The survey of medicine prices and availability was conducted in six randomly selected districts of .... and affordability and price components (1) and is accessible on the HAI website ..... check of all data collection forms prior to data entry.
Study assessing prices, availability, and affordability of children’s medicine in Odisha, India
This publication does not necessarily represent the decisions or policies of the World Health Organization.
Lead Organization: Department of Pharmacology S.C.B. Medical College& Hospital, Cuttack ‐753007 Odisha, India Project Team Nodal Officer Dr Trupti Rekha Swain Area Supervisors Dr Bandana Rath Dr Suhasini Dehury Dr Harshbardhan Nayak Dr Satyajit Samal Dr Anjali Tarai Data Collectors Dr Bandana Rath Dr Dhaneswari Jena Dr Abinash Panda Dr Ayaskant Sahoo Dr Ajitesh Sahu Dr Suhasini Dehury Dr Priti Das Dr Rajashree Samal Dr Satyajit Samal Dr Gaurav Kumar Dr Sansita Parida Dr Anjali Tarai, Dr Debasish Bisoi Dr Santwana Mahar Dr Monalisa Jena Dr Harsavardhan Nayak Dr Ramachandra Giri Dr Himanshu S Sahu Dr Sudhir Ku Parida Data entry personnel Dr Satyajit Samal
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Acknowledgements We are grateful to the Department of Health and F.W. Department of the Government of Odisha for giving permission to conduct the study. We also wish to extend our thanks to the Advisory Group: Mrs A Garg, IAS, Commissioner cum Secretary, Health & F.W. Dept. Government of Odisha
Professor PK Das, DMET, Odisha
Dr K Nayak, DHS, Odisha
Mr AS Das, Drugs Controller, Odisha
Dr K Nayak, Jt Director, State Drug Management Unit, Odisha
Dr RK Paty, Medical Officer, State Drug Management Unit, Odisha
Professor J Jena, Head, Dept. of Pharmacology, SCB Medical College, Cuttack
Professor CS Moharana, Head, Dept. of Pharmacology, MKCG Medical College, Berhampur
Professor S Mohanty, Head, Dept. of Pharmacology, VSS Medical College, Burla
Professor B Mohapatra, Head, Dept. of Community Medicine, SCB Medical College, Cuttack.
We are very thankful for the sincere cooperation and participation of the doctors, pharmacists, and other staff at the medicine outlets during the process of data collection. Health Action International and the World Health Organization provided technical support for the survey and their assistance is gratefully acknowledged. Finally we convey our heartfelt thanks to the following personnel for their valuable guidance and support throughout the study: Dr B Gitanjali, Technical Officer for Essential Drugs and Other Medicines, World Health Organization, Regional Office for South‐East Asia, New Delhi
Dr A Kotwani, Associate Professor Department of Pharmacology, V.P. Chest Institute, University of Delhi
Dr K Holloway, Regional Adviser, Essential Drugs and Other Medicines, World Health Organization, Regional Office for South‐East Asia, New Delhi
Dr K Weerasuriya, Medical Officer, Medicines Access and Rational Use (MAR) Essential Medicines and Pharmaceutical Policies (EMP), World Health Organization, Geneva.
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Contents Abbreviations ...................................................................................................................................... v Executive summary ............................................................................................................................. vi 1. Introduction ..................................................................................................................................... 1 Better Medicines for Children project ................................................................................................................................. 1 Background of the state ............................................................................................................................................................. 2 Administrative divisions ............................................................................................................................................................. 2 Health sector ................................................................................................................................................................................... 3 Pharmaceutical sector ................................................................................................................................................................ 4 Financing and sources of medicines supply ...................................................................................................................... 5 Pharmaceutical procurement ................................................................................................................................................. 6 Price control of medicines ......................................................................................................................................................... 6 2. Methodology of the surveys ............................................................................................................. 7 Overview ........................................................................................................................................................................................... 7 Selection of medicine outlets .................................................................................................................................................. 8 Selection of medicines to be surveyed ............................................................................................................................. 10 Data collection ............................................................................................................................................................................. 10 Data entry ...................................................................................................................................................................................... 11 Data analysis ................................................................................................................................................................................ 11 Price components survey ....................................................................................................................................................... 12 3. Results ........................................................................................................................................... 13 Medicine availability ................................................................................................................................................................ 13 Medicine prices ........................................................................................................................................................................... 19 Public sector procurement prices ....................................................................................................................................... 19 Private sector patient prices ................................................................................................................................................. 19 NGO/Mission sector patient prices..................................................................................................................................... 20 Affordability of standard treatment regimens ............................................................................................................. 21 Components of the price structure .................................................................................................................................... 22 Private sector ............................................................................................................................................................................... 22 Public sector ................................................................................................................................................................................. 25 Summary ........................................................................................................................................................................................ 26 4. Conclusion ..................................................................................................................................... 29 5. References ..................................................................................................................................... 31 Annex 1. List of core and supplementary medicines surveyed ............................................................ 32 Annex 2. Medicine price data collection form used in the survey ....................................................... 33 Annex 3. Availability of individual medicines, in three sectors ........................................................... 39 Annex 4. Median price ratios, public sector procurement pricesa ....................................................... 41 Annex 5. Median price ratios, private sector patient pricesa ............................................................... 42
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Abbreviations Cap
Capsule
DFID
Department for International Development
EML
Essential Medicines List
HAI
Health Action International
Inj
Injection
MPR
Median price ratio
MRP
Manufacturer’s retail price
NGO
Nongovernmental organization
ORS
Oral rehydration solution
Rs
Rupees
SDMU
State Drug Management Unit
Susp
Suspension
Tab
Tablet
VAT
Value added tax
WHO
World Health Organization
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Executive summary A field study to measure availability, affordability and price components of selected medicines was undertaken in Odisha, an eastern Indian state, using a standardized methodology developed by the World Health Organization (WHO) and Health Action International. The study was conducted as part of the WHO‐led Better Medicines for Children project, funded by the Bill and Melinda Gates Foundation, which aims to improve access to essential medicines for children by addressing issues of availability, safety, efficacy, and price. The survey of medicine prices and availability was conducted in six randomly selected districts of Odisha: Cuttack, Ganjam, Sambalpur, Kalahandi, Kandhamal, and Balasore. Data on 34 essential medicines were collected in medicine outlets in the public, private, and NGO/mission sectors of each district, using a validated sampling frame. Data were also collected on government procurement prices. For each medicine surveyed, data were collected on the highest‐priced and lowest‐priced forms available on the day of visit to that facility. Medicine prices are expressed as ratios relative to Management Sciences for Health international reference prices for 2009 (median price ratio, MPR). Using the salary of the lowest‐paid government worker, affordability was calculated as the number of daysʹ wages this worker would need to purchase standard treatments for common conditions. A price components survey was also conducted to identify the add‐on costs in the supply chain that contribute to final patient prices. The survey included two types of data collection: central data collection on official policies related to price components, and tracking specific medicines through the supply chain to identify add‐on costs. Medicine tracking was conducted in two regions: Cuttack and Balasore districts. Six medicines were tracked backwards through the distribution chains in public and private sectors to identify the add‐on costs that contribute to final price (final procurement price in the public sector and final patient price in the private sector). The results of the survey highlight a number of important issues, including the following points.
Availability of medicines in the public and private sector Mean availability of the 34 essential paediatric medicines in the public sector was 17.0%, indicating that most patients must purchase medicines from the private sector. Highest‐ priced products were not found in the public sector, indicating that facilities were only stocking one product for each medicine. In the private sector, the mean availability of highest‐priced and lowest‐priced medicines was 10.8% and 38.5%, respectively. In the NGO and mission sector, availability of children’s medicine was 21.8%
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When availability was analysed by therapeutic class, oral rehydration solution (ORS) for the treatment of diarrhoea was the most prevalent, with availability of 85% or more in all three sectors. However, dispersible zinc tablets were virtually unavailable (less than 5% availability) in all three sectors. Antibiotics had variable availability depending on the medicine and sector surveyed, though availability of individual medicines was consistently less than 60% with the exception of ofloxacin. For the antiasthmatic class, Beclomethasone inhalers were virtually unavailable (less than 5% availability) in all three sectors. Salbutamol inhalers had higher availability in the public and private sectors (51.2% and 64.6%, respectively), but were not available in the NGO/mission sector. No antiepileptics were available in public sector facilities, while in the private sector availability ranged widely from 1.2% for diazepam rectal solution to 42.7% for valproic acid oral liquid.
Public sector procurement prices The Government of Odisha uses a central procurement system whereby medicines are procured by an open tendering process. All the medicines in the government (public) sector are procured as generic (branded generic) forms. In the public sector, the procurement agency is purchasing medicines at prices 48% lower, on average, than international reference prices, indicating a fair level of purchasing efficiency. Medicines procured by the government are made available to the patients free of cost in public sector facilities.
Private sector patient prices Both highest‐priced and lowest‐priced products were found in the private sector, indicating that private sector facilities were sometimes stocking multiple products for individual medicines. Both highest‐priced and lowest‐priced products were generally branded generics, as originator brands are usually not found. On average, highest‐priced and lowest‐ priced products were being sold at 1.83 and 1.46 times the international reference price, respectively. For some medicines, substantial price variation was observed across individual outlets.
NGO/Mission sector patient prices In NGO/mission sector facilities, medicines were found to cost 2.08 times their international reference price. However due to low medicine availability results are based on four medicines only. When the prices of these four medicines are compared with those in the private sector, they are found to cost 12.4% more in the NGO/mission sector.
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Affordability of standard treatment regimens in the private sector In treating common conditions using standard regimens, the lowest paid government worker would need between 0.1 (fever, diarrhoea using ORS only) and 0.7 (respiratory infection) of one day’s wages to purchase medicines from the private sector. While this could appear affordable, this number does not includes costs associated with consultations and diagnostic tests. Further, a majority people in Odisha earn significantly less than the lowest government wage. Finally, this affordability indicator does not consider individuals or families with multiple medications.
Components of medicine prices In the private sector, the cumulative mark‐up on branded generic products was approximately 53% will little variation across individual medicines. The manufacturerʹs retail price (MRP) is the largest contributor to the final patient price; in the case of paracetamol, for example, the MRP contributed 65% to the final patient price. Larger cumulative percentage mark‐ups are observed for unbranded rather than branded generics. For example, for paracetamol suspension and ORS powder the cumulative per cent mark‐ ups of unbranded generics are 218% and 326%, compared to 53% for the brand product in each case. For unbranded generics the retail mark‐up is the largest contributor to final patient price (61% in the case of paracetamol). In the public sector, the MRP contributes 90% to the final procurement price and add‐on costs (taxes and mark‐ups) contribute 10%. The results of the survey show that the availability, price, and affordability of children’s medicines in Odisha should be improved in order to ensure equity in access to basic medical treatments, especially for the poor. This requires multi‐faceted interventions, as well as the review and refocusing of policies, regulations, and educational interventions within the state.
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1. Introduction In September 2010, the Sriram Chandra Bhanja Medical College, Cuttack, conducted a state‐ wide study on the prices, availability, and affordability of a selection of medicines in Odisha,1 India. These medicines were reviewed by product type (highest‐priced and lowest‐ priced), and compared with those in other sectors and countries. Those component costs with the most significant contribution to the final price of medicines were categorized as well. The study was conducted as part of the WHO‐led Better Medicines for Children project, which aims to improve access to essential medicines for children by addressing issues of availability, safety, efficacy, and price. This study was conducted using an adaptation of the standardized methodology developed by the World Health Organization (WHO) and Health Action International (HAI). The WHO/HAI methodology is described in the manual Measuring medicine prices, availability, and affordability and price components (1) and is accessible on the HAI website (http://www.haiweb.org/medicineprices). The main objectives of the study were to answer the following questions: What is the availability of children’s medicines in the public, private, and NGO/mission sectors?
Is the public sector purchasing children’s medicines efficiently in comparison with international reference prices?
What is the price of children’s medicines in the public, private and NGO/mission sectors, and how does this compare with international reference prices?
What is the difference in price of highest‐price and lowest‐price generic equivalents?
How affordable are medicines for the treatment of common conditions for people with low income?
What charges get added to the price of medicines as they proceed from manufacturer to patient?
Better Medicines for Children project The Better Medicines for Children project was initiated by WHO in 2009 with funding from the Bill and Melinda Gates Foundation. The overarching goal of the project is to improve access to essential medicines for children by addressing issues of availability, safety, efficacy, and price. Specific objectives include promoting their inclusion in national essential medicines lists, treatment guidelines, and procurement schemes; working with drug
1
Formerly known as Orissa.
1
regulatory authorities to expedite regulatory assessment of essential medicines for children; and developing measures to monitor and manage their prices.
Background of the state Odisha lies on the eastern coast of India between 17.15’ and 22.45’ in the North latitude and between 81.45’ and 87.50’ in the East longitude. The state is bound by Jharkhand on the north, Chhattisgarh on the west, Andhra Pradesh on the south, and the Bay of Bengal on the east. The state lies in a subtropical geo‐climatic region with vastly varied topography. Odisha encompasses 155 707 square kilometres of land (4.74% of the country). Odisha is one of the least urbanized states in India. The 2001 census places the rate of urbanization at 14.97. The scheduled tribe and scheduled caste populations constitute 22.13% and 16.53% respectively of the total state population. This is comparatively higher than the total figures for India (16.20% scheduled tribe and 8.19% scheduled caste, respectively). The agriculture sector comprises about 80% of the total work force and contributes 50% of the state’s domestic product. Rice is the principal crop. Its cultivation is the main occupation of 75% of the people. The net state domestic product increased from Rs. 16 184.30 crores2 in 1993–1994 to Rs. 25 178.31 crores in 2004–2005. The per capita income has increased to Rs. 6555 in 2004–2005. Odisha has been one of the most natural disaster‐prone states of India. Floods and droughts regularly devastate the state and cyclones are common. Frequent occurrences of natural calamities are barriers to economic progress.
Administrative divisions Administratively Odisha has 3 revenue divisions, 30 districts, 58 subdivisions, 171 tehsils and 314 community development blocks. There are 105 local bodies, 31 towns, 6235 gram panchayats and 51 124 villages. Bhubaneswar is the capital. In the three‐tier system of administration (Administrative Department, Heads of Department, and District Offices and Subordinate Offices), department heads play a key role between the Administrative Department and District Offices and Subordinate Offices. The Director of Health Services in Odisha occupies a distinct position in the health care service administration of the state pertaining to promotive, preventive, and curative aspects of health care in the districts which have populations of one crore with 38% schedule population. The Health & F.W. Department of the state formulates all health policies, and the Director of Health Services, being the head of the department, executes them. Elements of the national health programme are also executed in the state under the control and supervision of the Director of Health Services.
2
One crore rupees equals US$ 10 million. US$ 1 ≈ 50 rupees.
2
Health sector In 2009 the state’s per capita total expenditure on health was Rs. 263 (US$ 1 equals Rs. 45.2). Tables 1 and 2 show various health indicators of Odisha, a state characterized by widespread poverty and deprivation, where the population depends more heavily on public health facilities than does the rest of the country. The utilization of public health facilities for outpatient care in rural and urban areas is 51% and 54%, respectively, while the national averages are 22% and 19%, respectively (2). Despite the public’s reliance on the public system, evidence has highlighted huge gaps in the infrastructure of public health care, and suggests that institutions do not operate at optimal levels (2). In this context, it is important to discuss out‐of‐pocket expenditure and whether the state government is able to protect Odisha’s large number of poor families from health shocks. As revealed elsewhere (3), out‐of pocket‐expenditure represented 77% of total health expenditure in 2001–2002, and slightly more, 80%, in 2004–2005. This huge percentage of out‐of‐pocket expenses highlights the inadequate availability of public services and the great burden placed on the poor in accessing medical services. Table 1. Selected health indicators of Odisha Indicator (reference) Crude birth rate (4)
21 per 1000 population
Crude death rate (5)
8.8 per 1000 population
Infant mortality rate (3)
65 per 1000 live births
Infant mortality rate, urban (4)
46 per 1000 live births
Infant mortality rate, rural (4)
68 per 1000 live births
Natural growth rate (5)
13.1%
Total fertility rate (3)
2.4
Couple protection rate (3)
50.7%
Life expectancy at birth, 1996–2001 (7)
61.64 years
Maternal mortality rate ,2007-09 (5)
258 per 100 000 live births
Perinatal mortality rate (6)
65.3 per 1000 live & still births
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Table 2. A selection of statistics of the health infrastructure of Odisha, 1999–2000 Doctor:population ratio
1:7560
Population:health facility
1:21 700
Nurse:doctor ratio
1:2
Bed:population ratio
1:2680
Auxiliary nurse-midwife:population ratio
1:5200
Medical college hospitals
6 (3 government & 3 private sector)
District headquarter hospitals
32
Subdivisional hospitals
22
Community health centres
231
Primary health centres
117
1
Primary health centres
1162
Mobile health units
14
Specialized hospitals (e.g. TB, leprosy, eye, paediatrics)
120
Subcentres
6688
Total 1
8392
Lowest level govt. health facility staffed with one doctor, one nurse, and one pharmacist.
Pharmaceutical sector The Government of Odisha has been implementing a series of management system changes and reforms within the health sector, particularly in the Drug Controller Office, which is the regulatory authority of medicines in the state. The Department for International Development (DFID) in the United Kingdom of Great Britain and Northern Ireland has been a key player in assisting the government of Odisha in this effort, which, among other things, includes enhancing capacity to improve the supply of essential drugs. Changes in pharmaceutical policy began in 1998. They were intended to restructure the drug procurement and distribution system to make it more simple and efficient. Changes included scale‐up of treatment protocols for selected diseases and streamlined warehouse management, to make accessible to health facilities the maximum number of high‐quality drugs. Other major features of this policy include the following: A rational drug list contains essential items of drugs (generic products only).
An stringent quality control mechanism involves testing each batch of drugs supplied.
Includes a drug budget and passbook system for all individual institutions.
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Institutions can choose any drug in any quantity within budget and essential drug list constraints.
Centralized drug procurement is from manufactures only, to ensure most competitive prices.
Online inventory control system connects all warehouses with one central drug store attached to the central office.
Twenty per cent of drug budget made available to the districts and peripheral institutions for emergency purchase and meeting expenditure towards transport.
An awareness programme for physicians and pharmacists has been initialized for rational drug use and better logistics.
Policy linked with other sector reform policies to establish treatment protocols, and clinical audit practices.
Financing and sources of medicines supply Implementation of a sustainable drug policy requires financial solvency. Continuous availability of high‐quality drugs cannot be ensured without funding and the efficient use of resources. Without these components the reality is that supply cannot meet demand. Around the turn of the century, Odisha’s health budget hovered around 3% of the overall budget (Table 3). Table 4 shows the normal rates for provisioning medicines to health facilities. Table 3. The health sector budget
Table 4. Budgets for various health facilities in Odisha Outpatient dept. (>30 beds) Inpatient dept. (>30 beds) Area hospital (16–30 beds) Community health centres (6–15 beds) Block level primary health centre Below primary health centre1 1
Rs. 0.050 per patient/day Rs. 9.50 per patient/day Rs. 100 000 per day Rs. 50 000 per day Rs. 30 000 per day Rs. 16 000 per day
Lowest level govt. health facility staffed with one doctor, one nurse, and one pharmacist. Source: (8).
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The requirement of funds for drugs determined on the basis of the above norms is Rs. 9.00 crores. The requirement as per projected demand is Rs. 12.00 crores in 2001–2002. Funds allotted to the Deputy Director of Medical Stores in 2001–2002 were the following: Central procurement: non‐plan 6.08 crores; plan 0.5309 crores.
DFID: Panchabyadhi3 0.93 crores; heat stroke 1.00 crores; sub health centre medicines 0.78 crores.
The World Bank (156 health facilities) and DFID (2 districts)4 provided additional funds, in rupees, at the turn of the century as well: World Bank 12 500 000 (1998–1999); 29 500 000 (1999–2000); 46 500 000 (2000–2001)
DFID: 2 020 128 (1998–1999); 3 810 892 (1999–2000); 2 886 761 (2000–2001).
Pharmaceutical procurement Until 1997, the Director of Medical Education Training placed contract rates on suppliers for various components of drugs. One or more suppliers were set along with the prices. The chief medical officers of districts only placed orders with the suppliers for whom the rate contract had been placed. Following a government order in 1997, the procurement methods changed. The requirements of public health facilities were ascertained on the basis of district‐wide indents, from which a state list was compiled. Tenders are called for supply of specific quantities after receipt of bids and evaluation; following the prescribed approval procedures, orders are placed on the selected bidders at pre‐approved prices. The revised system was introduced to ameliorate deficiencies in the system prior to 1997, such as irrational drug purchases (due to irregular and tardy funds), procurement problems in small districts, and slow moving items/stock outs.
Price control of medicines The Department of Chemicals and Petrochemicals of the Ministry of Chemical and Fertilizer develops the pricing policy for the pharmaceutical industry in India. The prices of some drugs are controlled through the Drug Price Control Order of 1995. Price controlled drugs are divided into two categories: the first includes drugs considered as essential and is subject to more stringent rules than those in the second category. Concessions on prices exist for manufacturers who conduct in‐house Bulk drug research and development, and for new drugs introduced into India, either by domestic or foreign firms.
3 The Panchabyadhi scheme is a guideline to treat the five most commonly occurring diseases in Odisha – malaria, leprosy, diarrhoea, acute respiratory infections, and scabies. 4 FID also provides funds for testing of quality and transportation of medicines.
6
The following initiatives have been taken by the Indian Government favouring the pharmaceutical industry in the 2008–2009 budget: a reduction in excise duty (from 16 to 8%) on all goods produced in the pharmaceutical sector;
amounts spent on eligible for a 125% weighted deduction;
a reduction in customs duty (from 10 to 5%) and a total exemption of excise duty on specified life‐saving drugs and bulk components used in the manufacture of anti‐ HIV/AIDS drugs;
central sales tax on specified life saving drugs reduced (from 3 to 2%);
value added tax (VAT): drugs and medicines are taxed at 4% (except Assam State where the rate is 6%); and
a generous tax rate of 4% for medical devices (12.5% in the States of Maharashtra, Gujarat & Kerala.
Odisha like few other states has introduced a system of levying tax on MRP at a single point, that is, first sale in the state is subject to VAT on the basis of MRP and subsequent sales, in general, are exempt. The MRP system is optional in some states. levy entry tax on entry of medicines and devices in to these states. a national medicine price monitoring system for retail/patient prices. There are no regulations mandating retail/patient medicine price information to be made publicly accessible.
Rational use of medicines Odishaʹs Essential Medicines List (EML), last updated in 2009, contains unique medicine formulations and is currently being used for public sector procurement. There is a committee responsible for the selection of products on the national EML. The first standard treatment guideline was the Panchabyadhi scheme initiated in 2001. The next treatment guideline was prepared in 2006.
2. Methodology of the surveys Overview The survey of the prices, availability, and affordability of medicines in Odisha was conducted using an adaptation of the standardized WHO/HAI methodology (1). Data on the availability and final (patient) prices of medicines were collected in medicine outlets in public, private, and NGO/mission sectors. Government procurement prices were also surveyed.
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A total of 34 child‐specific essential medicines were surveyed, 23 from a core list recommended by WHO and 11 medicines selected locally. For each medicine in the survey, two products were monitored: the highest‐priced (either originator5 brand or branded generic) and lowest‐priced6 All prices were converted to US dollars using the exchange rate (buying rate) on the first day of data collection (15 September 2010): US$ 1 = Rs. 45.20. Another survey was conducted alongside to identify additional costs contributing to the final price of medicines. The survey included two phases: a pharmaceutical policy investigation at the central level and review of the additional costs contributing to final price along the medicine distribution chain. In the latter, a selection of survey medicines were traced backwards through the supply chain, from dispensing point to importer or local manufacturer, and different charges and mark‐ups were identified.
Selection of medicine outlets Sampling was conducted in a manner consistent with the WHO/HAI methodology, which has been shown through a recent validation study to yield a nationally representative sample (8). In the first step, six districts in different geographical regions of the state were randomly selected as survey areas for data collection. The major urban centre of each district was selected as one survey area, and an additional five areas were chosen at random from those which could be reached within a dayʹs drive from the headquarters of each district. One district (Koraput from southern Odisha) was excluded from the selection of survey areas due to political instability. The following six areas were surveyed (Figure 1): Cuttack (medical college hospital and nodal point)
Sambalpur (western Odisha with medical college hospital)
Ganjam (southern Odisha with medical college hospital)
Kalahandi (rural district)
Kandhamal (tribal district)
Balasore (northern Odisha a rural district)
5 6
Originator brand child-specific medicines are usually not available in Odisha because of their high cost. The lowest-priced medicines in the facility at the time of the survey.
8
Figure 1. Map of Odisha showing the districts chosen for the survey
In each survey area (district), the main public head quarter hospital and 13 other smaller public health facilities constituted 14 sample survey areas. In each district this selection was made from all public facilities expected to stock most of the medicines in the survey. Fourteen private sector and two other facilities (e.g. NGO/Mission) within a four‐hour drive from the main public hospital were also identified and surveyed (Table 5). Table 5. Type and number of facilities or medicine outlets surveyed in each district Public sector facilities (n=14) Medical college hospital (if present) – 1
Private sector facilities (n=14) Retail pharmacies (chemist shops) – 8
District hospital – 1
Private clinics/Nursing homes/ Dispensing doctors – 6
NGO/Mission sector (n=2) Health facilities run by NGOs/mission sector – 2
Community health centres – 2 Primary health centres – 10
In total, 79 outlets were surveyed in each of the public and private sectors, and 5 outlets were surveyed in the NGO/mission sector. While 12 facilities in the NGO/mission sector were initially selected, only 5 were within one day’s drive and thus qualified for inclusion in the study.
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Selection of medicines to be surveyed As part of the Better Medicines for Children project, 23 medicines in 30 different formulations and strengths were recommended for inclusion in the survey. An additional 11 medicines were selected at the state level for inclusion in the survey. Supplementary medicines were selected based on recommendations of the committee that was engaged in the preparation of the child‐specific essential medicines list for the state. A few medicines were excluded from the survey because they are available through restricted outlets only (e.g. morphine tablets for oral use). Annex 1 list all the medicines surveyed. For each medicine, a specific dosage form and strength was surveyed to ensure that data would be comparable across facilities. In total 34 medicines were included in the survey, all of which were expected to be available at the different levels of public sector facilities in the six survey areas.
Data collection The survey team consisted of a survey manager, 5 area supervisors, 18 data collectors, and 1 person to enter the data. All area supervisors and data collectors were faculty members and post graduate students of pharmacology and community medicine departments, working in three government medical colleges of the state. All survey personnel received training in the standard survey methodology and data collection/data entry procedures at a workshop held on 3 and 4 September 2010. As part of the workshop, a data collection pilot test was conducted at public and private medicine outlets, which did not form part of the survey sample. Data collection took place between 15 September 2010 and 15 February 2011. Data collectors visited medicine outlets in pairs and collected information on medicine availability and price using a standard data collection form (Annex 2) specific to the medicines being surveyed in Odisha. Area supervisors checked all forms at the end of each day of data collection, and validated the data collection process. Each day, 20% of the medicine outlets were independently surveyed and those results were compared with those of the data collectors. Upon completion of the survey the survey manager conducted a quality control check of all data collection forms prior to data entry. Public procurement data were collected on the prices the government pays to procure medicines. Data were collected for the same medicines as surveyed in medicine outlets. Procurement data were obtained from the State Drug Management Unit (SDMU) in Bhubaneswar, Odisha’s central medicine procurement agency. To collect data on price components, six ‘tracer’ medicines were selected from the 34 medicines surveyed. The price of these medicines was tracked backwards, from sample medicine outlets to central sources, to identify the different charges added to the price of the medicine at each stage of the distribution chain. This was accomplished by contacting wholesalers, suppliers, procurement officers, and ministry of health officials. 10
Data entry Survey data were entered into the pre‐programmed MS Excel Workbook provided as part of the WHO/HAI methodology. Data entry was checked using the ʹdouble entryʹ and ʹdata checkerʹ functions of the Workbook. Erroneous entries and potential outliers were verified and corrected as necessary.
Data analysis The availability of individual medicines is calculated as the percentage of medicine outlets where the medicine was found. Mean (average) availability is also reported for the 34 surveyed medicines. Note that the availability data only refer to the day of data collection at each particular facility and may not reflect average monthly or yearly availability of medicines at individual facilities. Medicine prices obtained during the survey are expressed as ratios (median price ratios, MPRs) relative to a standard set of international reference prices: Median local unit price Medicine price ratio = ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ International reference unit price The ratio is thus an expression of how much the local medicine price diverges from the international reference price. For example an MPR of 2 would mean that the local medicine price is twice that of the international reference price. Median price ratios were only calculated for medicines with price data from at least four medicine outlets, except for procurement prices where a single data point was accepted. The exchange rate used to calculate MPRs was US$ 1 = Rs. 45.20; this was the commercial ‘buy’ rate taken from local bank on the first day of data collection. The 2009 Management Sciences for Health reference prices, taken from the International drug price indicator guide (9), were used as the international reference prices in the survey. These reference prices are the medians of recent procurement prices offered by profit‐making and non‐profit‐making suppliers to international non‐profit‐making agencies for generic products. These agencies typically sell in bulk quantity to governments or large NGOs, and the prices are therefore relatively low as they represent efficient bulk procurement without the costs of shipping or insurance. Price data were obtained at the start of the survey (15 September 2010) for each medicine surveyed. Price results are presented for individual medicines, as well as for the 34 medicines combined. Summary results for the combined medicines have provided a reasonable representation of medicines in the country and price conditions on the market. As averages can be skewed by outliers, median values have been used in the price analysis as a better representation of the midpoint value. The magnitude of price and availability variations is presented as the interquartile range. A quartile is a percentile rank that divides a distribution into four equal parts. The range of values containing the central half of the 11
observations, that is, the range between the 25th and 75th percentiles, is the interquartile range. Finally, the affordability of treating six common conditions was assessed by comparing the total cost of medicines prescribed at a standard dose, to the daily wage of the lowest paid government worker (Rs. 277.42 at the time of the survey). Though it is difficult to assess true affordability, treatments costing one day’s wage or less (for a full course of treatment for an acute condition, or a 30‐day supply of medicine for chronic diseases) are generally considered affordable.
Price components survey Alongside the main survey, a price component survey was undertaken. Information on government policies and regulations that affect price components was collected in the first phase of the study from interviews with staff in various ministries and health‐care delivery systems at the central level. In the second phase, data were collected on the actual price components of a selection of the 34 survey medicines. Medicines were chosen to be representative of different therapeutic classes and formulations, both acute and chronic conditions, and those found to have large price variations across individual outlets (Table 6). Table 6. Selected medicines for which price components were determined Medicine Amoxicillin/ Clavulanic acid Artemether + lumefantrine ORS sachet 1 litre Paracetamol suspension Salbutamol inhaler Ofloxacin
Therapeutic class Antibiotic
Dry syrup
Acute
Significant pricing variation Yes
Antimalarial
Dispersible tablet
Acute
Yes
Electrolyte Antipyretic
Powder Suspension
Acute Acute
Yes Yes
Antiasthma tic
Metered-dose inhaler Tablet
Chronic
Yes
Acute
Yes
Antibiotic
Formulation
Level of disease
To identify costs added to the base price of target medicines, each was tracked backwards from the end of the supply chain (e.g. retail pharmacies in the private sector) to their point of origin (manufacturers and importers). For each medicine, data were collected for both the originator brand/branded generic product and a generic equivalent. The generic product was the lowest‐priced generic most commonly found during the medicine prices and availability survey. If this medicine was not available at a dispensing site, the next lowest‐ priced generic product available at the dispensing site was used. Samples came from both the public and the private sector in the main urban area of Bhubaneswar as well as in one rural survey area (Balasore) used in the medicine prices survey. In each district, two dispensing sites were surveyed (one from both the private and
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public sector). Survey sites were selected from the facilities used in the main medicine prices survey based on the following criteria: 1) locations that sold medicines with the maximum variation in pricing were chosen; 2) proximity to data providers (within one day’s drive); and 3) integrity of data providers. Dispensaries or private retail pharmacies were visited first, where information was collected on the procurement price and the dispensing price, as well as any mark‐ups, taxes and dispensing fees; from here the wholesaler or public sector supplier was identified for each medicine. Identified wholesalers and public sector suppliers were then visited, and data were collected on wholesale mark‐ups, local distribution costs, and any taxes collected. Data collection proceeded in this manner for each medicine through each stage of the supply chain, ending with the importer (for imported medicines) and the manufacturer (for locally produced medicines). The data collected on the prices of the components of medicines were analysed according to five common stages of the supply chain: manufacturer’s retail price (MRP) + insurance and freight (stage 1);
stockist / Carry & Forwarding agency landed price (stage 2);
wholesale selling price (private) or central medical stores price (public) (stage 3);
retail price (private) or dispensary price (public) (stage 4); and
Dispensed price (stage 5).
Analysis includes the cumulative per cent mark‐up at the end of each stage, the total cumulative per cent mark‐up, and the per cent contribution of individual components to the final medicine price. As medicines are provided to patients at no cost in the public sector, add‐on costs represent the charges paid by Odisha’s SDMU.
3. Results Medicine availability Average availability of the lowest‐priced survey medicines in the public sector was low at 17.0% (Table 7). Average availability of lowest‐priced generics in the private sector was better than in the public sector but was still relatively low (38.5%). Highest‐priced generic branded products were also found in the private sector, with an average availability of 10.8% (Annex 3 lists the availability of each of the surveyed medicines in the private, public, and NGO/mission sectors). Availability of lowest‐priced generics in NGO/mission sector facilities was similar to that of the public sector (21.8%).
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Table 7. Comparison of mean availability (%) of all surveyed medicines on the day of data collection, in three sectors Public sector (n=82 outlets) Highest- Lowestpriced priced product product Mean availability (standard deviation)
0.0%
17.0% (26.3%)
Private sector (n=82 outlets) HighestLowestpriced priced product product 10.8% (17.9%)
38.5% (31.6%)
NGO/Mission sector (n=5 outlets) HighestLowestpriced priced product product 0.0%
21.8% (30.9%)
Table 8 contains the availability of individual medicines in each of the three sectors under review. The essential medicines with the lowest availability (20% or less) in all three sectors are: Chloramphenicol powder for injection
Diazepam, rectal solution
Beclomethasone, inhaler
Zinc, dispersible tablet
Ferrous sulfate, suspension
Benzylpenicillin, injection
Isoniazid + rifampicin + pyrazinamide, dispersible tablet
Phenobarbital, injection
Procaine penicillin, injection
Carbamazepine, chewable tablet
Carbamazepine, chewable tablet and suspension
Phenytoin, suspension.
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Table 8. Comparison of the availability of individual medicines, in three sectors Availability (%)
Public (n=79 outlets)
Private sector (n=79 outlets)
NGO/Mission sector (n=5 outlets)
>75%
Ofloxacin tab (200 mg), ORS (1 l).
Chloroquine syrup, ondansetron syrup, ofloxacin tab, ORS (1 l), albendazole susp, paracetamol susp.
Albendazole susp, chloroquine syrup, ORS (1 l), paracetamol susp.
50–75%
Paracetamol susp, salbutamol inhaler, albendazole susp.
Amoxicillin + clavulanic acid syrup, salbutamol inhaler, vit A susp, predinisolone susp, azithromycin tab, ORS (200 ml).
Amoxicillin syrup, ondansetron syrup.
25–50%
Amoxicillin susp, cotrimoxazole susp, chloroquine susp.
Amoxicillin + clavulanic acid tab, gentamycin inj, amoxicillin susp & dispersible tab, artemether + lumefantrine dispersible tab, valproic acid oral liquid, paracetamol tab, ibuprofen tab.
Azithromycin tab, ofloxacin tab, benzyl benzoate lotion.
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