More Work Needed to Reduce Prices, Increase Availability of Locally Produced Medicines

Posted on: January 31, 2017 Topics: access to medicines

Increasingly in recent years, governments of low- and middle-income countries have embraced local production of medicines as a way to increase availability and lower prices.

But a new study co-authored by School of Public Health researchers suggests that local production alone does not guarantee either lower prices or better access to medicines, and it recommends closer monitoring of procurement, supply, and distribution of locally produced and imported medicine.

The study, in the Journal of Pharmaceutical Policy and Practice, examined differences in pricing and availability between imported and locally produced medicines in Ethiopia and Tanzania. Data were collected from private and public sector outlets and analyzed for 25 medicines in Ethiopia and 24 in Tanzania, including antibiotics and pain relievers.

The findings showed that in Ethiopia, the availability of locally produced medicines was higher than for imports, in both the public and private sectors. But the government paid more for local medicines compared to imports, and patient prices were actually higher for the local products. Eight of nine medicines that were procured as both local and imported products were less expensive when imported.

In Tanzania, the availability of local products was worse in the public sector when compared with imports. Although the government paid less for local products, the cost to patients was slightly higher than for imports because of government mark-ups.

“What is clear from the study is that in both countries, the government does not purchase adequate quantities, as medicine availability (local and imports) in the public sector was only 52 percent in Tanzania and 64 percent in Ethiopia,” the authors said. They noted that Ethiopia had adopted a plan in 2015 to boost local production of quality-assured, low-cost medicines.

The authors suggested that governments continue to enact policies that support local production, but take steps to ensure that high prices are not being passed on to patients.

“Governments supporting local production should fully investigate price components, including mark-ups, local taxes, rebates and discounts, then regulate markets to ensure their support results in more affordable medicines for patients,” they said.

The study also found that patients in the private sector in Ethiopia paid considerably more for imported than locally produced medicines. In Tanzania, imports were far more available than local products in the private sector, while prices were similar.

“The apparent consumer willingness to pay higher prices for imported products, as seen in the private sector in Ethiopia, may reflect a perception that imports are of higher quality,” the authors said. They recommended that governments do more to promote the quality of locally produced medicines.

The study was led by Margaret Ewen of Health Action International in Amsterdam. SPH co-authors were Richard Laing, professor of global health, and Warren Kaplan, assistant professor of global health.

Other co-authors were from: the University of Addis Ababa; Muhimbili University of Health and Allied Sciences; Harvard Pilgrim Health Care Institute; the World Health Organization Regional Office for the Eastern Mediterranean; and Athena Institute, VU University.

Lisa Chedekel


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