The Union of South American Nations (UNASUR) plans to publish by the end of this year the reference price bank, which will be used as a reference in centralised purchase of medicines both at the national and regional level, reducing prices but negatively affecting the pharma industry.
IHS Life Sciences perspective | |
Significance | Through an official statement the Union of South American Nations (UNASUR) has announced the beginning of the work to set a medicine prices bank to be used as a reference list on the negotiations of both national and regional centralised purchased of high-cost medicines. |
Implications | The potential implementation of this bank of prices is likely to help to establish a kind of regional reference pricing system across UNASUR's member states, which could help national health authorities to procure medicines at competitive prices but negatively affect pharma industry. |
Outlook | UNASUR plans to publish by the end of this year the reference price list with details of the retail prices offer in each member state, which will be used as reference in centralised purchase of medicines both at the national and regional level. |
The Union of South American Nations (UNASUR) has taken some action on the announced project of setting a reference price bank. A meeting was held last week in Buenos Aires, Argentina with the UNASUR's Technical Group of Universal Access to Medicines (GAUMU), the South American Institute of Government in Health (ISAGS) and healthcare representatives from the member states of Argentina, Brazil, Bolivia, Colombia, Chile, Ecuador, Guyana, Paraguay, Peru, Uruguay, and Venezuela and the Pan American Health Organization's director, Maureen Birmingham.
Through an official statement UNASUR has announced the beginning of work to set a medicine prices bank to be used as a reference list on the negotiations of both national and regional centralised purchased of high-cost medicines. UNASUR's official statement can be accessed here, in Spanish.
UNASUR secretary Ernesto Samper has stated that a regional reference price list will enable any member state to compare prices in order to reduce the disparity that exists in medicine prices across the region and to use the prices as a reference at the time of procuring them through centralised national and regional tenders.
Outlook and implications
Progress achieved in this UNASUR meeting is the result of the work that the South America Union is doing in order to publish by the end of the year a reference price list with details of the retail prices offer in each member state (see Latin America: 13 May 2015: UNASUR to publish reference price list for South America). The creation of a regional medicine price bank has been anticipated for the past year but the success of the medicine prices bank would depend on the on-the-ground implementation of the projects by each member state.
The implementation of these bank of prices is likely to move the region on establishing a kind of regional reference pricing system across UNASUR's member states, which could help national health authorities to procure medicines at competitive prices and facilitate centralised purchase of medicines both at the national and regional level.
Nevertheless, this price bank is likely to negatively affect the innovative pharma industry as it may reduce the freedom to set prices depending on the specific economic characteristics of each Latin American market, exposing pharmaceutical firms to a more pronounced negative impact on revenues (see Latin America: 16 October 2014: UNASUR to create medicine prices bank to compare South American countries with international markets).
Centralised drug purchasing systems for the Ministries of Health of member states would be positive in terms of achieving savings at a regional level, and is part of a strategic plan implemented by UNASUR that is aimed at secure access to innovative medicines at affordable prices. The joint purchase of high-cost medicines has also reached some agreement in the Mercosur (Southern Common Market), but it has not been implemented yet (see Latin America: 16 June 2015: Mercosur members sign agreement for centralised purchase of high-cost medicines).
Although launching a medicines price bank would be a milestone that would help the region to use its negotiation power as a block to secure discounts in joint procurement of medicines, it is important to highlight that the implementation of these kind of initiatives at the regional level could be difficult due to the large number of member states with different price regulations and market conditions.