Neelam Dhingra MD

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Increasing the world-wide supply of
safe, affordable factor replacement
therapy Differential Pricing
Neelam Dhingra MD Coordinator Blood Transfusion
Safety World Health Organization Geneva
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Global Blood Supply Human Development Index (HDI)
Low HDI (n36) 2.3 millions (3)
Medium HDI (n88) 29.4 millions (36)
High HDI (n54) 49.4 millions (61)
Total Annual Blood Collection 81 millions (178
Countries)
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WHO Global Database on Blood Safety (GDBS)

• Accurately assess the global situation on blood
  safety
• Obtain best available information on situation of
  BTSs
• Identify areas of need
• Monitor progress/trends

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WHO Blood Safety ProgrammeMission
Strengthening of national blood programmes to
ensure the provision and appropriate use of safe,
quality and adequate blood and blood products
that meet the needs of all patients
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Access to Drugs

• Access to medicines depends on many factors,
  notably
• rational selection and use of drugs
• adequate and sustainable financing
• affordable prices
• reliable supply systems
• Prices are only one factor. Yet prices are an
  important factor especially in developing
  countries
• In developed countries, pharmaceuticals are
  largely publicly funded, through reimbursement
  and insurance schemes, in developing countries,
  typically, 50 to 95 of drugs are paid by the
  patients themselves
• Thus, in developing countries, prices of
  medicines have direct implications for access

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Multiple approaches to reduce the price of
medicines

• Differential (Tiered) pricing
• The adaptation of prices charged by the seller to
  the purchasing power of governments and
  households in different countries.
• Competition
• Between suppliers (both research-based and
  generic manufacturers) to reduce prices
• Regional sub-regional procurement
• Groups of countries or regions collaborate to
  purchase larger volumes of drugs, and thereby
  benefit from further discounts

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Multiple approaches to reduce the price of
medicines

• Licensing agreements/Voluntary licensing
• Companies with patent medicines offer licenses to
  other manufacturers based in developing countries
  if they are able to produce the same quality
  medicines at lower cost
• Licensing arrangements between international
  pharmaceutical companies and manufacturers in
  developing countries

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Multiple approaches to reduce the price of
medicines

• Parallel importation
• If a manufacturer has patented a product in
  several countries, it may sell it at a different
  price in different countries. If the price in
  country A is substantially lower than that in
  country B, an importer in country B may buy the
  product at the cheaper price in country A, and
  sell it in country B at a price which is lower
  than the price set by the patent holder
• New funding mechanisms
• Public and private sector funding may need to be
  increased dramatically to help pay for treatment,
  which, even at the lowest prices, may still be
  out of reach of many of the poorest people living
  with HIV/AIDS

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Multiple approaches to reduce the price of
medicines

• Compulsory licensing
• This means that the law allows the granting of a
  license without permission from the patent
  holder. In practical terms, a country may allow
  the national authority to grant a third party the
  permission to manufacture or commercialize a drug
  which is still under patent.
• Using the emergency health safeguards built into
  trade arrangements, international agreements and
  national intellectual property legislation allow
  for countries to issue compulsory licences to
  manufacture patented medications, in situations
  of national emergency

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The TRIPS Agreement

• Ministerial conference in Doha 'The Agreement on
  Trade-related Aspects of Intellectual Property
  Rights' is an integral part of the World Trade
  Organization (WTO) Agreements, which create
  binding international obligations among WTO
  Member States
• To minimize the adverse effects of patent
  protection on public health
• Improve access by differential pricing- price
  vary according to national ability to pay
• International manufactures make selective offers
  to substantial discounts to government and NGOs

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Accelerating Access to HIV/AIDS Care Treatment
in Developing Countries

• The objectives of this initiative are
• To make HIV/AIDS drugs more affordable and
  accessible in developing countries
• To improve technical collaboration in the
  development of national programme capacities to
  deliver care, treatment and support

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A Country Driven Process

• Ongoing political commitment by national
  governments is essential for the successful
  implementation of any strategy to improve ARV
  access
• The process is initiated by the national
  government, which is responsible for the
  implementation of its decisions
• At the request of a member country, UN agencies
  and their partners in this initiative provide
  technical support.

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Drug Procurement

• Following a request by a country and an analysis
  of the current situation, an action plan is
  developed to cover all aspects of HIV care
  delivery relevant to the countrys needs
• With reference to ARV, the country action plan
  includes the following
• the mechanism by which the government will
  purchase drugs
• how the purchase of drugs will be financed
• how the rational use of drugs will be supported
  (e.g., training of health care workers, improved
  laboratory services).

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Drug Procurement

• Expressions of interest requested from
  research-based and generic pharmaceutical
  manufacturers interested in becoming potential
  suppliers of ARVs as part of this initiative.
• A drug procurement system can operate at three
  levels, involving individual countries, groups of
  countries in a particular region or sub-region or
  globally, using existing schemes operated by
  UNICEF, UNFPA or WHO

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Drug Procurement

• By 2002, 80 countries had indicated their
  interest in the Initiative
• 41 from Africa, 24 from Latin America and the
  Caribbean, 5 from Europe, 5 from Asia, and 5 from
  the Middle East. 39 of these countries have
  completed or are in the advanced stages of
  developing national care and treatment plans
• With support from UNAIDS/WHO, 19 of these
  countries have reached agreement with
  manufacturers on significantly reduced drug
  prices in the context of national plans

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Price of ARVs as given by manufactures
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End User Prices

• Prices to patients
• National distribution
• Handling charges
• Mark up rates
• National imports/exports
• Sales tax

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Case study Vaccine Pricing

• Low-Income countries charged a reduced price
  compared to open market through bulk procurement
  established by WHO and UNICEF
• Price of 6 basic vaccine for the developing
  country are less than 10 of the price of those
  vaccines in the richer countries
• Factors influencing- vaccine costs and prices
• Volume of production production cost fixed,
  larger batches cost less per dose
• Stage of the product cycle- new vs old
• Little danger of export of vaccines procured by
  WHO/UNICEF from a developing country to rich
  country