A conceptual framework to build effective medicine pricing policies for low and middle-income countries (LMICs)

Abstract

Building effective medicine pricing policies is a challenging task in all high-, middle- and low-income countries. In high-income countries have stable health systems in place, trained workforce, as well as specialised agencies to evaluate innovative drugs for reimbursement. However, in low- and middle-income countries (LMICs) the challenges are manifold. A large majority of low- and middle-income countries lack technical expertise either to evaluate new medicines or to set efficient medicine prices. The countries also lack comparator reference pricing data to set prices. Also, there are significant out-of-pocket expenditures as people pay for medicines by themselves. An effective medicine pricing policy is vital in the context that it can be used as a tool to improve access and affordability among the masses. This discussion paper presents a conceptual framework to build effective medicine pricing policies for low and middle-income countries (LMICs). The enablers to build effective medicine pricing policies are also discussed. This includes (a) data and statistics on the pharmaceutical situation of the country (b) Having a national medicine policy in the country (c) The availability of the medicine pricing data and (d) Human resources and technical capacity. WHO has recommended several strategies including External Price Referencing (EPR), Internal Reference pricing, Value-based pricing, Cost-plus pricing, and Generic medicine policies to build a pricing policy. However, this information is generic and it's a complex task for countries to tailor to their needs, hence a critical analysis is provided on these policies. The concepts related to fair medicine pricing, providing information to consumers and price transparency are also discussed.