Global Insight Perspective | |
Significance | Overall findings indicate that private-sector prices are 44% higher than the public sector. However, in terms of availability of medicines, the private sector scored a median availability of 91%. |
Implications | International reference pricing and greater usage of generic drugs are being propagated as a result of the report. Generic drug prices were found to be four times higher than the world average in the 2004 report. |
Outlook | The survey would mean greater scrutiny of prices by the government. While it could pave the way for an enhanced organised market in medicine dispensation, authorities could be moved to provide greater controls in drug prices. |
Medicine Prices Survey
A quarterly assessment of medicine prices and their availability, proposed by Kenya’s health ministry and backed by the World Health Organisation (WHO) and Health Action International (HAI) Africa, was launched recently, bringing in a new era of greater scrutiny in both public- and private-sector drugs. The attempt is part of a larger project spearheaded by the WHO to provide an improved review of pharmaceutical product prices in Africa where the agency funds national and regional health programmes, including those concerned with HIV/AIDS, malaria and tuberculosis. The survey takes into account three variables: affordability; drug prices; and accessibility. Thirty-three medicines across the sector in both urban and rural facilities were surveyed to check drug prices, while in terms of availability, 28 drugs listed on Kenya’s Essential Drug List (EDL) were also assessed.
The findings include:
- Private-sector prices are 44% higher than in public health facilities.
- Prices in public urban facilities are 16% less than those in public rural facilities.
- Prices in private-sector pharmacies, both urban and rural, remain the same.
- Medicine prices are 139% higher in private urban facilities compared to those in public urban facilities, while in the rural areas, private-sector prices are just 4% higher than their public-sector counterparts.
Below is an assessment of median price ratios in the different rural and urban setups. The median ratio takes into account the local price and the international reference price in local currency.
Comparison of Median Price Ratios Between Sectors | |||||
Sectors | Overall Private/Public | Public Urban/Public Rural | Private Urban/Private Rural | Private Urban/Public Urban | Private Rural/Public Rural |
Price Ratio | 1.44 | 0.84 | 1.00 | 2.39 | 1.04 |
No. of pairs compared | 20 | 10 | 30 | 19 | 10 |
Source: Medicine Price Monitor April 2006 | |||||
In terms of availability, only 12 of the 28 drugs were found to be available in almost 50% of the public-sector facilities. Anti-retrovirals scored the highest, with public-sector facilities stocking the most in comparison. In the overall availability of medicines, the private sector showed maximum potential, with the public sector accounting for just 52% of median availability of the 27 facilities surveyed in that sector. Affordability-wise, all the medicines were found to be out of reach for almost 60% of the population, which lives on an income of below US$2 a day. The Nation quoted Health Minister Charity Ngilu as stating that a high of 69% of all household outpatient expenditure was attributed to drugs costs. The survey also found that medicine prices were highest in the capital, Nairobi, and lowest in North Eastern Province, the source adds.
Outlook and Implications
This attempt by the international agencies and the government is to secure an ongoing assessment of medicine prices in Kenya. The move was spurred by earlier studies that showed a gulf in medicine accessibility between various sectors. The review can be looked upon as part of the ministry’s ongoing health-sector reform, wherein the public sector received a US$5-billion fund infusion earmarked for the next four years. The divide between the public and private sector is distinct. The private sector primarily comprises agents and even pharmacies that ally with multinationals to import, register and distribute their products on the private market. The high prices in the sector could come under greater scrutiny, resulting in potential control over limited therapeutic areas. The health ministry is also attempting to propagate greater usage of generic drugs that could result in improved opportunities for Indian and South African pharma firms that operate in the region. The public-sector drug prices reflect the costs of procurement by the government that are often absorbed by international donors and agencies' funds. The government recently revamped the country’s procurement and distribution system through the Kenyan Medical Supply Agency (KEMSA) that resulted in 30% cost savings (see Kenya: 18 April 2006: Restructuring Of Kenya's Drug-Procurement System Pays Off as KEMSA Saves 30% In Costs). KEMSA's new role extended from maintaining medicine warehouses to monitoring supply and facilitating the purchase of drugs by hospitals. Based on the success of the current survey, the government is expected to increase the ambit of drugs included in the review.
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