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Drug Prices Can Take A Surprising Turn When A Poor Country Gets Richer (NPR)

July 9, 2019

From the article:

"A new report, published by the Center for Global Development in June, finds that as countries move up the ladder of economic development, it becomes harder for government agencies, hospitals and health care companies to buy drugs at reasonable prices.

The report compares the range of prices that seven low- and middle-income countries pay for 25 medicines, including acetaminophen for pain relief, bisoprolol to treat high blood pressure, insulin to treat diabetes and omeprazole to treat heartburn. And when the prices were compared, there was a huge discrepancy. Some countries pay 20 to 30 times as much as other countries for the same drugs.

So even though a country may be progressing up the economic ladder, the researchers say, there may not be affordable medicine for everyone.

The researchers studied the Philippines, Senegal, Serbia, South Africa, Tunisia and Zambia as well as the Indian state of Kerala. They selected these countries to see how drug pricing is affected as poor countries improve economically, say the researchers.

(At the time of the report's writing, the World Bank classified Senegal as a low-income country, while the others were lower-middle and upper-middle income. Since the report was published, the World Bank has upgraded Senegal to "lower-middle income" status.)

Although the source for the data, IMS Health Data, prohibits the researchers from disclosing the drug prices in each country, the price discrepancies send a clear message, say the researchers.

The system in which countries procure its drugs is "hobbled by inefficiencies that leave some of the poorest countries paying some of the highest drug prices in the world," according to the report.

"There was some element of surprise that the [price discrepancies were] so high," says Prashant Yadav, a medicine supply chain researcher from Harvard Medical School and the Bill & Melinda Gates Foundation (a funder of NPR and this blog). Yadav did not work on the report.

A 2017 analysis from CGD found that in Ghana, for example, a commonly prescribed high-cholesterol medicine costs the government 11 cents per capsule – nearly double the U.K. National Health Service's listed price: 6 cents per capsule. If the price is adjusted for inflation, Ghana is actually paying 50 times more than the U.K.

High drug prices are a major factor in why at least one-third of the world population – primarily in developing countries – doesn't have regular access to medicines, according to the World Health Organization..."

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Executive Vice President of CGD, CEO of CGD Europe, and Senior Fellow