Abstract
Increasing prescription drug pricing often reflects additional work stress on medical professionals because they function as financial advisors for patients and help them manage out-of-pocket expenses. Providers or prescribers wish to help patients with prescription costs but often lack related information. Healthcare plan providers try to display prescription and drug cost information on their websites, but such data may not be linked to electronic prescription software. A mark-up is defined as the additional charges and costs that are applied to the price of a product for the purpose of covering overhead costs, distribution charges, and profit. Therefore, the policies implemented in the pharmaceutical distribution chain might include the regulation of wholesale and retails mark-ups and pharmaceutical remuneration. If mark-ups are regulated, countries are highly recommended to use regressive mark-ups rather than fixed percentage mark-ups. This narrative review provides insights into the framework of pharmaceutical mark-up systems by describing different factors impacting pharmaceutical prices and affordability. These include the interplay of medicine pricing and the supply chain, the impact of pertinent laws and regulation and out-of-pocket expenditure.
Highlights
Countries across the world are implementing various pharmaceutical pricing policies and procedures in order to cope with increasing drug prices [1]
Four policies and strategies that are most commonly used are the regulation of mark-ups and distribution chains, external/international reference pricing, promotion of generic medicine use, and tariff/tax exemptions
Malaysia [3], Vietnam and Laos practice external reference pricing to regulate the price of pharmaceutical products while most of the ASEAN countries, especially Malaysia and Indonesia, apply generic medicine promotion to enhance the use of generic medicines as they are much cheaper [4]
Summary
Countries across the world are implementing various pharmaceutical pricing policies and procedures in order to cope with increasing drug prices [1]. Four policies and strategies that are most commonly used are the regulation of mark-ups and distribution chains, external/international reference pricing, promotion of generic medicine use, and tariff/tax exemptions. With the implementation of regressive mark-ups policy, many countries found it beneficial to stop excessive charges being added to medicines as they pass along the supply chain. This policy requires a strong strategy of enforcement by the government as well as high-level political support to make sure it is efficient to control the drug price [6,9,10]. Where there is no dispensing fee or sales tax, Stage 5 costs will be voided and the Stage 4 price will be the final selling price [12]
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