Estimation of cost-based prices for injectable medicines in the WHO Essential Medicines List

ObjectivesChallenges remain in ensuring universal access to affordable essential medicines. We previously estimated the expected generic prices based on cost of production for medicines in solid oral formulations (ie, capsules or tablets) on the WHO Model List of Essential Medicines (EML). The objec...

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Published inBMJ open Vol. 9; no. 9; p. e027780
Main Authors Gotham, Dzintars, Barber, Melissa Joy, Hill, Andrew M
Format Journal Article
LanguageEnglish
Published England BMJ Publishing Group LTD 01.09.2019
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Abstract ObjectivesChallenges remain in ensuring universal access to affordable essential medicines. We previously estimated the expected generic prices based on cost of production for medicines in solid oral formulations (ie, capsules or tablets) on the WHO Model List of Essential Medicines (EML). The objectives of this analysis were to estimate cost-based prices for injectable medicines on the EML and to compare these to lowest current prices in England, South Africa, and India.DesignData on the cost of active pharmaceutical ingredients (APIs) exported from India were extracted from an online database of customs declarations (www.infodriveindia.com). A formula was designed to use API price data to estimate a cost-based price, by adding the costs of converting API to a finished pharmaceutical product, including the cost of formulation in vials or ampoules, transportation and an average profit margin.ResultsFor injectable formulations on the WHO EML, medicines had prices above the estimated cost-based price in 77% of comparisons in England (median ratio 2.54), and 62% in South Africa (median ratio 1.48), while 85% of medicines in India had prices below estimated cost-based price (median ratio 0.30). 19% of injectable medicines in England, 9% in South Africa, and 5% in India had prices more than 10 times the estimated cost-based price. Medicines that appeared in the top 20 by ratio of lowest current price to estimated cost-based price for more than one country included numerous oncology medicines—irinotecan, leuprorelin, ifosfamide, daunorubicin, filgrastim and mesna—as well as valproic acid and ciclosporin.ConclusionsEstimating manufacturing costs can identify cases in which profit margins for medicines may be set significantly higher than average.
AbstractList OBJECTIVESChallenges remain in ensuring universal access to affordable essential medicines. We previously estimated the expected generic prices based on cost of production for medicines in solid oral formulations (ie, capsules or tablets) on the WHO Model List of Essential Medicines (EML). The objectives of this analysis were to estimate cost-based prices for injectable medicines on the EML and to compare these to lowest current prices in England, South Africa, and India. DESIGNData on the cost of active pharmaceutical ingredients (APIs) exported from India were extracted from an online database of customs declarations (www.infodriveindia.com). A formula was designed to use API price data to estimate a cost-based price, by adding the costs of converting API to a finished pharmaceutical product, including the cost of formulation in vials or ampoules, transportation and an average profit margin. RESULTSFor injectable formulations on the WHO EML, medicines had prices above the estimated cost-based price in 77% of comparisons in England (median ratio 2.54), and 62% in South Africa (median ratio 1.48), while 85% of medicines in India had prices below estimated cost-based price (median ratio 0.30). 19% of injectable medicines in England, 9% in South Africa, and 5% in India had prices more than 10 times the estimated cost-based price. Medicines that appeared in the top 20 by ratio of lowest current price to estimated cost-based price for more than one country included numerous oncology medicines-irinotecan, leuprorelin, ifosfamide, daunorubicin, filgrastim and mesna-as well as valproic acid and ciclosporin. CONCLUSIONSEstimating manufacturing costs can identify cases in which profit margins for medicines may be set significantly higher than average.
Objectives Challenges remain in ensuring universal access to affordable essential medicines. We previously estimated the expected generic prices based on cost of production for medicines in solid oral formulations (ie, capsules or tablets) on the WHO Model List of Essential Medicines (EML). The objectives of this analysis were to estimate cost-based prices for injectable medicines on the EML and to compare these to lowest current prices in England, South Africa, and India. Design Data on the cost of active pharmaceutical ingredients (APIs) exported from India were extracted from an online database of customs declarations ( www.infodriveindia.com ). A formula was designed to use API price data to estimate a cost-based price, by adding the costs of converting API to a finished pharmaceutical product, including the cost of formulation in vials or ampoules, transportation and an average profit margin. Results For injectable formulations on the WHO EML, medicines had prices above the estimated cost-based price in 77% of comparisons in England (median ratio 2.54), and 62% in South Africa (median ratio 1.48), while 85% of medicines in India had prices below estimated cost-based price (median ratio 0.30). 19% of injectable medicines in England, 9% in South Africa, and 5% in India had prices more than 10 times the estimated cost-based price. Medicines that appeared in the top 20 by ratio of lowest current price to estimated cost-based price for more than one country included numerous oncology medicines—irinotecan, leuprorelin, ifosfamide, daunorubicin, filgrastim and mesna—as well as valproic acid and ciclosporin. Conclusions Estimating manufacturing costs can identify cases in which profit margins for medicines may be set significantly higher than average.
Challenges remain in ensuring universal access to affordable essential medicines. We previously estimated the expected generic prices based on cost of production for medicines in solid oral formulations (ie, capsules or tablets) on the WHO Model List of Essential Medicines (EML). The objectives of this analysis were to estimate cost-based prices for injectable medicines on the EML and to compare these to lowest current prices in England, South Africa, and India. Data on the cost of active pharmaceutical ingredients (APIs) exported from India were extracted from an online database of customs declarations (www.infodriveindia.com). A formula was designed to use API price data to estimate a cost-based price, by adding the costs of converting API to a finished pharmaceutical product, including the cost of formulation in vials or ampoules, transportation and an average profit margin. For injectable formulations on the WHO EML, medicines had prices above the estimated cost-based price in 77% of comparisons in England (median ratio 2.54), and 62% in South Africa (median ratio 1.48), while 85% of medicines in India had prices below estimated cost-based price (median ratio 0.30). 19% of injectable medicines in England, 9% in South Africa, and 5% in India had prices more than 10 times the estimated cost-based price. Medicines that appeared in the top 20 by ratio of lowest current price to estimated cost-based price for more than one country included numerous oncology medicines-irinotecan, leuprorelin, ifosfamide, daunorubicin, filgrastim and mesna-as well as valproic acid and ciclosporin. Estimating manufacturing costs can identify cases in which profit margins for medicines may be set significantly higher than average.
Author Barber, Melissa Joy
Gotham, Dzintars
Hill, Andrew M
AuthorAffiliation 1 Independent researcher , Independent , London , UK
2 Harvard T.H. Chan School of Public Health , Harvard University , Boston , Massachusetts , USA
3 University of Liverpool , Liverpool , UK
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– name: 1 Independent researcher , Independent , London , UK
– name: 3 University of Liverpool , Liverpool , UK
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  givenname: Dzintars
  orcidid: 0000-0003-0359-1259
  surname: Gotham
  fullname: Gotham, Dzintars
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  organization: Independent researcher, Independent, London, UK
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  givenname: Melissa Joy
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  surname: Hill
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BackLink https://www.ncbi.nlm.nih.gov/pubmed/31575568$$D View this record in MEDLINE/PubMed
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Issue 9
Keywords health systems
essential medicines
generics
cost of production
health economics
Language English
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Snippet ObjectivesChallenges remain in ensuring universal access to affordable essential medicines. We previously estimated the expected generic prices based on cost...
Challenges remain in ensuring universal access to affordable essential medicines. We previously estimated the expected generic prices based on cost of...
Objectives Challenges remain in ensuring universal access to affordable essential medicines. We previously estimated the expected generic prices based on cost...
OBJECTIVESChallenges remain in ensuring universal access to affordable essential medicines. We previously estimated the expected generic prices based on cost...
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crossref
pubmed
bmj
SourceType Open Access Repository
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Index Database
Publisher
StartPage e027780
SubjectTerms Blood products
Costs
Costs and Cost Analysis
Drug dosages
Drug Industry - economics
Drugs, Essential - economics
England
Health Economics
Hepatitis
Humans
India
Injections - economics
Manufacturers
Manufacturing
Pharmaceutical industry
South Africa
Wage & price controls
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Title Estimation of cost-based prices for injectable medicines in the WHO Essential Medicines List
URI http://dx.doi.org/10.1136/bmjopen-2018-027780
https://www.ncbi.nlm.nih.gov/pubmed/31575568
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Volume 9
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