The price of medicines

Abstract

Amongst the problems that challenge severely advances in health delivery is the question of finance. How much money should be allocated to health? And how much of this money should be earmarked for medicines? And finally, why carry out studies in pharmacoeconomics, and why study pharmacoeconomics? These questions are addressed in this work. Although one cannot expect to ever have definite answers to all of them it is hoped that this work will highlight some of the issues and suggest ways to address them. Issues considered range from aspects such as the balance between disposable income and the cost of healthcare through popular, industrial, governmental or institutional perceptions to consideration of fundamental principles such as human rights and the instinct for self-preservation. Factors impinging on healthcare, especially the cost of medicines, in relation to the three fundamental dimensions of healthcare, that is clinical, economic and humanistic, were also examined. "What is pharmacoeconomics" was the first question posed and to which an answer was sought. Equitable access to adequate healthcare and other principles were discussed using case examples such as a British pharmacist's expe1ience in delive1ing pharmaceutical care in Uganda. An attempt was also made to examine those factors which are taken in consideration by a manufacturing firm when it is about to fix a price for the launch of a new product into a particular market, the pharmaeconomic aspects of new therapeutic agents, such as patent life, and different treatment regimens. In order to put this in perspective, the rise of the pharmaceutical Industry, the development of generic products, the regulatory activities in the drugs market, the introduction of the single European currency, rates of exchange and ways to compare costs of drugs were examined. Factors that contribute to the cost of medicines that were considered included expected market share, availability and costs of raw materials, novelty of treatment class and of pharmaceutical dosage forms, prevalence of therapeutic indications as well as prices of competing products, including that of genetics. Aspects influencing costs such as the position of orphan drugs, sources of new therapies, costs of different treatment regimens, cost effectiveness and cost of controls were all considered in the light of sensitivity regarding one's state of health. Various scandals reported in the media are referred to and their impact on the public image of the pharmaceutical industry is considered. Examples included the monochloroacetic acid conspiracy case, the Bausch and Lomb contact lens incident, vitamin price fixing and the Poggiolini affair. The real needs as well as the exaggerated claims of the industry the costs of research and development are discussed. The impact and cost contribution of advertising, prescription versus non-prescription medication, the influence of the patient's quality of life efficacy and safety, ethical or generic presentation, distribution costs (including pharmacist services), the demand for the highest quality in medicine and the lack of transparency in p1icing were considered. Illogical real price, such as in the case of viagra and the presentation of the same pharmaceutical at enormously different prices (sometimes even those produced by the same manufacturer and marketed under different names), is used to point out the need for some standard in pricing. Gold is proposed as a possible universal standard to determine and compare prices of medicinals in terms of the equivalent weight of gold, prices so stated being easily converted to the various local currencies and enabling direct comparison of the price of the item in different countries. The subject of intellectual property rights as applied in the case of medicines leads to a consideration of the other side of the coin in defense of the industry by highlighting the significant costs incurred by the industry necessitated by research and development and the fact that regulatory constraints make patent life even shorter. Taxation such as VAT, applied in some countries but not in others lead to different prices which cannot be fairly laid at the door of the industry. Marketing departments, of pharmaceutical manufacturers in particular, do face problems in fixing prices according to affordability in various countries, leading to further problems through parallel importation and re-importing of drugs. In conclusion, a number of examples are used to demonstrate the problems arising from the cost of medicines, pointing out the need for pharmacoeconomic studies, notwithstanding their deficiencies, and giving reasons and concrete examples to support the argument for the teaching of pharmacoeconomics in a rational way without necessarily adding another subject to an already exhaustive curriculum of a pharmacy course. A number of projects carried out under supervision at the Department of Pharmacy of the University of Malta on various aspects of pharmacoeconomics ranging from the contribution and limitations of formularies to the cost effectiveness of glucose measuring machines, use of statins or treatment of acne as well as a summary of useful indicative data obtained from such studies conclude the case for pharmacoeconomic studies in determining the cost of medicines.