Survey on Prices of Medicines in Ethiopia

Publication date: 2005

SSUURRVVEEYY OONN PPRRIICCEESS OOFF MMEEDDIICCIINNEESS IINN EETTHHIIOOPPIIAA OOccttoobbeerr,, 22000055 AAddddiiss AAbbaabbaa,, EEtthhiiooppiiaa Federal Democratic Republic of Ethiopia Ministry of Health World Health Organization i TABLE OF CONTENTS Page Acknowledgements iii Acronyms v List of Figures vi List of Tables vii EXECUTIVE SUMMARY 1 1. INTRODUCTION 5 1.1 Geographical and socio-demographic and data 5 1. 2 The Health Sector 5 1.3 The Pharmaceutical Sector 5 2. OVER ALL CONTEXT OF THE STUDY 8 2.1 Problem statement 8 2.2 Objectives 8 2.3 Methodology 8 2.3.1 Sampling 9 2.3.2 Data collection and management 9 2.3.3 Limitations of the study 10 3. FINDINGS AND ANALYSIS 11 3.1 Within sector price and availability comparison 11 3.1.1 Medicine procurement price 11 3.1.2 Medicines availability and patient prices in medicine retail out lets 12 3.1.2.1 Public health facilities 12 a) Comparison of medicines availability across medicine types 12 b) Patient price comparison across medicine types 12 3.1.2.2 Private pharmacies 13 a) Comparison of medicines availability across medicine types 13 b) Patient price comparisons across medicine types 14 3.1.2.3 SP/ERCS medicine retail out lets 14 a) Comparison of medicine availability across medicine types 14 b) Patient price comparison across medicine types 15 ii Page 3.2 Cross sector price and availability comparisons 15 3.2.1 Comparison of individual medicine availability and price across sectors 15 3.2.1.1 Comparison of individual medicines availability 15 3.2.1.2 Comparison of individual medicines prices 16 3.2.2 Comparison of over all medicine availability and price levels across sectors 19 3.2.2.1 Comparison of over all medicines availability 19 3.2.2.2 Comparison of over all medicines prices 21 3.3 Treatment affordability 22 3.4 Price composition 26 3.4.1 Cumulative mark-up by sector and product type 26 3.4.2 Components of prices 27 4. International comparison of prices and treatment affordability 30 4.1 Comparison of price 30 4.1.1 Comparison of sector median prices of core medicines 30 4.1.2 Comparison of median prices of individual core medicines 31 4.2 Comparison of treatment affordability 33 5. DISCUSSION 34 6. CONCLUSION AND RECOMMENDATIONS 36 6.1 Conclusion 36 6.2 Recommendations 37 REFERENCES 38 ANNEXES 39 Annex I Administrative regions of Ethiopia 39 Annex II List of medicines included in the survey 40 Annex III List of facilities and outlets sampled 42 Annex IV National pharmaceutical sector form 44 Annex V Medicines prices collection form 50 iii ACKNOWLEDGMENTS The study on the prices of medicines in Ethiopia was commissioned by the Federal Ministry of Health and conducted with the technical and financial assistance of the World Health Organization (WHO). The overall activity of the study was centrally coordinated by Mr Abiyu Faris from the Pharmaceuticals Administration and Supplies Service (PASS) of the Ministry of Health and Mr Bekele Tefera, National Professional Officer (NPO) for Essential Drugs and Medicines policy (EDM) program of WHO Ethiopia. The draft report of the study was written by Mr Bekele Tefera, NPO/EDM of WHO Ethiopia with inputs from Mr Abiyu Faris and Mr Martin Auton (WHO consultant, South Africa). The report was reviewed by a consensus building work shop conducted on 24 June 2005 G.C. This final report, also prepared by Mr Bekele Tefera (NPO/EDM), has incorporated the comments and suggestions given by the work shop participants and other contributors. We would like to thank Mr Alemayehu Lemma, head of PASS, Ministry of Health for facilitating the study on behalf of the Federal Ministry of Health. Our gratitude also goes to Dr Olusegun Babaniyi, Who Representative to Ethiopia, Dr Gilles Forte (Coordinator of DAP/WHO/HQ) and Mr Abayneh Tamir Desta (EDM/AFRO) for their support and guidance. We gratefully acknowledge the contribution of Mr Martin Auton for reviewing and commenting on all the draft reports of the study. Special thanks go to the following pharmacists and medical doctors who served as data collectors: Mrs Azeb Fisseha (Pharmacist, Tigray), Dr. Tedros Hailu (Mediccal Doctor, Tigray), Mr Lee Soo-Gye (Pharmacist, Amhara), Mr Solomon Abera (Pharmacist, Oromiya), Dr. Taye Tolera (Medical Doctor, Oromiya), Mr Zelalem Petros (Pharmacist, SNNPR) and Dr. Habtamu Assefa (Medical Doctor, SNNPR). Many thanks go to the following professionals who served as field supervisors in each survey region: Mr Mulu Legesse (Pharmacist, Tigray), Mr Tesfaye Godana (Pharmacist, Amhara), Mr Abdul Melik Ebro (Pharmacist, Oromiya) and Mr Mulugeta Asfaw (Pharmacist, SNNPR). We would like to acknowledge with gratitude the contribution of all people who participated in the work shop representing the following institutions and associations: · Disease prevention and Control Department, Federal Ministry of Health · Pharmaceuticals Administration and Supplies Service(PASS) of the Federal ministry of Health · Drug Administration and Control Authority of Ethiopia · Health service and training Department as well as Pharmacy Teams of all Regional Health Bureaus which participated in the work shop · Pharmaceuticals and Medical Supplies Import and Whole sale Share Company (PHARMID) · Essential Drug Program of the Ethiopian Red Cross Society iv · Ethiopian Pharmaceuticals Manufacturers’ Association · Almeta private import and distribution company · Ageca Ethiopia private import and distribution company · Ethiopian Chamber of Commerce · School of Pharmacy, Addis Ababa University · Ethiopian Pharmacy Association Our gratitude is due to the Pharmaceuticals and Medical Supplies Import and Whole Sale Distribution Share Company (PHARMID), the Ethiopian Red Cross Society (ERCS) essential drug program, all private import and distribution companies and the staff of all Public hea lth facilities, Private pharmacies, Special Pharmacies and ERCS pharmacies, for their time and effort for providing the necessary information. Lastly, we would like to extend our sincere thanks to Dr Tefera Wonde (Policy advisor/WHO Ethiopia) and Dr Sam Muzuki (medical officer/ WHO Ethiopia) who proof-read some parts of the report of the study as well as all those who assisted in one way or another to make the study a success. v ACRONYMS CIF Cost Insurance and Freight DACA Drug Administration and Control Authority E.C. Ethiopian calendar EDL Essential Drugs List EDM Essential Drugs and Medicines policy EFV Efavirenz ERCS Ethiopian Red Cross Society FOB Free On Board G.C. Gregorian Calendar GDP Gross Domestic Product HAI Health Action International IRP International Reference Price LPG Lowest Price Generics LIDE List of Drugs for Ethiopia MOH Ministry of Health MPR Median Price Ratio MSH Management Science for Health MSG Most Sold Generics MUP Manufacturers Unit Price NGO Non Governmental Organization NPO National professional Officer PASS Pharmaceuticals Administration and Supplies Service SMUP Sector Median Unit Price SNNPR Southern Nations, Nationalities and Peoples Region SP Special Pharmacy 3TC Lamivudine USD United States Dollar WHO World Health Organization ZDV Zidovudine (also known as AZT) vi LIST OF FIGURES Page Figure 1 MPRs of six medicines in the private pharmacies by medicine type 16 Figure 2 Median of median percent availability of medicines across sectors 19 Figure 3 Distribution of 26 medicines sought across sectors by product type 20 Figure 4 Comparison of over median MPRS of the three sectors 22 Figure 5 Cost of treatment of a combination of ARI, asthma, hypertension and diabetes mellitus in a family using LPGs 23 Figure 6 Cumulative mark-up of Sector Median Unit Price of LPG over Manufacturer’s Unit Price (CIF/FOB) 26 Figure 7 Proportions of cumulative mark up on the CIF price of LPG cotrimoxazole paediatric Suspension in public health facilities 27 Figure 8 Components of the final price of LPG cotrimoxazole paed. Suspension in the public health facilities 28 Figure 9 Variation of prices of LPG in different sectors and countries 30 Figure 10 Variation of the prices of IB and LPG in private pharmacies 31 Figure 11 Variation of the price of IB in private pharmacies 32 vii LIST OF TABLES Page Table 1 Summary of median of MPRs of three types of medicines in public procurement agencies 11 Table 2 Summary of the median of median percent availability of three types of medicines in the public health facilities 12 Table 3 Summary of the median MPRs of three types of medicines in the public health facilities 12 Table 4 Summary of the median of median percent availability of three types of medicines in the private pharmacies 13 Table 5 Summary of the median of MPRs of three types of medicines in the private pharmacies 14 Table 6 Summary of the median of median percent availability of three types of medicines in SP/ERCS medicines outlets 14 Table 7 Summary of the median MPRs of three types of medicines in SP/ERCS medicine out lets 15 Table 8 Median percent availability of some commonly used medicines in three sectors 17 Table 9 Median MPRs of some commonly used medicines in three sectors 18 Table 10 Summary of the median of median percent availability of medicines in the four sectors 19 Table 11 Comparison of median MPRs of procurement with median MPRs of the other three retail sectors 21 Table 12 Comparison of median MPRs of the three retail sectors 21 Table 13 Summary of median MPR of medicines across sectors by medicine types 22 Table 14 Cost of treatment of some common diseases 25 Table 15 Example of percent cumulative mark-up by sector 26 Table 16 Example of components of prices to patients in public health facilities 29 Table 17 International comparison of median MPRs of core medicines 30 viii Page Table 18 International comparison of median MPRs of IB core medicines in private pharmacies 31 Table 19 International comparison of the median MPR of LPG core medicines in private pharmacies 32 Table 20 International comparison of affordability (number of day’ wage required) in private pharmacies (IB) 33 Table 21 International comparison of affordability (number of days’ wage required) in private pharmacies (LPG) 33 1 EXECUTIVE SUMMARY Introduction The study on the prices of medicines in Ethiopia was jointly conducted by the Pharmaceuticals Administration and Supplies Service (PASS) of the Federal Ministry of Health and the World Health Organization (WHO) from 15 September to 15 October 2004. The survey was carried out in four regions of the country: Tigray, Amhara, Oromia and Southern Nations, Nationalities and Peoples Region (SNNPR) as well as in the capital city, Addis Ababa. The fieldwork was based on standardized international methodology jointly developed by WHO and Health Action International (HAI). The main objective of the study was to find out the price and availability of selected medicines as well as affordability of cost of treating common diseases to low- income people in Ethiopia and recommend appropriate policy actions for improvement. Data on prices and availability of 26 selected medicines were collected from 2 government procurement agencies, 25 private pharmacies, 34 medicine outlets in public health facilities and 28 other medicine out lets which included revolving drug fund pharmacies called ‘ Special pharmacy’ and pharmacies owned by the Ethiopian Red Cross Society (ERCS). These two types of revolving drug fund medicine out lets were considered as a group. Price and availability data were subjected to within sector and cross sector comparisons. The price data were also compared with International Reference Prices (IRPs), which are the medians of procurement prices offered by not -for-profit suppliers in 2003 to developing countries for multi source generically equivalent products, and compiled by Management Science for Health (MSH). In order to assess affordability of cost of treatment of common disease conditions to low- income people, the costs of treating 6 common disease conditions were calculated and compared with the daily wage of the lowest paid government worker (Birr 6.70 or US$ 0.80 per day). In addition, the com ponents of prices of medicines were identified to determine cost factors, which contribute to the final cost of medicines that a patient pays. Availability The results show that availability of medicines in public health facilities was lower than in the private pharmacies but comparable to the availability in special pharmacies /ERCS medicine outlets. Availability of all types of medicines also varied widely between medicine outlets surveyed in all sectors. For example, the median availability of lowest price generics was 76.5 %, 96 % and 78.6 % in the public health facilities, private pharmacies and special pharmacies /ERCS medicine outlets, respectively. In contrast, median availability of most sold generics was 29.4 %, 68 % and 37.5 % in the public health facilities, private pharmacies and special pharmacies /ERCS retail outlets, respectively. 2 Innovator brand products were not available in public health facilities and were hardly available in special pharmac ies/ERCs medicine outlets. They were not also available in the government procurement agencies since they purchase drugs using generic names. This shows that the generic policy is effectively implemented in the public sector. In general, lowest price generic products had better availability than the other types of medicines. For example, availability of lowest price generics was 3, 2 and 1.4 times the availability of most sold generic equivalent products in public health facilities, special pharmacies /ERCS retail outlets and private pharmacies, respectively. Investigation of the availability of 10 commonly used medicines revealed that availability of all the 10 medicines in public health facilities was inadequate (i.e. below 75 %). The availability of these medicines in special pharmacies /ERCS retail outlets also showed similar trend. Due to the government policy on the distribution of Anti Retroviral drugs, they were available only in ERCS medicine outlets. The low availability of medicines in the public health facilities and special pharmacies/ ERCS medicine retail outlets indicates that patients will be forced to purchase medicines at higher prices in the private pharmacies or go to informal sector or forgo treatment. Price Public procurement prices for most sold and lowest price generic products in Ethiopia were lower than the international reference prices by 29 % and 39 %, respectively. This shows that procurement agencies in Ethiopia are purchasing medicines at internationally competitive prices. Comparison with other African countries has also shown that Ethiopia has a relatively cheaper generic patient prices and procurement prices. In general, prices of medicines were lowest in public health facilities and highest in private pharmacies. Prices in special pharmacies/ERCS retail outlets were in between that of the two sectors. For example, Patient charges in the private pharmacies for the most sold and lowest price generic products were 69.2 % and 67.2 %, respectively above patient charges in public health facilities. Patient charges in the private pharmacies for most sold and lowest price generic products were 29.6 % and 27.1 %, respectively above patient charges in Special pharmacies/ERCS retail out lets. In Special pharmacies/ERCS retail out lets, patient charges for most sold and lowest price generic products were 15.9 % and 26.2 %, respectively above patient charges in public health facilities. Innovator brand products generally had higher prices than their generic equivalents. For example, innovator brand products in the private pharmacies were 5.9 times as expensive as the most sold and 5.7 times as expensive as the lowest price generic equivalents. However, comparison with other African countries has shown that innovator brand products have a relatively cheaper price in Ethiopia but wider price variation. 3 Prices of most sold generics tend to be slightly higher than that of lowest price generic equivalents. But, the differences were not marked. When compared with International Reference Prices, the prices of generic products in public health facilities and special pharmacies/ERCS medicine outlets were quite good. But the prices in the private pharmacies were relatively high. For example, the median prices of lowest price generic equivalents in public health facilities, private pharmacies and Special pharmacies/ERCS retail outlets were 35 %, 125 % and 70% above the international reference prices, respectively. However, when prices of individual medicines are considered, it was observed that median prices of generic products were as low as nearly half of their international prices (e.g. MPR of tetracycline in public health facilities = 0.61) and as high as 50 times their international reference price (e.g. MPR of cotrimoxazole = 49.44). It was also noticed that from among all generics sold in the public health facilities, metronidazole capsule, which is a locally manufactured product, had the highest median price ratio (MPR=3), i.e. its median price was nearly 3 times its international reference price. Affordability Cost of treatment of diseases varied between innovator brand products and their generically equivalent products as well as between sectors. In order to purchase a course of innovator brand Amoxicillin from private pharmacies to treat pneumonia, a lowest paid government worker would need to work for 4.10 days. To purchase the lowest price generically equivalent products of the same medicine from public health facilities, private pharmacies and special pharmacies/ERCS retail outlets, he/she would need to work for 0.70, 0.90, and 0.80 days, respectively. For a one -month course of glibenclamide to treat diabetes mellitus , a lowest paid government worker would need to pay his/her 10.3 days' wages for an innovator brand product in private pharmacies. But, purchasing the generically equivalent products from public health facilities, private pharmacies and special pharmacies /ERCS retail outlets would require only his/her 0.80, 0.90 and 1. 2 days' wages, respectively. Suppose we have an asthmatic child with Acute Respiratory Infection (ARI), an adult with diabetes mellitus and another adult with hypertension in a family. The breadwinner, who is a lowest paid government worker, will have to work nearly for 3, 4.6 and 4.6 days to purchase the necessary lowest price generic versions from public health facilities, special pharmacies/ERCS medicine outlets and private pharmacies , respectively. To purchase one-month triple combination of Anti Retro Viral generic old regimen [(ZDV+3TC) + EFV], a lowest paid government worker would need to work for 3.5 months. Previous studies * indicate that around 44 % and 81 % of the Ethiopian population earn less than US$ 1 and US$ 2 per day, respectively. It is also reported that only 3.6 % of the total household income is spent on medical care, transport, communication, education, recreation and entertainment. * Please see reference number 9, 10 and 11 4 Given the above low-income level and extremely small proportion of house hold income spent on medical care, it seems that cost of treatment of diseases is unaffordable to the majority of the Ethiopian people. Comparison of affordability of cost of treatment in private pharmacies of Ethiopia w ith that of other African countries has also shown that cost of treatment in Ethiopia is less affordable despite lower median prices in Ethiopia. This may be due to the low income level in Ethiopia. Price composition The major contributors to the total cost of medicines to patients were retail mark-ups followed by wholesale mark-ups. There is no ceiling set by law on the wholesale and retail mark-ups in all sectors. However, through interviews and observations during data collection, it was noted that wholesale mark-ups in general range from 20% - 40% of the landed costs of imported products and 5 % -10% of the ex-factory prices of locally manufactured products. Retail mark-ups range from 20 % - 30 %, depending on the type of the sector. But the rates in the private sector are unpredictable. Conclusion and recommendations The survey has provided key information that can be used for future planning and policy actions. In order to minimize shortcomings or weaknesses identified in this study, the following recommendations are forwarded: · Investigate the cause of low availability of medicines in the public health facilities and special pharmacies/ERCS medicine retail outlets. · Uphold /maintain the generic policy implementation in the procurement of medicines. · Undertake in-depth study on pricing system in public health facilities to find out the reasons for variations in price levels of medicines. · Develop a pricing policy which contain aspects of price control and incentives to reduce prices · Introduce different financing options such as community revolving drug schemes and health insurance schemes; · Introduce /revise exemptions or differential fee system to ensure access by the poorest; · Conduct regular education programs on the essential drugs concept and rational drug use to health personnel and the public in order not to lose the gains from effective generic policy implementation in the public sector. 5 1. INTRODUCTION 1.1. Geographical and Socio-demographic Data Ethiopia is located in Eastern part of Africa, which is commonly known as the horn of Africa between 3 and 15 degrees North latitude and 33 and 48 degrees East longitude. Administratively, the country is divided into nine National Regional States (Tigray, Afar, Amhara, Oromiya, SNNPR, Benishangul-Gumuz, Gambella, Somali and Harari) and two Administrative States (Addis Ababa City administration and Dire Dawa council). [Annex I]. It had a population of approximately 71.1 million in 1996 E.C. (2003/04 G.C.)*. The GDP at current market prices in the same year was USD 69.2 billion. (1) 1.2. The Health Sector The health service delivery system in Ethiopia is guided by a National Health Policy issued in September 1993 G.C. (2) The Ministry of Health is the major provider of Health Care followed by the private sector, Non-Governmental Organizations (NGOs) and other governmental organizations. Each of the states or regions listed above has a health bureau, which is responsible for the overall management of health service delivery in the state or region. The actual delivery of health service is carried out by different levels of health care facilities: 126 hospitals, 519 Health Centres, 1797 Health Stations and 2899 Health Posts. In 1996 E.C. (2003/04 G.C.), the potential health service coverage (by health centres, health stations and health posts) was 64 %. The recurrent national health expenditure in the same year was Birr 532,172,000 (USD62, 169,626). (1) 1.3. The Pharmaceutical Sector Policy and Regulation The pharmaceutical sector is guided by a national drug policy issued in November 1993 G.C. (3) and regulated by the "Drug Administration and Control Proclamation No. 176/1999’’ promulgated on 29 June 1999 G.C. (4) The Drug Administration and Control Authority (DACA), which was established by the above proclamation, is the National Drug Regulatory Authority. DACA issues certificate of competence to manufacturers, whole sellers and retailers. A system of drug registration and laboratory quality control exists. There are different registration fees for imported and locally manufactured drugs but no distinction between innovator brand product and generic medicines. * There is a difference of 7-8 years between Ethiopian Calendar (E.C.) and Gregorian Calendar (G.C.) 6 There are two types of medicines lists in the country: A national medicines list called "List of Drugs for Ethiopia (LIDE)", July 2002 G.C. edition, which contains medicines to be imported or locally produced in the country (5). The second list is the ‘ Essential Drugs List (EDL)’’ which is a sub list of the LIDE. It was revised in 1996 E.C. (2003/04 G.C). and the revised version contains 282 priority medicines for public procurement. (6) There is a policy of generic prescribing and substitution, but there are no incentives for its implementation. There is no price regulation in the country. Procurement and Distribution Import and wholesale are done by the public sector, private sector, NGO's and International Organizations. The pharmaceutical Administration and Supply Service (PASS) of the Ministry of Health and the Pharmaceutical and Medical Supply Import and Wholesale Share Company known as PHARMID are responsible for import and distribution of medicines to the public sector. PHARMID has eight wholesale distribution branches (2 in Addis Ababa and 6 in different regions). Moreover, each regional health bureau has regional and district stores which distribute medicines to health facilities owned by the Ministry of Health. The public procurement is done through international and local open tenders, restricted tender, direct purchasing or negotiation and it is limited to the LIDE. There is a local preference up to 15%. In 1996 E.C. (2003/04 G.C), there were 37 wholesalers, 54 importers and 13 local manufacturers. The drug retail activity is carried out by the public sector, private sector, city councils and the Ethiopian Red Cross Society ((ERCS). In1996 E.C. (2003/04 G.C.), there were 275 pharmacies (run by pharmacy degree graduates), 375 drug shops (run by pharmacy dip loma graduates) and 1783 rural drug vendors (run by nurses or health assistants or pharmacy technicians) (1). Moreover, each health care facility has its own medicine retail outlet. In 1994 E.C. (2001/02 G.C.), the total government drug budget was about 12.1 million USD, which was approximately 19% of the recurrent government health budget and represented a per capita drug budget of 0.18 USD. The total annual drug expenditure in the same year was estimated at 30 million USD out of which 12.3 million USD was donation (7). There are public health programs such as TB/Leprosy Control, Family Planning, Malaria Control, and HIV/AIDS Control, which are assisted by donors. Anti-TB/Leprosy medicines as well as family planning medicines and supplies are provided free of charge to all patients in public health facilities. Moreover, poor patients are provided with medicines free of charge in public health facilities upon submission of certificate of exemption from their local administrations. Some organizations also have health insurance for their employees, which cover their medicine cost. There is no ceiling set by law on the wholesale and retail mark-ups in the country. However, generally PHARMID charges 20-40% wholesale mark-up on imported medicines and 5-10% on locally manufactured products. PASS distributes medicines to regional health bureaus at cost. 7 Pharmacies owned by the ERCS and public health medicine outlets (including special pharmacies) charge a retail mark-up of 25% while pharmacies owned by municipalities charge 20% retail mark-up. Drug Financing Sources of drug financing include government finance, private expenditure (i.e. user charges or out of pocket payments), external assistance, loan and private health insurance. There are no current figures on the contribution of each source although the National Health Accounts exercise in 1988E.C. (1995/96 G.C.) indicated that private expenditure on drugs accounts for the largest share of the total estimated drug expenditure in the country. 8 2. OVER ALL CONTEXT OF THE STUDY 2.1 Problem Statement High prices limit access to medicines, particularly to low-income people. Consequently, they are major barriers to better health. In order to take policy actions, which improve access to essential medicines, the government needs reliable information on the prices of medicines. Procurement agencies also need information on prices of medicines in order to negotiate cheaper prices so as to make medicines affordable to consumers. Other stakeholders such as Non Governmental Organizations (NGOs), international agencies, health professionals and consumers also need this information to advocate for more equitable access to essential medicines. Therefore, the goal of this study is to find out the price and availability of selected medicines as well as affordability of cost of treatment of common diseases to low - income people in Ethiopia. 2.2 Objectives The objectives of the study are the following: · To assess availability of key medicines in different sectors; · To measure affordability of the cost of treatment of common diseases to low-income people in the country; · To determine the components of the prices of medicines (i.e. taxes, duties, etc. levied on medicines) and the level of various mark-ups that contribute to the price at which medicines reach the consumers; · To compare the relative prices of innovator brand medicines and their generic equivalents; · To compare medicines prices across different types of medicines and sectors; · To compare procurement prices in Ethiopia with international reference prices and with local retail prices; · To recommend appropriate policy actions for improvement. 2.3 Methodology The survey on prices of medicines in Ethiopia was jointly conducted by PASS/MOH and World Health Organization (WHO) from 15 September to 15 October 2004 in four regions of the country, namely, Tigray, Amhara, Oromia and SNNPR as well as the capital city, Addis Ababa. The regions were selected randomly, except Addis Ababa, so that the results will be representative of the national situation and generalization can be made about the country. The fieldwork was based on the methodology described in the "Medicines Prices - a new approach to measurements, 2003 edition" manual which was jointly developed by the World Health Organization (WHO) and Health Action International (HAI). (8) 9 2.3.1 Sampling A total of 26 medicines were included in the survey. Of these, 9 medicines were pre selected as core medicines for international comparisons and 17 other medicines, which are commonly used in the country, were added as supplementary medicines. The complete list is attached as Annex II. For each medicine, up to three types of products were monitored, namely, innovator brand product, most sold generic equivalent and lowest pr ice generic equivalent products. The most sold generic equivalents were determined nationally before the beginning of the survey while the lowest price generic equivalents were obtained per facility at the time of the survey. Data on prices of medicines and availability of medicines on the day of the survey were collected from 2 public procurement agencies (i.e. PHARMID and PASS), 25 private pharmacies , 34 medicine outlets in health facilities owned by the Ministry of Health (14 health centres and 20 hospitals), 28 medicine outlets which included revolving drug fund pharmacies called ‘Special Pharmacies’ and Pharmacies owned by ERCS. Hereafter, both health centres and hospitals will be collectively referred to as “public health facilities”. In the work book of this study, special pharmacies and pharmacies owned by the ERCS are collectively referred to as “Other sector” medicine out lets. The above medicine outlets were distributed in the four survey regions and in the capital city, Addis Ababa and the complete list is attached as Annex II. The prices measured in the above outlets included public procurement prices and prices charged to patients. The components of medicine prices were also measured in order to examine the total mark-up structure and identify cost factors, which contribute to the total cost of each medicine to the patient. Baseline information on national medicines policy, procurement and distribution, government and private sector policies and financing mechanisms of medicines was also collected centrally using the ‘National Pharmaceutical Form’ provided in the WHO/HAI 2003 manual (Annex IV). The findings were summarized under the title ‘The pharmaceutical sector’ on page 5. 2.3.2 Data Collection Five data collection teams were formed (i.e. one team per survey region) and each team was composed of one medical doctor and one pharmacist who were officially assigned by the Health bureaus in the survey regions, except in Addis Ababa. In the capital city, Addis Ababa, the two survey managers themselves collected data. The heads of the pharmacy teams in the health bureaus of the survey regions served as supervisors. The over all activity was centrally coordinated by an officer from the Pharmaceutical Administration and Supply Service (PASS) of the Ministry of Health and the National Professional Officer (NPO) for Essential Drugs and Medicines Policy (EDM) in the WHO Office of Ethiopia. Before the survey was started, the data collectors and supervisors were trained on 8-10 September 2004 in Addis Ababa. At the end of the Training, field-testing of the survey tools 10 was done. A standardized data collection forms developed by WHO/HAI were used to collect the data from the facilities surveyed (Annex V). Data collected from all the survey areas were entered and analysed using WHO/HAI computerized workbook version 3.05. 2.3.3 Limitations of the study The study methodology, which developed by WHO/HAI group is under review and is to be developed further as experiences from more studies accumulate. Moreover, patient charges in all sectors are compared with International public procurement prices instead of International reference retail prices. This may affect the validity of the price comparison. 11 3. FINDINGS AND ANALYSIS The data on prices and availability of medicines as well as affordability of cost of treatment of common diseases to low-income people were subjected to within sector and across sector analysis: The median prices of medicines in each sector were compared with International Reference Prices (IRPs), which are the medians of procurement prices offered by not-for-profit suppliers in 2003 to developing countries for multi source generically equivalent products, and compiled by Management Science for Health (MSH). This comparison yields ‘Med ian Price Ratio (MPR)’ which is basically median unit price of a drug ( in local currency) divided by the unit reference price of MSH (in local currency). In other words, MPR shows the number of times greater (or less) than the IRP a medicine costs in Ethiopia. Median Price Ratios (MPRs) of medicines thus generated were compared across medicine types within a sector as well as across sectors. Median percent availability of medicines was compared across medicine types within a sector as well as across sector s. Price and availability variations between medicines out lets were measured by the ranges between the 25th and 75th percentiles (inter-quartile range) and between minimum and maximum values. In order to find out what prices of medicines mean to ordinary citizens, affordability of the cost of treatment of common disease conditions was assessed by comparing the costs of treatments with the daily wage of lowest paid government unskilled worker (Birr 6.7 or US$ 0.80 per day). Finally, the different componen ts of prices of medicines, which contribute to the total cost of medicines to patients, were examined. 3.1. Within sector price and availability comparison 3.1.1. Medicine procurement price Single order procurement prices were collected from two government agencies (i.e. PHARMID and PASS) and their median MPRs were calculated. The procurement prices from PHARMID were tender prices of 2004 while that of PASS were tender prices of 2003. Table 1: Summary of median MPRs of three types of medicines in public Procurement agencies. Statistics Most sold (n = 17) Lowest Price (n = 17) Median MPR 0.71 0.61 25% ile MPR 0.57 0.58 75% ile MPR 1.21 0.83 Minimum MPR 0.3 0.36 Maximum MPR 42.19 1.38 Comparison of public procurement prices in Ethiopia with international procurement prices reveals that procurement prices in Ethiopia are lower than the international procurement 12 prices by 29 % and 39 % with respect to most sold and lowest price generics, respectively (Median MPR 0. 71 and 0.61). The above table also illustrates that procurement prices of most sold and lowest price generics are almost the same (Median MPR 0. 71 versus 0.61) but showed different price variation between medicine orders. On the other hand, no price data were found for innovator brand products since the government agencies purchase medicines by generic names. 3.1.2. Medicines availability and patient prices in medicines retail outlets 3.1.2.1. Public health facilities (n = 34) a) Comparison of medicines availability across medicine types. Table 2: Summary of median of median percent availability of three types of medicines in the public health facilities. Statistics Brand (n = 0) Most sold (n = 19) Lowest Price (n = 26) Median availability 0 % 29.4 % 76.5 % 25% ile availability 0 % 7.4 % 59.6 % 75% ile availability 0 % 42.6 % 91.2 % Of the 26 medicines for which prices were sought, there were no innovator brand products in all public health facilities surveyed. Availability of lowest generic equivalent products was nearly 3 times the availability of most sold generic equivalent products (Median of median availability 76.5 % versus 29.4 %). Half of the most sold generic equivalent products were found between 7.4 % - 42.6 % of the public health facilities surveyed. In contrast, half of the lowest price generic alternatives were found between 59.6 % - 91.2 % of the public health facilities surveyed. This shows marked variation of the availability of both types of products between the public health facilities surveyed. b) Patient price comparison across medicine types. Table 3: Summary of the median MPRs of three types of medicines in the public health facilities Statistics Most sold (n = 19) Lowest Price (n = 19) Median MPR 1.35 1.34 25% ile MPR 1.23 1.11 75% ile MPR 2.04 2.01 Minimum MPR 0.74 0.61 Maximum MPR 3.0 2.57 13 Comparison of the median MPRs of 19 most sold and 19 lowest price generic equivalent products shows that there is no marked difference in the prices of the two generic versions (median of MPRs 1.35 versus 1.34). When compared with international reference prices, the median of median prices of most sold and lowest price generic products were only 35 % and 34 % above the international reference prices, respectively. This shows that the prices of generic medicines in the public health facilities are relatively good. The inter-quartile range shows that there is no marked variation in prices of both types of generic versions between public health facilities surveyed. 3.1.2.2 Private pharmacies (n = 25) a). Comparison of medicines availability across medicine types. Table 4: Summary of median of median percent availability of three types of medicines in the private pharmacies. Statistics Brand (n = 8) Most sold (n = 23) Lowest Price (n = 26) Median availability 0 % 68 % 96 % 25% ile availability 0 % 36 % 85 % 75% ile availability 27 % 87 % 100 % The above table illustrates that availability of lowest price medicines in private pharmacies was 1.4 times the availability of most sold generic medicines (median of median availability 96 % versus 68 %). Half of the most sold generic medicines were found between 36 %-87 % of the private pharmacies surveyed and their over all availability varied between the private pharmacies surveyed. In case of lowest price generic alternatives, half of them were found in between 85 % -100% of the private pharmacies surveyed and their over all availability showed less variation as compared with that of most sold generic medicines. On the other hand, the figures in the above table show that more than a quarter of the innovator brand products were not available in any of the retail outlets (i.e. 25th percentile is 0.00) and half of the innovator brand products were found in less than 27 % of the private pharmacies surveyed. 14 b) Patient price comparisons across medicine types Table 5: Summary of the median MPRs of three types of medicines in the private pharmacies. Brand Vs Most sold Brand Vs Lowest price Most sold Vs Lowest price Statistics Brand (n = 7) Most sold (n = 7) Brand (n = 8) Lowest Price (n = 8) Most sold (n = 23) Lowest Price (n = 23) Median MPR 13.51 2.28 11.55 2.04 2.34 2.34 25% ile MPR 8.40 1.89 8.36 1.83 1.78 1.66 75% ile MPR 28.33 2.76 26.26 2.47 3.70 3.10 Minimum MPR 2.39 1.01 2.39 1.07 0.99 0.99 Maximum MPR 49.44 4.50 49.44 4.13 61.36 7.44 There are three pairs of columns in table 5 above. In each pair of columns, summary price ratios for pairs of equivalent products are compared. The above comparison shows that the innovator brand products were 5.9 times as expensive as most sold generic equivalent medicines (median of MPR 13.51 versus 2. 28) and 5. 7 times as expensive as the lowest price generic equivalent medicines (median of MPR 11.55 versus 2.04). The inter-quartile ranges indicate that prices of innovator brand products showed marked variation between the private pharmacies surveyed. On the other hand, the comparison between most sold and lowest price generic equivalent produc ts showed that both types of products had the same price level (median of MPR 2.34 versus 2.34) but showed different price variation among the private pharmacies surveyed. 3.1.2.3. SP/ERCS medicine retail outlets (n = 28)* a) Comparison of medicine availability across medicine types. Table 6: Summary of the median of median percent availability of three types of medicines in SP/ERCS medicine outlets. Statistics Brand (n = 0) Most sold (n = 20) Lowest Price (n = 25) Median availability 0 % 37.5 % 78.6 % 25% ile availability 0 % 17.9 % 57.1 % 75% ile availability 0 % 46.4 % 84.8 % As Table 6 shows, the median availability of innovator brand products was 0% meaning that they were scarcely available in the SP/ERCS retail outlets. Availability of lowest price generic * In the work book of this study, SP/ERCS medicine retail outlets (meaning Special Pharmacies and ERCS medicine retail outlets) are collectively referred to as “Other sector” medicine outlets. 15 products was 2 times the availability of most sold generic products (median of median availability 78.6 % versus 37.5 %). The over all medicine availability in SP/ERCS medicine retail outlets was very low. Half of the most sold generic products were found in 17.9 % - 46.4 % of other sector medicine retail outlets surveyed while half of the lowest price generics were found in 57.1 % - 84.8 % of SP/ERCS medicine retail outlets surveyed. The over all availability of both types of products varied between the medicine retail outlets surveyed. b) Patient price comparison across medicine types. Table 7: Summary of median MPRs of three types of medicines in the SP/ERCS medicine retail outlets. Statistics Brand (n = 0) Most sold (n = 20) Lowest Price (n = 20) Median MPR 1.63 1.67 25% ile MPR 1.35 1.32 75% ile MPR 2.55 2.42 Minimum MPR 0.78 0.78 Maximum MPR 4.63 4.63 Table 7 shows that most sold generics and lowest price generics had similar price levels (median MPR 1.63 versus 1. 67) and similar price variability across SP/ERCS medicine retail outlets surveyed. Median of median prices of medicines in SP/ERCS medicine retail outlets were 63 % and 67 % above the international reference price with respe ct to most sold and lowest price generics, respectively. This shows relatively good prices of medicines in the sector. 3.2 Cross sector price and availability comparisons 3.2.1 Comparison of individual medicine availability and prices across sectors 3.2.1.1. Comparison of individual medicines availability Table 8 on page 17 shows the median percent availability of 10 medicines which are commonly used in the country. The table shows that the overall availability of Acyclovir in public health facilities and SP/ERCS medicine retail outlets is less than 15%. Availability of all the 10 medicines in public health facilities was also inadequate (i.e. below 75 %). The availability of these medicines in SP/ERCS outlets also showed similar pattern. The low availability of the above products indicates the need for intervention to improve availability of these essential drugs to treat common diseases in the country. Anti Retroviral (ARV) drugs were allowed to be available only in pharmacies owned by the ERCS and city councils due to the government policy. Hence, the availability of ARVs was not included in the calculation of the overall availability of medicines. They were considered separately. 16 3.2.1.2 Comparison of individual medicines prices Table 9 on page 18 and Figure 1 below illustrate that from among the generic products, Lowest price generic tetracycline eye ointment had the lowest median price ratio in all sectors (MPR= 0.61 in public health facilities, 0.78 in SP/ERCS outlets and 1.01 in the private pharmacies) while most sold Hydrochlorthiazide tablet (Esidrex R) had the highest median price (MPR=61.36) when sold in the in the private pharmacies. In specific terms, these mean that the median price of generic tetracycline eye ointment in public health facilities is a little bit higher than half of its international reference price while the price of hydrochlothiazide is nearly 61 times its international reference price. From among all the generic products sold in the public health facilities, metronidazole 250 mg capsule which is a locally manufactured generic product, had the highest median price ratio i.e. its median price was nearly 3 times its international reference price (MPR= 2.57 for LPG and 3.0 for MSG). Innovator brand products generally have high median price ratios. For example, Cotrimoxazole tablet in the private pharmacies had the highest median price ratio among the innovator brand products and its median price is nearly 50 times its international reference price (MPR=49.44). Compared to the price of its generic equivalents in the private pharmacies, innovator brand Cotrimoxazole is 18 times that of the most sold and 21 times that of the lowest price generic equivalent (MPR 49.44 versus MPR 2.69 and MPR 2.35). Figure 1 MPRs of six medicines in private pharmacies by medicine type 32.45 49.44 9.59 8.74 61.36 2.82 2.69 2.28 1.01 3.31 2.82 2.35 2.05 2.02 1.01 0 10 20 30 40 50 60 70 Hydrochlorthiazide 25 mg tablet Glibenclamide 5 mg tablet Cotrimoxazole (400 + 80 ) mg tablet Clotimazole topical cream, 1 % Amoxicillin 250 mg tablet Tetracycline eye ointment, 1% Medicine Price Ratio (MPR) Innovator brand Most sold generic Lowest price generic 17 Table 8: Median percent availability of some commonly used medicines in three sectors. Brand Most sold Lowest price Medicine name Public health facilities (n= 34) Private pharmacies (n=25) SP/ERCS out lets (n=28) Public health facilities (n= 34) Private pharmacies (n=25) SP/ERCS out lets (n=28) Public health facilities (n= 34) Private pharmacies (n=25) SP/ERC S out lets (n=28) Aciclovir 200 mg tablet 0 % 0 % 0 % 2.9 % 4 % 0 % 14.7 % 88 % 7.1 % Chloroquine phosphate 250 mg tablet 0 % 0 % 0 % 29.4 % 84 % 46.4 % 61.8 % 100 % 85.7 % Clotrimazole topical cream, 1 % 0 % 48 % 3.6 % 11.8 % 48 % 17. 9 % 58.8 % 96 % 57.1 % Benzyl benzoate lotion, 25 % 0 % 0 % 0 % 5.9 % 88 % 42.9 % 52.9 % 88 % 46.4 % Diclofenac 25 mg tablet 0 % 0 % 0 % 0 % 0 % 0 % 17. 6 % 88 % 42.9 % Diclofenac 50 mg tablet 0 % 0 % 0 % 38.2 % 80 % 32.1 % 50 % 100 % 46.4 % Quinine dihydrochloride 300 mg/ ml injection 0 % 0 % 0 % 44.1 % 64 % 53.6 % 52.9 % 64 % 71.4 % Salbutamol inhaler 0.1 mg per dose 0 % 52 % 0 % 35.3 % 68 % 42.9 % 55.9 % 84 % 42.9 % Hydrochlorthiazide 25 mg tablet 0 % 0 % 0 % 0 % 32 % 3.6 % 73.5 % 100 % 67.9 % Penicillin G sodium crystalline , powder for injection, I MIU/ vial 0 % 0 % 0 % 44.1 % 48 % 53.6 % 73.5 % 64 % 75 % 18 Table 9: Median MPRs of some commonly used medicines in three sectors. Brand Most sold Lowest price Medicine name Public health facilities (n= 34) Private pharmacies (n=25) SP/ERCS out lets (n=28) Public health facilities (n= 34) Private pharmacies (n=25) SP/ERCS out lets (n=28) Public health facilities (n= 34) Private pharmacies (n=25) SP/ERCS out lets (n=28) Diazepam 5 mg tablet 6.61 4.63 2.07 7.44 4,63 Diclofenac 50 mg tablet 2.36 4.72 2.36 4.72 2.36 Glibenclamide 5 mg tablet 32.45 2.36 2.82 2.54 2.82 3.67 Metronidazole 250 mg capsule 3.0 4.69 3.75 2.57 4.69 3.13 Tetracycline eye ointment, 1 % 0.74 1.01 0.78 0.61 1.01 0.78 Hydrochlorthiazide 25 mg tablet 61.36 1.65 3.31 3.64 Amoxicillin 250 mg capsule 8.74 1.41 2.02 1.68 Clotrimazole topical cream, 1 % 9.59 1.60 2.28 2.56 0.93 2.05 1.70 Cotrimoxazole (400+80) mg tablet 49.44 1.35 2.69 1.48 1.35 2.35 1.75 Cotrimoxazole (80 +40) mg/ml paediatric suspension 24.2 1.16 1.93 1.16 1.0 1.93 1.16 19 3.2.2 Comparison of overall medicine availability and price levels across sectors 3.2.2.1 Comparison of over all medicines availability Table 10: Summary of the median of median percent availability of medicines in the four sectors. Type of medicine Procurement (n=2 orders) Public health facilities (n= 34) Private pharmacies (n=25) SP/ERCS out lets (n=28) Brand N/A 0 % 0 % 0 % Most Sold N/A 29.4% 68 % 37.5 % Lowest Price N/A 76.5 % 96 % 78.6 % From table 10 above, it is clear that innovator brand products are unavailable in public procurement agencies since medicines are purchased by generic names. Their median of median availability in all the other three sectors is also 0 %. This shows that generic policy is well implemented at least in the public sector. On the other hand, the overall availability of most sold and generic equivalent medicines in the public health facilities is lower than that of the private pharmacies but comparable to that of SP/ERCS medicine retail outlets. This situation indicates that patients will be forced to purchase drugs at higher prices in private pharmacies or go to informal sector or forgo treatment. Figure 2 below illustrates the situation graphically. Figure 2 Median of median percent availablity of medicines across sectors 29.40% 68% 37.50% 76.5% 96.0% 78.6% 0% 20% 40% 60% 80% 100% 120% Public health facilities Private pharmacies SP/ERCS out lets Most sold generic Lowest price generic 20 Figure 3 below presents availability of medicines from a different perspective. It shows the distribution of the 26 medicines included in the survey across sectors and by product types. Figure 3 Distribution of 26 medicines sought across sectors and by product type 0 4 0 15 1 0 24 4 00 5 2 4 4 0 2 4 1 0 14 0 5 6 0 0 13 4 0 3 9 2 3 3 0 3 6 0 0 5 0 9 9 0 2 13 0 0 10 0 3 14 0 0 2 0 5 10 15 20 25 30 Brand MSG LPG Brand MSG LPG Brand MSG LPG pubic health facilities Private pharmacies SP/ERCS out lets N um be r of m ed ic in es ( ou t o f 2 6 so ug ht ) Not in any sampled outlets In < 25 % of out lets In atleast 25 % but< 50 % of outlets In atleast 50% but <75 % of outlets In atleast 75% but < 90 % of outlets In 90 % or more of outlets As indicted in the legend, availability of each product type in each sector is grouped in to six levels. Numbers of medicines found in each group are shown in the graph. For example, some of the medicines were not found in any of the outlets surveyed. Others were almost always available in the sector (in 90 % or more of the surveyed outlets). 21 3.2.2.2 Comparison of over all medicines prices. Table 11: Comparison of median MPRs of procurement with median MPRs in the three retail sectors. Type of medicine Ratio of Public health facilities patient price to procurement price Ratio of Private pharmacies price to Procurement price Ratio of SP/ERCS outlets price to procurement price Brand Most Sold 193.7 % 298.5 % 207.7 % Lowest Price 222.2 % 371.5 % 279.5 % Table 11 compares public procurement prices with medicine charges to patients in public health facilities, private retail outlets and SP/ERCS retail outlets. The figures show that public health facilities charge 93.7 % and 122.2 % mark-up on public procurement prices of most sold and lowest price generic equivalent products, respectively. The mark-ups are even higher in the private pharmacies and SP/ERCS outlets i.e. private pharmacies charge 198.5 % and 271.5 % mark-ups on public procurement prices of most sold and lowest price generics, respectively while the SP/ERCS out lets charge 107.7 % and 179.5 % mark–ups on public procurement prices of most sold and lowest price generics, respectively. Table 12: Comparison of median MPRs of the three retail sectors Type of medicine Ratio of Private pharmacies to Public health facilities Ratio of SP/ERCS out lets to Public health facilities Ratio of SP/ERCS out lets to Private pharmacies Brand Most Sold 169.2 % 115.9 % 70.4 % Lowest Price 167.2 % 126.2 % 72.9 % Table 12 and Figure 4 compare patient’s charges in the public health facilities with charges in the private pharmacies and SP/ERCS medicine retail outlets. Patient charges in the private pharmacies were 69.2 % and 67.2 % above patient charges in public health facilities with respect to most sold generics and lowest price generics, respectively. On the other hand, patient charges in the pr ivate pharmacies were 29.6 % and 27.1 % above patient charges in the SP/ERCS out lets with respect to most sold generics and lowest price generics, respectively. In SP/ERCS out lets, patient charges were 15.9 % and 26.2 % above patient charges in public health facilities with respect to most sold and lowest price generics, respectively. 22 Figure 4 Comparison of median MPRs of the three sectors 169.2% 115.9% 70.4% 167.2% 126.2% 72.9% 0.00% 50.00 % 100.00 % 150.00 % 200.00 % Private pharmacies to public health facilities ratio SP/ERCS outlets to public health facilities ratio SP/ERCS outlets to private pharmacies ratio Most sold generic Lowest price generic Table 13 Summary of Median MPR of medicines across sectors by medicine types. Type of medicine Public health facilities (n= 34) Private pharmacies (n= 25) SP/ERCS outlets (n= 28) Brand 11.55 Most sold 1.35 2.34 1.63 Lowest price 1.35 2.25 1.70 Table 13 above shows that the median of median price of both most sold and lowest price generic products in public health facilities were only 35 % above the international reference price. The medians of median price of these products in SP/ERCS retail outlets were 63 % and 70 % above the international reference price, respectively. This shows a relatively good price level for generic products in public health facilities and SP/ERCS retail outlets. On the other hand, the median of median prices of most sold and lowest price generics in the private pharmacies were 134 % and 125 % above the international reference price. This shows a relatively higher price level in the private pharmacies. 3.3 Treatment Affordability Affordability of the cost of a single course of therapy for 6 disease situations was measured by comparing it with the daily wage of the lowest paid government worker. The monthly salary of the lowest paid government worker is Birr 200 i.e. Birr 6.7 (approx. US$ 0.80) per day. As an example of the above comparison, table 14 on page 25 illustrates the affordability of treatment cost in public health facilities, private pharmacies and SP/ERCS outlets for three chronic and three acute disease conditions. 23 In order to purchase a course of innovator brand Amoxicillin from private pharmacies to treat pneumonia in an adult, a lowest paid government worker would need to work for 4.10 days. To purchase the lowest price generically equivalent products of the same medicine from public health facilities, private pharmacies and SP/ERCS l outlets, he/she would need to work for 0.70, 0.90, and 0.80 days, respectively. For a one-month course of glibenclamide to treat diabetes mellitus , a lowest paid government worker would need to pay his/her 10.3 days' wages for an innovator brand product in the private pharmacies. But, purchasing the generically equivalent products from public health facilities, private pharmacies and SP/ERCS outlets would require only his/her 0.80, 0.90 and 1.2 days' wages, respectively. On the other hand, suppose we have an asthmatic child with Acute Respiratory Infection (ARI), an adult with diabetes mellitus and another adult with hypertension in a family. The breadwinner, who is a lowest paid government worker, will have to work for 3, 4.6 and 4.6 days to purchase the necessary lowest price generic (LPG) versions* from public health facilities, SP/ERCS medicine outlets and private pharmacies, respectively. This scenario illustrated by figure 5 above. Figure 5 Cost of treatment of a combination of ARI, Asthma, hypertension, and diabetes mellitus in a family using LPG 3 4.6 4.6 0 1 2 3 4 5 Public health facilities Private pharmacies SP/ERCS out lets Number of days' wage The prices of Anti Retroviral (ARV) drugs were considered separately due to their particular nature. When compared with International Reference Price, their prices were quite reasonable. For example, the median price of Zidovudine + Lamivudine combination was only 0.93 times its International Reference Price. Others also had similar medicine price ratios. This is partly due to their exemption from import tax and partly because they are procured in a centralized competitive international bidding and dispensed to patients without retail mark up. However, it does not mean that anti retro viral therapy is affordable to majority of the patients in Ethiopia. A monthly triple combination first line therapy [(ZDV + 3 TC) + EFV)] costs Birr * A combination of Cotrimoxazole paed, susp, Glibenclamide , Salbutamol and hydrochlorthiazide (Table 14). 24 690 (US$ 80) and Birr 700 (US$ 81) for lowest price generic and most sold generic combinations, respectively. According to the 1999/2000 national survey (9), 44.2% of the Ethiopian population earn below US$ 1 per day. The World Development Report (10) also reports for the same year that 80.7 % of the Ethiopian population gets below US$ 2 per day. The household income, consumption and expenditure survey conducted in 1999/2000 by the Central Statistical Authority of Ethiopia (11) indicates that only 3.6 % of the total household income is spent on medical care, transport, communication, education, recreation and entertainment. This is barely equivalent to one day’s wage of a lowest paid government employee. But, it is important to note that this one day’s wage is not meant to cover the cost of medicines only. In other words, the portion of monthly income of the lowest paid government employee that can be spent on medicines alone is much less than his/her one day’s wage. The above economic parameters when considered together show that costs of treatment for common diseases seem to be unaffordable to the majority of the population in Ethiopia. 25 Table 14: Cost of Treatment of some common diseases. Public health facilities Private pharmacies SP/ERCS out lets Treatment Type of medicine Days’ wage Days’ wage Days’ wage Innovator Brand 4.10 Most sold generic equivalent Acute Respiratory Infection (adult): Amoxicillin 250mg, 21 tablets Lowest price generic equivalent 0.70 0.90 0.80 Innovator Brand Most sold generic equivalent 0.10 0.20 0.10 Malaria: Chloroquine Phosphate 250mg, 10 tablets Lowest price generic equivalent 0.10 0.20 0.10 Innovator Brand 10.30 Most sold generic equivalent 0.80 0.90 Diabetes mellitus: Glibenclamide 5mg, 60 tablets Lowest price generic equivalent 0.80 0.90 1.2 Innovator Brand 6.00 Most sold generic equivalent 2.00 2.50 2.50 Asthma: Salbutamol 0.1 mg/dose inhaler, 1 bottle of 200 doses Lowest price generic equivalent 1.70 2.70 2.50 Innovator Brand Most sold generic equivalent 8.3 Hypertension: Hydrochlothiazide 25 mg, 30 tablets Lowest price generic equivalent 0.2 0.4 0.5 Innovator Brand 7.9 Most sold generic equivalent 0.4 0.6 0.4 Acute Respiratory Infection (Child): Cotrimoxazole (200 +40) mg/5 ml, 100ml suspension Lowest price generic equivalent 0.3 0.6 0.4 26 3.4 Price Composition In order to see some of the reasons why prices differ between sectors, the prices of medicines to the final consumers were studied by breaking them down to their component parts. The findings are discussed as follows. 3.4.1 Cumulative mark-up by sector and product type Table 15 Example of percent cumulative mark- up by sector. Name of medicine Type of medicine P rocurement price Public health facilities patient charge Private pharmacies price SP/ERCS out lets patient charge Innovator brand 159.1 % Most sold generic 0 % 104.5 % 272 % Cotrimoxazole (40 +80) mg/ml pediatric Suspension of 100 ml Lowest price generic 11.4 % 86.7 % 272 % 89.5 % Table 15 shows the summary of percent cumulative mark-ups of the Sector Median Unit Price (SMUP) over Manufacturer’s Unit Price (CIF/FOB) in each sector. Patient charges in the public health facilities and private pharmacies included mark-ups of 104.5 % and 272 %, respectively over the manufacturer’s price of the most sold generic version. For lowest price generic products, the mark-ups over the manufacturer’s price were 86.7 %, 272 %, and 89.5 % with regard to patient charges in the public health facilities , private pharmacies and SP/ERCS medicine outlets, respectively. Figure 6 below better illustrates the cumulative mark up of Lowest price Generic (LPG) over the manufacturers’ price. Figure 6 Cumulative mark up of sector median unit price of LPG over manufacturers' unit price (CIF/FOB) 11.4% 86.7% 272.0% 89.5% 0% 50% 100% 150% 200% 250% 300% Public procrument price Public health facilities patient price Private pharmacies price SP/ERCS out lets patient price 27 3.4.2 Components of prices Components of the prices of medicines were measured in the public, private and SP/ERCS outlets for imported products. Table 16 on page 29 presents the components of the price of an imported lowest price generic version Cotrimoxazole paediatric suspension in the public health facilities. The results are given both as percentage add-ons and cumulatively. The total add-ones to import price (CIF) of the product cumulate to about 83 %. As there is no ceiling set by law on the wholesale and retail mark-ups in the country, the figures indicated as wholesale and retail mark-up are estimations based on examination of records and interviews w ith importers and retailers. Figure 7 and 8 below present the different price components in slightly different ways by taking LPG cotrimoxazole paediatric suspension as a typical example . The two figures indicate that retail mark-up adds the largest amount to the total mark-up followed by wholesale mark-up, handling cost and customs. Figure 7 Proportions of cumulative mark up on the CIF price of LPG cotrimoxazole paed. suspension in the public health facilities 5% 7.40% 33.30% 36.80% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Retail mark up Whole sale mark up Handling cost Customs 28 Figure 8 Components of the final price of LPG cotrimoxazole paed. suspension to patients in the public health facilities CIF 55% Customs 3% Handling cost 4% Whole sale mark up 18% Retail mark up 20% 29 Table 16 Example of components of prices to patients in the public health facilities. Describe sector and type of medicine: Lowest price generic version of cotrimoxazole paediatric suspension in the public health facilities Example 1:Medicine Name Medicine Strength Dosage Form Target Pack Size Dispensed Quantity Type of Charge Charge Basis Amount of Charge Price of Dispensed Quantity Cumulative % Mark-up Co-trimoxazole suspension 8+40 mg/ml millilitre 70 100 Cost, insurance, freight (CIF) price NA NA 2.04 0.00% Customs percent 5.00% 2.15 5.00% Handling cost percent 7.00% 2.30 12.35% Whole sale mark-up percent 30.00% 2.98 46.06% Retail mark-up percent 25.00% 3.73 82.57% 30 4. International Comparison of prices and treatment affordability The prices of medicines and affordability of treatment costs in Ethiopia are compared with that of other African countries. 4.1 Comparison of price 4.1.1 Comparison of sector median prices of core medicines Table 17 International comparison of median MPRs of core medicines Data of other African countries Data from Ethiopia Particulars Number of countries included Median 25th percentile 75th percentile Median 25th percentile 75th percentile Public procurement median MPR LPG 8 0.86 0.65 1.16 0.59 0.50 0.61 Public sector patient median MPR LPG 6 2.11 1.25 2.78 1.41 1.00 1.88 NGO sector patient median MPR LPG* 5 2.56 2.51 2.63 2.09 1.15 3.64 Private pharmacy patient median MPR LPG 8 3.56 3.04 4.41 2.82 1.93 4.13 Private pharmacy patient median MPR IB 8 16.39 14.35 17.73 13.51 8.74 24.20 As Table 17 above shows, the median MPRs of core medicines in all sectors in Ethiopia are lower than the median MPRs of the other African countries (all less than the 25th percentiles). Figure 9 Variation of prices of LPG in different sectors and countries 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 P ub lic pr oc ru m en t P ub lic se ct or P riv at e ph ar m ac y N G O s ec to r P ub lic pr oc ru m en t P ub lic se ct or P riv at e ph ar m ac y N G O s ec to r Other African countries Ethiopia P ric e (m ed ia n M P R ) 75th percentile 25th percentile Median Variations in the prices of Lowest Price Generic (LPG) medicines in public procurement agencies and public sector (i.e. public health facilities) of Ethiopia are lower than that of other * In the Ethiopian context, it is patient price in SP/ERCS retail out lets. 31 African countries. But, price variations in private pharmacies and NGO sector (SP/E RCS retail outlets in the Ethiopian context) of Ethiopia are higher than that of the other African countries (see Fig. 9 above). Figure 10 below also illustrates that the variations in the prices of both Innovator Brand (IB) and LPG medicines are higher in Ethiopia; the variation in the price of IB medicines being more marked than variations in the prices of LPG medicines. Figure 10 Variation of prices of IB and LPG in private pharmacies 0 5 10 15 20 25 30 IB LPG IB LPG Other African countries (n=8) Ethiopia P ric e (m ed ia n M P R ) 75th percentile 25th percentile Median 4.1.2 Comparison of median prices of individual core medicines Table 18 International comparison of the median MPRs of IB core medicines in private pharmacies Data of other African countries Data from Ethiopia Medicine Number of countries included Median 25th percentile 75th percentile Median 25th percentile 75th percentile Amoxicillin 250 mg cap. 5 8.74 7.15 15.22 8.74 8.69 9.75 Glibenclamide 5 mg tab. 5 49.24 33.93 60.02 32.45 31.04 33.86 Salbutamol inhaler, 0.1 mg /dose 7 3.78 2.61 4.51 2.39 2.33 2.50 Sulphadoxine- pyrimethamine (500+25 mg) tab. 7 13.58 12.81 15.46 13.51 13.45 13.51 The median MPRs of most of the innovator brand products of the core medicines listed in Table 18 above are lower than that of the other African countries. Figure 11 below shows that the variations in the prices of IB medicines in Ethiopia are lower than that of the other African countrie s; the variation in the price of Glibenclamide in the other African countries was the highest (nearly ten times that in Ethiopia) followed by Amoxicillin. 32 Figure 11 Variation of the price of IB in private pharmacies 0 10 20 30 40 50 60 70 A m ox ic ill in G lib en cl am id e S al bu ta no l in ha le r S ul ph ad ox in e- P yr im et ha m in e A m ox ic ill in G lib en cl am id e S al bu ta no l in ha le r S ul ph ad ox in e- P yr im et ha m in e Other African countries Ethiopia P ric e (m ed ia n M P R ) 75th percentile 25th percentile Median Table 19 International comparison of the median MPR of LPG core medicines in private pharmacies Data of other African countries Data from Ethiopia Medicine Number of countries included Median 25th percentile 75th percentile Median 25th percentile 75th percentile Aciclovir 200 mg tab. 8 3.45 2.14 4.71 1.19 0.91 1.43 Amoxicillin 250 mg cap. 8 1.92 1.75 2.31 2.02 2.02 2.35 Cotrimoxazole paediatric suspension (8+40) mg/ml 8 1.93 1.90 3.35 1.93 1.93 2.25 Diazepam 5 mg tab. 8 4.44 2.91 6.94 7.44 6.61 9.92 Diclofenac 25 mg tab. 4 7.06 6.35 8.07 5.67 4.54 6.49 Glibenclamide 5 mg tab. 8 7.47 4.81 12.15 2.82 2.82 3.53 Hydrochlorthiazide 25 mg tab. 6 4.88 3.60 22.99 3.31 3.31 6.61 Salbutamol inhaler, 0.1 mg /dose 7 1.78 1.28 2.20 1.07 0.99 1.07 Sulphadoxine- pyrimethamine (500+25 mg) tab. 7 4.13 3.52 4.62 4.13 2.36 4.50 On the other hand, Table 19 above shows that the MPRs of nearly half of the LPG medicines sold in the private pharmacies of Ethiopia are lower than the corresponding median MPRs of the other African countries. 33 Comparison of the price variations indicates that two-third of the LPG medicines have lower variations while a third of them have higher variation than that of the other African countries; the price variations of Glibenclamide and Hydrochlothiazide in the other African countries were highest (nearly six times that of Ethiopia). 4.2 Comparison of treatments affordability Table 20 and 21 below compare affordability in terms of number of days’ wage of a lowest paid government worker required to treat the specified diseases using IB and LPG core medicines bought from private pharmacies, respectively. The data of both tables show that the costs of treating the diseases in Ethiopia require more number of days’ wage than in the other African countries. This finding indicates that the cost of treating diseases in Ethiopia is less affordable to low income people. Table 20 International comparison of affordability (number of days’ wage required) in private pharmacies (IB) Data of other African countries Data from Ethiopia Disease Medicine Number of countries included Median 25th percentile 75th percentile Number of days’ wage Diabetes Glibenclamide 5 7.20 6.10 10.30 10.30 Adult ARI Amoxicilline 4 1.50 1.20 2.33 4.10 Asthma Salbutamol inhaler 6 4.45 2.85 5.83 6.00 Malaria Sulphadoxine- pyrimethamine 7 0.80 0.70 1.20 1.30 Table 21 International comparison of affordability (Number of days’ wage required) in private pharmacies (LPG) Data from other African countries Data from Ethiopia Disease Medicine Number of countries included Median 25th percentile 75th percentile Number of days’ wage Diabetes Glibenclamide 8 1.25 0.80 1.33 0.90 Hypertension Hydrochlorthiazide 7 0.40 0.25 1.10 0.40 Adult ARI Amoxicilline 7 0.40 0.35 0.60 0.90 Paediatric ARI Cotrimoxazole suspension 8 0.45 0.28 0.60 0.60 Asthma Salbutamol inhaler 7 2.00 1.60 3.60 2.70 Malaria Sulphadoxine- pyrimethamine 7 0.30 0.20 0.35 0.40 34 5. DISCUSSION The survey of medicines prices in Ethiopia shows that procurement agencies are purchasing medicines at internationally competitive prices. Public procurement prices in Ethiopia were lower than the international reference prices by 29 % and 39 % with respect to most sold and lowest price generic products, respectively. This procurement price level should be maintained, if not improved. In general, prices of medicines were lowest in public health facilities and highest in private pharmacies. Prices in SP/ERCS retail outlets were in between that of the two sectors. When compared with International Reference Prices, the prices of generic products in public health facilities and SP/ERCS medicine outlets were quite good. But their prices in the private pharmacies were relatively high. There was no marked difference in the prices of most sold and generic versions in the same sector and their price variation between medicine outlets also had the same trend. Comparison of the prices of core medicines in all sectors in Ethiopia with their prices in other African countries has shown that Ethiopia has a relatively cheaper patient prices and procurement prices. However, price variations of LPG core medicines were lower in public procurement agencies and public health facilities but higher in private pharmacies and SP/ ERCS pharmacies. Innovator brand products generally had higher prices than their generic equivalents. For example, innovator brand products in the private pharmacies were 5.9 times as expensive as the most sold and 5.7 times as expensive as the lowest price generic equivalents. When compared with international reference prices, individual innovator brand products also had high median price ratio. For instance, cotrimoxazole tablet was nearly 50 times the international reference price (MPR= 49.44). Some generic equivale nts also had even higher price ratio. For example, Hydrochlothiazide tablet (Esidrex R) in the private pharmacies was 61 times the international reference price (MPR = 61.36). But this may be due to problems in classifying medicines as innovator brand and generic product. In general, availability of medicines in public health facilities was lower than in the private pharmacies but comparable to availability in SP/ERCS medicine outlets. Innovator brand products were not available in public health facilities and were hardly available in SP/ERCS medicine outlets. They were not also available in the government procurement agencies since they purchase drugs in generic name. This shows effective generic policy implementation in the public sector. Availability of the generic equivalents varied from sector to sector and from medicine -to medicine. For example, availability of lowest price generics was 76.5 %, 96 % and 78.6 % in the public health facilities, private pharmacies and SP/ERCS outlets, respectively. In contrast availability of most sold generics was 29.4 %, 68 % and 37.5 % in the public health facilities, private pharmacies and SP/ERCS outlets, respectively. 35 Investigation of the availability of 10 commonly used medicines revealed that availability of all of them in public health facilities was inadequate (i.e. less than 75 %). As a result of the government policy, Anti retro viral drugs were available only in ERCS medicine outlets Measured in terms of affordability, the cost of treating common diseases varied between innovator products and generic versions. For example, there was nearly 4-fold difference between the price of innovator brand of amoxicillin and its generic equivalent in the private pharmacies. Nearly 12-fold difference was also observed between the price of innovator brand glibenclamide and its generic equivalent in the private pharmacies. When a family with a combination of four disease conditions is considered, it was shown that the breadwinner, who is a lowest paid government employee , would need to work for nearly 3, 4.6 and 4.6 days to purchase the necessary lowest price generic version medicines from public health facilities, SP/ERCS medicine out lets and private pharmacies , respectively. A monthly supply of first line generic triple combination Anti Retroviral regimen [(ZDV + 3 TC) + EFV)] requires 3.5 month’s wage of the lowest paid government employee. When the above situations are seen in the light of the income level of the Ethiopian people and the proportion of the total household income spent on medicines, it seems that costs of treatment of common diseases are unaffordable to the majority of the Ethiopian people. Comparison of affordability of treatment costs in private pharmacies of Ethiopia with that of other African countries has also shown that cost of treatment in Ethiopia is less affordable. Regarding mark-ups on medicines prices, there is no ceiling set by law on the wholesale and retail mark-ups in all sectors. However, through interviews and observations during da ta collection, it was noted that wholesale mark-ups in general range from 20% - 40% of the landed costs of imported products and 5 % -10% of the ex-factory prices of locally manufactured products. Retail mark-ups range from 20 % - 30 %, depending on the type of the sector. But the rates in the private sector are unpredictable. Components of the prices of medicine consisted, among others, a 5 % import tax on imported medicines, except Anti Retroviral drugs. All finished medicines are exempted from Value Added Tax (VAT). It was observed that the major contributors to the total cost of medicines to patients were retail mark-ups followed by wholesale mark-ups. 36 6. CONCLUSION AND RECOMMENDATIONS 6.1 Conclusion The principal conclusions of the study are as follows: Availability · The over all availability of medicines in the public health facilities and SP/ERCS retail outlets was very low. Consequently, patients are forced to purchase drugs at higher prices in private pharmacies or go to informal sector or forgo treatment. · Innovator brand products were not available in public health facilities and were hardly available in SP/ERCS medicine outlets. They were not available in the government procurement agencies either. · Lowest generic equivalent products had better availability than most sold generic equivalent products. Price · The public sector in Ethiopia charges reasonably low prices to patients as compared with International Reference Prices. Comparison with other African countries has also shown that Ethiopia has a relatively cheaper generic patient prices and procurement prices. · In general, prices of medicines were lowest in public health facilities and highest in private pharmacies. Prices in SP/ERCS retail outlets were in between that of the two sectors. · When compared with International Reference Prices, the prices of generic products in public health facilities and SP/ERCS medicine outlets were quite good. But their prices in the private pharmacies were relatively high. · There was no marked difference in the prices of most sold and lowest price generic versions in the same sector and their price variation between medicine outlets also had the same trend. The cheapest generic equivalent is not always the most sold. · The prices of innovator brands were considerably higher than prices of their generic equivalents. However, comparison with other African countries has shown that innovator brand products have a relatively cheaper price in Ethiopia but wider price variation. Affordability · Costs of treatment of common diseases were lowest in public health facilities followed by SP/ERCS retail outlets and private pharmacies. The cost was also highest if innovator brand products are used instead of generic equivalent products. 37 · Given the low -income level of majority of the Ethiopian people and the proportion of total household income spent on medicines, it seems that costs of treatment of common disease are unaffordable to the majority of the Ethiopian people. · Comparison of affordability of cost of treatment in the private pharmacies of Ethiopia with that of other African countries has shown that cost of treatment in Ethiopia is less affordable despite lower median price in Ethiopia . This may be due to the low income level in Ethiopia · There is no control on prices of medicines in Ethiopia. Consequently, wholesale and retail mark ups vary from sector to sector and from medicine-to-medicine depending on the market situation. Price components · The major contributors to the total cost of medicines to patients were retail mark-ups followed by wholesale mark-ups. 6.2 Recommendations Based on the above findings, the following recommendations are made: Availability and Price · Investigate the cause of low availability of medicines in the public health facilities and SP/ERCS medicine retail outlets. · Uphold/maintain the generic policy implementation in the procurement of medicines. Affordability In order to increase affordability, consider different strategies such as: · Development of a pricing policy which could contain aspects of price control and incentives to reduce prices; · Different financing options such as community revolving drug schemes and health insurance schemes; · Introduction /revision of exemptions or differential fee system to ensure access by the poorest; · Conducting regular education programs on the essential drugs concept and rational drug use to health personnel and the public in order not to lose the gains from the effective generic policy implementation; · Undertaking in-depth study on pricing system in public health facilities to find out the reasons for variations in price levels of medicines. 38 REFERENCES 1. FDRE (2003/ 04). Health and Health Related Indicator. Addis Ababa: Planning and Programming Department, Ministry of Health, 1996 E. C. (2003/ 04). 2. TGE (1993). Health policy of the Transitional Government of Ethiopia. Addis Ababa: TGE 3. TGE (1993). National drug policy of the Transitional Government of Ethiopia. Addis Ababa: TGE 4. FDRE (1999). Drug Administration and Control Proclamation. Addis Ababa: The House of Representatives, Federal Democratic Republic of Ethiopia, 29 June 1999. 5. DACA (2001). List of Drugs for Ethiopia. Addis Ababa: Drug Administration and Control Authority, July, 2001. 6. DACA (2004): Essential Drugs List (Unpublished document). Addis Ababa: Drug Administration and Control Authority, May 2004. 7. FDRE / WHO (2003). Assessment of the pharmaceutical sector in Ethiopia. Addis Ababa. Ministry of Health and the World Health Organization, October 2004. 8. WHO/HAI (2003). Medicines prices: a new approach to measureme nt. World Health Organization/ H ealth Action International, Geneva, 2003. 9. MOFED (2004). Millennium development goals report: Challenges and prospects for Ethiopia . Addis Ababa. The Ministry of Finance and Economic Development of the Federal Democratic Republic of Ethiopia and the UN country Team, March 2004. 10. WB (2004). World development indicators. World Bank, 2004. 11. FDRE (2002). The 1999/2000 Household income, consumption and expenditure survey key findings. Addis Ababa: Central Statistical Authority of the Federal Democratic Republic of Ethiopia, April 2002. 39 ANNEX I Administrative regions of Ethiopia Regions surveyed 40 Annex II List of Medicines included in the survey "Innovator" Product Most Sold Generic Version (Nat'l) Med. No. Medicine Name Medicine Strength Dosage Form Target Pack Size Core List (yes/no) Name Manufacturer Country of Production Name Manufacturer Country of Production 1 Aciclovir 200mg tab 25 y Zovirax GSK U.K. Cyclovir Cadila India 2 Amoxicillin 250mg cap/tab 21 y Amoxil SKB (GSK) U.K. Z mox Aurobindo India 3 Co-trimoxazole susp. 8+40mg/ml susp 100ml y Bactrim Roche Switzerland Cadiprim Cadila India 4 Diazepam 5mg tab 100 y Valium Roche Switzerland Neuril CID Egypt 5 Diclofenac 25mg tab 100 y Voltarol Novartis Switzerland Dyclomax GSK K.K. 6 Glibenclamide 5mg tab 60 y Daonil HMR Germany Betanase Cadila India 7 Hydrochlorthiazide 25mg tab 30 y Dichlotride MSD U.K. Esidrex Novartis Switzerland 8 Pyrimethamine/Sulphadoxine 25+500mg tab 3 y Fansidar Roche Switzerland Laridox IPCA India 9 Salbutamol inhaler 0.1mg/dose inhaler 200doses y Ventoline GSK U.K. Aerolin EPICO Egypt 10 Promethazine 25mg tab 100 n Promethazine EPHARM Ethiopia 11 Metronidazole 250m g cap 60 n Flagyl Aventis Switzerland Metronidazole EPHARM Ethiopia 12 Mebendazole 100mg tab 6 n Vermox Janssen Pharma Belgium Wormin Cadila India 13 Penicillin Procaine Benzyl 4 MIU/vial vial 1 vial n Procaine Penicillin fortified EPHARM Ethiopia 14 Tetracycline eye ointment 1% eye oint 5 gram n Acromycin Lederle Tetracycline Shanghai China 15 Benzyl benzoate lotion 25% top. lotion 125ml n Benzyl benzoate EPHARM Ethiopia 16 Methyldopa 250mg Tab 60 n Aldomet MSD Netherlands Dopegyt Egis Hungary 17 Niclosamide 500mg Tab 4 n Yomesan Bayer Germany Niclosamide EPHARM Ethiopia 41 "Innovator" Product Most Sold Generic Version (Nat'l) Med. No. Medicine Name Medicine Strength Dosage Form Target Pack Size Core List (yes/no) Name Manufacturer Country of Production Name Manufacturer Country of Production 18 Clotrimazole topical cream 1% cream 15 gram n Canestan Bayer Germany Clotrimazole Shanghai China 19 Chloroquine phosphate 250mg Tab 10 n Nivaquine Rhone-Poulenc Rorer France Chloroquine phosphate EPHARM Ethiopia 20 Co-trimoxazole 400+80mg Tab 20 n Bactrim Roche Switzerland Cotrimol IPCA India 21 Chloramphenicol 250mg Cap 100 n Chloramphenicol EPHARM Ethiopia 22 Penicillin G sodium crystalline inj 1MIU/vial vial 1 vial n Penicillin G, sodium crystalline EPHARM Ethiopia 23 Sodium Chloride IV inj 0.9% IV soln 1000ml n Sodium chloride EPHARM Ethiopia 24 Quinine dihydrochloride inj 300mg/ml ampoule 2ml n Quininject Medreich India 25 Diclofenac 50mg Tab 100 n Voltarol Novartis Switzerland Dyclomax GSK U.K. 26 Amoxicillin 500mg Cap 21 n Amoxil SKB (GSK) U.K. Z mox Aurobindo India 1 Lamivudine (3TC) 150mg Tab 60 n Epivir GSK U.K Avolam Ranbaxy India 2 Stavudine (d4T) 40mg Tab 60 n Zerit BMS France Avostav Ranbaxy India 3 Efavirenz (EFV) 200mg Cap 90 n Sustiva BMS France Stocrin MSD Netherlands 4 Lamivudine + Zidovudine 150+300 mg Tab 60 n Combivir GSK U.K. Lamuzid Cadila (Zydus) India 5 Nevirapine 200mg Tab 60 y Viramune Boehringer I Germany Nevipan Ranbaxy India 42 Annex III List of facilities and outlets sampled GEOGRAPHICAL AREA: Tigray region Public sector Private sector Other sector Adigrat hospital Amare pharmacy Adigrat hospital Special pharmacy Axum St. Mary hospital Abeba pharmacy ERCS Mekele pharmacy Abi Adi hospital Ethiopia pharmacy Axum St. Mary hospital Special pharmacy Quiha hospital St. George pharmacy Woukro hospital Special pharmacy Semien Health centre Tinsae Pharmacy GEOGRAPHICAL AREA: Amhara region Public sector Private sector Other sector Gondar university hospital Bata pharmacy Gondar university hospital Special pharmacy Felege hiwot hospital Goha pharmacy Bahir Dar ERCS pharmacy Finote selam hospital Nile pharmacy Finote selam hospital Special pharmacy Debre Tabor hospital St. Gabriel pharmacy Felege hiwot hospital Special pharmacy Lalibela hospital Silase pharmacy Debre Tabor hospital Special pharmacy Motta Health centre Lalibela hospital Special pharmacy Adet Health centre Motta hospital special pharmacy GEOGRAPHICAL AREA: SNNPR Public sector Private sector Other sector Arba Minch hospital Biruk pharmacy Butajira hospital Special pharmacy Aleta wondo health centre Alpha pharmacy Dilla hospital Special pharmacy Bodity health centre Getachew pharmacy Hossan hospital special pharmacy Yirgalem hospital Addis hiwot pharmacy Arba Minch ERCS pharmacy Soddo hospital Shiferaw pharmacy Awassa ERCS pharmacy 43 GEOGRAPHICAL AREA: Oromiya region Public sector Private sector Other sector Assela hospital Fentale pharmacy Bishoftu hospital Special pharmacy Adama hospital M.T. pharmacy Bishoftu ERCS pharmacy Fitche hospital Tinsae pharmacy Fitche hospital Special pharmacy Bishoftu hospital Nazrawi pharmacy Adama ERCS pharmacy Shashemene hospital Amare pharmacy Shashemene hospital Special pharmcay Metehara health centre Assela hospital Special pharmacy Ziway health centre Adama hospital Special pharmacy Sebeta health centre Mojo health centre GEOGRAPHICAL AREA: Addis Ababa Public sector Private sector Other sector Zewditu hospital Aster pharmacy St. Paul hospital Special pharmacy Ras Desta hospital Lukas pharmacy Black Lion hospital Special pharmacy Yekatit 12 hospital Kidus pharmacy ERCS pharmacy No. 1 Kazanchis health centre Redeate pharmacy ERCS pharmacy No. 2 Woreda 17 health centre Harar pharmacy Kotebe health centre Special pharmacy Arada health centre Meshualekia Health centre Lideta health centre 44 Annex IV National Pharmaceutical Sector form Date: 10 September 2004 Country: Ethiopia Population: 71,066,000 [1996 E.C (2003/2004 G.C.)] Rate of exchange (commercial “buy” rate) to US dollars on the first day of data collection: One USD = 8.6432 Birr (Source: Inter Bank Forex Rate Bulletin , 15 September 2004) Sources of information: 1. Health and health related indicators, planning and Programming department, MOH, 1995E.C 2. Assessment of the pharmaceutical sector in Ethiopia, FMOH/WHO, 2003 3. Results of Interview with the staff of Drug Administration and Control Authority 4. Results of interview with the staff of PHARMID 5. Results of interview with the staff of Ethiopian Red Cross Society (ERCS) essential drug project 6. Results of interview with the staff of Pharmaceuticals Administration and Supplies Service (PASS), MOH 45 General information on the pharmaceutical sector Is there a formal National Medicines Policy document covering both the public and private sectors? q Yes q No Is an Essential Medicines List (EML) available? q Yes q No If yes, state total number of medicines on national EML: 282 (draft EML) If yes, year of last revision: 2004 (draft) If yes, is it (tick 3all that apply): q National q Regional q Public sector only q Both public and private sectors q Other (please specify): If yes, is the EML being used (tick 3all that apply): q For registration of medicines nationally q Public sector procurement only q Insurance and/or reimbursement schemes q Private sector q Public sector Is there a policy for generic prescribing or substitution? q Yes q No Are there incentives for generic prescribing or substitution? q Yes q No Public procurement5 Is procurement in the public sector limited to a selection of essential medicines? q Yes q No If no, please specify if any other limitation is in force: National list of Drugs Type of public sector procurement (tick 3all that apply): q International, competitive tender q Open q Closed (restricted) q Negotiation/direct purchasing q National, competitive tender q Open q Closed (restricted) q Negotiation/direct purchasing 5 If there is a public procurement system, there is usually a limited list of items that can be procured. Products procured on international tenders are sometimes registered in the recipient country only by generic names. Import permits to named suppliers are issued based on the approved list of tender awards. An open tender is one that is publicly announced; a closed one is sent to a selection of approved suppliers. 46 Are the products purchased all registered? q Yes q No Is there a local preference?6 q Yes q No Are there public health programmes fully implemented by donor q Yesq No assistance which also provide medicines? (e.g. TB, family planning, etc.) If yes, please specify: TB/Leprosy control and Family planning Distribution7 Is there a public sector distribution centre/warehouse? q Yes q No If yes, specify levels: national, regional, Zonal and district Are there private not-for-profit distribution centres: q Yes q No e.g. missions/nongovernmental organizations? If yes, please specify: missions/nongovernmental organizations Number of licensed wholesalers: 91 (37 wholesalers and 54 importers & whole sale distributors) Retail [(1995 E.C 2003/2004 G.C)] Urban Rural Overall Number of inhabitants per pharmacy (approx.) 25,842,181 Number of inhabitants per qualified pharmacist (approx.) 161,890 Number of pharmacies with qualified pharmacists 275 Number of medicine outlets with pharmacy technician 375 Number of other licensed medicine outlets 1783 Private sector8 Are there independent pharmacies? q Yes q No Number: 212 Are there chain pharmacies? q Yes q No Number: Do doctors dispense medicines? 9 q Yes q No If yes, approximate coverage or % of doctors who dispense: Are there pharmacies or medicine outlets in health facilities? q Yes q No 6 A local preference means that local companies will be preferred even if their prices are not the cheapest. Local preference is normally in the range of 10–20%. 7 The public sector often has a central storage and distribution centre which may have at least one sublevel. The private not-for-profit sector may be dominated by one type of NGO (e.g. church missions), but may also comprise others such as Bamako Initiative type projects, Red Cross or Red Crescent Society, Médecins Sans Frontières. 8 Retail outlets may be called pharmacies, medicine outlets, drug stores, chemists, etc. They may be run/owned by a qualified pharmacist (with diploma) or another category: e.g. pharmacy technician, or a lay person with short training. 9 Many countries allow doctors to dispense and sell medicines. 47 Financing (Give approximate figures, converted to US dollars at current exchange rate: commercia l “buy” rate on the first day of data collection) Type of expenditure Approximate annual budget (US dollars) National public expenditure on medicines including government insurance, military, local purchases in past year 30 million (2002/03 G.C) Estimated total private medicine expenditure in past year (out of pocket, private insurance, NGO/mission) Unknown Total value of international medicine aid or donations in past year 12.3 million (2002/03 G.C) What percentage of medicines by value are imported? Unknown Government price policy Is there a medicines regulatory authority? q Yes q No Is pricing regulated? q Yes q No Is setting prices part of market authorization/registration? q Yes q No Do registration fees differ between: n Innovator brand and generic equivalents q Yes q No n Imported and locally produced medicines q Yes q No Public sector Are there margins (mark-ups) in the distribution chain? q Yes q No n Central medical stores (PHARMID: 20-40 % for imports, 5-10 % for local products) n Regional store No additional profit margin n Other store (specify) % n Public medicine outlet Are there any other fees or levies? q Yes q No If yes, please describe: Private retail sector Are there maximum profit margins? q Yes q No If yes (if they vary, give maximum and minimum): n Wholesale % (20-40% for imported products; 5 -10% for local products) n Retail % (20-30%) 48 Is there a maximum retail price (sales price)? q Yes q No (If it varies, give maximum and minimum) n Maximum: n Minimum: Do patients pay professional fees (e.g. dispensing fee)? q Yes q No If yes, please describe: “Other” sector” Are there maximum profit margins? q Yes q No If yes (if they vary, give maximum and minimum): n Wholesale (20 % of the landed cost for ERCS) n Retail (20% for municipality pharmacies; 25% for special pharmacies and ERCS pharmacies) Is there a maximum sale s price? q Yes V No Insurance, risk-sharing or prepayment schemes Are there any health insurance, risk-sharing or q Yes q No prepayment schemes or revolving medicine funds? If yes, please describe: Some organizations cover the cost of drugs prescribed for their employees; poor patients will be provided drugs free of charge upon submission of certificate of exemptions from local administrations. Are all medicines covered? q Yes q No If no, state which medicines are covered (e.g. EML, public health programmes): Are some patients / groups of patients exempted, regardless of insurance coverage? (e.g. children < X yrs, war veterans) q Yes q No If yes, please specify: Estimated percentage of population covered % Is it official policy to supply all medicines free at primary health care level? q Yes q No If no, are some free? q Yes q No If yes, tick 3 all that apply: q Tuberculosis q Malaria q Oral rehydration salts q Family planning q Others, please specify: Leprosy Are there official us er charges/patient co-payments/fees? q Yes q No Are all medicines supplied free at hospitals? q Yes q No 49 If no, are some free? q Yes q No If yes, please specify: Anti TB/Leprosy drugs and family planning drugs & supplies 50 Annex V Medicine Price Data Collection form Use one form for each health facility and pharmacy Date: Area number: Name of town/village/district: Name of health facility/pharmacy (optional): Health facility/pharmacy ID (mandatory): Distance in km from nearest town (population >50 000): Type of health facility: q Public q Private retail pharmacy q Other (please specify): Type of price in public and private not-for-profit sector: q Procurement price q 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: Verification To be completed by the area supervisor at the end of the day Signed: Date: 51 MEDICINE PRICE DATA COLLECTION FORM Most sold: determined nationallyLowest price: determined at facility A B C D E F G H I Generic name, dosage form, strength Brand name(s) Manufacturer Available tick ü for yes Pack size recom- mended Pack size found Price of pack found Unit price (4 digits) Comments Aciclovir t ab 200 mg Zovirax GSK 25 /tab Most sold generic equivalent Cyclovir Cadila 25 Lowest price generic equivalent 25 Amoxicillin caps/tab 250 mg Amoxil SKB (GSK) 21 /tab Most sold generic equivalent Z mox Aurobindo 21 Lowest price generic equivalent 21 Co-trimoxazole paed suspension (8+40) mg/mL Bactrim Roche 100 mL /mL Most sold generic equivalent Cadiprim Cadila 100 mL Lowest price generic equivalent 100 mL Diazepam tab 5 mg Valium Roche 100 /tab Most sold generic equivalent Neuril CID 100 Lowest price generic equivalent 100 Diclofenac tab 25 mg Voltarol Novartis 100 /tab Most sold generic equivalent Dyclomax GSK 100 Lowest price generic equivalent 100 Glibenclamide tab 5 mg Daonil HMR 60 /tab Most sold generic equivalent Betanase Cadila 60 Lowest price generic equivalent 60 Hydrochlorothiazide tab 25 mg Dichlotride MSD 30 /tab Most sold generic equivalent Esidrex Novartis 30 Lowest price generic equivalent 30 52 A B C D E F G H I Generic name, dosage form, strength Brand name(s) Manufacturer Available tick ü for yes Pack size recom- mended Pack size found Price of pack found Unit price (4 digits) Comments Pyrimethamine with sulfadoxine tab (25+500) mg Fansidar Roche 3 /tab Most sold generic equivalent Laridox IPCA 3 Lowest price generic equivalent 3 Salbutamol inhaler 0.1 mg per dose Ventoline GSK 1 inhaler: 200 doses /dose Most sold generic equivalent Aerolin EPICO 1 inhaler: 200 doses Lowest price generic equivalent 1 inhaler: 200 doses Promethazine tablet 25 mg 100 /tab Most sold generic equivalent Promethazine EPHARM 100 Lowest price generic equivalent 100 Metronidazole capsule 250 mg Flagyl Aventis pharma 60 /caps Most sold generic equivalent Metronidazole EPHARM 60 Lowest price generic equivalent 60 Mebendazole tablet 100 mg Vermox Janssen Pharma 6 /tab Most sold generic equivalent Wormin Cadila 6 Lowest price generic equivalent 6 Penicillin, Procaine benzyl, powder for injection, 4 MIU/vial 1 vial /vial Most sold generic equivalent Procaine penicillin fortified EPHARM 1 vial Lowest price generic equivalent 1 vial Tetracycline eye ointment, 1 % Achromycin Lederle 5g /g Most sold generic equivalent Tetracycline Shanghai 5g Lowest price generic equivalent 5g 53 A B C D E F G H I Generic name, dosage form, strength Brand name(s) Manufacturer Available tick ü for yes Pack size recom- mended Pack size found Price of pack found Unit price (4 digits) Comments Benzyl benzoate lotion, 25 % 125 mL /ml Most sold generic equivalent Benzyl benzoate EPHARM 125 mL Lowest price generic equiv alent 125 mL Methyldopa tablet 250 mg Aldomet MSD 60 /tab Most sold generic equivalent Doepygyt Egis 60 Lowest price generic equivalent 60 Niclosamide tablet 500 mg Yomesan Bayer 4 /tab Most sold generic equivalent Niclosamide EPHARM 4 Lowest price generic equivalent 4 Clotrimazole topical cream, 1 % Canesten Bayer 15 g /g Most sold generic equivalent Clotrimazole Shangahai 15g Lowest price generic equivalent 15g Chloroquine Phosphate tablet 250 mg Nivaquine Rhone-poulenc Rorer 10 /tab Most sold generic equivalent Chloroquine phosphate EPHARM 10 Lowest price generic equivalent 10 Cotrimoxazole tablet (400 + 80) mg Bactrim Roche 20 /tab Most sold generic equivalent Cotrimol IPCA 20 Lowest price generic equivalent 20 Chloramphenicol capsule 250 mg 100 /caps Most sold generic equivalent Chloramphenicol EPHARM 100 Lowest price generic equivalent 100 54 A B C D E F G H I Generic name, dosage form, strength Brand name(s) Manufacturer Available tick ü for yes Pack size recom- mended Pack size found Price of pack found Unit price (4 digits) Comments Penicillin G, sodium crystalline, powder for injection, 1 MIU/vial 1 vial /vial Most sold generic equivalent Penicillin G, sodium crystalline EPHARM 1 vial Lowest price generic equivalent 1 vial Sodium chloride (Normal saline) Intravenous injection, 0.9 % 1000mL /mL Most sold generic equivalent Sodium chloride EPHARM 1000 mL Lowest price generic equivalent 1000 mL Quinine dihydrochloride 300 mg/ml injection 2 mL /mL Most sold generic equivalent Quinine ject Medreich 2 mL Lowest price generic equivalent 2 mL Diclofenac tablet 50 mg Voltarol Novartis 100 /tab Most sold generic equivalent Dyclomax GSK 100 Lowest price generic equivalent 100 Amoxicillin capsule 500 mg Amoxil SKB (GSK) 21 /tab Most sold generic equivalent Z mox Aurobindo 21 Lowest price generic equivalent 21 55 A B C D E F G H I Generic name, dosage form, strength Brand name(s) Manufacturer Available tick ü for yes Pack size recom- mended Pack size found Price of pack found Unit price (4 digits) Comments Lamivudine (3TC) tablet 150 mg Epivir GSK 60 /tab Most sold generic equivalent Avolam Ranbaxy 60 Lowest price generic equivalent 60 Stavudine (d4T) tablet 40 mg Zerit BMS 60 /tab Most sold generic equivalent Avostav Ranbaxy 60 Lowest price generic equivalent 60 Efavirenz (EFV) 200 mg capsule Sustiva BMS 90 /caps Most sold generic equivalent Stocrin MSD 90 Lowest price generic equivalent 90 Lamivudine + Zidovudine tablet (150 + 300) mg Combivir GSK 60 /tab Most sold generic equivalent Lamuzid Cadila (Zydus) 60 Lowest price generic equivalent 60 Nevirapine tab 200 mg Viramune Boehringer I 60 /tab Most sold generic equivalent Nevipan Ranbaxy 60 Lowest price generic equivalent 60 56

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