Research Article: Evaluating Drug Prices, Availability, Affordability, and Price Components: Implications for Access to Drugs in Malaysia

Date Published: March 27, 2007

Publisher: Public Library of Science

Author(s): Zaheer Ud Din Babar, Mohamed Izham Mohamed Ibrahim, Harpal Singh, Nadeem Irfan Bukahri, Andrew Creese, Ken Harvey

Abstract: BackgroundMalaysia’s stable health care system is facing challenges with increasing medicine costs. To investigate these issues a survey was carried out to evaluate medicine prices, availability, affordability, and the structure of price components.Methods and FindingsThe methodology developed by the World Health Organization (WHO) and Health Action International (HAI) was used. Price and availability data for 48 medicines was collected from 20 public sector facilities, 32 private sector retail pharmacies and 20 dispensing doctors in four geographical regions of West Malaysia. Medicine prices were compared with international reference prices (IRPs) to obtain a median price ratio. The daily wage of the lowest paid unskilled government worker was used to gauge the affordability of medicines. Price component data were collected throughout the supply chain, and markups, taxes, and other distribution costs were identified. In private pharmacies, innovator brand (IB) prices were 16 times higher than the IRPs, while generics were 6.6 times higher. In dispensing doctor clinics, the figures were 15 times higher for innovator brands and 7.5 for generics. Dispensing doctors applied high markups of 50%–76% for IBs, and up to 316% for generics. Retail pharmacy markups were also high—25%–38% and 100%–140% for IBs and generics, respectively. In the public sector, where medicines are free, availability was low even for medicines on the National Essential Drugs List. For a month’s treatment for peptic ulcer disease and hypertension people have to pay about a week’s wages in the private sector.ConclusionsThe free market by definition does not control medicine prices, necessitating price monitoring and control mechanisms. Markups for generic products are greater than for IBs. Reducing the base price without controlling markups may increase profits for retailers and dispensing doctors without reducing the price paid by end users. To increase access and affordability, promotion of generic medicines and improved availability of medicines in the public sector are required.

Partial Text: The price of medicine is considered one of the most important obstacles to access [1]. The purchase of medicines contributes significantly to the health care budget of developing countries, and drug expenditures may amount to 50%–90% of nonpersonnel costs [2]. In developing countries, studies and data on medicine prices are scanty. Measuring and understanding the reasons for the price of medicines is the first stage in developing medicine pricing policies that would ensure the affordability of medicines.

The study followed the WHO–Health Action International (HAI) methodology [1]. Among a total of 48 medicines included in the survey, 28 belong to the core list medicines suggested by WHO–HAI for international comparison, and 20 were added as supplementary drugs. The core list medicines were selected on the basis of the global disease burden. The supplementary list was prepared on the basis of the local disease burden, local needs as determined by a community survey, while other factors, such as drug availability and utilization patterns, were taken into account [17].

In this study, 20 public hospitals, 32 private sector pharmacies, and 20 dispensing doctors’ clinics were selected for data collection.

In Malaysia, public sector procurement prices were high for IBs, and both IBs and generics were very expensive in DDSs and PSRPs when compared with the IRPs. Prices varied across sectors in private sector retail pharmacies.



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