Microsoft word - medicine prices in kenya 11 05 06.doc

MEDICINE PRICES IN KENYA
MEASURING MEDICINE PRICES
One-third of the global population lacks reliable access to needed medicines. The high price of medicines is a key factor in their inaccessibility. High prices are particularly burdensome to patients in developing countries where most medicines are paid for out-of-pocket In September 2004, the Kenya Ministry of Health was supported by the World Health Organisation (WHO), Health Action International-Africa PRESENTATION OF PRICE INFORMATION
(HAI-A) and the HAI-A partners in Kenya, to carry out a national survey The WHO/HAI survey methodology presents prices as median price of medicine prices. The survey was conducted in the public, private and ratios (MPR). The MPR is the ratio of the local price divided by an NGO sectors. Using the WHO/HAI methodology: Medicine Prices: a international reference price converted into the same currency. As new approach to measurement, the Ministry assessed the affordability such, the reference price serves as an external standard for evaluating of key medicines, analyzed the prices and availability of selected key local prices. An MPR of 1 means the local price is equivalent to the medicines, and identified price components (taxes, mark-ups etc.) of reference price whereas an MPR of 2 means the local price is twice the locally produced and imported medicines. The evidence obtained was reference price. The international reference prices used for this survey used to determine factors contributing to high and variable medicine were taken from the 2003 Management Sciences for Health (MSH) prices and identify strategies and policies to improve their affordability. International Drug Price Indicator Guide (e MSH This is one of a series of papers summarizing the results of medicine guide pulls together information from recent price lists of large, non- price surveys carried out by countries across Africa and elsewhere in profit generic medicine suppliers and thus reflects the prices governments could be expected to pay for medicines. BACKGROUND - KENYA
INTERPRETATION OF FINDINGS
Kenya is classified as a low income country by the World Bank with an Where survey findings point to the high cost or poor availability of a few estimated GNP per capita of US$ 453 in 2001. Total health expenditure specific medicines, they are named in this paper. However, these are (public & private) was estimated at US$ 30 per capita in 2000, with an unlikely to be isolated incidents. As only around 50 medicines were estimated 76% being private expenditure; total medicines expenditure included in this survey, a finding of high prices or low availability of (public & private) being estimated at US$7 per capita ; public sector even 3 or 4 medicines – or 6% to 8% of those studied – could indicate medicines budget was about US$0.51 per capita in 2002. a greater problem and requires further investigation. Health care is provided by the Ministry of Health, Missions/NGO and the AFFORDABILITY
private sector; the Mission sector providing around 40% health care. In In this paper, affordability is calculated in terms of the number of days the public sector and mission sectors, there is a policy of cost sharing the lowest paid unskilled government worker would have to work to pay with an exemption policy for some needy groups. However there is no for one treatment course for an acute condition or one month’s policy with respect to what prices are charged and the exemption treatment for a chronic condition. At the time of the survey, the lowest system is not very accessible for outpatient services. The government paid unskilled government worker earned KSh 166 (US$2.045) per health insurance scheme covers only a small percentage of in-patient day. According to the World Development Report 2005, 58.3% of the care. In the public sector there are 1700 health centres and Kenyan population lives on less than US$2 per day. More than half of dispensaries; 160 hospitals and two referral hospitals. Access to health the population lives on less than the salary of the lowest paid centres in the rural areas is poor with many households living more that government worker and hence the affordability for many Kenyans will The public sector drug supply system has been reformed through the Overall, affordability of treatments for chronic conditions was much less establishment of the Kenya Medical Supplies Agency (KEMSA) as a than affordability of treatments for acute conditions. body corporate with the mandate of developing and operating a viable The burden is especially great for a family needing treatment for commercial service for the procurement and sale of drugs and medical several conditions at the same time, e.g. using the lowest priced supplies to the public health institutions. Procurement for the Ministry of generic medicines, it would take just under 7 days’ wages for the Health (MOH) is done by MOH Procurement and Supply Division, lowest paid unskilled government worker to purchase a salbutamol through KEMSA; external procurement agencies; and by health facilities inhaler for a child with asthma, a course of cotrimoxazole suspension at provincial and district level. Pharmaceutical supplies are distributed for a child with a respiratory tract infection, glibenclamide tablets for an by KEMSA which has a drug storage and distribution system with a adult with diabetes and ranitidine tablets for an adult with a peptic central warehouse in Nairobi and a well-developed network of regional ulcer; innovator brands would need 25 days work for a months supply In the private sector there are more than 600 registered retail pharmacies. Affordability of medicines for a family in private pharmacies
(1 months treatment or treatment course for antibiotics)
MEDICINES, AREAS AND SECTORS SURVEYED
The medicines surveyed included a standardized core group of 30 total for 1 months treatment = 25 days wages medicines that were surveyed in all countries and a supplementary group of 15 medicines specific to Kenya. The core group was selected based on global burden of disease, availability of standard formulations and importance. Medicines in the supplementary group were selected because of the importance and/or the frequency of their use in treating important common health problems in Kenya. Both medicines on and total for 1 months treatment = 7 days wages off patent and on and off the national essential medicines list were In all, 45 medicines were surveyed in the 53 public health facilities; 57 private sector outlets and 47 mission/NGO health facilities. The survey also found marked differences in affordability between medicines within a therapeutic category. The two graphs below illustrate these differences for two lowest priced generics used to treat diabetes and hypertension. While there may be clinical advantages of one treatment option over the other, for patients paying out-of-pocket 2 World Medicines Situation , WHO 2004 and in particular when a medicine is not available in the public sector, Number of times more expensive: public sector procurement prices patients may be unable to afford the preferred treatment. compared to international reference prices Price (MPR) Affordability of treatments of diabetes
(lowest priced generics; 1 months course)
PUBLIC SECTOR PATIENT PRICES
At public sector facilities, patient prices for the lowest priced generic medicines were found to be 1.99 times international reference prices. Patient prices ranged from 0.26 times (or 74% less than) the international reference price for amoxicillin + clavulanic acid to 13.18 times the international reference price for chlorpheniramine. Affordability of treatments for hypertension
Number of times more expensive: public sector patient prices for (lowest priced generics; 1 months course)
medicines compared to international reference prices 38 of the 45 medicines studied were on the essential drug list of Kenya. The median availability of those medicines on the Kenya nifedipine retard 20mg twice daily Essential Drugs List was found to be 65% (n=53 facilities). It should be noted that from within these 38, some of the medicines would only be At the time of the study, sulphadoxine-pyrimethamine was the expected to be at the referral hospital level and not at some of the recommended treatment for uncomplicated malaria, which is currently lower level facilities that were surveyed. being changed to artemether + lumefantrine. The chart below The following medicines were found to have an availability of greater demonstrates the affordability of malaria medicines with the than 80%: amodiaquine, amoxicillin, carbamazepine, implementation of the new malaria drug policy of artemether + chlorpheniramine, cotrimoxazole suspension, diazepam, doxycycline, lumefantrine compared to the current sulphadoxine-pyrimethamine. furosemide, gentamycin injection, metronidazole, sulphadoxine-pyrimethamine, tetracycline eye ointment and tinidazole. Affordability of treatments for malaria
Both innovator brand and generic version ceftriaxone injection was found the public sector, the patient price of the generic version being 38% lower than the innovator brand price. The following table shows those medicines for which patients at public facilities are charged at least 3 times published international prices for the lowest priced generic and/or innovator brand. A difference of 3 times or more between the international reference price and the price charged to patients in the public sector makes these medicines seem particularly expensive than what could be available or achieved. Number of times more expensive: public sector patient prices compared to international reference prices The new regimen is around 50 times more expensive in the private sector than the old regimen in the public or private sectors – or an additional 4 ½ days work for branded artemether + lumefantrine (there is no generic) compared with the lowest priced generic sulphadoxine- Cost-effectiveness analyses indicate that antimalarial treatment is generally highly cost-effective, even in the most resource-poor countries. In practice, however, the costs of treating malaria patients with the most effective antimalarials may well not be affordable for communities or households. With such policy changes, it is essential that measures are taken to ensure continued access to malaria There are no national guidelines on how medicines prices should be The price of medicines is a key aspect of their affordability. In this determined in the public sector and it was found that the prices patients survey, public procurement prices were assessed as were the prices are charged for lowest priced generic medicines varied from facility. In charged to patients at public sector facilities, in the private sector, and some cases, the prices varied by many multiples. Those medicines with the greatest variation in price are shown below. PUBLIC SECTOR PROCUREMENT PRICES
Public sector procurement prices for the lowest priced generic
medicines were found to be 0.61 times international reference prices. In
other words, Kenya is procuring medicines at 39% less than the
international market prices of non-profit generic medicine suppliers.
Nine of the 24 medicines were procured at lower than half the Innovator brands are not generally procured for use in the public sector 4 The lowest priced generic equivalent was determined facility-by-facility and was the lowest priced generic international reference price; However, two medicines were procured equivalent product available for sale at each facility included in the survey. In determining public procurement for more than twice the international reference price; as such, Kenya is prices, the lowest priced generic at the national medical store or on the national tender document was used. 5 paying 2.81 and 2.21 times published international market prices for Patient prices were analyzed only in cases where at least 4 data points were available, i.e. price data were collected from at least four facilities. captopril and tetracycline eye ointment. 6 Not all facilities were included in this analysis as some facilities provided medicines free of charge or provided medicines at a flat-rate fee. Medicines with largest variations in patient prices
Availability of the lowest priced generic
75%ile
25%ile
Median
PRIVATE SECTOR PRICES
In the private sector, the prices patients are charged for medicines varied from facility to facility. In some cases, the prices varied by many 58 private pharmacies, private clinics and private hospitals were multiples. The lowest priced generics medicines with the greatest surveyed. Out of the 45 medicines surveyed, innovator brand products were found for 34 of them in the private sector. In the private sector, patient prices for the lowest priced generics were Medicines with largest variations in patient prices
found to be 3.33 times the international reference price. The prices charged to patients for the lowest priced generic medicines ranged from 75%ile
25%ile
0.43 times the international reference price for losarten to 20.42 times Median
the international reference price for fluconazole. For innovator brands, patient prices were found to be 17.75 times the international reference price. The prices charged to patients for the innovator brand medicines ranged from 1.85 times the international reference price for losarten to 140.07 times the international reference price for ciprofloxacin. Number of times more expensive: private sector patient prices for medicines compared to international reference prices Price of innovator and generic medicines, in general, vary within a region and between regions, the level of variation also varied between regions; the following chart shows the medians and variation in price of the medians across the 8 regions of Kenya. The median MPR being 60% higher in Nairobi than in Central, Coast and Rift Valley Provinces. Variation in MPR for lowest priced generic
between the regions
In the private sector, the median availability of those medicines on the Kenya Essential Drugs List was found to be 81.9% (n=58 facilities). The availability of innovator brands and generics varied widely between Availability of innovator brands
The prices of individual medicines vary between regions. Below is the MPR of lowest priced generic albendazole
The following table shows those generic medicines for which patients in the private sector are charged at least five times the published international prices for the lowest priced generic and innovator brand. A difference of five times or more between the international reference price and the price charged to patients makes these medicines seem 7 Coding on regional variation charts: Nairobi Province (NA); Coast Province (CO); Eastern Province (EA); North particularly expensive than what could be available or achieved. Eastern Province (NE); Central Province (CE); Rift Valley Province (RV); Nyanza Province (NY); Western Province (WE) Number of times more expensive: private sector patient prices for NON-GOVERNMENTAL SECTOR PATIENT PRICES
medicines compared to international reference prices In the non-governmental sector, the price charged to patients for lowest priced generics was found to be 2.73 times the international reference price. Patient prices ranged from 0.37 times the international reference price for losartan to 14.84 times the international reference In this sector, the price charged to patients for innovator brands was found to be 8.52 times the international reference price. Patient prices ranged from 0.93 times the international reference price for indinavir to 100.86 times the international reference price for albendazole. Number of times more expensive: patient prices for medicines at 60.02 non-governmental facilities compared to international reference When comparing the price differential between innovator brand medicines and lowest priced generic medicines (for matched pairs of medicines where only the same medicines found in both groups are compared), innovator brands were found to be 5.09 times more expensive than the lowest priced generic (n=33 medicines). The table below shows the differential between the prices patients are charged in the private sector for the innovator brand and the lowest priced generic equivalent for the ten medicines with the greatest differences. It can be seen that some of the innovator brands were widely available and hence likely to have a noteworthy market-share, despite having a high brand premium to the price; e.g. 43% of the private sector outlets stocked innovator brand furosemide despite it being 50 times (5000%) more expensive than the lowest priced generic Patient prices and availability in the private sector for innovator brands compared to lowest priced generic equivalents In NGO facilities, the median availability of those medicines on the Number of times more expensive Availability Kenya Essential Drugs List was found to be 61.4% (n=44 facilities), whereas the prices patients are charged for medicines varied from facility to facility for some medicines. Those lowest priced generics with the greatest variation in price are shown below. Medicines with largest variations in patient prices
75%ile
25%ile
Median
ON-GOVERNMENTAL SECTOR PROCUREMENT
NGO sector procurement prices for the lowest priced generic medicines were found to be 0.74 times international reference prices. In other The following table shows those medicines for which patients at NGO words, NGO procurement prices are 26% less than the published facilities are charged at least 5 times the published international prices international market prices of non-profit generic medicine suppliers. for the lowest priced generic and/or innovator brand. A difference of 5 Number of times more expensive: NGO procurement prices times or more between the international reference price and the price compared to international reference prices charged to patients in the public sector makes these medicines seem particularly expensive than what could be available or achieved. Number of times more expensive: NGO sector patient prices compared to international reference prices Of the 45 medicines surveyed, nine medicines were procured at less than half the international reference price and five products were procured for more than 50% above the international reference price; three innovator brand products were procured: ceftriaxone, nevirapine and zidovudine. The prices of the nine products are summarized below. Number of times more expensive: NGO procurement prices compared to international reference prices (lowest priced generics unless otherwise specified) aciclovir 1.99 ceftriaxone (innovator brand) 8 Not all facilities are included in this analysis as some facilities provided medicines free of charge or provided INTER-SECTORAL COMPARISONS
Though patient prices in the private sector were generally 19% higher than those in the NGO sector, some medicines were up to six times The table below compares the prices of lowest priced generics between more expensive; however 19 medicines were the same or lower in the sectors where the same medicines were found in both sectors. private sector. The similarity of medicine prices between the sectors is Number of times more expensive: patient prices in the private sector compared to NGO facilities (lowest priced generic) The patient prices of some medicines in the public sector were exactly the same or almost the same in all sectors; the chart below illustrates Same price for some medicines across all sectors
(lowest priced generics)
For innovator brands, the private sector patient prices was almost the same (1.03 times) as the NGO sector (n=14 medicines). While NGO sector procurement prices were 21% more than for public sector procurement prices for lowest priced generics, the NGO sector procurement price of some medicines was up to 10 times the public Amitriptyline
Clotrimazole Cream
Doxycycline
sector procurement price, whereas for some of the medicines, the Furosemide
Ibuprofen
Metronidazole
Phenytoin
Number of times more expensive: NGO sector procurement prices Medicines need to be affordable, but also available - however low the compared to public sector procurement prices (lowest priced price list may be, it is not helpful unless the medicine is on the shelve. Some medicines were not widely available in either public or private sectors while others were more widely available in the private sector. In some cases, this increased availability was accompanied by a small or no difference in patient prices whereas in other cases the prices charged to patients in the private sector were much higher – up to 2.5 times the price for omeprazole. The following table presents availability in the public and private sectors, and the percentage difference in patient prices at public facilities versus the private sector for lowest While public sector patient prices for lowest priced generics were almost three times the public sector procurement prices, the public sector patient price of some medicines was as much as 42 times the public procurement price; this may relate to items being sourced from the private sector instead of public sector procurement sources. Number of times more expensive: patient prices at public sector facilities compared to public sector procurement prices (lowest Medicines from the Kenya Essential Drugs List were widely found in all Availability of medicines on the Kenya Essential Drugs List Some medicines, across all sectors are apparently at elevated prices, Though patient prices in the private sector were generally 48% higher and than they could be when compared to the international reference than those in the public sector, some medicines were up to eight times price e.g. albendazole, atenolol, captopril, chlorpheniramine, more expensive. However 10 medicines were the same or lower in the private sector. The similarity of medicine prices between the sectors is presented later. Three antiretroviral medicines were included in the survey; only nevirapine was widely found at 58.5% of public facilities and 50% of Number of times more expensive: private sector patient prices NGO facilities; it was only found at 1 of the 58 private outlets surveyed. compared to public sector facilities (lowest priced generic) amoxicillin+ clavulanic acid PRICE COMPONENTS
Examining the components that make up the price of medicines is an important step in determining how to reduce their cost. The final price paid for a medicine whether by the government or a patient reflects the manufacturers selling price plus all the intervening price additions. These additions include the cost of importing, distributing and dispensing the medicine. In the private sector, for a locally produced product in Kenya, the manufacturer’s selling price represents around 31% of the final patient price and the wholesaler and retailer mark-ups account for 5% and 64% of the patient price respectively. Some medicines were sold at the same prices in all sectors, despite Typical proportions of add-ons of final patient price for an
locally produced generic product in the private sector
often been procured at much lower prices in the public and NGO sectors. The impact of implementing the new malaria policy needs measures to be taken to ensure continued affordable access to effective medicines especially in the private and NGO sectors PUBLIC SECTOR
Where patients pay for medicines, the prices were 20% lower in the public sector than in the NGO sector and 30% lower than in the private sectors respectively. Patient prices were almost 3 times the public sector procurement price, although some medicines, including key essential medicines had much For an imported generic medicine, the cost price in the private sector represents 44% of the final price with wholesale and retail mark-ups The patient prices of some medicines in the public sector were almost accounting for 10% and 25% respectively; the importer mark-up is 15% the same as in the private and NGO sectors; this was despite the and port & clearance costs and import declaration fees are 5% and 1% public sector procurement price being low for some medicines. The public sector procurement system is paying more than might be necessary for a small proportion of medicines. Typical proportions of add-ons of final patient price for an
generic product in the private sector
PRIVATE SECTOR
Private sector patient prices were 48% higher than public sector patient prices and 19% higher than NGO sector patient prices. Innovator brands were on average 5 times the price of the lowest priced generics; some branded medicines were widely available and hence were likely to have noteworthy market share despite having very high brand premiums. The availability of innovator and generic brands varied between regions, with more innovator brands and fewer generics found in Nairobi; Nyanza Province had the reverse – the highest availability of generics and lowest availability of brands. NGO SECTOR
RECOMMENDATIONS FROM COUNTRY REPORT AND Prices in NGO facilities were greater than in the public sector; prices
being closer to those of the private sector; availability in the NGO STAKEHOLDER MEETING
sector was generally greater than in the public sector. A summary of the recommendations from the full survey report and stakeholder meeting report is provided below; a fuller explanation can A significant proportion of innovator brands were stocked by some NGO facilities with very high brand premiums when compared to the Develop and implement a medicines pricing policy to achieve a lowest priced generic medicines stocked in other NGO facilities, and greater level of transparency, uniformity and predictability in the pricing of medicines including the consideration of reference Some medicines procured by the NGO sector were much higher than pricing for medicines in the private sector the corresponding procurement price obtained by the public sector. Periodically monitor the prices of medicines, as well as aspects of access to monitor the effects of interventions ACKNOWLEDGEMENTS
Empower consumers by disseminating price information in a The survey was carried out by the Ministry of Health (MoH) in collaboration with, and funded by the World Health Organisation, Develop and implement pro-poor interventions aimed at Health Action International (HAI) and HAI’s partner in Kenya, INRUD-increasing access to essential medicines. Kenya (International Network for the Rational Use of Drugs). The MoH Promote prescribing and use of medicines by generic name in all sectors by mandating generic prescribing and substitution Advisory Group: Prof I Kibwage, Dean Faculty of Pharmacy, University Promote the use of generics to health providers and the public of Nairobi & Chairman, Pharmaceutical Society of Kenya; Prof W Lore, including measures to reassure on the quality of generics Chairman, Kenya Association of Physicians & National Coordinator, Enhance the efficiency of the public procurement agency and INRUD-Kenya; Mr A Mwenda, Chief Executive Officer, Institute of establish supportive linkages with the mission sector Economic Affairs; Dr. J Masiga; Head of Operations, Mission for procurement system Essential Drugs and Supplies (MEDS); Mr S Ochieng; Chief Executive To increase availability improve the estimation of needs and Officer, Consumer Information Network; Ms C Cepuch; Health Action management medicines in public health facilities including International – Africa; Dr F Siyoi, Chief Pharmacist, MoH & Registrar, moving away from the “push” system - so as to reduce wastage, Pharmacy and Poisons Board; Dr R Mbindyo, WHO-Kenya. Survey Manager: Mr J Ombogo; Secretary, INRUD Kenya & General Develop a pricing policy for public sector patient prices of Manager, Sustainable Healthcare Foundation & Member, Pharmacy Investigate the causes of regional variation Consultant: Martin Auton; for Health Action International- Africa Field Data Collectors: A Sheikh; A Kairu; A Kiaura; A Odhiambo; F ANALYSIS
Kairo; G Too; J Thuo; J Mutungi; J Plekwa; M Oluka; R Sumukwo; R Below is a further analysis of the findings presented in this paper. Nyaramba; R Kiuga; S Koech; W Karema; W Onduso AFFORDABILITY AND ACCESS TO MEDICINES
“Out-of-pocket” purchase of most medicines is not affordable to the FURTHER INFORMATION
For further information, contact: Dr Jean Marie Trapsida, Coordinator Consideration of price in the choice of medicines could determine EDM, WHO Regional Office for Africa, Brazzaville, Republic of Congo, whether a patient can obtain a medicine for treatment, or not. . Gilles Forte, Coordinator, Department of Some medicines, in all sectors seem to be at higher prices than they Technical Cooperation on Essential Drugs and Traditional Medicine, could be when compared to the international reference price. There was marked price variation for some medicines within the public, Coordinator, Health Action International (HAI) Africa, PO Box 66054- private and NGO sectors - some patients are paying much more than 00800 Nairobi, Kenya, [email protected] they would be in other facilities or pharmacies. Some key medicines were not widely available in the public sector.

Source: http://www.haiweb.org/medicineprices/surveys/200411KE/sdocs/KenyaSummary.pdf