WHO Fair Pricing Forum, held on 11-13 April, sought to motivate an open discussion among a wide range of stakeholders including the public sector, civil society, and the pharmaceutical industry to find the ways and strategies to reduce medicine prices, make them more transparent and SDGs-responsive in order to expand access to medicines for all.
Today, the pricing mechanisms developed by pharmaceutical companies on their own are not transparent. Ranges in prices of the same medicines in different markets allow us to conclude that companies price the medicines “as high as possible on that market”.
According to 2017 WHO Reporton “Estimated costs of production and potential prices for the WHO Essential Medicines List”, medicines account for a quarter of all health expenditures globally and 100% of health expenditures for about half of households in low and middle-income countries. Their affordability raises a global concern.
“Each year, 100 million people fall into poverty because they have to pay for medicines out-of-pocket. High-income countries’ health authorities are increasingly having to ration medicines for cancer, hepatitis C and rare diseases. The problem extends even to older medicines whose patents have expired, such as insulin for diabetes”. This fact partially reverses conventional wisdom that a valid patent creates an effect on price (results in high price) and its expiry should lead to a drop in price due to the accessibility of other market players. Indeed, according to WHOand many other studies, prices of generic versions that are registered following patent expiry usually decrease rapidly, often by more than 90% compared to the originator brand. However, in some cases, where there is a market monopoly on the product, the companies can price the medicine at whichever price they wish, therefore, the expiry of the patents on older medicines may not lead to drop in prices. This problem rather relates to inefficient domestic competition policy frameworks and laws. As a result, there is a price paradox, when Tunisia and Morocco pay more for the pneumonia vaccine than France does.
The 2017 WHO reporton “Estimated costs of production and potential prices for the WHO Essential Medicines List” demonstrated that based on per-capita pharmaceutical expenditure, a basket of 201 essential medicines was unaffordable in nearly all low-income countries and 13 middle-income countries, even though the cost of production of most medicines on WHO’s Essential Medicines List is far lower of the final price paid by governments, patients or insurance schemes. Many low- and middle-income countries pay higher prices for certain medicines than wealthier countries do.
The 2019 Fair Pricing Forum is a second meeting, dedicated to the problem of affordability of medicines and transparency of the pricing mechanism. It follows the inaugural forum held in the Netherlands in 2017 (10–11 May). Since the 2017 Forum, some countries have made major strides in improving access to medicines through better pricing policies. However, high prices of newly developed medicines and growing prices of existing medicines continue to present major challenges to low-, middle- and even high-income countries.
Visit the WHO website for further developments in the theme and read the Report from 2019 Fair Pricing Forum that will be published in the next couple weeks. Should you get interested in these complex issues of transparency of prices of medicines, access to medicine, please, follow the lectures by Prof. Nerina Boschiero, who can provide expert insights into the problem of access to medicine, compulsory licenses, and international regulation established in the TRIPS Agreement. There are also interesting cases brought before the WTO which Prof. Boschiero analyzed in her articles. Feel free to get advice from Prof. Zappalaglio, who is an expert in IP and, of course, follow the course in Global Health in order to get informed about the recent politics, law, economics, and Global Health Policy. The transformative 2030 Agenda is shaping the global discourse on Global Health, stay informed and take a part in it.
