IHS Global Insight Perspective | |
Significance | A new survey published by the Chilean National Consumer Agency (Sernac) has revealed significant drug-price variations within retail pharmacies in the country, reaching as much as 6,000 Chilean pesos (US$10.25). Twelve pharmacies and 170 medications were included in the survey. |
Implications | Sernac's latest report points to the growing efforts of the government to introduce concrete measures and enhance the regulatory platform for business development within the pharma sector in Chile. The continuation of price reports in Chile is expected to highly influence the purchasing behaviour of individuals, who will become more aware of their possibility of saving money by purchasing certain products in certain locations. |
Outlook | Not only clients are expected to benefit from this type of governmental initiative, but also pharmaceutical companies and pharmacies who are willing to reduce their prices and offer a better deal to their clients. |
A new survey published in Chile by the National Consumer Agency (Sernac), has revealed that drug-price discrepancies within retail pharmacies in the country reach as much as 6,000 Chilean pesos (US$10.25). A total of 12 pharmacies participated within the survey, which focused upon 170 different pharmaceutical products. Salcobrand, Farmacias Ahumada (Fasa), Dr. Simi and Cruz Verde were among the participants.
Share of Prices in Leading Pharmacies in Chile
Price Range in Leading Retail Pharmacies | |||
Pharmacies | Approx. Share Maximum Prices (%) | Approx. Share of Average Prices (%) | Approx. Share of Minimum Prices (%) |
Salcobrand (centre, east and south) | 60 | 28 | 12 |
Ahumada (centre, east and south) | 15 | 49 | 36 |
Cruz Verde (centre, east and south) | 5 | 35 | 60 |
Dr. Simi | 7 | 56 | 37 |
Source: Sernac | |||
According to the study, 60% of medications sold at Salcobrand fell within the range of the most expensive products, while only 12% were considered within the minimum price range.
Farmacias Ahumada (Fasa) followed Salcobrand with 15% of medications within the maximum price range. Conversely, 26% of the products were considered within the minimum price limit and 49% within the average price scale. Only 7% of Dr. Simi's products fell within the category of maximum priced medications, while 37% were considered within the range of cheaper drugs. A total of 56% of the pharmaceutical products sold at Dr. Simi were considered within the average price range. Cruz Verde enjoyed the largest percentage of medications falling within the minimum price range, accounting for 60% of the total. Also, it reported the lowest percentage within the maximum price range, with only 5% of the total.
Range of Pharmacy Prices
Pharmacies' Price Range of Pharmaceutical Products | |||||
Drug Name | Active Ingredient/Presentation | Laboratory | Lower Price (Chilean pesos) | Higher Price (Chilean pesos) | Difference % |
Aspirin | acetylsalicylic acid/40 tablets | Bayer | 2,480 | 3,540 | 43 |
Bisolvon | Bromhexine, 120 ml | Boehringer Ingelheim | 4,080 | 5,140 | 26 |
Celebra | celecoxib, 30 tablets | Pfizer | 26,890 | 29,835 | 11 |
Combivent | Ipratropium/200 doses | Boehringer Ingelheim | 9,650 | 12,425 | 29 |
Cozaar | Losartan/30 tablets | Merck Sharp and Dohme | 18,080 | 22,375 | 24 |
Glafornil | metformin/30 tablets | Merck | 4,220 | 5,225 | 24 |
Glucophage Forte | metformin/30 tablets | Roche | 6,548 | 8,110 | 24 |
Migrogynon CD | evonorgestrel/28 tablets | Bayer | 2,650 | 4,120 | 55 |
Nexium | esomeprazole/14 tablets | AstraZeneca | 12,360 | 15,450 | 25 |
Panadol | paracetamol/12 tablets | GSK | 820 | 970 | 18 |
Xenical | Orlistat/21 tablets | Roche | 22,664 | 28,650 | 26 |
Yasmin | drospirenone, ethinyl estradiol/21 tablets | Bayer | 10,550 | 13,060 | 24 |
Source: Sernac | |||||
Prices for medications reported significant discrepancies within the market. Taking as an example medications from multinational laboratories, such as Bayer (Germany), Boehringer Ingelheim (Germany), Pfizer (U.S.), Merck Sharp and Dohme (Germany), Merck & Co (U.S.), Roche (Switzerland), AstraZeneca (U.K.) and GlaxoSmithKline (GSK, U.K.), the difference was evident. For instance, Bayer's analgesic medication Aspirin (acetylsalicylic acid) reported one of the highest price ranges with a 43% difference between its minimum (2,480 Chilean pesos) and maximum (3,540 Chilean pesos) retail price. Migrogynon CD (evonorgestrel) also reported a high price discrepancy with a minimum cost of 2,650 Chilean pesos and a maximum of 4,120 Chilean pesos. The price difference for this medication was 55%.
Conversely, medications such as Pfizer's Celebra (celecoxib) and GSK's Panadol (paracetamol) reported the lower difference in their retail price with an 11% and an 18% cost discrepancy respectively.
Differences Between OTC Drugs
While drug price differences among retail pharmacies were significant, variations between the costs of products with the same active ingredient were greater. For instance, some of the most-consumed over-the-counter (OTC) drugs such as ambroxol, ibuprofen, losartan, paracetamol, and salbutamol reported laboratory price differences from 907.4% to 2,378.8%. Paracetamol registered the smallest range of cost variation while ibuprofen reported the largest difference in price.
Laboratories' Price Range of Active Ingredients | ||
Active Ingredient | Dosage, mg | Difference (%) |
ambroxol | 30 | 1,127.1 |
ibuprofen | 400 | 2,378.8 |
losartan | 50 | 1,150.0 |
paracetamol | 500 | 907.4 |
salbutamol | 100 | 1,150.0 |
Advisory Board for Drug Prices
Amid the ongoing price-fixing scandal involving Fasa, Cruz Verde and Salcobrand and the publication of Sernac's first price report, Chilean minister of health, Alvaro Erazo, has announced the creation of an advisory board for medications in the country (see Chile: 25 March 2009: Fasa's Final Confession Confirms Pharmacies' Price-Fixing Agreement in Chile). The board is expected to initiate its activities by 21 May and have as a main objective the strengthening of Chile's pharmaceutical market transparency. Consumer protection agencies, pharmaceutical laboratories, retail pharmacies, healthcare professionals and law experts are expected to collaborate in this project. As such, price discrepancies and unclear pricing procedures within the pharmaceutical market in Chile are expected to be reduced.
Outlook and Implications
Drug-pricing problems are not new in Chile, where a highly monopolised pharmaceutical retail market has influenced the emergence of illegal activities on pricing processes and fuelled ongoing reports on this issue (see Chile: 20 June 2008: Consumer Group Reports Price Discrepancies Among Leading Chilean Retailers). Sernac's latest report and the creation of an advisory board for drugs point to the growing efforts of the government to contain this problem and introduce concrete measures to enhance the regulatory platform for business development within the sector and protect consumers.
The continuation of price reports in Chile is expected to highly influence the purchasing behaviour of individuals within the country. This could take place as clients become aware of the possibility of saving money by purchasing their medications from pharmacies that offer products with lower prices. Furthermore, as clients realise the considerable variation in costs between medications with the same active ingredients, they could also favour generic medications over branded products.
As such, not only consumers are expected to benefit from this type of governmental initiative, but also pharmaceutical companies and pharmacies who are willing to reduce their prices and offer a better deal to their clients.