, Kenya experienced wide stock-outs in part due to the company's inability to supply the order in full and on time. Similar problems could arise in Uganda. Despite Kenya's experience, Uganda has awarded its next tender for artemether-lumefantrine to Ajanta Pharma. Uganda is already facing wide stock-outs and risks exacerbating an already dire situation the longer it takes to fulfil the procurement contract. A tender process based primarily on price cannot account for a company's ability to consistently supply sufficient product in time

Physical and chemical stability of expired fixed dose combination artemether-lumefantrine in uncontrolled tropical conditions

<p>Abstract</p> <p>Background</p> <p>New artemisinin combination therapies pose difficulties of implementation in developing and tropical settings because they have a short shelf-life (two years) relative to the medicines they replace. This limits the reliability and cost of treatment, and the acceptability of this treatment to health care workers. A multi-pronged investigation was made into the chemical and physical stability of fixed dose combination artemether-lumefantrine (FDC-ALU) stored under heterogeneous, uncontrolled African conditions, to probe if a shelf-life extension might be possible.</p> <p>Methods</p> <p>Seventy samples of expired FDC-ALU were collected from private pharmacies and malaria researchers in seven African countries. The samples were subjected to thin-layer chromatography (TLC), disintegration testing, and near infrared Raman spectrometry for ascertainment of active ingredients, tablet integrity, and chemical degradation of the tablet formulation including both active ingredients and excipients.</p> <p>Results</p> <p>Seventy samples of FDC-ALU were tested in July 2008, between one and 58 months post-expiry. 68 of 70 (97%) samples passed TLC, disintegration and Raman spectrometry testing, including eight samples that were post-expiry by 20 months or longer. A weak linear association (R²= 0.33) was observed between the age of samples and their state of degradation relative to brand-identical samples on Raman spectrometry. Sixty-eight samples were retested in February 2009 using Raman spectrometry, between eight and 65 months post-expiry. 66 of 68 (97%) samples passed Raman spectrometry retesting. An unexpected observation about African drug logistics was made in three batches of FDC-ALU, which had been sold into the public sector at concessional pricing in accordance with a World Health Organization (WHO) agreement, and which were illegally diverted to the private sector where they were sold for profit.</p> <p>Conclusion</p> <p>The data indicate that FDC-ALU is chemically and physically stable well beyond its stated shelf-life in uncontrolled, tropical conditions. While these data are not themselves sufficient, it is strongly suggested that a re-evaluation of the two-year shelf-life by drug regulatory authorities is warranted.</p

Combatting Substandard and Falsified Medicines: A View from Rwanda

Agnes Binagwaho and colleagues describe Rwanda's experience of pharmacovigilance for malaria and tuberculosis, and call for a global treaty and leadership by the World Health Organization to address the global manufacture and trade in substandard and falsified medicines. Please see later in the article for the Editors' Summar

The Primacy of Public Health Considerations in Defining Poor Quality Medicines

Paul Newton and colleagues argue that public health, and not intellectual property or trade issues, should be the prime consideration in defining and combating counterfeit medicines, and that the World Health Organization (WHO) should take a more prominent role