Nepal: Reproductive Health Commodity Pricing Survey
Publication date: 2006
NEPAL: REPRODUCTIVE HEALTH COMMODITY PRICING SURVEY MAY 2006 This publication was produced for review by the United States Agency for International Development. It was prepared by the DELIVER project. NEPAL: REPRODUCTIVE HEALTH COMMODITY PRICING SURVEY UNDERSTANDING EQUITY, ACCESS, AND AFFORDABILITY OF ESSENTIAL REPRODUCTIVE HEALTH COMMODITIES The author’s views expressed in this publication do not necessarily reﬂ ect the views of the United States Agency for International Development or the United States Government. DELIVER DELIVER, a six-year worldwide technical assistance support contract, is funded by the U.S. Agency for International Development (USAID). Implemented by John Snow, Inc. (JSI), (contract no. HRN-C-00-00-00010-00) and subcontractors (Manoﬀ Group, Program for Appropriate Technology in Health [PATH], and Social Sectors Development Strategies, Inc.), DELIVER strengthens the supply chains of health and family planning programs in developing countries to ensure the availability of critical health products for customers. DELIVER also provides technical management of USAID’s central contraceptive management information system. Recommended Citation Rao, Raja, and Dhruba Thapa. 2006. Nepal: Reproductive Health Commodity Pricing Survey: Understanding Equity, Access, and Affordability of Essential Reproductive Health Commodities. Arlington, Va.: DELIVER, for the U.S. Agency for International Development. Abstract Regulatory guidelines under the Nepal Drug Act of 1978 govern the sale and distribution of pharmaceutical products in Nepal. Regulations are based on a 1995 National Drug Policy that promotes community drug fi nancing programs in the public sector and establishes profi t and distribution margin rates. Those policies were put in place to encourage equity, access, and use of medicines. The fi ndings from this analysis indicate that cumulative distribution and profi t margins for some reproductive health (RH) medicines in the private sector exceed the established norms. Partially because of Nepal’s proximity to India and its well-established local pharmaceutical industry, public sector procurement effi ciency exceeds international benchmarks according to median price ratio comparisons. As a result, many generic RH medicines are available to patients at affordable prices. There is, however, a signifi cant brand premium between low- and high- priced generic RH medicines. Analysis of 83 private pharmacies, public health facilities, and nongovernmental clinics indicates that several essential RH medicines are not available in many of those outlets. The geographic composition of Nepal, combined with the Maoist insurgency, has also made product distribution and patient access to RH medicines diffi cult, which raises the cost and treatment options in several Mountain and Hill districts in the country. This analysis informs Nepal’s RH commodity security decision makers—and others interested in the relationship between price and access—through examination of the price, price components, availability, and affordability of RH medicines. Other country stakeholders are expected to replicate the methodology by using pricing analysis to promote equity and access to essential medicines. DELIVER John Snow, Inc. 1616 North Fort Myer Drive 11th Floor Arlington, VA 22209 USA Phone: 703-528-7474 Fax: 703-528-7480 Email: firstname.lastname@example.org Internet: deliver.jsi.com Contents Map of Nepal. viii Abbreviations and Acronyms . ix Acknowledgments . xi Executive Summary . xiii Main Findings . xiv Main Recommendations . xv 1. Introduction. 1 1.1 Background . 2 1.2 Goal and Objectives . 2 1.3 Country Context . 3 1.4 Drug Financing . 4 1.4.1 Pricing Framework . 5 1.4.2 Community Drug Financing Schemes . 6 2. Methodology. 9 2.1 Reproductive Health Commodities Tracer List . 9 2.2 Sampling . 10 2.2.1 Site Selection and Facility Type . 11 2.3 Data Collection . 12 3. Survey Findings . 15 3.1 Procurement . 16 3.1.1 Procurement Effi ciency . 17 3.1.2 Brand Premium . 17 3.1.3 Sector Comparison . 18 3.2 Patient Prices . 19 3.2.1 Medicine Outlet Prices Across Sectors . 20 3.2.2 Medicine Outlet Prices by Region . 20 3.2.3 Medicine Outlet Prices by Topography . 23 3.3 Product Availability . 24 3.3.1 Product Availability by Region and Sector (LPGs) . 27 3.3.2 Product Availability by Topography and Sector . 29 3.4 Product Affordability . 30 3.5 Product Margins . 33 3.5.1 Observed Cumulative Margins . 35 3.5.2 Cumulative Margins by Region . 36 3.5.3 Cumulative Margins by Topography . 38 4. Summary of Findings and Implications . 41 4.1 Procurement . 41 v Nepal: Reproductive Health Commodity Pricing Survey 4.2 Patient Prices . 42 4.3 Availability . 43 4.4 Affordability. 44 4.5 Product Margins . 45 5. Recommendations. 47 Glossary . 49 Bibliography. 51 Annexes 1. Reproductive Health Medicines Tracer List . 53 2. Medicine Price Data Collection Form . 55 3. Facilities Surveyed . 61 4. Comparison of Brand Prices by Region (private sector) . 64 5. Product Availability by Region and Sector (LPGs) . 66 6. Product Availability by Topography and Sector (LPGs) . 70 Figures 3.1 Median Procurement Effi ciency and Brand Premium . 16 3.1.3 Sector Comparison of Procurement Effi ciency for Lowest-Priced Generics . 18 3.2 LPG and HPG Patient Price Ratios for All Sectors . 19 3.2.1 Median LPG Patient Price Ratios by Sector . 20 3.2.3 Private Sector Retail Price Distribution by Topography . 24 3.3.2 Product Availability by Topography and Sector . 29 3.3.3 RH Product Availability for Selected Tracer Medicines by Topography . 30 3.4 Reproductive Health Product Affordability in Days’ Wages (Private Sector) . 32 3.5 Pharmaceutical Price Components (Private Sector). 34 3.5.1 Observed Median Cumulative Price Margins. 36 3.5.1 Distribution of Price Components for Selected RH Commodities (Private Sector). 36 Tables 1.4.1 Maximum Private Sector Pharmaceutical Import Margins .5 2.2 Facility Sample Distribution. 11 2.2.1 Survey Sample by Facility Type . 12 3.1.2 Procurement Brand Premium . 18 3.2.2a Medicine Outlet Price Ratios by Region . 21 3.2.2b Regional Medicine Outlet Price Distribution by Brand (private sector) . 22 3.2.3 Topographical Price Distribution and Variance (Selected RH Tracer Commodities) . 24 vi Contents 3.3 RH Commodity Availability by Sector . 26 3.3.1 LPG Product Availability by Region and Sector . 28 3.3.2 Regional LPG Product Availability . 28 3.4.1 Cost as a Percentage of Annual Income for Selected RH Commodities . 33 3.5.2 Median Cumulative Margins by Region . 37 3.5.3 Median Cumulative Margins by Topography . 38 vii Nepal: Reproductive Health Commodity Pricing Survey MAP OF NEPAL Tanahun Surkhet Arghakhanchi Pyuthan Rolpa Salyan Palpa Myagdi Gulmi Baglung Syangja Pa rb at Humla Dadeldhura Achham Darchula Baitadi Bajhang Dolpa Rukum JajarkotDailekh Manang Mustang Kalikot Jumla Mugu Udayapur Sindhuli Dhankuta KhotangBhojpur Ilam Terhathum Pa nc ht ha Sindhupalchok Kavrepalanchok Dh ad in Gorkha Lamjung Nuwakot Ramechap Okhaldhunga Sankhuwasabha Solukhumbu Dolakha Taplejung Bardiya Banke Dang Rupandehi Nawalparasi Chitwan Kaski Parsa Makwanpur Bara Rautahat Sarlahi Ma ho tta ri Dhanusha Rasuwa Kathmandu Bhaktapur JhapaMorang SunsariSaptari Lalitpur Bajura Kanchanpur Kailali Mountai Hil Tera Doti Siraha Geographical Region Survey districts: Mountain—Mustang, Rasuwa and Solu Hill—Parbat, Kaski, Tanahu, Kathmandu, Bhaktapur, Lalitpur, Kavre, and Dhanakuta Terai—Banke, Bardia, Rupandehi, Bara, Parsa, Morang, and Sunsari Source: www.mapsofworld.com/nepal/nepal-district-map.html viii Abbreviations and Acronyms BNMT British Nepal Medical Trust CDP Community Drug Program CIF Cost, Insurance, and Freight CIP Carriage and Insurance Paid TO CPR contraceptive prevalence rate CTO Chief Technical Offi cer CYP couple-years of protection DDA Department of Drug Administration EDM Essential Drugs and Medicine EDP external development partner FHD Family Health Division FPAN Family Planning Association of Nepal GNI gross national income GoN Government of Nepal HAI Health Action International HMG His Majesty’s Government of Nepal HP health post HPG highest-priced generic IDA International Dispensary Association INN international nonproprietary name IRP International Reference Price IUD intrauterine device JSI John Snow, Inc. LMD Logistics Management Division LPG lowest-priced generic MOH Ministry of Health MPP median procurement price MSH Management Sciences for Health MSP manufacturing selling price ix Nepal: Reproductive Health Commodity Pricing Survey NCDA Nepal Chemists and Druggists Association NFHP Nepal Family Health Program NGO nongovernmental organization OC oral contraceptive PATH Program for Appropriate Technology in Health PHCC primary health care center PPR procurement price ratio PSI Population Services International RDF revolving drug fund RH reproductive health SHP sub-health post STI sexually transmitted infection TAG Technical Advisory Group UCS unsubsidized commercial sector UNFPA United Nations Population Fund USAID U.S. Agency for International Development VDC Village Development Committee WHO World Health Organization x Acknowledgments The Ministry of Health (MOH) of His Majesty’s Government of Nepal (HMG) granted permission to undertake this survey. It was conducted under the leadership of the Director General of Health Services; Director, Logistics Management Division (LMD); Director, Family Health Division (FHD); and Director, Department of Drug Administration (DDA). The authors wish to express their sincere gratitude to all the people who gave their time and lent their expertise to participate in the survey, to provide technical guidance, and to help ensure that the effort resulted in relevant fi ndings. Those individuals include our primary data collec tors—Babu Ram Adkikari, Kiran Sunder Bajracharya, Laxman Bharati, and Suresh Panthee—whose enthusiasm, willingness to learn, and resolve in the fi eld resulted in pricing data and qualitative insight that were indis pensable to this report. The staff at John Snow, Inc., in the Nepal Family Health Program (NFHP) provided the survey team with technical support, offi ce space, computers, vehicles, and staff time for assorted survey tasks. We express our thanks to the Nepal RH Commodity Survey Technical Advisory Group (TAG) for their feedback, advice, and support. Finally, we are grateful to the U.S. Agency for International Development (USAID) for providing fi nancial support for the survey and analysis through the John Snow, Inc./DELIVER project. Members of the Technical Advisory Group Dr. Nirakar Man Shrestha, Director General, DHS and Chair Dr. M. K. Chhetri, Director, LMD Dr. Pivush Kumar Rajendra, Director, FHD Dr. Bhupendra B. Thapa, Director, DDA Dr. Shyam Sundar Mishra, Director, FHD Mr. Bal Krishna Khakurel, Senior Pharmacist, MOH Mr. Bhoj Raj Pokhrel, Country Director, Policy Projects Offi ces, Nepal Mr. Radha Raman Prashad, President, Nepal Pharmacy Council Mr. Deepak C. Bajracharya, Deputy Country Representative, PSI Mr. Pradip Vaidhay, Director, Pharmaceutical Manufacturers’ Association of Nepal Mr. Paras Baral, Director, Nepal Chemists and Druggists Association xi Nepal: Reproductive Health Commodity Pricing Survey Mr. Rasmus Pior Gjesing, Technical Offi cer, EDM, World Health Organization Mr. Pangday Yonzone, CTO, United States Agency for International Development, Nepal Dr. Peden Pradhan, Assistant Representative, United Nations Population Fund Dr. Janardan Lamichhane, Logistics Team Leader, Nepal Family Health Program xii Executive Summary During April and May 2005, a fi eld survey to measure the prices of reproductive health (RH) commodities in Nepal was conducted using a methodology developed by the World Health Organization (WHO) and Health Action International (HAI). The survey team was led by the John Snow, Inc. (JSI)/DELIVER project, with technical and logistics support from the Nepal Family Health Program (NFHP). Support for the survey was based on the assumption that an understanding of prices and price components—and an appreciation of their policy context—would help promote equity and access to RH commodities, thereby strengthening RH commodity security. The goal of the pricing survey was to provide data and analysis that will be used to help promote equity, access, and affordability of RH commodi ties for all population segments. The following objectives were identifi ed to meet the goal: 1. In Nepal, inform RH commodity security decision making by better understanding the prices and price components of essential RH commodities. 2. Examine procurement effi ciency and brand premiums. 3. Measure prices in the medicine outlets of the public, private, and nongovernmental organization (NGO) sector. 4. Determine product availability and affordability. 5. Identify price components and their cumulative mark-up effects. 6. Contribute data and analysis to support community drug fi nancing programs and objectives. 7. Evaluate the effi cacy of the survey methodology for potential replication and comparisons. Married women of reproductive age make up 20 percent of Nepal’s popu lation of 24.7 million. Maternal and infant mortality rates are high; skilled health workers attend only 11 percent of births. While the use of modern methods of contraception has increased steadily over the past decade—to 36 percent in 2001—the affordability and availability of contraceptives and other RH commodities are inadequate in a country with a per capita gross national income (GNI) of US$240. In Nepal, 70 percent of drug expenditures are paid for with out-of-pocket payments (MOH 2002). The Government of Nepal (GON) and donors provide some fi nancing for public sector drugs. Increasingly, communi ties are becoming responsible for fi nancing drugs through self-sustaining community drug programs, which are supported by client-fi nanced revolv ing drug funds (RDFs). xiii Nepal: Reproductive Health Commodity Pricing Survey The survey team sampled 83 public, private, and NGO medicine outlets in four of the fi ve administrative regions. The outlets included hospitals, primary health care centers (PHCCs), health posts (HPs), pharmacies, NGO clinics, and cooperative facilities. The government, private import ers, and NGOs provided the procurement prices. The sample distribution included 18 districts, 49 urban facilities, and 34 rural facilities. By type, it included 47 private sector pharmacies, 15 public sector outlets, and 11 NGO clinics. The topographical distribution included 44 Terai, 29 Hill, and 10 Mountain zone medicine outlets. Main Findings The main survey fi ndings fall into fi ve categories: central-level procure ment, medicine outlet prices, product availability, product affordability, and cumulative margins. Central-Level Procurement • Public sector procurement of low-priced generics (LPGs) is more effi cient than private and NGO sector procurement, and is cheaper than international reference procurement prices. • The median procurement brand premium price variation between LPGs and high-priced generics (HPGs) is 426 percent—higher than in three comparison countries (Kenya, Peru, and the Philippines). • Local manufacturing and Nepal’s proximity to India help account for relatively low central-level procurement prices across the sectors. Medicine Outlet Prices • The cross-sectoral median of medicine outlet price ratio is 2.11 (LPG) and 4.11 (HPG), which represent a 95 percent brand premium. • The median private sector medicine price in the Hill and Terai zones is comparable. The variance with the Mountain zone outlets is almost 100 percent. • The Western region has the lowest ratio of medicine outlet prices for LPGs in the public sector, and the Eastern region has the high est ratio of prices for LPGs. The Midwestern region has the highest ratio of prices for the public sector. The Central region has highest ratio of medicine outlet prices for HPGs. Product Availability • The mean product availability across all products, sectors, and prices was 21.3 percent. The fi gure was 9.1 percent for HPGs and 33.4 percent for LPGs. • The availability of condoms, oral contraceptive (OC) pills, and injectable contraceptives was more than 75 percent in public sector’s medicine outlets. The availability of intrauterine devices (IUDs) was greater in the public sector than in the other two sectors. xiv Executive Summary • Mean product availability for LPGs is lower in the Mountain zone (23 percent) than in the Terai (37 percent) and the Hill (35 percent) zones. Product Affordability • It costs the lowest-paid government worker 21 days of wages for a year’s worth of HPG ferrous folic acid. It costs that same worker 12.8 days of wages for 15 cycles (one year’s supply) of HPG OC pills. • The cost of one couple-years of protection (CYP)—using the socially marketed Sunaulo Gulaf OC pill and Dhal Deluxe condom—is less than 1 percent of annual income for the highest-earning 60 percent of the population. • The cost of one year’s supply of Kama Sutra condoms and Ovral L OC pills for family planning exceeds 1 percent of the annual income for all wealth groups. For the very poor, the cost of 15 cycles of Ovral L represents more than 18 percent of annual per capita income. Cumulative Margins • The maximum cumulative margin allowed for imported RH commodities in the private sector, on the basis of existing practices, is 42 percent. The same margin for locally manufactured commodi ties, which excludes import taxes and importer margins, is 26 percent. • Controlling for ampicillin (only one retail price was recorded), the mean cumulative margin in the Mountain zone is 130 percent. It is 230 percent when including ampicillin. • The median cumulative margin observed was 259 percent for ampi cillin 500 mg, 163 percent for oxytocin, and 84 percent for ferrous folic tablets. The median cumulative margins for tetanus toxoid vaccine and metronidazole were considerably lower (33 percent and 58 percent, respectively). Main Recommendations 1. To increase the number of reproductive health commodities avail able at each level in the health system, have the Department of Drug Administration (DDA), in collaboration with other MOH agencies and stakeholders, update the essential medicines list. 2. Strengthen the DDA’s regulatory mechanism for pricing to help ensure that retail prices for all essential medicines are within the margins set out in its regulatory guidelines. 3. Devise a pharmaceutical information management system, and consid er integrating it within the existing health management information system to include access and rational use indicators, per WHO guide lines. Share this report with those development partners who have a direct or indirect stake in the issues. 4. Disseminate the fi ndings of this report to the key staff members of the MOH and external development partners (EDPs), and seek their feed xv Nepal: Reproductive Health Commodity Pricing Survey back to determine how they can participate in addressing the issues raised in this report. 5. Launch an advocacy campaign to inform and educate consumers on the benefi ts of using LPG medicines. The fi rst stage of this campaign should focus on districts that have community drug programs (CDPs), where cost sharing is more prevalent. 6. To increase medicine effi cacy and reduce costs, encourage the use of rational prescribing and rational use of RH medicines. 7. Conduct regular consultations with EDPs to make NGOs and private sector providers more visible in the Mountain districts, as they are in the Hill and Terai districts. At the same time, using a review of exist ing data, assess the availability of medicine outlets in the Mountain districts. 8. Coordinate the fi ndings of this study with the ongoing work of the Health Economics and Financing Unit on alternative fi nancing methods. 9. To validate the baseline procurement and the wholesale and retail price margins discussed in this report, conduct a similar, but broader, pricing analysis of other essential medicines. 10. After the report is fi nalized, post the fi ndings on the MOH website. xvi 1. Introduction During April and May 2005, a fi eld survey measuring the prices of repro ductive health (RH) commodities was carried out in Nepal. The decision to investigate RH commodity prices was made during the previous year by an essential RH medicines consultative group, led by the World Health Organ ization (WHO), the United Nations Population Fund (UNFPA), and the U.S. Agency for International Development (USAID) and including John Snow, Inc. (JSI). A central objective of the group was to develop an essen tial RH medicines list, which would be similar to the model essential medi cines list promoted by WHO—and adapted by more than 100 countries. It was accepted that an understanding of prices and price components of the commodities on the essential RH medicines list, as well as an appreciation for the policy context surrounding those prices, would help promote equity and access. The Nepal survey team was lead by John Snow, Inc. (JSI)/DELIVER, with technical and logistics support from the Nepal Family Health Program (NFHP). The survey and resulting analyses are based on a methodol ogy developed by WHO and Health Action International (HAI)1 (2003) to measure prices of essential medicines. Detailed information about the methodology can be found in a manual that WHO and HAI developed in a collaborative technical project, thus standardizing methods for collecting and analyzing medicine prices. The manual is a guide to measuring the price that people pay for medicines across sectors (private, public, nongovernmental organization [NGO]). It also helps researchers identify price components (e.g., margins, taxes) and assess the affordability and availability of medicines. JSI modifi ed the WHO methodology to account for a medicine list (RH commodities) different from the one issued in the original WHO/HAI manual. The availability of innovator brands, for example, was not applicable in the Nepal survey, because only multiple-priced RH generic brands were available.2 Additionally, a number of contextual factors in Nepal, including travel constraints, limited resources, and complexity of drug fi nancing programs, also forced the team to rethink original assump tions and to modify the survey approach to fi t the in-country environment. Overall, however, the survey team attempted to follow the WHO/HAI methodology in sampling selection, data collection, and analysis. 1. HAI is a European-based network of organizations that focuses on health care systems and policies. The promotion of the essential medicines concept and of equitable access and rational use of medicines is one of their program areas. 2. See section 2 for a detailed discussion on the effect of generic brand comparisons in the absence of innovator brands. 1 Nepal: Reproductive Health Commodity Pricing Survey 1.1 Background Ample evidence suggests that RH medicines are unaffordable and unavail able throughout the developing world. In South Asia, medicines account for 80 percent of total health care spending and more than 25 percent of government health budgets (Creese 2002). Yet, despite the proportion of resources spent on medicines, 33 percent of the world’s population does not have access to basic, essential medicines (including RH commodities). Information gaps and diffi culty obtaining prices—particularly procurement price data—further compound the problem by making it more diffi cult to examine pricing systems. Several groups have conducted pricing surveys of essential medicines using methodologies such as the one developed by WHO and HAI (2003). Those surveys indicated that procurement prices, disproportionate profi t margins, and large brand premiums remain obstacles to affordable medicines. Pricing surveys for essential RH medi cines have rarely been documented and have not historically commanded the attention that the broader issue of essential medicines has. As mentioned, WHO, UNFPA, the Program for Appropriate Technology in Health (PATH), JSI, and other groups formed a consultative body to address the issue of essential RH commodities (UNFPA and WHO 2003). With the acknowledgment that RH commodities are frequently not a category of focus in many developing countries, the group recommended that the RH essential medicines list be used for two pilot surveys. The list represents specifi c RH treatment areas: family planning; sexually transmit ted infections (STIs) and HIV/AIDS; and prenatal, obstetric, and neonatal care. As a result, JSI committed to conducting the Nepal survey; PATH led a survey team that conducted a similar survey in Nicaragua. Results from the two country surveys are expected to be compared, and additional surveys will be carried out in other countries. Ultimately, the aim is to answer several questions: What price do consumers pay? How effi cient are procurement systems? Are commodities (on the essential RH medicines list) available? Are margins too high? Who profi ts? Can the information be used to increase equity, access, and use of RH commodities? 1.2 Goal and Objectives Many developing countries, including Nepal, are increasingly decentraliz ing their health care systems, thus providing broader power to district and community authorities in the management of health services. One central problem remains: achieving a full supply of essential medicines, particular ly RH medicines. Attempts to secure suffi cient supplies are often plagued by inadequate sources of fi nancing to meet the demand—most notably in severely resource-poor settings. Consequently, one aspect of health sector reform has been to introduce user fees for medicines thereby providing local health authorities with additional (client-sourced) income with which to procure essential medicines. In Nepal, the added challenge of regulating the commercial sector to ensure affordability in pricing also plays a big role in access to RH medi cines. The goal of the pricing survey was, therefore, to provide pricing 2 Introduction data and analysis that could be used to help promote equity, access, and affordability of RH commodities for all population segments. The analysis and any resulting pricing policy changes alone cannot meet this objective. Greater client information and education, provider training (including rational prescribing), increased procurement fi nancing, and other systemic factors make up the broader agenda. To help meet the goal through pricing analysis, the survey team identifi ed the following objectives: 1. Inform Nepal’s RH commodity security decision making by better understanding the prices and price components of essential RH commodities. 2. Examine procurement effi ciency and brand premiums. 3. Measure prices in the public, private, and NGO sector’s medicine outlets. 4. Determine product availability and affordability. 5. Identify price components and their cumulative mark-up effect. 6. Contribute data and analysis to support community drug fi nancing programs and objectives. 7. Evaluate the effi cacy of the survey methodology for potential replica tion and comparisons. Results from this survey will be reviewed by the Nepal Technical Advisory Group (TAG), which is made up of policymakers, donors, and technical agencies. The fi ndings will then be compared with the results of similar studies in other countries to understand the price components and policies that determine client prices of RH commodities. The data collected will help policymakers and advocates identify the factors contributing to price in each sector. The fi ndings can also help policymakers determine how changes in RH commodity pricing policies can result in greater access, affordability, and equity. 1.3 Country Context Nepal is engaged in a civil confl ict between the government and pro- Maoist forces. The long-standing unrest has resulted in the deaths of thou sands of people and makes the political future of the country uncertain. Nepal is already one of the poorest countries in the world, with a gross national income (GNI) of US$240 per capita. The civil war has compound ed the effects of poverty through the decreases in tourist revenue, the migration of rural workers and farmers to the cities, and the additional obstacles to delivering social services to rural Mountain, Hill, and Terai districts.3 3. The topography of Nepal consists of three geographic bands that stretch from east to west and begin with the Terai zone on Nepal’s southern border with India. North of this ﬂ at farming plain is the Hill zone, and further north is the Mountain zone, where access to health and other social services is limited by topography, climate, and an absence of trans portation infrastructure. 3 Nepal: Reproductive Health Commodity Pricing Survey Country Statistics: • Population 24.7 million (WHO 2004) • Population growth rate 2.2 percent • Fertility rate 4.2 percent • Infant mortality rate 61 per 1,000 live births • Under-fi ve mortality rate 82 per 1,000 live births • Maternal mortality rate 539 per 100,000 live births (PRB 2004) • Married women of reproductive age 4.5 million • Contraceptive prevalence rate (CPR) 36 percent (Nepal MOH et al. 2001) • Skilled attendant births 11 percent Inadequate transportation infrastructure, notably in the rural and Moun tain areas, results in increased costs and delays in the delivery of goods and services. This factor is likely one that contributes to the low level of births attended by skilled health workers. In general, the inadequate infrastruc ture limits patient access to basic health services. For political and administrative purposes, Nepal is divided into fi ve devel opment regions: Eastern, Central, Western, Midwestern, and Far Western. Across regions, there are 75 districts, 3,912 Village Development Commit tees (VDCs), and 58 municipalities. The district health offi ce is responsible for managing the health outlets in the district. Those outlets include the district hospital, primary health care centers (PHCCs), health posts (HPs), and sub-health posts (SHPs) (Nepal MOH 2000). Nepal’s essential medi cines list contains 310 items.4 Each facility, depending upon its level in the system, has a prescribed list of such medicines that it is required to keep in stock. District hospitals, for example, are stocked with medicines for advanced tertiary care, while SHPs are stocked with a limited range of medicines for outpatient primary care (Nepal MOH et al. 2002). In the private sector, there are 12,700 registered commercial pharmacies (MOH 2000). Most outlets are not managed by a trained pharmacist. However, the Department of Drug Administration (DDA)—which has regulatory oversight of commercial pharmacies —requires a three-week training course for individuals who dispense medicines to clients. The government is aware that this training is inadequate and is taking steps to address the issue. As in many countries, the distribution of pharmacies is concentrated in and around major urban areas including the Kathmandu Valley, Biratnagar, Pokhara, and Nepalganj. Of 75 districts, only Manang does not have a registered drug retailer (MOH 2000). 1.4 Drug Financing The policies on drug fi nancing in Nepal are contained in the Ministry of Health (MOH) document titled “Policy for Drug Financing Schemes,” which was last updated in 2000. In it, the MOH comments that it ensures 4. The Nepal National List of Essential Drugs, Third Revision, was updated in 2002. 4 Introduction “a continuous and adequate supply of drugs at health facilities” (Nepal MOH 2000). The document also acknowledges that the availability of essential medicines remains an important challenge. The policy recog nizes that health sector resources committed by His Majesty’s Govern ment of Nepal (HMG) and donors are inadequate for a full supply of essential medicines and that “the ultimate responsibility for drug fi nanc ing (schemes) lies with communities” (Nepal MOH 2000). This section examines those community drug fi nancing mechanisms and the regulatory framework in which they operate; then it raises questions about how they infl uence availability at medicine outlets. 1.4.1 Pricing Framework The DDA has the primary responsibility for drug registration, quality assurance, and development and enforcement of pricing policies and regu lations. In the private sector, the Nepal Chemists and Druggists Association (NCDA) provide the DDA with a list of recommended retail prices for all medicines it distributes to wholesalers and retailers. The DDA has author ity to establish a fi nal retail price, which is based, in part, on the maximum price margin allowance for each entity in the distribution chain. Table 1.4.1 indicates the maximum allowable margin for each level and the cumulative effect of price components on the fi nal retail price. An import duty is levied on all medicines coming from abroad, including India. Importers are permitted to add distribution and profi t margins. Wholesalers are entitled to an additional 8.5 percent profi t margin in sales transactions with retailers. The maximum allowable retail mark-up is 16 percent. Table 1.4.1 shows that a medicine that is imported at an index (hypothetical) price of Rs 100 per unit should have a maximum retail price of Rs 141.6. A key output of the survey was the ability to compare this theoretical maximum price with actual, observed prices. The results of this analysis are discussed in the section 3.5. Pharmaceuticals manufactured in Nepal fall under similar guidelines, except that import taxes and importer margins are not included as price components. Instead, only the retailer Table 1.4.1. Maximum Private Sector Pharmaceutical Import Margins Entity Price Component % Mark-Up Cumulative % on Price International CIF/CIP Index Price 0 100.0 HMG Nepal Import Tax 5 105.0 Importer Distribution Margin 2.5 107.6 Importer Proﬁ t Margin 4.5 112.5 Wholesaler Proﬁ t Margin 8.5 122.0 Retailer Proﬁ t Margin 16 141.6 Cumulative Mark-up 37 42.0 Final Retail Price 141.6 5 Nepal: Reproductive Health Commodity Pricing Survey margin and, in some instances, the wholesaler margin—when products go through wholesalers—are included in the fi nal retail price. Public sector medicine prices are determined by community health management committees and are infl uenced, in part, by the procurement source. The Logistics Management Division (LMD) procures and distributes the bulk of medicines available at public sector medicine outlets. It is also responsible for distributing essential medicines to outlets (free of charge) and provides some fi nancing for local purchases by the facilities. According to the Community Drug Program (CDP) guidelines, the facilities are encouraged to charge cost prices (the LMD procurement price) for the medicines that they receive free of charge. The prices the outlets charge to patients for medicines they purchase in the private market are generally at or slightly above their purchase prices. The maximum price for any medicine, regardless of source, must be 16 percent below the retail price—or, as table 1.4.1 indicates, wholesale price. 1.4.2 Community Drug Financing Schemes Private expenditure on health care is 72.8 percent of total expenditure, ranking Nepal just behind Myanmar, India, and Bangladesh, with a high proportion of out-of-pocket expenditures for health care (WHO 2004). Similarly, 70 percent of drug expenditures in Nepal are fi nanced by out- of-pocket payments. Even with those payments, a full supply of essential medicines, including RH commodities, is not available in the public sector because the sum total of fi nancing is inadequate to meet demand. As a result, the MOH is promoting the development of self-sustaining commu nity drug schemes. In general, those mechanisms recover costs through client payments and purchase additional medicines through a revolv ing drug fund (RDF). In theory, the health facility is able to increase the availability of essential medicines because it is allowed and encouraged to maintain an RDF to use for additional purchases after the government allotment has been distributed. There is no single national community drug fi nancing model. The MOH’s drug fi nancing policy concludes that the diverse topographical and socio cultural variations of the country encourage variations in the schemes (Nepal MOH 2000). In each scheme, however, the health management committees carry out the regulatory and management responsibilities, which are part of community government or VDCs. In some instances, those responsibilities are contracted to NGOs working in the communities. The two main drug fi nancing schemes are the MOH-sponsored CDPs and the British Nepal Medical Trust (BNMT) Drug Scheme. Community Drug Program The MOH designed the national CDP to increase the availability of essential medicines by introducing cost sharing with clients. It began in 3 districts and is now being implemented, to varying degrees, in nearly 20 districts. Certain exemptions exist. Treatments for tuberculosis and leprosy, vaccines available under the Expanded Program on Immunization, and 6 Introduction contraceptives are distributed free of charge. Prices for other medicines cannot exceed local wholesale prices. British Nepal Medical Trust The BNMT program works with local health authorities to increase the provisions of essential medicines and supplies. BNMT community programs aim to achieve full supply and fi nancial sustainability through a combination of sources: LMD-supplied medicines, VDC contributions, BNMT subsidies and patient user fees. The local health management committees retain management of the community fi nancing schemes, including oversight of the RDF. A number of other smaller community and NGO-supported fi nancing schemes charge registration fees for treatment and essential medicines (Nepal MOH 2000). However, a number of challenges remain to the sustainability of all the community drug programs, including limited public sector fi nancing, ability to pay (poor clients), inadequate skills and training at the VDC level, and audit and oversight of the RDFs. 7 2. Methodology The survey methodology used by the team was based largely on the guid ance provided in the WHO/HAI manual. The methodology described in the manual and the accompanying electronic database, which is used for data entry and analysis, were indispensable to the survey. They provided a planning outline for site, sector, and sampling selection; the identifying data collectors and data collection techniques; and the several thematic areas for analysis (e.g., procurement, cross-sectoral comparison, availabil ity, price ratios). After securing permission from the MOH agencies to conduct the survey, the team established a TAG of MOH agency directors, donors, and other technical experts.5 The TAG was to provide relevant technical and policy feedback to the survey team and to help guide the data collection and anal ysis process. It also supported early-stage ownership of the price survey by Nepali stakeholders, and it is expected to be a focal point for any future policy-related initiatives stemming from the survey fi ndings. 2.1 Reproductive Health Commodities Tracer List The survey team had earlier prepared a model RH tracer list made up of a cross-section of essential and commonly used RH commodities. This list was based on previous RH pricing work and was thoroughly vetted by RH technical experts at UNFPA, WHO, the World Bank, PATH, and JSI. The list was further subdivided into major RH treatment areas: family planning (contraceptives); STIs and HIV/AIDS; prenatal, obstetrical, and neonatal care. The team shared this list with TAG members and other Nepali experts before starting to collect data. The original list contained several items that are not found in Nepal. TAG members identifi ed other products they thought should be added to make the fi nal list specifi c to treatment guidelines and the essential medicines list in Nepal. As a result, a number of products were added, revised, or deleted. Methylergometrine 2 mg (ampoule), for example, was added; the dosage of oxytocin was reduced from 10 IU to 5 IU; and the dosage for metronidazole capsules or tablets was increased to 400 mg (see annex 1 for the fi nal RH commodity tracer list). Female condoms remained on the list, although it was established before data collection that none would be found in-country. In this case, some TAG members thought that evidence of what RH products were not found would have policy implications. 5. See the acknowledgments for a full list of individuals who served on the TAG. 9 Nepal: Reproductive Health Commodity Pricing Survey Another modifi cation that the survey team made to the WHO/HAI methodology concerned the comparison of innovator and generic brand medicines. The manual included a list of 30 essential medicines whose innovator brands were generally available in the private sector—making a price or brand premium comparison with the generic brand relatively straightforward. The commodities on the RH tracer list, however, had been off patent for decades. Therefore, the team quickly realized, and the TAG confi rmed, that the survey team would fi nd only generic brands in the country. As a result, data were collected for two products under each international nonproprietary name (INN):6 (1) the highest-priced generic and (2) the lowest-priced generic brand. In the private sector, the team generally found (and recorded) two prices (highest and lowest price) for each product. Often, more than two products were available in urban pharmacies. In rural pharmacies, generally only one generic product for each nonproprietary medicine was available. In public facilities, the teams were prepared to record the sale prices for RH commodities provided free by the LMD and the prices for commodities purchased in the local private market. In practice, the commercially sourced product (and, therefore, price) was often not available. In facilities where this product was available, the price, as expected, was usually marginally higher than the LMD-sourced product, because the facility had to cover its purchase cost. Regardless, most public sector outlets provided the survey teams with only one price. Prices recorded at NGO facilities were entered in a separate category (Other) so that cross-sectoral price comparisons could be made between the private, public, and NGO sectors.7 2.2 Sampling Using guidance provided in the WHO/HAI manual, the team sampled 83 public, private, and NGO sector medicine outlets. Five specifi c price categories were included: 1. Medicine Procurement Prices: This sector includes government, private importers, and NGO procurers. 2. Public Sector Patient Prices: If prices were not found, procurement prices were not recorded. Instead, it was noted that the product is free and available. 3. Private Sector Retail Prices: Prices clients pay at pharmacies, private hospitals, and other for-profi t outlets. 4. Other Sector Retail Prices: This sector includes client prices at NGO clinics, Sajha Swashtha Sewa (nonprofi t cooperatives), and nonprofi t hospitals. 5. Wholesaler (Stocklist) Prices: A limited number of wholesale prices were obtained in the follow-on data collection effort in May 2005. 6. A common, generic name selected by experts to identify a new pharmaceutical product. An updated list of INNs can be found at http://www.who/edm/qsm/. 7. This comparison was done for NGO clinics and other nonproﬁ t outlets that were neither public nor private. Socially marketed contraceptives found in pharmacies, however, were recorded in the private sector section of the database, and their brands were noted for further analysis. 10 Methodology The survey team spent several days in the Kathmandu Valley collecting procurement prices before beginning data collection in the fi eld. In Kath mandu, central-level procurement prices were collected from four private importers, the LMD (the primary public sector procurer of essential medi cines), and two NGOs. The prices recorded during those interviews were based on the CIF/CIP price, which are trade terms that indicate the unit price and include the cost of the goods, insurance, and shipping and freight charges. The WHO/HAI manual recommends that medicine outlets be sampled from at least four geographic areas, selected on the basis of their proximity to urban centers and to one another.8 While collecting data in four distinct regions increased the cost and complexity of the survey, team members felt certain that if they reduced the geographic scope, they would be unable to conduct a compelling cross-regional comparison of price and availability. Table 2.2. Facility Sample Distribution Geographic Distribution Region Anchor Districts Urban Rural Terai Hill Mountain Total Western Pokhara 6 11 11 6 11 5 22 Midwestern Nepalganj 2 12 7 18 0 0 18 Central Kathmandu 6 15 5 8 11 2 21 Eastern Birtnager 4 11 10 11 7 3 21 Totals 18 49 34 44 29 10 83 As table 2.2 indicates, the anchor urban facilities were the Kathmandu Valley, Pokhara, Birtnagar, and Nepalganj. Each anchor represented the main urban area in each of the four regions. Facilities were classifi ed as rural if they were farther than 15 km from the urban areas. The TAG further recommended that the survey team consider collecting data from facilities in the Mountain zone, because data on pricing and availability in those remote areas has been diffi cult to obtain. The team included 10 Mountain facilities in three regions. 2.2.1 Site Selection and Facility Type The survey team had originally planned to collect data at no more than 60 outlets. However, after the team presented the original fi ndings to TAG members in late April 2005, they suggested that data from additional outlets, particularly in the public sector, would strengthen the validity of the fi ndings. An additional 23 outlets were surveyed in May 2005, bringing the total to 83. This fi gure represented an urban-rural and Terai, Hill, and Mountain districts cross-section of the country; attempts were made to balance the facility count by sector. 8. Security in the Far Western region at the time was unstable, so no attempt was made to include this region in the survey. 11 Nepal: Reproductive Health Commodity Pricing Survey Table 2.2.1. Survey Sample by Facility Type Facility Type Region Hospital Pharmacy PHCC/HP/SHP NGO Clinic Total Western 5 9 3 4 21 Midwestern 1 12 3 3 19 Central 3 13 4 0 20 Eastern 2 13 3 4 22 Totals 12 47 13 11 83 Within each of the four administrative zones, the selection of medicine outlets was based on their proximity to each of the urban centers. Though additional facilities were included in the survey, the following represented the core selection: • Public sector: Main hospital—two urban and two rural medicine outlets • Private sector: Four pharmacies per region, within 5 km of a survey public sector outlet • NGO sector: NGO or other outlets, determined by their proximity to public sector outlets (within a 10 km range). (If none were available, other factors were considered, such as geography and region.) As mentioned, the actual number of facilities exceeded the number origi nally planned, primarily as a result of convenience and opportunities to collect data identifi ed by the team in the fi eld, the cooperation of medicine outlet staff, and the recommendation by the TAG for surveys of additional outlets. As noted in table 2.2.1, there was a balance between hospitals (public and private), public sector outlets, and NGO facilities. As a result of the disproportionate number of pharmacies compared to other types of outlets (particularly in urban areas), the sample included 47 pharmacies. A standard medicine price data collection form was used to record infor mation for procurement and medicine outlets. This form, included in the WHO/HAI’s price survey CD-ROM, allowed the team to record facility information (e.g., name, location) and to develop a unique facility identifi cation number for data entry. 2.3 Data Collection The TAG also recommended that some qualitative questions be added to the form, including the qualifi cations of the dispenser and the percentage profi t margin charged on their products9 (see annex 2). 9. All but three pharmacies reported charging the maximum proﬁ t margin allowed by govern ment guidelines—16 percent. Initial ﬁ ndings indicate that this report may not be accurate. 12 Methodology Using the standard form, the survey team collected procurement price information for only the most recent procurements for each sector, instead of multiple procurements over time. This information should be consid ered when comparing the results with the International Reference Prices (IRPs),10 which was used as a baseline in the survey analysis (MSH 2004). It is unclear at this stage of the analysis whether any of the procurement prices provide a distorted impression. Procurement data at multiple points in time should be collected, as they become available. In surveying medicine outlets, the team attempted, with guidance from the TAG, to focus on the public health facilities participating in the CDP and other community-based drug fi nancing schemes, where price data were available. Drug fi nancing in Nepal, as in many countries, is complex. As noted in the previous section, in approximately 20 of 75 districts, commu nity health authorities have set up RDFs by charging patients for certain categories of medicines. As shown in table 2.2.1, the team collected data from 13 PHCCs, HPs, and SHPs. In addition, 3 of the 11 hospitals were categorized as public. Of the 15 public sector sites surveyed, 11 participat ed in a community-based drug fi nancing program and were able to provide price data. However, most of the outlets, including many hospitals, did not have a number of the RH tracer commodities on our collection list. This case was also true for commercial sector importers.11 The data collection at the central procurement level was conducted by the authors, who also served as the survey co-managers and who presented the preliminary fi ndings to the TAG. The majority of the medicine outlets in the areas outside the Kathmandu Valley were surveyed by four fourth- year pharmacy students from Tribhuvan University in Kathmandu. Those students were identifi ed by TAG members (and confi rmed through the survey process) as possessing the pharmacological and country knowledge and skills necessary for effective data collection. After a full day of training that included pre-testing the tool at pharmacies in Kathmandu, the data collectors were in the fi eld for eight days in April 2005, then for three days in May 2005 (to collect data from the additional outlets). The effort of the survey team resulted in the collection of RH pricing data from 18 districts in 5 regions, including 10 Mountain and 33 rural medi cine outlets (see annex 3). The next section provides a detailed analysis of the fi ndings of this survey. It includes data on and analysis of procurement effi ciency and brand premium, patient prices, availability, affordability, and the effect of cumulative margins on price. The analysis is segmented by region, topography, and brand. Section 4 then discusses some of the themes and policy implications raised by the fi ndings. 10. The IRPs used in the survey are based on the median procurement prices in the 2004 MSH Price Indicator Guide. 11. See section 3.3 for a discussion on availability at procurement facilities and medicine outlets. 13 3. Survey Findings The survey fi ndings are based on the analysis of data from 83 public, private, and NGO medicine outlets throughout Nepal. In addition, seven central-level procurement agencies12 and four wholesalers provided procurement and sale prices. The description of fi ndings and the analysis in this section cover 1. central-level procurement 2. medicine outlet prices 3. product availability 4. product affordability 5. the effect of cumulative margins on price The procurement section examines brand premiums13 and procurement effi ciencies, and it describes the results of a cross-sectoral comparison of the public, private, and NGO sectors. The medicine outlet analysis also examines the implications of brand premiums; price variations between sectors; and a segmentation of price data by sector, region, brand, and topography. The sections on product availability and affordability look at the percentage availability in medicine outlets of the RH tracer medi cines and the affordability of those medicines for users. Both sections also provide segmentation analyses by sector, region, brand, and topography. The variables are used to examine pricing, availability, and affordability implications in more detail than the initial median price and ratio analy sis suggested in the WHO/HAI manual. This analysis provides data on variations in, for example, brand prices between the Central and East ern regions; the availability of ampicillin in the Terai and Hill zones; the affordability of RH medicines by different income groups; and similar comparisons using a range of variables. The section concludes with a comparison of the maximum cumulative margins allowed by statute and the observed margins of the RH tracer commodities. The margins are an aggregation of price components (e.g., taxes, distribution mark-ups, retailer profi t) and the cumulative effect that those components have on client price. Consequently, the section attempts to determine the proportion of price components on retail prices, and if those components—expressed individually and cumulatively—exceed pric ing statutes established by the DDA. 12. Four private importers, the main public sector procurer (the LMD) and two NGOs were surveyed in Kathmandu to obtain procurement price data. 13. The deﬁ nition of brand premium for this survey is the difference in price between the highest and lowest-priced generic product. This difference can be expressed as a ratio, percentage, or monetary value. 15 Nepal: Reproductive Health Commodity Pricing Survey 3.1 Procurement Previous pricing surveys indicated that a number of countries, including the Philippines, Peru, and Kenya, are paying substantially more for generic essential medicine procurement than standard IRPs (WHO 2003; WHO and HAI 2003). Some of the price variation is due to the use of higher priced suppliers, the excessive freight and insurance costs, the absence of capacity to negotiate effectively, or a combination of these and other vari ables. The benchmark used for this survey and widely used in a number of other surveys is an IRP established by the International Drug Price Indi cator Guide, published by Management Sciences for Health (MSH) with support from WHO (MSH 2004). The annual guide details maximum, minimum, and median international procurement prices for more than 900 drugs and nondrug consumables. The guide lists only prices for generic products supplied, for example, by the International Dispensary Asso ciation (IDA), UNFPA, and other procurement agents. Therefore, direct comparisons between IRPs listed in the guide and innovator brand14 prod ucts need to consider the price premium for the procurement of brands. Further, the IRP established for this survey is based on the median procure ment reference price in the MSH guide, which means, for example, that even a comparison of HPG products with the median IRP would probably show considerable variation. Figure 3.1 highlights both those variations and provides a comparison of median country procurement prices (for all sectors) with 2004 IRPs. The comparison is expressed not in price, but in price ratios. Procurement prices for the lowest-priced generic products (indicated by the yellow bar) should be somewhat close to the MSH reference prices. A ratio of 1.00, for example, would indicate parity with the median reference price.15 Figure 3.1. Median Procurement Efﬁciency and Brand Premium 20 IRP Ratio 15 10 5 0 Philipines Peru Kenya Nepal 16.27 10.17 16.9 4.97 12.2 4.73 6.78 1.29 Generic Brand 14. The innovator brand is the ﬁ rst product authorized for use under patent protection. 15. Procurement price ratios for the Philippines, Peru, and Kenya are based on a list of 30 essential medicines. For Nepal price ratios are based on an entirely different set of 32 RH tracer medicines. The overlap consisted of two products. 16 Survey Findings The medicines (indicated by the blue bar) for the Philippines, Peru, and Kenya are innovator brands, which are still on patent. The brands that constitute the Nepal sample (indicated by the blue bar) are the procure ment prices for the highest-priced generics. An innovator brand compari son between Nepal and the three other countries was not possible because most of the innovator RH tracer medicines in the survey were not found in Nepal, because they are off patent. 3.1.1 Procurement Efﬁ ciency Figure 3.1 indicates that the median cross-sectoral (public, private, and NGO) procurement ratio in Nepal for the lowest-priced generics is 1.29, indicating that the country is procuring RH products at prices comparable with median international prices—or simply that its procurement is effi cient. The procurement price ratios (PPRs) for the lowest-priced generic products in the Philippines, Peru, and Kenya, by contrast, indicate that the procure ment systems are not obtaining competitive prices. The PPR in the Philip pines is 10.17, indicating that median procurement prices (MPPs) are 10 times more than IRPs. In Kenya and Peru, the PPR indicates that prices are nearly 5 times IRPs.16 The reasons should be investigated separately. None theless, the PPR for Nepali LPGs is both comparable with IRPs and consid erably more effi cient (as defi ned by prices) than in the other countries. The PPR for the innovator brands on the essential medicines tracer list (found in the Philippines, Peru, and Kenya) and for the highest-priced generic brands (found in Nepal) is, as expected (see footnotes 14 and 15), signifi cantly higher than the IRP. As indicated earlier, this fact is because the IRPs are based on median generic procurement prices, not on innova tor or highest-priced brands. 3.1.2 Brand Premium The brand premium is the difference in price between the highest-priced generic (or innovator brands in the case of the Philippines, Peru, and Kenya) and the lowest-priced generic of the same product. It is important to high light this difference because the price effect of clients purchasing the high est-priced generic instead of the lowest-priced one (with similar effi cacy) is signifi cant when that premium is large. This signifi cance is particularly true in Nepal and other countries where many low-income consumers may not have adequate information to make rational selection choices. This issue is discussed in greater detail in the examination of brand premiums at medi cine outlets. However, procurement-level brand premiums do affect clients, because the premium becomes even larger as price components are added. Table 3.1.2 highlights the procurement brand premium in Nepal between the lowest- and highest-priced generic RH tracer medicines. The table indicates that, even though brand samples used for the other countries 16. Data for the Philippines, Peru, and Kenya are from WHO (2003). 17 Nepal: Reproductive Health Commodity Pricing Survey Table 3.1.2. Procurement Brand Premium Philippines Peru Kenya Nepal Brand (Rs.) 16.27 16.9 12.2 6.78 Generic (Rs.) 10.17 4.97 4.73 1.29 Brand Premium (%) 60 240 158 426 are innovator brands, median brand premium in Nepal is 426 percent— considerably higher than the other examples. A likely explanation for this gap is the considerably high procurement effi ciency of low-cost generics in Nepal. 3.1.3 Sector Comparison Figure 3.1 illustrated the comparative and absolute procurement effi ciency in Nepal. LPG procurements are near parity with the RH tracer medicines, at a ratio of 1.29/1.00. Equally signifi cant is the comparative advantage that Nepal has over the other countries in the LPG category. A disaggregation of that fi gure by sector reveals the composition of the median PPR for the public (LMD), private, and NGO sectors. Drawing on the sample, fi gure 3.1.3 indicates that public sector procurement is more effi cient than the median IRP for those same products. In other words, the LMD is obtaining prices below the international median prices. For example, if the median IRP17 for the basket of RH tracer drugs is Rs. 100,18 then the public sector in Nepal is procuring that drug at a median price of Rs. 82. The median procurement ratios of both the NGO and private sectors are also relatively effi cient. In general, the close proximity of India, with its established generic pharmaceutical manufacturing industry, plays a key role in allowing all Figure 3.1.3. Sector Comparison of Procurement Efﬁ ciency for Lowest-Priced Generics IRP Ratio 2 1.5 1 0.5 0 MPR 0.82 1.78 1.36NGO Private Sector LMD 17. The MSH Price Indicator Guide will be the international price ratio reference for all tables and ﬁ gures in this report, unless stated otherwise. 18. Rs. is an abbreviation for rupee, the Nepali unit of currency. When the survey began, Rs. 70 was equal to US$1. All prices in the tables, graphs, and ﬁ gures in this report are denominated in rupees, unless stated otherwise. 18 Survey Findings sectors to obtain competitive prices. Specifi cally, the LMD is also able to obtain signifi cantly low prices for generic products by purchasing through Nepali manufacturers. The implication of the comparatively low PPRs (for all sectors), is that they may translate into low prices from medicine outlets across all sectors. Sections 3.2 and 3.5 provide details on this topic. 3.2 Patient Prices Patient price levels are largely dependent on the effi ciency of procurement systems in selecting and purchasing the appropriate range of high-quality products at a low cost. The previous section indicated that there is a substantial procurement price difference between LPGs and HPGs—a ratio of 1.29/6.78, or 426 percent. Therefore, a similar brand premium should be found at the retail level. Procurement effi ciency is not, however, the only independent variable responsible for access to low-cost RH commodities at the client level. Wholesale profi t margins, distribution costs, demand, and retail profi t margins are all factors that affect consumer prices. In theory, for example, a pharmacy located in an urban area across the road from a medi cine wholesaler should have lower prices than one in an isolated Mountain district where distribution costs are higher and demand may be lower. This section examines and disaggregates patient prices in the public, private, and NGO sectors.19 Price ratios, median prices, and brand-specifi c prices are used to examine and compare pricing by region, topography, and sector. Figure 3.2 illustrates the brand premium paid by consumers between the lowest- and highest-priced generic RH commodities. For all sectors (public, private, and NGO), the median patient price for low-priced generics (LPG) was equivalent to a ratio of 2.11/1 when compared with IRPs. Those same products were nearly double the price when the highest-priced generic equivalents were purchased (primarily in commercial pharmacies).20 Figure 3.2 LPG and HPG Patient Price Ratios for All Sectors Product LPG HPG Price Ratio Nepal Medicine Outlet Price Ratio Compared to IRP Procurement Price (all sectors) 2.11 4.1 3 4 5210 19. The analysis of NGO patient prices will be less comprehensive than the analysis of public and private sector prices because of the absence of sufﬁ cient patient price data. 20. HPG ﬁ gures are based on HPGs found at private and NGO outlets. Only three HPGs were found at public sector outlets. Consequently, public sector LPG prices were not used in ﬁ gure 3.2. The LPG ﬁ gure is based on median outlet prices. 19 Nepal: Reproductive Health Commodity Pricing Survey The ratio represents a 95 percent brand premium. When compared with the 426 percent median brand premium for public procurement, the client price premium indicates that profi t margins may be lower for the higher-priced products because the price differences between the two product categories narrow considerably at the retail level. Lower margins for higher-priced products have been found in other pricing surveys (Sarley et al. 2003), and they may be one of several factors that resulted in the substantial contrac tion of the brand premium between the procurement and retail levels. 3.2.1 Medicine Outlet Prices Across Sectors Figure 3.2.1 disaggregates the LPG price ratios given in fi gure 3.2. The median public sector’s LPG price ratio is 1.64/1, while the IRP ratios for the private and NGO sectors are comparable at 2.12 and 2.11. The compara tively high patient price at NGO outlets may result from the fact that many of the facilities are Nepali NGOs and hospitals, which were operating with out signifi cant international donor support. The facilities included commu nity hospitals, Sajha Swashtha Sewas, and a smaller number of FPAN and Marie Stopes clinics. The availability of LPGs from India may be another reason the private sector LPG prices are also relatively comparable with NGO and public sector LPG prices. Figure 3.2.1. Median LPG Patient Price Ratios by Sector 2.5 IRP Ratio 2 1.5 1 0.5 0 Median LPG Patient Price Ratios by Sector NGOsPrivatePublic 1.64 2.12 2.11 3.2.2 Medicine Outlet Prices by Region The survey identifi ed measurable differences in price across the four regions where information was collected (Eastern, Central, Midwestern, and Western). Specifi c causes for those interregional variations are only speculative at this point. Distribution costs, profi t margin variations among wholesalers and retailers, demand, and region-specifi c income levels may all contribute to the observed price differences. However, those price variations do have an effect on the affordability of, and thus access to, RH products. They also raise questions about equity: Why should clients in region A pay more than clients in region B? Policymakers should address this inequity. 20 Survey Findings Table 3.2.2. Medicine Outlet Price Ratios by Region Public Private NGO Median LPG LPG HPG LPG HPG LPG HPG Brand Premium (%) Central 2.13 2.03 4.71 2.36 5.20 2.13 4.96 133 Eastern 1.43 2.72 3.90 3.05 5.14 2.72 4.52 66 Midwestern 2.50 2.11 3.92 2.24 3.28 2.24 3.60 61 Western 1.17 2.08 3.87 2.14 5.08 2.08 4.48 115 Table 3.2.2 displays the median LPG and HPG price ratios by region and indicates the brand premium within each region. The Central region has the highest median HPG price ratio. The median price ratio for HPGs (compared with IRPs) in the Central region is 4.96/1. Consequently, the brand premium in that region is 133 percent. In contrast, the lowest median HPG price ratio for the RH commodities tracer list is in the Midwestern region, at 3.60/1. It follows that this region also has the lowest brand premium. By region, the lowest-priced RH commodities are the LPGs surveyed in the Western region (2.08/1). There are also considerable differences in median price between LPGs and HPGs by sector. Table 3.2.2 indicates that clients obtain the lowest median price in the country at public sector medicine outlets in the Western region (1.17/1). By contrast—and something the survey team did not expect— clients pay the highest median price for RH commodities at Central region NGO outlets (5.20/1).21 Prices for LPGs at public sector medicine outlets in the Eastern and Western regions were the lowest in the country; they result from public sector procurement effi ciencies and medicine outlet pricing policies (i.e., low-cost procurements and no margin client prices). Public sector medicine outlet prices in the Central and Midwestern regions are approximately 100 percent greater than in the other two regions. One reason may be that a number of health management committees have set higher prices in those regions to account for income levels or other factors. Further analysis of the community drug programs in those regions is needed to determine the reasons for the differences. The preliminary analysis conducted by the survey team failed to include a regional analysis by price and brand. Instead, in part because of the limitations of the software program used to record and measure prices, the analysis was restricted to median price ratios. Subsequently, a more specifi c 21. The sample size for the Central NGO outlets was signiﬁ cantly small enough, at three, to warrant further NGO surveys in the region to conﬁ rm this ﬁ nding. Further, all three outlets were located in urban areas, where prices are generally higher. 21 Nepal: Reproductive Health Commodity Pricing Survey analysis, focusing on pricing variations by brand and region, was conduct ed. Table 3.2.2 illustrates the results.22 Overall, the table indicates that prices for the brands of RH commodi ties in the table are highest in the Western region. It is followed by the Midwestern region, the Eastern region, and the Central region—which has the lowest median prices of the 13 brands in the table. The analysis is not weighted by value, because the team did not obtain data on quantities procured, distributed, or sold. It may be more useful to focus instead on brand analysis, though it is much more diffi cult to establish patterns across regions. Some observations include the following: • The retail price of the socially marketed oral contraceptive (OC) pill Sunaulo Gulaf and the condom Dhal Deluxe are consistent across regions, at Rs. 8 and Rs. 1, respectively. • The median price of Penidure (benzathine penicillin) is 50 percent higher in the Midwestern region, than in the three others. Table 3.2.2. Regional Medicine Outlet Price Distribution by Brand (private sector) Regional Distribution in Rs. Product Brand Central Eastern Midwestern Western Ampicillin 500 V Aristocillin 30.42 29.40 29.55 29.00 Beuzethrine benzylpenicillin powder 1.2 Penidure 20.02 20.23 30.00 20.81 OC Pill Sunaulo Gulaf 8.00 8.76 8.20 8.00 Condom Kama Sutra 4.57 5.83 n/a 7.33 Dhal Deluxe 0.90 0.93 1.18 0.86 Co-trimoxazole T 800 Bactrim DS 2.18 2.05 2.22 1.79 Ferrous Folic Acid Ferrofolic 2.13 2.00 1.86 1.81 Metronidazole vial Metronidazole 26.37 24.33 30.83 26.50 Oxytocin Ampule Syntocinon 20.94 24.20 24.45 28.26 Tetanus Toxoid Bett 10.11 11.61 9.61 9.93 Doxycycline Tablet Peridox 5.35 5.82 5.44 5.25 Methylergometrine Ampule Methergin 31.25 31.72 29.44 35.11 Folic Tablet Folvite 1.94 1.81 1.77 1.87 n = 14 n = 14 n = 13 n = 9 22. A regional price analysis for the public and NGO sectors was not included because the sample size for each of the sectors (15 and 18) was insufﬁ cient to produce statisti cally signiﬁ cant results when segmented by region. Further, many of the public and NGO medicine outlets had a limited set of products available, which compounded the difﬁ culty of making comparisons of this type. By contrast, the private sector sample—a majority were retail pharmacies—included 50 facilities distributed somewhat evenly throughout the four regions. 22 Survey Findings • Similarly, the median price of Metronidazole is 50 percent higher in the Midwestern region than in the three others. • The median price of Syntocinon (oxytocin ampoule) varies between Rs. 20, 24, and 28 across regions, which is consistent with the overall price differences between regions. • The Western region has 3 of the 13 most expensive brands; the Midwestern, 4; the Eastern, 3; and the Central, 3, which illustrates the absence of substantial aggregate pricing trends across regions. While no particular region emerges as signifi cantly more or less expensive (in aggregate), signifi cant regional variations do appear when individual brands are examined. Annex 4 contains tables for 12 RH commodity tracer brands. The tables in the annex suggest that, on a percentage basis, there are considerable variations in pricing between regions for several tracer products. For example, the median price of Ferrous folic in the Central and Western regions shows an 18 percent price variance. In the same regions, the median price of Syntocinon varies by 35 percent. Private medicine outlet clients in the Midwestern region pay 35 percent more for Metronidazole than do such clients in the Eastern region. Conversely, the median retail price for the tetanus toxoid vaccine brand Bett is 21 percent higher in the Eastern region than in the Midwestern region. The examples suggest that interregional pricing variations are brand specifi c and do not conform to aggregate product comparisons. 3.2.3 Medicine Outlet Prices by Topography As discussed earlier, the topographical map of Nepal is composed of three distinct zones: The Terai is a fl at farming plain that stretches along Nepal’s southern border with India. The Hill districts, which include the Kathmandu Valley, are north of the Terai and south of the Mountain districts. The inadequate transportation infrastructure in the country, primarily the lack of paved roads and the inadequate maintenance of existing ones, results in long delays and increased costs to transport goods, particularly from urban areas to the remote parts of the country. Consequently, many public, private, and NGO health facilities are relying more often on the expensive but reliable air transportation network to move products and people within the country. Figure 3.2.3 illustrates the effect that many of the barriers are having on price in the private sector. The average median prices of three of the four RH tracer products listed (doxycycline, tetanus toxoid vaccine, and co trimoxazole) are considerably higher in the Mountain zone than in the Terai and Hill zones. 23 Nepal: Reproductive Health Commodity Pricing Survey Figure 3.2.3. Private Sector Retail Price Distribution by Topography 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 Doxycycline 100mg Methyl-Erg. .2mg Co-Triomox 800/160 Tetanus Toxoid .5ml Terai Hill Mountain The median retail price of doxycycline 100 mg tablets is 49 percent higher in the Mountain zone than in the other two zones.23 For the teta nus toxoid vaccine, the difference is 96 percent. Surprisingly, the median retail price of methylergometrine was consistent across topographical zones. Table 3.2.3 provides comparisons for eight additional products. Notably, the percentage variance between the (average) Terai and Hill median prices and the Mountain median price is more than 100 percent for ampicillin, co-trimoxazole, and metronidazole. Those and other substantial price variations result in a 99 percent (unweighted) greater average median price in the Mountain districts. It must, however, be stressed that the sample size of private sector outlets there was limited to four facilities because of the diffi culty the survey team had in traveling in the districts, the added transportation costs, and the low density of retail providers. Nonetheless, the results do provide evidence that RH products are considerably more expensive in the Moun tain districts; policymakers should consider this issue when devising strate gies to increase equity and access. 3.3 Product Availability The RH commodity tracer list developed for this survey was initially based on a broader list put together by a group of technical experts from UNFPA, USAID, the World Bank, WHO, JSI, and other technical partners. That list represented a cross-section of RH medicines prevalent in West Africa. The Nepal survey team used those commodities as the basis to develop a Nepal-specifi c RH commodity tracer list. Through consultations with 23. The ﬁ gure was derived by averaging the median prices of the products in the Terai and Hill districts and by dividing that ﬁ gure by the median price in the Mountain district. 24 Survey Findings Table 3.2.3. Topographical Price Distribution and Variance (selected RH tracer commodities) Product Topographical Distribution Terai Hill Average Mountain Variance (%) Ampicillin 21.31 29.37 25.34 120.00 374 Benzathine benzylpenicillin powder 1.2 20.46 26.42 23.44 68.00 190 OC Pill 8.00 4.81 6.40 10.00 56 Condom HPG 4.08 4.72 4.40 7.33 67 Co-trimoxazole 800 mg 2.08 1.55 1.81 4.92 172 Ferrous Folic Acid 1.92 1.76 1.84 2.00 9 Metronidazole vial 20.90 25.12 23.01 49.57 115 Oxytocin 27.12 25.13 26.12 18.83 –28 Tetanus Toxoid 10.42 9.98 10.20 20.00 96 Doxycycline Tablet 2.85 3.11 2.98 4.43 49 Methylergometrine Ampule 32.82 31.87 32.34 30.00 –7 Folic Acid 1.30 1.27 1.28 n/a n/a n = 31 n = 15 n = 46 n = 4 99 pharmacists, personnel from the DDA, FHD, and other TAG members, a number of changes were made to the original tracer list to better refl ect a cross-section of RH products in Nepal. One week before data collection, a fi nal list was created that the survey team felt represented a cross-section of RH commodities available in Nepal. The fi nal tracer list contained 32 RH products in the major RH treatment categories—family planning (contra ceptives); STIs and HIV/AIDS; and prenatal, obstetrical, and neonatal commodities. Products were marked as available if an outlet contained at least one unit ready for distribution to clients. Attempts to measure stock levels were beyond the scope of the survey. Table 3.3 displays the availability of all 32 RH products on the Nepal tracer list. There were 83 facilities surveyed, with a possible total sample size of 166 when the two product categories (HPGs and LPGs) were added together. Overall, the mean or average availability across sectors (including HPGs and LPGs) was 21.3 percent. This fi gure is somewhat misleading when trying to determine whether at least one product is available to clients, because the overall average is affected by the low prevalence of HPGs in all sectors, which was 9.1 percent. The mean availability of HPGs in public sector outlets, for example, was 0.8 percent. (Two separately priced brands of doxycycline and co-trimoxa zole were available at an urban HP in Thimi [Kathmandu district], and two brands of co-trimoxazole were recorded at a rural PHCC in the 25 Nepal: Reproductive Health Commodity Pricing Survey Table 3.3. RH Commodity Availability by Sector Medicine or Drug Name Medicines Availability in Outlets (% available) HPG LPG Public (n = 15) Private (n = 50) NGO (n = 18) Public (n = 15) Private (n = 50) NGO (n = 18) Average (n = 166) Ampicillin (250 mg) 0.0 10.0 11.1 6.7 34.0 16.7 13.1 Ampicillin (500 mg) 0.0 14.0 27.8 0.0 50.0 50.0 23.6 Benzathine benzylpenicillin (1.2) 0.0 0.0 0.0 13.3 56.0 38.9 18.0 Benzathine benzylpenicillin (2.4) 0.0 0.0 0.0 0.0 12.0 5.6 2.9 Condom (male) 0.0 90.0 66.7 86.7 92.0 72.2 67.9 Co-trimoxazole 400/80 13.3 8.0 5.6 93.3 46.0 38.9 34.2 Co-trimoxazole 800/160 0.0 36.0 38.9 13.3 84.0 61.1 38.9 Doxycycline 6.7 68.0 55.6 66.7 90.0 83.3 61.7 Ergometrine Injection 0.0 0.0 5.6 0.0 2.0 5.6 2.2 Female Condom 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Ferrous Salt + Folic Acid 0.0 24.0 16.7 66.7 46.0 33.3 31.1 Ferrous Salt + Folic Acid (additive) 0.0 18.0 22.2 0.0 28.0 33.3 16.9 Folic Acid 0.0 28.0 22.2 0.0 70.0 38.9 26.5 Implant (subdermal) 0.0 0.0 11.1 46.7 0.0 38.9 16.1 Iron 0.0 0.0 0.0 0.0 2.0 5.6 1.3 IUD 0.0 0.0 0.0 53.3 0.0 5.6 9.8 Levonorgestrel 0.0 2.0 5.6 0.0 0.0 5.6 2.2 Magnesium Sulfate 0.0 2.0 0.0 0.0 0.0 5.6 1.3 Medroxyprogesterone Acetate 0.0 0.0 0.0 86.7 28.0 16.7 21.9 Methylergometrine 0.0 14.0 0.0 40.0 64.0 38.9 26.1 Metronidazole Bottle 0.0 4.0 5.6 26.7 72.0 61.1 28.2 Metronidazole Tablets 6.7 68.0 44.4 73.3 96.0 88.9 62.9 Nevirapine Syrup (100 ml bottle) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Nevirapine Tablets 0.0 0.0 0.0 0.0 6.0 5.6 1.9 Nifedipine 0.0 2.0 0.0 0.0 52.0 38.9 15.5 OC Pill (E+L) 0.0 16.0 11.1 20.0 74.0 38.9 26.7 OC Pill (E+N) 0.0 18.0 16.7 73.3 76.0 55.6 39.9 OC Pill (levonorgestrel) 0.0 0.0 5.6 13.3 18.0 16.7 8.9 OC Pill (nogestrel) 0.0 0.0 0.0 0.0 2.0 0.0 0.3 Oxytocin 0.0 30.0 16.7 60.0 78.0 61.1 41.0 Sulphadoxine/Pyrimethamine 0.0 2.0 0.0 0.0 26.0 33.3 10.2 Tetanus Toxoid Vaccine 0.0 2.0 5.6 40.0 74.0 55.6 29.5 Averages 0.8 14.3 12.3 27.5 39.9 32.8 21.3 Average LPG Availability 33.4 Average HPG Availability 9.1 26 Survey Findings Bardia district.) Conversely, the mean availability for LPGs was—as expected—considerably higher, at 33.4 percent. A number of prod ucts remained on the final tracer list despite knowledge that they were unlikely to be found.24 Some product-specific observations include the following: • For the 32 products, only 2 of 15 public sector outlets stocked at least one HPG and one LPG product (an HP in Thimi and a PHCC in the Bardia district). • As expected, LPG intrauterine devices (IUDs) were more available in the public sector outlets (53 percent). Of those outlets, 87 percent also stocked three-month injectables, 86 percent stocked condoms, and 93 percent stocked with co-trimoxazole. • The overall availability of magnesium sulfate across sectors and prod uct prices was just over 1 percent. It was available only in a pharmacy in Lalitpur (Kathmandu Valley) and an FPAN clinic in Pokhara. • In public sector outlets, the average availability of the full range of LPG contraceptives on the tracer list was 48 percent. Availability of condoms, injectables, and (at least one) OC pill was 82 percent. • Condoms are the most widely available RH product in all sectors and are available in more than 90 percent of the pharmacies and public sector outlets. • Sulphadoxine/pyrimethamine, nifedipine, folic acid, and magnesium sulfate were unavailable in all 15 public sector outlets. Additional observations can be made from those data. Overall, the impli cation for policymakers is to determine what strategies to implement to increase the availability in all sectors of RH products, particularly sulpha doxine/pyrimethamine, magnesium sulfate, benzathine–benzylpenicillin, nifedipine, and ferrous salt and folic acid. The following sections segment the data from table 3.3 by region and topography. 3.3.1 Product Availability by Region and Sector (LPGs) Product availability is highest in private sector outlets in the Eastern region (45.3 percent) and lowest in public sector outlets in the Western region (16.7 percent). The mean product availability across the four regions, however, is surprisingly consistent (see table 3.3.1)—ranging from 29.9 percent (Central) to 31.7 percent (Midwestern). By contrast, variations between sectors, both across and between regions, are signifi cant. NGO product availability is 17 percent in the Eastern region, compared with more than 35 percent in the Western region. Conversely, public sector mean availability is highest in the Eastern region (27 percent) and lowest in the Western region (17 percent). Mean availability by sector across regions varies considerably (public, 21 percent; private, 40 percent; NGO, 30 percent). Within the surveyed regions, variance between sectors is considerable. In the Western region, availability ranges between 37 percent in NGOs and 17 percent in public sector outlets. The percentage of RH products avail 24. The products included female condoms, ergometrine, levonorgestrel, and nevirapine syrup and tablets. 27 Nepal: Reproductive Health Commodity Pricing Survey Table 3.3.1. LPG Product Availability by Region and Sector Sector Regional Product Availability by Sector Central n = 22 Eastern n = 21 Midwestern n = 18 Western n = 22 Mean n = 83 Public 20.3 27.6 21.9 16.7 21.6 Private 38.8 45.3 37.9 38.9 40.2 NGO 30.5 17.7 35.4 37.5 30.3 Mean 29.9 30.2 31.7 31.0 30.7 able in public sector outlets in each region is also substantially lower than in the other sectors. Table 3.3.2 indicates that the availability of a basket of 13 tracer products across regions is product specific. For example, condom availability is more than 80 percent in each region, while folic acid availability ranges from 24 percent in the Central region to 41 percent in the Western region. Metroni dazole is available in 92 percent of Central region facilities, but only 66–78 percent is available in the other three regions’ facilities. The availability of folic acid in the Western region is nearly double that in the Central region. Overall, the availability of folic acid, magnesium sulfate, ampicillin, and nifedipine is low in each region. The causes and implications will be further examined Table 3.3.2. Regional LPG Product Availability Medicine Name Regional Product Availability Central n = 22 Eastern n = 21 Midwestern n = 18 Western n = 22 Combined oral pill 59.5 59.5 68.9 77.5 Ampicillin (500 mg) 26.2 30.2 42.2 36.5 Condoms 81.0 86.5 86.7 81.2 Co-trimoxazole 800/160 45.2 46.0 53.3 59.0 Doxycycline 100 mg tab 83.3 64.3 63.3 74.1 Ferrous salt + folic acid 20.2 50.8 33.3 7.4 Folic acid 23.8 37.3 33.3 41.3 Magnesium sulfate 0.0 0.0 0.0 4.8 3 - Month injectable 36.9 45.2 37.8 50.3 Metronidazole tablets 91.7 66.7 67.8 77.8 Nifedipine 4.8 0.0 0.0 8.5 Oxytocin 38.1 53.2 65.6 51.6 Tetanus toxoid vaccine 48.8 58.7 66.7 48.7 Note: Annex 5 contains the percentage availability for all 32 LPG RH tracer products by region and sector. 28 Survey Findings and brought to the attention of policymakers by the TAG through a fi ndings review process. 3.3.2 Product Availability by Topography and Sector Equally worth noting is product availability by topography, between the Mountain, Hill, and Terai zones. On the basis of anecdotal evidence, a number of TAG members and the survey team expected that availability would be markedly lower in the Mountain zones, given the greater trans portation costs, the poor road infrastructure, and the security situation. Figure 3.2.2 suggests that this hypothesis was, in part, correct. The mean availability of RH tracer products was the lowest in the Mountain zone, at 23 percent, compared with 37 percent in the Terai and 35 percent in the Hill zones. However, the fi gures should be considered preliminary because of the low number of facilities surveyed in the Mountain zone. Nonethe less, it is reasonable to extrapolate from the preliminary fi gures that overall availability in the Mountain districts is low. The issue should be addressed in any policy action arising from this report. Further observations include the following: • Public sector product availability is consistent across the three zones—between 28 and 30 percent. • Private and NGO outlet availability in the Mountain sites surveyed is substantially lower than in such outlets in the Hill and Terai zones. • The highest concentration of RH product availability is in private sector outlets in the Terai (43 percent). The lowest is in NGO outlets in the Mountain zone (13.8 percent).25 Figure 3.3.2. Product Availability by Topography and Sector 50 40 30 20 10 0 Tera (n=44) Hill (n=29) Mountain (n=10) Product Availability by Topography and Sector Percent MeanNGOPrivatePublic 36.9 35.0 23.0 40.2 34.8 13.8 43.0 40.3 26.727.6 29.9 28.4 25. The NGO sample in the Mountain districts was limited to two, a number insufﬁ cient for making any concrete observations on NGO product availability. 29 Nepal: Reproductive Health Commodity Pricing Survey The availability of a subsection of 12 RH tracer products by topography is illustrated in fi gure 126.96.36.199 As indicated in previous analysis, condoms are the most widely available RH product. By topography, their availability was the highest in the Terai zone, at 88 percent. The availability of doxycy cline, ferrous folic tablets, and oral contraceptives was also more than 70 percent in the Terai. By contrast, ampicillin and benzathine benzylpenicillin were available in 8 percent of Mountain sites surveyed. Finally, availability in Mountain facilities of metronidazole, methylergometrine, and condoms was comparable with availability in the two other zones. Low product availability is also due, in part, to which products and services are offered. For example, SHPs and HPs stock only a limited variety of medicines—PHCCs and hospitals stock many more. Pharma cies are not expected to carry clinical contraceptives such as IUDs. 3.4 Product Affordability The WHO/HAI manual encourages researchers to conduct an afford- ability analysis of the tracer medicines. There are a number of ways to do this. First, as suggested in the manual, survey researchers can obtain the annual wage of the lowest-paid government worker to use as a benchmark to index affordability. Annual wages are then divided by 365 (days in a year) to obtain the worker’s average daily income. In Nepal, the income of the lowest-paid government worker is approxi mately Rs. 36,000 a year, or Rs. 98.6 daily. Multiplying the unit cost Figure 3.3.3. RH Product Availability for Selected Tracer Medicines by Topography 100 80 60 40 20 0 RH Product Availability for Select Tracer Medicines 3-month injectable Ampicillin 500mg BB Pwdr 1.2 Condom Cotrimox 800mg Doxy 100mg T Ferrous/ Folic Folic Acid Met Vial (bottle) Meth. Erg A Oral Pill (E+N) Tetanus Toxoid V Terai Hill Mountain Percent Note: BB Pwdr = Benzathine Benzylpenicillin Powder, Cotrimox = Co-trimoxazole, Doxy = Doxycycline, Met = Metronidazole, and Meth. Erg = Methylergometrine. 26. Annex 6 contains the percentage availability for all 32 LPG RH tracer products by topography and sector. 30 Survey Findings of the medicine by the total units needed for treatment gives a total treatment cost. That cost is divided by the daily wage of the worker to obtain total treatment cost expressed in days’ wages. For example, WHO standard treatment guidelines require that pregnant women use 270 units of ferrous and folic acid during the third trimester of preg nancy (WHO 2003).27 Multiplying 270 units by the cost per unit gives the total treatment cost. This figure is then divided by 98.6 (the daily wage), resulting in treatment costs expressed in days’ wages. Although the WHO/HAI method may prove useful for a number of medicines, an alternate measure is often used to express the treatment cost of contraceptives. The annual cost for each contraceptive method is determined by multiplying the unit price of the product by the couple- years of protection (CYP) factor for each method. CYP factors used in the analysis are 120 condoms and 15 cycles of OC pills (Stover et al. 1997). Cost, as a percentage of annual income, is then determined by dividing the annual cost per CYP for each product by average per capita income for each wealth quintile. While there is debate about the maxi mum percentage of annual income that individuals should spend on contraception, one fi gure that has been used is 1 percent (Harvey 1994). In other words, contraceptives are categorized as unaffordable if the cost exceeds 1 percent of a worker’s annual income. For the poor, who have less disposable income, this fi gure is probably excessive; 0.5 percent may be appropriate. Figure 3.4 provides an analysis of treatment costs expressed in days’ wages for six RH tracer products. As shown, there is a substantial difference, in days’ wages, between the median prices of HPGs and LPGs purchased in private medicine outlets. It takes almost 21 days of wages for the lowest- paid government worker in Nepal to pay for the median-priced ferrous and folic acid HPG, but only 14 days to pay for the median-priced LPG. There is an even larger difference between HPG and LPG oral pills (12.7 and 1.8 days) and condoms. However, it is diffi cult to determine the effect that days’ wages has on affordability. Are 12.7 days’ wages for HPG oral pills affordable? What about HPG ferrous and folic acid at 21 days’ wages? Those treatment costs seem high, but further research establishing a benchmark in days’ wages should be conducted before any conclusions are drawn. Further, the RH products used for each treatment are specifi c to acute and chronic conditions. A year’s supply of condoms and OC pills for family planning (see fi gure 3.4), should not be compared with 14 units of doxycycline to treat an acute infection. Rather, each product should be measured against comparable treatments for the same conditions. Table 3.4.1 displays treatment affordability expressed as a percentage of per capita annual income. This method has been used in several countries in recent years to determine the ability to pay for contraceptives (Chawla et al. 2003; Rao 2004). The fi rst three columns on the left side of the table 27. WHO’s standard treatment guidelines were used to obtain units of medicine required per treatment. The guidelines vary by country and program. However, they provide a relatively accurate benchmark to measure treatment costs. 31 Nepal: Reproductive Health Commodity Pricing Survey Figure 3.4. Reproductive Health Product Affordability in Days’ Wages (private sector) Days’ wages 25 20 15 10 5 0 Private Outlet Treatment Course Affordability in Days’ Wagesv LPG HPG Ferrous+ Folic Methyl- Ergometrine Doxycycline Condom Oral Pill 14.0 20.9 2.4 2.4 0.5 0.9 1.0 1.8 12.7 6.1 indicate product type, brand, and cost per treatment.28 The rows in the upper-right corner are per capita income fi gures for Nepal, divided by fi ve income subgroups or quintiles (expressed in dollars and rupees). The richest one-fi fth of individuals in the population (Q1), for example, earns an average of Rs. 37,082 annually, and the poorest group (Q5) earns an average of Rs. 6,291.29 Those fi gures may appear low, because they represent averages per one-fi fth of each income segment. The richest 10 percent in quintile 1 may earn substantially more than the average fi gure, while the poorest 10 percent in quintile 5 might earn very little monetary income at all. The cells under the columns labeled Q1–Q5 represent the percentage of per capita income required for each treatment by the corre sponding product and for each brand. Overall, the table indicates that there is a measurably signifi cant differ ence in affordability between two brands of the same products. The private sector brands—Kama Sutra, Ovral L, Ferric Plus, Peridox, and Methergin—require expenditure of more per capita income than the comparable socially marketed (Dhal Deluxe, Sunaulo Gulaf) and public sector products. Further observations include the following: • By the 1 percent standard of measure, the unsubsidized commercial sector (UCS) products—Kama Sutra condoms, Ovral L OC pills, and Ferric Plus—are unaffordable for all income groups (the excep tion is likely a percentage of individuals in Q1). • Kama Sutra condoms are more than 600 percent more expensive than the socially marketed Dhal Deluxe condoms. If purchased by an individual in the poorest group (Q5) for one year of CYP, the cost would represent 11 percent of annual income. 28. The cost of treatment for contraceptives represents annual treatment costs and were deter mined by multiplying CYP factors by median brand price. For all other products, treatment costs were derived by unit cost by total units needed for treatment. 29. The sources are World Bank national accounts data and OECD National Accounts data ﬁ les (GNI, 2003, Atlas method). 32 Survey Findings Table 3.4.1. Cost as a Percentage of Annual Income for Selected RH Commodities Estimated per Capita Income Rich/Q1 Q2 Q3 Q4 Poor/Q5 US$ 526 247 177 135 89 Rs. 37,082 17,382 12,499 9,519 6,291 Cost per Treatment Product Brand (Rs.) Percentage of Annual Income Q1 Q2 Q3 Q4 Q5 Condom Kama Sutra 709.20 Condom Dhal Deluxe 116.40 OC Pill Ovral L 1,176.45 OC Pill Sunaulo Gulaf 123.60 Ferrous Folic Acid Ferric Plus 1,957.50 Ferrous Folic Acid Ferrofolic 526.50 Doxycycline Peridox 76.44 Doxycycline Public Sector 49.00 Methylergometrine Methergin 223.16 Methylergometrine Public Sector 126.00 1.91 4.08 5.67 7.45 11.27 0.31 0.67 0.93 1.22 1.85 3.17 6.77 9.41 12.36 18.70 0.33 0.71 0.99 1.30 1.96 5.28 11.26 15.66 20.56 31.12 1.42 3.03 4.21 5.53 8.37 0.21 0.44 0.61 0.80 1.22 0.13 0.28 0.39 0.51 0.78 0.60 1.28 1.79 2.34 3.55 0.34 0.72 1.01 1.32 2.00 Note: Costs in excess of 1 percent are shaded red; costs under 1 percent are shaded green. • Sunaulo Gulaf pills and Dhal Deluxe condoms are evenly priced and represent affordable contraceptive choices for the top 60 percent of the population (Q1–3). • The cost of the generic doxycycline 100 mg tablets that are avail able in public sector outlets represents only 0.78 percent of annual income for Q5 (the poorest). The cost of Peridox, a low-priced UCS brand, represents 1.22 percent of income for this same group. • Ferric Plus is an example of the proliferation of high-priced ferrous salt and folic acid brands in the commercial market. These and other similar brands contain additives (e.g., zinc, vitamin C) that are marketed to higher-income consumers. On the basis of 270 total treatment units, which are a minimum fi gure, the product represents more than 5 percent of the annual income of Q1. • Doxycycline distributed through public sector outlets and Peridox are the only 2 products that cost less than the 1 percent benchmark for the poorest 40 percent of the population (Q4–5). 3.5 Product Margins The DDA reviews the recommended retail prices for pharmaceuticals estab lished by the NCDA. Using those recommendations, the DDA issues the maximum pharmaceutical retail prices allowed for imported and nation ally manufactured products. Those prices are based on maximum allow able profi t and distribution margins for each entity in the price chain (i.e., importer, wholesaler, and retailer). The National Drug Policy is somewhat 33 Nepal: Reproductive Health Commodity Pricing Survey unclear on the issue. It indicates that the DDA has the authority to establish an offi cial price, but not a fi xed price (Nepal MOH 2000). For example, the policy indicates that retailers in remote areas can include reasonable higher margins for additional transport costs. This policy is no doubt that is one reason higher retail prices were observed in Mountain districts. Nonetheless, the survey team was told that the DDA does have regulatory authority and can apply punitive measures if it uncovers egregious violations of maximum margin levels. Figure 3.5 indicates the maximum margins allowable for each entity in the pharmaceutical price chain. As stated in section 1.4.1, imported medicines are subject to a fl at 5 percent government import tax. Importers can then charge a 3 percent distribution margin and a 5 percent profi t margin. Wholesalers and retailers then levy a 9 percent and a 16 percent profi t margin, respectively. The total of those price components is 37 percent above the CIF/CIP30 procurement price (the price of the medicine after it arrives in-country), plus the cost of insurance and freight charges. Yet, because those margins are levied on top of previous margins, they have a cumulative effect. The 16 percent retail profi t margin, for example, is not added to the CIF/CIP price, but to the price after taxes and importer and wholesaler margins have been applied. The cumulative effect that those margins have on price is, therefore, 42 percent (see table 1.4.1). Locally manufactured pharmaceuticals are not subject to import taxes and importer margins. In some instances, local manufacturers sell directly to retailers; this approach eliminates the wholesale margins. Locally manufac tured medicines are, therefore, subject either to retail margins or to retail and wholesale margins. Nonetheless, locally manufactured generic drugs are typically less expensive than imports from Europe or India. On the Figure 3.5. Pharmaceutical Price Components (private sector) Private Sector Pharmaceutical Price Components National Imports 0 9 16 5 3 5 9 16 0 10 20 30 40 Percent Import tax Importer distribution margin Importer profit margin Wholesaler profit margin Retailer profit margin 30. A shipping term meaning that the seller usually pays the costs, insurance, and freight charges necessary to bring the products to the port of destination (WHO and HAI 2003). 34 Survey Findings basis of the data collected for the survey, the manufacturing selling price (MSP) for locally manufactured products is lower than for imported gener ics, and they are subject to only two price components. The production of more locally manufactured RH medicines should be investigated and possibly promoted as a strategy to reduce costs. 3.5.1 Observed Cumulative Margins The DDA has regularly communicated to importers, wholesalers, and retailers the maximum that margin each entity in the price chain can add to medicines. The four private importers that were surveyed for this analy sis indicated that they were aware of the margins. Data collectors reported that 47 of the 50 private sector medicine outlets were also aware of the 16 percent maximum retail mark-up. Most indicated that they charge between 14 and 16 percent. The cumulative margins observed were substantially higher than they should have been if the formula issued by the DDA had been used. In theory, cumulative margins should fall between 26 and 42 percent (the maximum cumulative margins for locally manufactured and imported medicines, respectively). The cumulative margins observed were higher for four of the fi ve selected RH products shown in fi gures 188.8.131.52 The median cumulative margin for ampicillin 500 mg was 259 percent; for oxytocin, 163 percent, and for ferrous salt and folic acid, 84 percent. The margins for tetanus toxoid vaccine and, to an extent, metronidazole fell within and near what would be expected by the statutory margin levels. One principal question relating to the analysis remains unanswered: How are the additional margins distributed between importers, wholesalers, and retailers? For example, the median CIF/CIP procurement price for oxytocin is Rs. 10.58 (see fi gure 3.5.1.a). Oxytocin is imported from India and is, therefore, subject to a 5 percent government import tax. The median retail price of oxytocin is Rs. 27.80. The amount remaining after subtracting the procurement price and tax is Rs. 17.20 (see fi gure 3.5.1.b). This cumula tive margin represents 61 percent of the median retail price of oxytocin. The cumulative margin on ampicillin constitutes 72 percent of the median retail price. What needs to be determined in future analysis is the propor tion of that amount that each actor in the system is levying on RH medi cines (and on pharmaceuticals, in general). These data can then be used to support pricing policy changes, additional enforcement, or other strategies that promote equity and access. 3.5.2 Cumulative Margins by Region On the basis of median retail price fi gures from section 3.2, cumulative margins were established by region for RH commodities that are sold 31. The cumulative margins were established by comparing the median CIF/CIP private sector procurement price with the median retail price for the selected RH commodities listed in ﬁ gure 3.4.1. 35 Nepal: Reproductive Health Commodity Pricing Survey Figure 3.5.1.a Observed Median Cumulative Price Margins National Import Iron/Folic Ampicillin 500mg Met Bottle TT Vaccine Oxytocin Median Private Sector Observed Cumulative Margin CIF/CIP to Retail Price 100500 150 200 250 300 26 42 84 259 58 33 163 Percent through private outlets. Table 3.5.2 compares the cumulative margins across the four regions. According to unweighted average, the Western region has the highest margins—82 percent—for the 12 tracer products in the table, but the variance between this fi gure and the average cumulative margins for the three other regions is not likely to be statistically signifi cant—only 2–5 percent. Yet again, as in the product availability analysis— which was also characterized by uniformity at the regional (aggregate) level—the divergence is product specifi c. Figure 3.5.1.b Distribution of Price Components for Selected RH Commodities (private sector) 40 35 30 25 20 15 10 5 0 17.2 0.53 10.58 Margin Import Tax CIF/CIP 2.6 0.39 7.81 9.4 0.82 16.40 25.9 0.50 10.00 1.3 0.08 1.51 Oxytocin TT Vaccine Met Bottle Ampicillin 500 mg Iron/Folic 36 Survey Findings Further observations include the following: • The average cumulative margin across regions is 80 percent, nearly double the allowable maximum of 42 percent. • The median retail margin for benzathine benzylpenicillin is 286 percent greater in the Midwestern than in the Central region. The margin is similarly greater in Eastern and Western regions. • Across regions the margins for HPG OC pills (not including socially marketed products) are below the maximum margin allowable (between 26 and 42 percent). • Across regions all OC pills are under the regulated margins. In the Midwestern region, HPG condoms and the tetanus toxoid vaccine are within the established margin. Co-trimoxazole and benzathine benzylpenicillin (40 and 22 percent) fall within the accepted cumula tive margin in the Eastern region. In the Central region, benzathine benzylpenicillin and oxytocin are within the established cumulative margin. In the Western region, median cumulative margins for benza thine benzylpenicillin, co-trimoxazole, and the tetanus toxoid vaccine (25, 23, and 43 percent) are all within the established range. • Products with high cumulative margins include doxycycline, ampicillin, and folic acid (across all regions). Cumulative margins for condoms in the Western region and metronidazole in the Midwestern region (129 percent and 108 percent) are also substantially above the established range and the mean. Table 3.5.2. Median Cumulative Margins by Region (%) Product Median Margins by Region Central n = 14 Eastern n = 14 Midwestern n = 13 Western n = 9 Ampicillin 500 mg 204 194 196 190 Benzathine benzylpenicillin Powder 1.2 21 22 81 25 OC Pill HPG 26 14 11 13 Condom HPG 43 82 25 129 Co-trimoxazole 800 mg 49 40 52 23 Ferrous Folic Acid 82 71 59 55 Metronidazole Vial 78 64 108 79 Oxytocin 38 60 61 87 Tetanus Toxoid 46 67 38 43 Doxycycline 100 mg 176 200 181 171 Methylergometrine 65 68 56 86 Folic Acid 95 82 78 87 Mean 77 80 79 82 37 Nepal: Reproductive Health Commodity Pricing Survey 3.5.3 Cumulative Margins by Topography The distribution of cumulative margins across the Terai, Hill, and Moun tain zones is characterized by an unambiguous observation: Cumulative margins in the Mountain districts—as expected after reviewing retail prices by topography—are considerably higher than in the Terai or Hill districts. The size of the Mountain zone private retail sample—which was four— also must be considered. It is unclear to what extent the sample size biased the fi ndings. As mentioned earlier, the survey team was constrained by a number of factors that limited the ability to survey additional Mountain facilities. Table 3.5.3 details the median cumulative margins for a basket of 12 RH tracer products. Unlike the distribution by region, where mean margins showed very little variance, and where additional sites in the Terai and Hills diluted the effect of Mountain facilities, the distribution by topog raphy shows marked differences between the Terai and Hill districts and Mountain districts. Controlling for ampicillin (for which only one retail price was recorded), the mean cumulative margin in the Mountain zone is 130 percent, as opposed to 230 percent with ampicillin included. Across zones, the mean cumulative margin is 113 percent. Controlling for ampicillin, that mean drops to 80 percent—the same mean cumulative margin seen across regions. Additional observations are as follows: • Figures from the Terai and Hill zones (and from the regions) provide some evidence to suggest that the cumulative margin for ampicillin 500 mg is relatively high. Therefore, the price recorded in the single Table 3.5.3. Median Cumulative Margins by Topography (%) Product Terai n = 31 Hill n = 15 Mountain n = 4 Ampicillin 500 mg Benzathine Benzylpenicillin Powder 1.2 OC Pill HPG Condom HPG Co-trimoxazole 800 mg Ferrous and Folic Acid Metronidazole Vial Oxytocin Tetanus Toxoid Doxycycline 100 mg Methylergometrine Ampule Folic Acid Mean 113 23 14 28 42 64 41 79 50 47 74 30 50 194 59 20 48 6 50 70 66 44 60 69 27 59 1100 310 49 129 237 71 235 24 188 129 59 230 38 Survey Findings Mountain outlet may be consistent with other retail outlets in that zone. • By topography, mean cumulative margins in the Terai and Hill districts are not excessively higher than the established rate. • In the Terai districts, 50 percent of RH products (those in the table) have cumulative margins above the acceptable rate. In the Hill districts, 67 percent do. At the two private retailers surveyed in the Mountain zone, only one product (oxytocin) had a cumulative margin below the established rate. Cumulative margins contribute to high RH medicine prices in many countries. In Nepal, the median rate of those margins for the basket of RH tracer products is 80 percent. In many other countries, that fi gure is much higher. Nonetheless, in Nepal, private sector clients pay nearly double the procurement price for RH medicines (on a median basis). If the analy sis of price components (e.g., importer distribution margins, retail profi t margins) was extended to cover the price before the product was procured, the cumulative margin would be even greater because of freight and insur ance costs. One of the next steps following the dissemination of this report will be to determine how and to what extent the price components examined here affect the equity, access, and affordability of RH commodities. Though this was beyond the scope of this report, the fi ndings did indicate that a number of middle- and lower-income clients might have diffi culty afford ing RH commodities at the current prices. Cumulative margins are just one contributing factor. The next section provides a summary and brief analysis of the survey fi ndings to determine the implications for clients and policymakers. 39 4. Summary of Findings and Implications Married women of reproductive age constitute 20 percent of Nepal’s population of 24.7 million. His Majesty’s Government of Nepal (HMG) has established that the equitable pricing, distribution, and availability of RH products to meet the demands of this population are important public health goals. The use of modern methods of contraception has steadily increased during the past decade, from 26 percent in 1996 to nearly 40 percent in 2005.32 HMG has also successfully expanded the availability of essential RH medicines through effi cient central-level procurement and HMG’s support of community drug programs. Reproductive health indica tors, however, point to a number of ongoing challenges: the unmet need for contraception and the maternal and infant mortality remain high, while access to RH services, notably by the rural poor, is low. Some of the reasons why those and other RH indicators are below the targets set out in HMG’s planning documents are likely attributable to the issues discussed in this report: RH commodity procurement, medi cine outlet pricing, availability and affordability, and effect of cumulative margins. Other factors that challenge RH commodity security—including prescribing practices, levels of consumer and provider information, and education and socio-political-economic status—must also be considered in any strategy to improve equity, access, and affordability. The RH pricing survey provides evidence that RH commodity security can be improved by policy actions that are based on the implications of the fi ndings. 4.1 Procurement Key Findings • The cross-sectoral median procurement price ratio (PPR) for LPGs is 1.29/1.00. • The cross-sectoral median PPR for HPGs (in the private and NGO sectors) is 6.78/1.00. • The cross-sectoral median PPR for LPGs and HPGs is substantially lower than in the Philippines, Peru, and Kenya. 32. Estimates are from HMG experts. 41 Nepal: Reproductive Health Commodity Pricing Survey • The median procurement brand premium (price variation between LPGs and HPGs) is 426 percent—higher than in the three compari son countries. • The public sector median PPR (from the LMD) is .82/1.00, which indicates greater effi ciency than the IRP. • Local manufacturing and Nepal’s proximity to India help account for relatively low central-level procurement prices across sectors. Implications Central-level procurement for all sectors in Nepal is comparatively more effi cient than in other countries. The high brand premium indicates that consumers pay substantially more by not choosing the lowest-priced generic RH product. The procurement effi ciency of the LMD results in the purchase of low-cost generic products, which it is able to distribute to health facilities for substantial savings for the MOH and public sector clients. 4.2 Patient Prices Key Findings • The cross-sectoral median price ratios at medicine outlets are 2.11 (LPG) and 4.11 (HPG), representing a 95 percent brand premium. • The median price ration at public sector medicine outlets is 1.64; at private sector outlets, 2.12; and at NGO sector outlets, 2.11. • The Western region has the lowest medicine outlet price ratios both for LPGs and in the public sector. The Eastern region has the highest price ratios for LPGs. The Midwestern region has the highest price ratios for the public sector. The Central region has the highest medi cine outlet price ratios for HPGs. • Public sector medicine outlet prices in the Central and Midwestern regions are approximately 100 percent greater than in the two other regions. • The prices of the socially marketed products Sunaulo Gulaf (OC pill) and Dhal Deluxe (condom) are consistent across regions. • Each region has three or four of the most expensive brands, making it diffi cult to compare aggregate pricing trends across regions. Instead, price variations are brand and product specifi c. • The UCS median price of the Ferrofolic, Syntocinon, Metronidazole, and Bett brands vary by more than 10 percent across regions. • The UCS median prices of three of four RH tracer products are more than 50 percent higher in the Mountain zone than in the Hill or Terai zones. • The UCS median medicine price in the Hill and Terai outlets are comparable, while the variance with the Mountain outlets is close to 100 percent. Implications • The brand premium between the procurement and medicine outlet levels narrows considerably, implying lower cumulative margins 42 Summary of Findings and Implications for higher-priced products and higher margins for lower-priced products. • The regional medicine prices do not indicate aggregate variations by region. Instead, the signifi cant variations are product and brand specifi c. Policymakers should ask additional questions about why there are differences between regions: for example, for Methergin, Syntocinon, and Penidure. • Private sector clients in the Mountain district are paying signifi cantly more for RH products than are clients in the Hill and Terai districts, which indicates an inequitable distribution of pricing across the topographical zones. 4.3 Availability Key Findings • Mean product availability across all sectors and product prices was 21.3 percent. The fi gure was 9.1 percent for HPGs and 33.4 percent for LPGs. • The availability of HPGs in public sector outlets was 0.8 percent. (Two of the 15 public sector outlets stocked one HPG and LPG pairs for two products.) • The availability of condoms, OC pills, and injectable contracep tives was more than 75 percent in public sector medicine outlets. The availability of IUDs was greater in the public sector than in the other two sectors. • The overall availability of magnesium sulfate across sectors and product prices was just over 1 percent. It was available only in a pharmacy in Lalitpur (Kathmandu Valley) and an FPAN clinic in Pokhara. • In public sector outlets, the average LPG availability for the full range of contraceptives on the tracer list was 48 percent. Availabil ity of condoms, injectables, and at least one OC pill was 82 percent. • Condoms are the most widely available RH product in all sectors; they are available in more than 90 percent of pharmacies and public sector outlets. • Sulphadoxine/pyrimethamine, nifedipine, folic acid, and magnesium sulfate were unavailable in all 15 public sector outlets. • By sector, product availability was highest in private sector facili ties (40 percent), followed by NGO outlets (30 percent) and public sector facilities (21 percent). • By region and sector, median product availability was highest in private sector outlets in the Eastern region (45 percent). It was lowest in public sector outlets in the Western region (17 percent). • By region, product availability varied by less than 2 percent (29.9 percent for Central to 31.7 percent for Midwestern). • Across regions, availability of condoms is more than 80 percent and availability of OC pills is 60 percent. By contrast, the availability of nifedipine and magnesium sulfate is less than 5 percent across regions. 43 Nepal: Reproductive Health Commodity Pricing Survey • Mean product availability is the lowest in the Mountain districts (23 percent), compared with the Terai (37 percent) and the Hill districts (35 percent). Implications • The availability of RH commodities across regions, sectors, and zones (less than 50 percent) is likely related to a number of RH challenges in Nepal. In the Mountain districts, the average availabil ity is less than 25 percent. Between regions mean availability is less than 32 percent. Those fi gures should raise questions about access between zones and across regions. • The availability of important RH medicines—including nifedip ine, ampicillin, and magnesium sulfate—is low across the country, implying that key RH commodities for STI prevention and prenatal care are unavailable for a majority of clients. • Despite considerable procurement effi ciency and support for CDPs, median product availability in the 15 public outlets surveyed is less than 25 percent, while contraceptive availability in those outlets is more than 60 percent. The implications for women seeking STI, prenatal, and obstetric care in public facilities are that the RH commodity security needs to be strengthened. 4.4 Affordability Key Findings • It takes 21 days of wages for the lowest-paid government worker to pay for HPG ferrous folic acid. It costs that same worker 12.8 days of wages for 15 cycles of HPG OC pills. • Most recent fi gures indicate that the poorest fi fth of the population earns an average of Rs. 6,291, and the richest fi fth earns an average of Rs. 37,082 per year. • One year’s supply of Kama Sutra condoms and Ovral L OC pills for family planning costs more than 1 percent of annual income for all wealth groups. For the very poor, 15 cycles of Ovral L represents more than 18 percent of annual per capita income. • The cost of one treatment of the HPG Ferric Plus (90 days) exceeds 5 percent of annual income for the richest group and more than 30 percent for the very poor. By contrast, the cost of the LPG brand Ferrofolic is only 1.4 percent and is 8.37 percent of annual income for those two groups. • The costs for one year of family planning protection using the socially marketed Sunaulo Gulaf OC pill and Dhal Deluxe condom are less than 1 percent of annual income for the top 60 percent of the population. Implications • The costs of many unsubsidized RH products are likely to be a barrier to access for the bottom 60 percent of the population. Afford 44 Summary of Findings and Implications ability of socially marketed condoms and OC pills is also likely an issue for the bottom 20–40 percent of the population. • LPG products provide an affordable alternative for the middle-poor. The poorest clients should be encouraged to go to public sector outlets—where contraceptives are distributed free of charge and where other RH products are sold for a much lower price. • When it can be proven that the price of protection is not a burden to access, income groups should be encouraged to use commercial sector outlets for RH products, making more public resources avail able to poorer clients. 4.5 Product Margins Key Findings • On the basis of guidelines established by the DDA, the maximum cumulative margin for imported RH commodities in the private sector is 42 percent. The maximum margin for locally manufactured commodities, excluding import taxes and importer margins, is 26 percent. • The median cumulative margins observed were 259 percent for ampicillin 500 mg, 163 percent for oxytocin, and 84 percent for ferrous folic acid tablets. The median cumulative margins for teta nus toxoid vaccines and metronidazole were considerably lower (33 percent and 58 percent). • The cumulative margin for oxytocin was 61 percent of the median retail price, and for ampicillin was 72 percent. • The average cumulative margins across regions (for select RH prod ucts) is 80 percent, double the 42 percent regulatory fi gure. • The median retail margin for benzathine benzylpenicillin is 286 percent greater in the Midwestern region than the Central region. This fi gure is comparable to the Eastern and Western regions. • Across regions, margins for HPG OC pills (not including socially marketed products) are below the regulatory margin rate (between 26 and 42 percent). • Products with high cumulative margins include doxycycline, ampi cillin, and folic acid (across all regions). Cumulative margins for condoms in the Western region and metronidazole in the Midwest ern region (129 percent and 108 percent) are also substantially above the established range and mean. • Cumulative margins in the Mountain districts—as expected after reviewing retail prices by topography—are considerably higher than in the Terai or Hill districts. • Controlling for ampicillin (for which only one retail price was recorded), the mean cumulative margin in the Mountain zone is 130 percent as opposed to 230 percent with ampicillin included. Implications • In the commercial sector, median cumulative price margins for RH products exceed the regulatory guidelines established by the DDA. 45 Nepal: Reproductive Health Commodity Pricing Survey Observed margins range to more than 1,000 percent and average more than 80 percent across regions. Although a number of prod ucts are near or below the maximum allowable margin, the implica tion is that price components, notably profi t margins, are infl ating the retail costs of RH commodities. • The provision of lower cost RH products in the public and NGO sectors should be strengthened to address the substantially higher cumulative margins observed in commercial sector outlets. Trans portation and distribution costs likely account for those margins. The net effect, however, is signifi cantly higher retail prices for clients in the Mountain districts. • Cumulative margins (price components) made up more than 60 percent of the retail price for oxytocin and ampicillin. The propor tion is equally signifi cant for a number of other tracer products. The identifi cation of importers, wholesalers, and retailers who may be charging excessive profi t margins for those products and the enforcement of regulatory guidelines can make such products more affordable, thereby increasing access and, potentially, use. 46 5. Recommendations 1. Increase the number of RH commodities available at each level in the health system by having the DDA, in collaboration with other MOH agencies and stakeholders, update the essential medicines list. 2. Strengthen the DDA’s pricing regulatory mechanism to help ensure that retail prices for all essential medicines are within the margins set out in its regulatory guidelines. 3. Devise a pharmaceutical information management system, and consider integrating it in the existing health management information system so it includes access and rational use indicators as directed in the WHO guidelines. Share this report with those development part ners that have a direct or indirect stake in these issues. 4. Disseminate the fi ndings of this report to the key staff members of the MOH and external development partners, and seek their feedback to determine how they can participate in addressing the issues raised in this report. 5. Launch an advocacy campaign to inform and educate consumers on the benefi ts of using the lowest-priced generic medicines. The fi rst stage of this campaign should focus on CDP districts, where cost shar ing is more prevalent. 6. To increase medicine effi cacy and to reduce costs, encourage the use of both rational prescribing and rational use of RH medicines. 7. Conduct regular consultations with external development partners to make the presence of NGOs and private sector providers more visible in the Mountain districts, as they are in the Hill and Terai districts. At the same time, using a review of existing data, assess the availability of medicine outlets in the Mountain districts. 8. Coordinate the fi ndings of this study with the ongoing work of the Health Economics and Financing Unit on alternative fi nancing methods. 9. Validate the baseline procurement price margin, and the wholesale and retail price margins discussed in this report, by conducting a similar, but broader, pricing analysis of other essential medicines. 10. After this report is fi nalized, post the fi ndings on the MOH website. 47 Glossary affordability. The cost of treatment in relation to income and expenses. This survey used the daily wage of the lowest-paid government worker and the average income by population quintile to measure affordability. brand name. Name given to a pharmaceutical product by the manufac turer. The use of this name is reserved exclusively to its owner, as opposed to generic names. In this report, the brand name drug may be referred to as the innovator brand. brand premium. The difference in price, expressed in monetary, ratio, or percentage terms, between various brands of the same product. The term is often used to describe the difference between innovator brand and generic products, but in this report it also refers to price variance between generic medicines. cost, insurance, and freight (CIF). A shipping term meaning the seller pays the costs, insurance, and freight charges necessary to bring the goods to the port of destination. Those costs are refl ected in the unit price of the product. generic medicine. A pharmaceutical product usually intended to be inter changeable with the innovator brand product. It is manufactured without a license from the innovator brand manufacturer and is marketed after the expiry of patent or other exclusivity rights. low priced generic (LPG), high-priced generic (HPG). Innovator brand products, whose patents have expired, that are manufactured under a vari ety of generic brand names. In Nepal and many other countries, there is a wide range of price differences between the generic products. LPG is used to identify the low-priced generic medicine or basket of medicines. HPG is used to identify the high-priced medicine or basket of medicines in relation to all generic brands of a specifi c medicine. mark-up. A percentage added to a purchasing price by an importer, whole saler, or retailer to cover storage, distribution, and profi t. median price. The value that divides the distribution in half. If the observa tions are arranged in increasing or decreasing order, the median price is the middle observation. It is a useful measure in cases where there is an asym metrical distribution of price data or when there are one or two extremely high or low values. MSH (Management Sciences for Health) reference prices. MSH issues an annual International Price Indicator Guide (http://erc.msh.org). It has two sections: the fi rst lists procurement prices offered by not-for-profi t suppli ers to developing countries for multisource generic procurements; the 49 Nepal: Reproductive Health Commodity Pricing Survey second lists tender prices offered to procurement agencies in developing countries. A median unit price is calculated for each product. The median price used in this report is the IRP. procurement price. The price paid by the government, private sector importers, or wholesalers to manufacturers or suppliers of medicines. wholesaler. An intermediary between manufacturers and retailers in vari ous activities such as promotion, warehousing, and the arranging for trans port or distribution. The wholesaler usually adds a profi t and distribution margin to the products, thereby increasing the retail price. In Nepal, the wholesaler is often referred to as a stockist. 50 Bibliography Association of Ghana Industries (AGI). 2003. “Proposals to the Govern ment of Ghana 2004 National Budget, November 14, 2003.” Available at http://www.agi.org.gh/2004Proposal.pdf (accessed February 26, 2004). Chawla, D., Asma Balal, Ruth Berg, David Sarley, and Susan Scribner. 2003. Bangladesh Contraceptive Market Segmentation Analysis. Arling ton, VA: John Snow, Inc./DELIVER, for the U.S. Agency for Interna tional Development. Creese, Andrew. 2002. Medicine Prices: A WHO and Health Action Inter national Collaboration: The Approach, Some Results, and Implications of Policies to Improve the Affordability of Medicines. Presentation. By WHO/EDM. Harvey, Philip D. 1994. The Impact of Condom Prices on Sales in Social Marketing Programs. New York: Studies in Family Planning, Popula tion Council. His Majesty’s Government of Nepal (HMG). 2002. National List of Essen tial Drugs, Nepal. 3rd Ed. Kathmandu, Nepal: His Majesty’s Govern ment, Ministry of Health, Department of Drug Administration. John Snow, Inc./DELIVER. 2003. Guidelines for Implementing Computerized Logistics Management Information Systems. Arlington, VA: John Snow, Inc./DELIVER, for the U.S. Agency for International Development. Management Sciences for Health (MSH). 2004. International Drug Price Indicator Guide, 2004 Edition. Boston: MSH. Nepal Ministry of Health (MOH), New ERA, and ORC Macro. 2002. Nepal Demographic and Health Survey, 2001. Calverton, MD: Family Health Division, MOH; New ERA; and ORC Macro. Nepal Ministry of Health (MOH) et al. 2001. Nepal Ministry of Health (MOH). 2000. Drug Financing. Kathmandu, Nepal: MOH. Population Reference Bureau (PRB). 2004. Data Finder: Nepal. Avail able at http://www.prb.org/datafi nd/datafi nder5.htm (accessed May 5, 2005). 51 Nepal: Reproductive Health Commodity Pricing Survey Rao, Raja. October 2004. Ghana: Ability to Pay for Contraceptives. Arlington, VA: John Snow, Inc./DELIVER, for the U.S. Agency for International Development. Sarley, David, Hany Abdallah, Raja Rao, Jocelyn Azeez, Peter Gyimah, and Bertha Garshong. 2003. Ghana: Pharmaceutical Pricing Study, Policy Analysis, and Recommendations. Arlington, VA: John Snow, Inc./ DELIVER, for the U.S. Agency for International Development. Stover, John et al. 1997. Empirically Based Conversion Factors for Calcu lating Couple-Years of Protection. N.p.: The EVALUTION Project. Carolina Population Center, Tulane University, and the Futures Group International. United Nations Population Fund (UNFPA) and World Health Organiza tion (WHO). 2003. Draft Discussion Document: Essential Drugs and other Commodities for Reproductive Health Services. New York: UNFPA and Geneva: WHO. World Health Organization (WHO) and Health Action International (HAI). 2003. Medicine Prices: A New Approach to Measurement. Geneva: WHO Essential Drugs and Medicines Policy Department and HAI. World Health Organization (WHO). 2004. Statistics by Country: Nepal. Available at http://www3.who.int/whosis/country/indicators. cfm?country=npl (accessed May 16, 2005). 52 Annexes Annex 1. Reproductive Health Medicines Tracer Commodities List Generic Name Dosage Form Dose Contraceptives Female Condom Condom Unit Male Condom Condom 52 mm Unit Implant (subdermal) Implant Rod Medroxyprogesterone Acetate Vial 150 mg IUD IUD Unit Combined OC Pill Ethinylestradiol+n orgestrel) Cap/tab .03/.3 mg Combined OC Pill Ethinylestradiol + levonorgestrel) Cap/tab .03/.15 mg OC Pill (Progestogen only) Levonorgestrel Cap/tab .03 mg OC Pill (Progestogen only) Norgestrel Cap/tab .075 mg Levonorgestrel Cap/tab .75 mg STIs and HIV/AIDS Nevirapine Cap/tab 200 mg Nevirapine Syrup 50 mg/5 ml Benzathine Benzylpenicillin Powder 2.4 MU Benzathine Benzylpenicillin Powder 1.2 MU Co-trimoxazole Cap/tab 400 mg/80 mg Co-trimoxazole Cap/tab 800/160 mg Doxycycline Cap/tab 100 mg Metronidazole Cap/tab 400 mg Metronidazole Bottle 500 mg/100 ml Ampicillin Vial 500 mg Ampicillin Vial 250 mg Prenatal Care Tetanus Toxoid Vaccine Vial .5 ml Ferrous Salt + Folic Acid Cap/tab 200–500 mg/2–5 mg (folic) (60–65 mg iron) Ferrous Salt + Folic Acid (additive) Cap/tab 200–500 mg/2–5 mg (folic) (60–65 mg iron) with zinc, vitamin C Ferrous Salt (Iron) Cap/tab 200–300 mg (60–65 mg Iron) Folic Acid Cap/tab 5 mg Sulfadoxine + Pyrimethamine Cap/tab 500 mg/25 mg 53 Nepal: Reproductive Health Commodity Pricing Survey Generic Name Dosage Form Dose Obstetrical/Neonatal Oxytocin Ampoule 5 IU/1 ml Ergometrine Injection .2 mg/1 ml Nifedipine Cap/tab 10 mg Methylergometrine Ampoule .2 mg/1 ml Magnesium Sulfate Injection 500 mg/8 ml 54 Annexes Annex 2. Medicine Price Data Collection Form Medicine Price Data Collection Form Health Facilities Use one form for each health facility and pharmacy. Date:_______________ Region:______________________________________ Name of town/village/district:_________________ urban/rural (circle one) Name of health facility/pharmacy (optional):__________________________ Health facility/pharmacy ID (mandatory):_____________________________ Distance in km from nearest town (population >50 000):________________ Type of health facility: Public Private retail pharmacy Other (please specify): Type of price in public and private not-for-profi t sector: Procurement price Price the patient pays Name of manager of the facility:_____________________________________ Name of person(s) who provided information on medicine prices and availability (if different):____________________________________________ Data collectors:___________________________________________________ Verifi cation (To be completed by the area supervisor at the end of the day): Signed:______________________________________________ Date:________________________________________________ 55 _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ Nepal: Reproductive Health Commodity Pricing Survey Pharmacy and Public Health Facility Qualitative Questions 1. What is your retail price margin (in percentage)? (In other words, what is the difference between the outlet’s buying price and its selling price to the client?) 2. What are the qualifi cations of the dispenser? 3. What is the ownership status of the facility? (applies to pharmacies) 56 Annexes A B C D E F G H I Generic Name, Dosage Form, Strength Brand Name(s) Manufacturer Available (tick for yes) Pack Size (recommended Pack Size (found) Price of Pack (found) Unit Price (4 digits) Comments Ampicillin 500 mg Vial (injection) Lowest-Priced Generic Equivalent 1 1 /vial /vial Ampicillin 250 mg Vial (injec tion) 1 /vial Lowest-Priced Generic Equivalent 1 /vial Benzathine Benzylpenicillin Powder 2.4 MU 1 /pck Powder for injection Lowest-Priced Generic Equivalent 1 /pck Benzathine Benzylpenicillin Powder 1.2 MU 1 /pck Lowest-Priced Generic Equivalent 1 /pck Combined OC Pill (E+L) Cap/Tab .03/.15 mg 1 /tab Ethinylestradiol + levonorgestrel Lowest-Priced Generic Equivalent 1 /tab Combined OC Pill (E+N) Cap/ Tab .03/.03 mg Lowest-Priced Generic Equivalent 1 1 /tab /tab Ethinylestradiol + norgestrel Condom (male) 52 mm 1 /pcs Lowest-Priced Generic Equivalent 1 /pcs Co-trimoxazole Cap/Tab 400/80 mg 1 /tab Lowest-Priced Generic Equivalent 1 /tab (continued) 57 Nepal: Reproductive Health Commodity Pricing Survey A B C D E F G H I Generic Name, Dosage Form, Strength Brand Manufacturer Available (tick for yes) Pack Size (recom mended Pack Size (found) Price of Pack (found) Unit Price (4 digits) Comments Co-trimoxazole Cap/Tab 800/160 mg Lowest-Priced Generic Equivalent Doxycycline Cap/Tab 100/mg Lowest-Priced Generic Equivalent 1 1 1 1 /tab /tab /tab /tab Ergometrine Ampule .2 mg/1 ml Lowest-Priced Generic Equivalent 1 1 /amp /amp Methylergomet rine Ampule .2 mg/1 ml Lowest-Priced Generic Equivalentt Female Condom 1 1 /amp /amp /pcs Likely will not ﬁ nd Lowest-Priced Generic Equivalent Ferrous Salt + Fo lic Acid 200–500 mg/2–5 mg (60–65 mg iron) Lowest-Priced Generic Equivalent 1 1 1 /pcs /cap /cap Iron = 60–65 mg Ferrous salt + Fo lic Acid 200–500 mg/2–5 mg (60–65 mg iron) (additive) Lowest-Priced Generic Equivalent 1 1 /cap /cap Includes additives, e.g., zinc, vitamin C Folic Acid 5 mg Lowest-Priced Generic Equivalent 1 1 /tab /tab (continued) 58 Annexes A B C D E F G H I Generic Name, Available Pack Size Pack Price Unit Dosage Form, Brand (tick (recom- Size of Pack Price Strength Name(s) Manufacturer for yes) mended (found) (found) (4 digits) Comments Implant (subder- Norplant 1 /set Public sector mal) Rod 36 mg carries 6 rod device Lowest-Priced 1 /set Generic Equivalent Iron 60 mg 1 /cap Lowest-Priced 1 /cap Generic Equivalent IUD 1 /pcs Public sector carries copper T380A Lowest-Priced 1 /pcs Generic Equivalent Levonorgestrel Postinor Gedeon 1 /tab Cap/Tab .75 mg Richter Lowest-Priced 1 /tab Generic Equivalent Magnesium 1 /vial Determine unit Sulfate Vial size; dosage 500 mg/8 ml form is 8 ml ampule Lowest-Priced 1 /vial Generic Equivalent Medroxyproges- Depo- Upjohn 1 /vial terone Acetate Provera 150 mg/ml Lowest-Priced 1 /vial Generic Equivalent Metronidazole 1 /bottle Sold as bottle Bottle 500 mg/100 ml Lowest-Priced 1 /vial Generic Equivalent Metronidazole 1 /tab Cap/Tab 400 mg Lowest-Priced 1 /tab Generic Equivalent (continued) 59 Nepal: Reproductive Health Commodity Pricing Survey A B C D E F G H I Generic Name, Available Pack Size Pack Price Unit Dosage Form, Brand (tick (recom- Size of Pack Price Strength Name(s) Manufacturer for yes) mended (found) (found) (4 digits) Comments Nevirapine Syrup Vira- Boehringer 1 /bottle Determine 10 mg/ml mune Ingelheim bottle size used in country; likely will not ﬁ nd Lowest-Priced 1 /bottle Generic Equivalent Nevirapine Cap/ Vira- Boehringer 1 /tab Likely will not Tab 200 mg mune Ingelheim ﬁ nd Lowest-Priced 1 /tab Generic Equivalent Nifedipine Cap/ 1 /tab Tab 10 mg Lowest-Priced 1 /tab Generic Equivalent OC Pill (Levo 1 /tab PoP norgestrel) Cap/ Tab .03 mg Lowest-Priced 1 /tab Generic Equivalent OC Pill (Noges 1 /tab PoP trel) Cap/Tab .075 mg Lowest-Priced 1 /tab Generic Equivalent Oxytocin Ampule 1 /amp 5 IU Lowest-Priced 1 /amp Generic Equivalent Sulfadoxine + Fansidar Roche 1 /cap Pyrimethamine Cap/Tab 500/25 mg Lowest-Priced 1 /cap Generic Equivalent Tetanus Toxoid 1 /vial Vaccine Vial .5 ml Lowest-Priced 1 /vial Generic Equivalent 60 Annexes Annex 3. Facilities Surveyed ID # Facility Type Region District Admin. Unit City/Village Sector 1 Procurement Central Kathmandu Kathmandu Kathmandu Public 51 Procurement Central Kathmandu Kathmandu Kathmandu Private 2 Procurement Central Kathmandu Kathmandu Kathmandu Private 3 Procurement Central Kathmandu Kathmandu Kathmandu Private 4 Procurement Central Kathmandu Kathmandu Kathmandu NGO 5 Procurement Central Kathmandu Kathmandu Kathmandu Private 54 Procurement Eastern Morang Biratnagar Biratnagar NGO 6 Hospital Central Kathmandu Kathmandu Kathmandu NGO 7 Pharmacy Central Kavre Kathmandu Kavre Private 8 Hospital Central Lalitpur Kathmandu Kathmandu NGO 9 Pharmacy Central Lalitpur Kathmandu Kathmandu Private 10 Pharmacy Central Bhaktapur/ Kavre Kathmandu Kathmandu Private 11 Hospital Central Bhaktapur Kathmandu Bhaktapur Public 12 Pharmacy Central Kavre Kathmandu Banepa Private 13 Health Post Central Kathmandu Kathmandu Thimi Public 14 Pharmacy Central Bhaktapur Kathmandu Bhaktapur Private 52 Pharmacy Central Kathmandu Kathmandu Thimi Private 15 Nursing Home Central Lalitpur Kathmandu Kathmandu Private 16 Hospital Western Kaski Pokhara Ramghat Private 17 Hospital Western Kaski Pokhara Pritivichock NGO 18 Hospital Western Danahu Pokhara Damauli NGO 19 Pharmacy Western Parbat Pokhara Kusma Private 20 Pharmacy Western Parbat Pokhara Kusma Private 21 Pharmacy Western Tanahu Pokhara Damauli Private 22 Pharmacy Western Kaski Pokhara Ramghat Private 23 NGO Western Kaski Pokhara Ramghat NGO 24 PHCC Western Kaski Pokhara Siswa Public 25 Hospital Western Kaski Pokhara Pokhara NGO 26 NGO Clinic Western Kaski Pokhara Upakar Marg NGO 28 Pharmacy Midwestern Bardia Nepalganj Magaragadi Private 29 Pharmacy Midwestern Bardia Nepalganj Bardia Private 30 NGO Midwestern Bardia Nepalganj Bardia NGO 31 Pharmacy Midwestern Bardia Nepalganj Bardia Private 62 Pharmacy Midwestern Banke Nepalganj Nepalganj Private 63 Pharmacy Midwestern Banke Nepalganj Nepalganj Private 64 Pharmacy Midwestern Banke Nepalganj Nepalganj Private 65 Pharmacy Midwestern Banke Nepalganj Nepalganj Private 66 Pharmacy Midwestern Bardia Nepalganj Magaragadi Private 67 Pharmacy Midwestern Bardia Nepalganj Magaragadi Private 68 PHCC Midwestern Bardia Nepalganj Magaragadi Public 69 NGO Midwestern Banke Nepalganj Kohlpur NGO (continued) 61 Nepal: Reproductive Health Commodity Pricing Survey Annex 3. Facilities Surveyed (cont’d) ID # Facility Type Region District Admin. Unit City/Village Sector 70 Pharmacy Midwestern Banke Nepalganj Kohlpur Private 71 Pharmacy Midwestern Banke Nepalganj Kohlpur Private 32 PHCC Midwestern Banke Nepalganj Nepalganj Public 33 Pharmacy Midwestern Banke Nepalganj Nepalganj Private 34 Hospital Midwestern Banke Nepalganj Nepalganj Public 35 Pharmacy Midwestern Banke Nepalganj Nepalganj Private 36 NGO Midwestern Banke Nepalganj Nepalganj NGO 38 Pharmacy Eastern Morang Biratnagar Biratnagar Private 39 Pharmcy Eastern Morang Biratnagar Rangeli Private 40 Pharmacy Eastern Morang Biratnagar Biratnagar Private 41 PHCC Eastern Morang Biratnagar Urlabari Public 42 Pharmacy Eastern Morang Biratnagar Biratnagar Private 43 Pharmcy Eastern Morang Biratnagar Rangeli Private 44 NGO Eastern Morang Biratnagar Biratnagar NGO 53 Pharmacy Eastern Sunsari Biratnagar Inaruwa Private 45 Pharmacy Eastern Sunsari Biratnagar Dharan Private 46 Pharmacy Eastern Solukhumbu Biratnagar Lukla Private 47 Pharmacy Eastern Sunsari Biratnagar Duhabi Private 48 Pharmacy Eastern Sunsari Biratnagar Dharan Private 49 Sub Health Post Eastern Solukhumbu Biratnagar Lukla Public 50 Hospital Eastern Solukhumbu Biratnagar Lukla NGO 55 Pharmacy Central Rasuwa Kathmandu Dhunche Private 56 Pharmcy Central Rasuwa Kathmandu Dhunche Private 57 Pharmacy Western Mustang Pokhara Marpha Private 58 NGO Western Mustang Pokhara Jomson NGO 59 Hospital Western Mustang Pokhara Jomson Public 60 Health Post Western Mustang Pokhara Marpha Public 61 Health Post Western Mustang Pokhara Jomson Public 72 Pharmacy Eastern Dhanakuta Biratnagar Hile Private 73 Pharmacy Eastern Dhanakuta Biratnagar Hulak tol Dhanakuta Private 74 Pharmacy Eastern Dhanakuta Biratnagar Hile Private 75 Pharmacy Eastern Dhanakuta Biratnagar Hile Private 76 NGO Eastern Dhanakuta Biratnagar Hulak tol Dhanakuta NGO 77 Hospital Eastern Dhanakuta Biratnagar Dhanakuta Public 78 PHC Central Parsa Kathmandu Pokhariya Public 79 Health Post Central Parsa Kathmandu Shirsiya Village Public 80 Health Post Central Bara Kathmandu Prasauni Public 81 Pharmacy Central Parsa Kathmandu Pokhariya Private 82 Pharmacy Central Bara Kathmandu Kalaiya Municipality Private (continued) 62 Annexes Annex 3. Facilities Surveyed (cont’d) ID # Facility Type Region District Admin. Unit City/Village Sector 83 Pharmacy Central Bara Kathmandu Kalaiya Municipality Private 84 Pharmacy Central Parsa Kathmandu Birganja Municipality Private 85 Pharmacy Central Bara Kathmandu Kalaiya Municipality Private 86 Sub-Health Post Western Rupandehi Pokhara C Ramnagar VDC Public 87 Sub-Health Post Western Rupandehi Pokhara Chhipagadh VDC Public 88 Pharmacy Western Rupandehi Pokhara Shankar Nagar Private 89 Pharmacy Western Rupandehi Pokhara Siddhartha Nagar Private 90 NGO Western Rupandehi Pokhara Siddhartha Nagar NGO 91 Hospital Western Rupandehi Pokhara Siddhartha Nagar Private 92 NGO Eastern Dhanakuta Biratnagar Dhanakuta NGO 93 Pharmacy Central Parsa Kathmandu Birgunj Private 94 Wholesaler Central Parsa Kathmandu Birgunj Private 95 Wholesaler Central Parsa Kathmandu Birgunj Private 96 Wholesaler Central Parsa Kathmandu Birgunj Private 97 Wholesaler Central Parsa Kathmandu Birgunj Private 63 Nepal: Reproductive Health Commodity Pricing Survey Annex 4. Comparison of Brand Prices by Region (private sector) Kama Sutra 14.00 12.008.00 7.00 10.00 6.00 8.00 R s. R s. R s. 5.00 4.00 R s. R s. R s. 6.00 3.00 4.00 2.00 2.001.00 0.00 0.00 Central Eastern Western Central Eastern Midwestern Western BettKama Sutra 36.001.40 35.00 1.20 34.00 1.00 33.00 32.000.80 0.60 30.00 39.001.40 28.00 0.20 27.00 0.00 26.00 Central Eastern Midwestern Western Central Eastern Midwestern Western Dhal D Methergin 2.002.50 1.95 2.00 1.90 1.50 1.85 31.00 1.801.00 1.75 0.50 1.70 0.00 1.65 Central Eastern Midwestern Western Central Eastern Midwestern Western Bactrim DS Folvite 64 Annexes Annex 4. Comparison of Brand Prices by Region (private sector) (cont’d) 2.2031.00 2.1030.50 2.0030.00 R s. R s. 29.00 1.80 28.50 1.70 28.00 1.60 Central Eastern Midwestern Western Central Eastern Midwestern Western Aristocillin Ferrofolic 35.00 30.00 35.00 25.00 30.00 25.0020.00 29.50 R s. R s. 1.90 20.00 15.00 15.00 10.00 10.00 5.00 0.00 Central Eastern Midwestern Western Central Eastern Midwestern Western Penidure 0.00 Metronidazole 9.00 8.80 8.60 8.40 8.20 8.00 7.80 7.60 R s. 30.00 25.00 20.00 15.00 10.00 5.00 0.00 R s. Central Eastern Midwestern Western Central Eastern Midwestern Western Sunaulo Gulaf Syntocinon 65 Nepal: Reproductive Health Commodity Pricing Survey Annex 5.1. Product Availability by Region and Sector (LPGs) Central (%) Ampicillin (250 mg) Public 0.0 Private 21.4 NGO 0.0 Average 7.1 Ampicillin (500 mg) 0.0 28.6 50.0 26.2 Benzathine Benzylpenicillin (1.2) 25.0 35.7 25.0 28.6 Benzathine Benzylpenicillin (2.4) 0.0 21.4 25.0 15.5 Female Condom 0.0 0.0 0.0 0.0 Male Condom 75.0 92.9 75.0 81.0 Co-trimoxazole 400/80 75.0 42.9 75.0 64.3 Co-trimoxazole 800/160 0.0 85.7 50.0 45.2 Doxycycline 50.0 100.0 100.0 83.3 Ergometrine Injection 0.0 0.0 0.0 0.0 Ferrous Salt + Folic Acid 0.0 35.7 25.0 20.2 Ferrous Salt + Folic Acid (additive) 0.0 14.3 50.0 21.4 Folic Acid 0.0 71.4 0.0 23.8 Implant (subdermal) 50.0 0.0 75.0 41.7 Iron 0.0 0.0 0.0 0.0 IUD 50.0 0.0 0.0 16.7 Levonorgestrel 0.0 0.0 0.0 0.0 Magnesium Sulfate 0.0 0.0 0.0 0.0 Medroxyprogesterone Acetate 75.0 35.7 0.0 36.9 Methylergometrine 25.0 64.3 0.0 29.8 Metronidazole Bottle 0.0 78.6 75.0 51.2 Metronidazole Tablets 75.0 100.0 100.0 91.7 Nevirapine Syrup 100ml Bottle 0.0 0.0 0.0 0.0 Nevirapine Tablets 0.0 14.3 0.0 4.8 Nifedipine 0.0 42.9 25.0 22.6 OC Pill (E+L) 25.0 92.9 50.0 56.0 OC Pill (E+N) 50.0 78.6 50.0 59.5 OC Pill (Levonorgestrel) 25.0 28.6 25.0 26.2 OC Pill (Nogestrel) 0.0 7.1 0.0 2.4 Oxytocin 0.0 64.3 50.0 38.1 Sulphadoxine/Pyrimethamine 0.0 14.3 25.0 13.1 Tetanus Toxoid Vaccine 50.0 71.4 25.0 48.8 66 Annexes Annex 5.2. Product Availability by Region and Sector (LPGs) Eastern (%) Ampicillin (250 mg) Public 33.3 Private 50.0 NGO 0.0 Average 27.8 Ampicillin (500 mg) 0.0 57.1 33.3 30.2 Benzathine Benzylpenicillin (1.2) 33.3 78.6 33.3 48.4 Benzathine Benzylpenicillin (2.4) 0.0 14.3 0.0 4.8 Female Condom 0.0 0.0 0.0 0.0 Male Condom 100.0 92.9 66.7 86.5 Co-trimoxazole 400/80 66.7 71.4 0.0 46.0 Co-trimoxazole 800/160 33.3 71.4 33.3 46.0 Doxycycline 66.7 92.9 33.3 64.3 Ergometrine Injection 0.0 7.1 0.0 2.4 Ferrous Salt + Folic Acid 0.0 85.7 66.7 50.8 Ferrous Salt + Folic Acid (additive) 0.0 0.0 0.0 0.0 Folic Acid 0.0 78.6 33.3 37.3 Implant (subdermal) 50.0 0.0 0.0 16.7 Iron 0.0 7.1 0.0 2.4 IUD 50.0 0.0 0.0 16.7 Levonorgestrel 0.0 0.0 0.0 0.0 Magnesium Sulfate 0.0 0.0 0.0 0.0 Medroxyprogesterone Acetate 100.0 35.7 0.0 45.2 Methylergometrine 33.3 71.4 33.3 46.0 Metronidazole Bottle 66.7 71.4 0.0 46.0 Metronidazole Tablets 33.3 100.0 66.7 66.7 Nevirapine syrup 100 ml Bottle 0.0 0.0 0.0 0.0 Nevirapine Tablets 0.0 0.0 0.0 0.0 Nifedipine 0.0 71.4 0.0 23.8 OC Pill (E+L) 33.3 78.6 33.3 48.4 OC Pill (E+N) 66.7 78.6 33.3 59.5 OC Pill (Levonorgestrel) 33.3 0.0 0.0 11.1 OC Pill (Nogestrel) 0.0 0.0 0.0 0.0 Oxytocin 33.3 92.9 33.3 53.2 Sulphadoxine/Pyrimethamine 0.0 50.0 33.3 27.8 Tetanus Toxoid Vaccine 50.0 92.9 33.3 58.7 67 Nepal: Reproductive Health Commodity Pricing Survey Annex 5.3. Product Availability by Region and Sector (LPGs) Midwestern (%) Ampicillin (250 mg) Public 0.0 Private 26.7 NGO 33.3 Average 20.0 Ampicillin (500 mg) 0.0 60.0 66.7 42.2 Benzathine Benzylpenicillin (1.2) 0.0 53.3 33.3 28.9 Benzathine Benzylpenicillin (2.4) 0.0 13.3 0.0 4.4 Female Condom 0.0 0.0 0.0 0.0 Male Condom 66.7 93.3 100.0 86.7 Co-trimoxazole 400/80 100.0 40.0 33.3 57.8 Co-trimoxazole 800/160 0.0 93.3 66.7 53.3 Doxycycline 50.0 73.3 66.7 63.3 Ergometrine Injection 0.0 0.0 0.0 0.0 Ferrous Salt + Folic Acid 0.0 33.3 66.7 33.3 Ferrous Salt + Folic Acid (additive) 0.0 40.0 33.3 24.4 Folic Acid 0.0 66.7 33.3 33.3 Implant (subdermal) 66.7 0.0 33.3 33.3 Iron 0.0 0.0 0.0 0.0 IUD 100.0 0.0 33.3 44.4 Levonorgestrel 0.0 0.0 0.0 0.0 Magnesium Sulfate 0.0 0.0 0.0 0.0 Medroxyprogesterone Acetate 66.7 13.3 33.3 37.8 Methylergometrine 50.0 60.0 33.3 47.8 Metronidazole Bottle 0.0 73.3 33.3 35.6 Metronidazole Tablets 50.0 86.7 66.7 67.8 Nevirapine Syrup 100 ml Bottle 0.0 0.0 0.0 0.0 Nevirapine tablets 0.0 0.0 0.0 0.0 Nifedipine 0.0 53.3 66.7 40.0 OC Pill (E+L) 0.0 80.0 33.3 37.8 OC Pill (E+N) 66.7 73.3 66.7 68.9 OC Pill (Levonorgestrel) 0.0 6.7 0.0 2.2 OC Pill (Nogestrel) 0.0 0.0 0.0 0.0 Oxytocin 50.0 80.0 66.7 65.6 Sulphadoxine/Pyrimethamine 0.0 26.7 33.3 20.0 Tetanus Toxoid Vaccine 33.3 66.7 100.0 66.7 68 Annexes Annex 5.4. Product Availability by Region and Sector (LPGs) Western (%) Ampicillin (250 mg) Public 0.0 Private 55.6 NGO 14.3 Average 23.3 Ampicillin (500 mg) 0.0 66.7 42.9 36.5 Benzathine Benzylpenicillin (1.2) 0.0 66.7 42.9 36.5 Benzathine Benzylpenicillin (2.4) 0.0 0.0 0.0 0.0 Female Condom 0.0 0.0 0.0 0.0 Male Condom 83.3 88.9 71.4 81.2 Co-trimoxazole 400/80 50.0 33.3 28.6 37.3 Co-trimoxazole 800/160 16.7 88.9 71.4 59.0 Doxycycline 33.3 88.9 100.0 74.1 Ergometrine Injection 0.0 0.0 0.0 0.0 Ferrous Salt + Folic Acid 0.0 22.2 0.0 7.4 Ferrous Salt + Folic Acid (additive) 0.0 77.8 42.9 40.2 Folic Acid 0.0 66.7 57.1 41.3 Implant (subdermal) 33.3 0.0 42.9 25.4 Iron 0.0 0.0 14.3 4.8 IUD 33.3 0.0 0.0 11.1 Levonorgestrel 0.0 0.0 14.3 4.8 Magnesium Sulfate 0.0 0.0 14.3 4.8 Medroxyprogesterone Acetate 100.0 22.2 28.6 50.3 Methylergometrine 0.0 66.7 57.1 41.3 Metronidazole Bottle 0.0 55.6 85.7 47.1 Metronidazole Tablets 33.3 100.0 100.0 77.8 Nevirapine Syrup 100 ml Bottle 0.0 0.0 0.0 0.0 Nevirapine Tablets 0.0 11.1 14.3 8.5 Nifedipine 0.0 44.4 42.9 29.1 OC Pill (E+L) 16.7 22.2 42.9 27.2 OC Pill (E+N) 83.3 77.8 71.4 77.5 OC Pill (Levonorgestrel) 0.0 55.6 28.6 28.0 OC Pill (Nogestrel) 0.0 0.0 0.0 0.0 Oxytocin 16.7 66.7 71.4 51.6 Sulphadoxine/Pyrimethamine 0.0 11.1 42.9 18.0 Tetanus Toxoid Vaccine 33.3 55.6 57.1 48.7 69 Nepal: Reproductive Health Commodity Pricing Survey Annex 6.1. Product Availability by Topography and Sector (LPGs) Mountain (%) Drug Name Public (n = 4) Private (n = 4) NGO (n = 2) Mean Ampicillin (250 mg) 0.0 0.0 0.0 0.0 Ampicillin (500 mg) 0.0 25.0 0.0 8.3 Benzathine Benzylpenicillin (1.2) 0.0 25.0 0.0 8.3 Benzathine Benzylpenicillin (2.4) 0.0 25.0 0.0 8.3 Female Condom 0.0 0.0 0.0 0.0 Male Condom 100.0 75.0 50.0 75.0 Co-trimoxazole 400/80 75.0 25.0 0.0 33.3 Co-trimoxazole 800/160 0.0 50.0 50.0 33.3 Doxycycline 75.0 75.0 50.0 66.7 Ergometrine Injection 0.0 0.0 0.0 0.0 Ferrous Salt + Folic Acid 50.0 25.0 0.0 25.0 Ferrous Salt + Folic Acid (additive) 0.0 0.0 0.0 0.0 Folic Acid 0.0 0.0 50.0 16.7 Implant (subdermal) 25.0 0.0 0.0 8.3 Iron 0.0 25.0 0.0 8.3 IUD 50.0 0.0 0.0 16.7 Levonorgestrel 0.0 0.0 0.0 0.0 Magnesium Sulfate 0.0 0.0 0.0 0.0 Medroxyprogesterone Acetate 100.0 0.0 0.0 33.3 Methylergometrine 25.0 50.0 50.0 41.7 Metronidazole Bottle 50.0 100.0 50.0 66.7 Metronidazole Tablets 75.0 100.0 50.0 75.0 Nevirapine syrup 100ml Bottle 0.0 0.0 0.0 0.0 Nevirapine tablets 0.0 0.0 0.0 0.0 Nifedipine 0.0 25.0 50.0 25.0 OC Pill (E+N) 100.0 50.0 0.0 50.0 Oxytocin 75.0 75.0 0.0 50.0 Sulphadoxine/Pyrimethamine 0.0 0.0 0.0 0.0 Tetanus Toxoid Vaccine 25.0 25.0 0.0 16.7 Average 28.4 26.7 13.8 23.0 70 Annexes Annex 6.2. Product Availability by Topography and Sector (LPGs) Hill (%) Drug Name Public (n = 4) Private (n = 4) NGO (n = 2) Mean Ampicillin (250 mg) 0.0 31.3 10.0 13.8 Ampicillin (500 mg) 0.0 50.0 60.0 36.7 Benzathine Benzylpenicillin (1.2) 33.3 50.0 30.0 37.8 Benzathine Benzylpenicillin (2.4) 0.0 18.8 10.0 9.6 Female Condom 0.0 6.3 0.0 2.1 Male Condom 66.7 93.8 70.0 76.8 Co-trimoxazole 400/80 100.0 56.3 40.0 65.4 Co-trimoxazole 800/160 33.3 81.3 50.0 54.9 Doxycycline 100.0 93.8 90.0 94.6 Ergometrine Injection 0.0 0.0 0.0 0.0 Ferrous Salt + Folic Acid 33.3 25.0 20.0 26.1 Ferrous Salt + Folic Acid (additive) 0.0 43.8 40.0 27.9 Folic Acid 0.0 68.8 30.0 32.9 Implant (subdermal) 66.7 0.0 60.0 42.2 Iron 0.0 0.0 10.0 3.3 IUD 66.7 0.0 0.0 22.2 Levonorgestrel 0.0 0.0 10.0 3.3 Magnesium Sulfate 0.0 0.0 10.0 3.3 Medroxyprogesterone Acetate 100.0 37.5 20.0 52.5 Methylergometrine 33.3 56.3 30.0 39.9 Metronidazole Bottle 33.3 56.3 70.0 53.2 Metronidazole Tablets 33.3 100.0 100.0 77.8 Nevirapine Syrup 100ml Bottle 0.0 0.0 0.0 0.0 Nevirapine Tablets 0.0 0.0 10.0 3.3 Nifedipine 0.0 50.0 10.0 20.0 OC Pill (E+N) 66.7 81.3 60.0 69.3 Oxytocin 33.3 62.5 70.0 55.3 Sulphadoxine/Pyrimethamine 0.0 18.8 50.0 22.9 Tetanus Toxoid Vaccine 66.7 87.5 50.0 68.1 Average 29.9 40.3 34.8 35.0 71 Nepal: Reproductive Health Commodity Pricing Survey Annex 6.3. Product Availability by Topography and Sector (LPGs) Terai (%) Drug Name Public (n = 4) Private (n = 4) NGO (n = 2) Mean Ampicillin (250 mg) 12.5 40.0 33.3 28.6 Ampicillin (500 mg) 0.0 53.3 50.0 34.4 Benzathine Benzylpenicillin (1.2) 12.5 63.3 66.7 47.5 Benzathine Benzylpenicillin (2.4) 0.0 6.7 0.0 2.2 Female Condom 0.0 0.0 0.0 0.0 Male Condom 87.5 93.3 83.3 88.1 Co-trimoxazole 400/80 87.5 43.3 50.0 60.3 Co-trimoxazole 800/160 12.5 90.0 83.3 61.9 Doxycycline 37.5 90.0 83.3 70.3 Ergometrine Injection 0.0 0.0 16.7 5.6 Ferrous Salt + Folic Acid 87.5 60.0 66.7 71.4 Ferrous Salt + Folic Acid (additive) 0.0 23.3 33.3 18.9 Folic Acid 0.0 80.0 50.0 43.3 Implant (subdermal) 37.5 0.0 16.7 18.1 Iron 0.0 0.0 0.0 0.0 IUD 50.0 0.0 16.7 22.2 Levonorgestrel 0.0 0.0 0.0 0.0 Magnesium Sulfate 0.0 0.0 0.0 0.0 Medroxyprogesterone Acetate 75.0 26.7 16.7 39.4 Methylergometrine 50.0 70.0 50.0 56.7 Metronidazole Bottle 12.5 76.7 50.0 46.4 Metronidazole Tablets 75.0 93.3 83.3 83.9 Nevirapine Syrup 100ml Bottle 0.0 0.0 0.0 0.0 Nevirapine Tablets 0.0 10.0 0.0 3.3 Nifedipine 0.0 56.7 83.3 46.7 OC Pill (E+N) 75.0 76.7 66.7 72.8 Oxytocin 50.0 86.7 66.7 67.8 Sulphadoxine/Pyrimethamine 0.0 33.3 16.7 16.7 Tetanus Toxoid Vaccine 37.5 73.3 83.3 64.7 Average 27.6 43.0 40.2 36.9 72 For more information, please visit http://www.deliver.jsi.com DELIVER John Snow, Inc. 1616 N. Fort Myer Drive 11th Floor Arlington, Va 22209 USA tel: 703-528-7474 fax: 703-528-7480 deliver.jsi.com
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