A win-win solution?: A critical analysis of tiered pricing to improve access to medicines in developing countries

Hdl Handle:
http://hdl.handle.net/10144/220355
Title:
A win-win solution?: A critical analysis of tiered pricing to improve access to medicines in developing countries
Authors:
Moon, Suerie; Jambert, Elodie; Childs, Michelle; von Schoen-Angerer, Tido
Journal:
Globalization and Health
Abstract:
Background: Tiered pricing - the concept of selling drugs and vaccines in developing countries at prices systematically lower than in industrialized countries - has received widespread support from industry, policymakers, civil society, and academics as a way to improve access to medicines for the poor. We carried out case studies based on a review of international drug price developments for antiretrovirals, artemisinin combination therapies, drug-resistant tuberculosis medicines, liposomal amphotericin B (for visceral leishmaniasis), and pneumococcal vaccines. Discussion: We found several critical shortcomings to tiered pricing: it is inferior to competition for achieving the lowest sustainable prices; it often involves arbitrary divisions between markets and/or countries, which can lead to very high prices for middle-income markets; and it leaves a disproportionate amount of decision-making power in the hands of sellers vis-à-vis consumers. In many developing countries, resources are often stretched so tight that affordability can only be approached by selling medicines at or near the cost of production. Policies that “de-link” the financing of R&D from the price of medicines merit further attention, since they can reward innovation while exploiting robust competition in production to generate the lowest sustainable prices. However, in special cases - such as when market volumes are very small or multi-source production capacity is lacking - tiered pricing may offer the only practical option to meet short-term needs for access to a product. In such cases, steps should be taken to ensure affordability and availability in the longer-term. Summary: To ensure access to medicines for populations in need, alternate strategies should be explored that harness the power of competition, avoid arbitrary market segmentation, and/or recognize government responsibilities. Competition should generally be the default option for achieving affordability, as it has proven superior to tiered pricing for reliably achieving the lowest sustainable prices.
Affiliation:
Harvard Kennedy School and School of Public Health, Boston, USA; Médecins Sans Frontières, Campaign for Access to Essential Medicines, Geneva, Switzerland
Publisher:
BioMed Central
Issue Date:
12-Oct-2011
URI:
http://hdl.handle.net/10144/220355
DOI:
10.1186/1744-8603-7-39
PubMed ID:
21992405
Additional Links:
http://www.globalizationandhealth.com/content/7/1/39
Type:
Article
Language:
en
ISSN:
1744-8603
Appears in Collections:
Health Politics

Full metadata record

DC FieldValue Language
dc.contributor.authorMoon, Suerieen_GB
dc.contributor.authorJambert, Elodieen_GB
dc.contributor.authorChilds, Michelleen_GB
dc.contributor.authorvon Schoen-Angerer, Tidoen_GB
dc.date.accessioned2012-04-24T16:45:59Z-
dc.date.available2012-04-24T16:45:59Z-
dc.date.issued2011-10-12-
dc.identifier.citationGlobalization and Health 2011; 7:39en_GB
dc.identifier.issn1744-8603-
dc.identifier.pmid21992405-
dc.identifier.doi10.1186/1744-8603-7-39-
dc.identifier.urihttp://hdl.handle.net/10144/220355-
dc.description.abstractBackground: Tiered pricing - the concept of selling drugs and vaccines in developing countries at prices systematically lower than in industrialized countries - has received widespread support from industry, policymakers, civil society, and academics as a way to improve access to medicines for the poor. We carried out case studies based on a review of international drug price developments for antiretrovirals, artemisinin combination therapies, drug-resistant tuberculosis medicines, liposomal amphotericin B (for visceral leishmaniasis), and pneumococcal vaccines. Discussion: We found several critical shortcomings to tiered pricing: it is inferior to competition for achieving the lowest sustainable prices; it often involves arbitrary divisions between markets and/or countries, which can lead to very high prices for middle-income markets; and it leaves a disproportionate amount of decision-making power in the hands of sellers vis-à-vis consumers. In many developing countries, resources are often stretched so tight that affordability can only be approached by selling medicines at or near the cost of production. Policies that “de-link” the financing of R&D from the price of medicines merit further attention, since they can reward innovation while exploiting robust competition in production to generate the lowest sustainable prices. However, in special cases - such as when market volumes are very small or multi-source production capacity is lacking - tiered pricing may offer the only practical option to meet short-term needs for access to a product. In such cases, steps should be taken to ensure affordability and availability in the longer-term. Summary: To ensure access to medicines for populations in need, alternate strategies should be explored that harness the power of competition, avoid arbitrary market segmentation, and/or recognize government responsibilities. Competition should generally be the default option for achieving affordability, as it has proven superior to tiered pricing for reliably achieving the lowest sustainable prices.en_GB
dc.language.isoenen
dc.publisherBioMed Centralen_GB
dc.relation.urlhttp://www.globalizationandhealth.com/content/7/1/39en_GB
dc.rightsArchived with thanks to Globalization and Health's Open Access policyen_GB
dc.subject.meshDeveloping Countriesen_GB
dc.subject.meshHealth Policyen_GB
dc.titleA win-win solution?: A critical analysis of tiered pricing to improve access to medicines in developing countriesen
dc.typeArticleen
dc.contributor.departmentHarvard Kennedy School and School of Public Health, Boston, USA; Médecins Sans Frontières, Campaign for Access to Essential Medicines, Geneva, Switzerlanden_GB
dc.identifier.journalGlobalization and Healthen_GB
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