RESUMEN
This paper analyses the structure of and variability in taxation and prescription drug distribution policies and quantifies the impact of such policies on the cost of prescription drugs to health systems in 35 countries. Taxes on prescription drugs remain highly prevalent (83% of the sample) although 63% of the sample countries implement a lower than standard VAT rate. Three remuneration types of the wholesale and retail distribution chain have been identified. Wholesale and retail distributors are remunerated on a regressive mark-up basis, which is price-dependent, although fixed fees and fixed percentages, which are non-price dependent, are also highly prevalent. Price component analysis for three groups of products classed as high-, medium- and low-priced suggests that mark-ups plus taxes varied significantly across countries and products, and ranged from 5% to 187% of ex-factory prices. Average margins also vary significantly by countries and products ranging 5-65% of retail prices. The cost of distribution and taxation contributes significantly to prescription drug costs for health systems. Although distribution chain remuneration raises efficiency and overall affordability questions, these need to be considered together with the regulatory framework shaping market structure of the distribution chain, as well as any prevailing horizontal and vertical integration policies. The overall cost of prescription drugs could be reduced immediately by eliminating taxation; this could go some way to alleviate fiscal pressures on health budgets, whilst avoiding resource re-allocation from health to other sectors.
RESUMEN
OBJECTIVES: The World Health Organization provides 10 specific guidelines for managing the prices of pharmaceutical products. Many of those are widely known and used such as reference pricing, value-based pricing, price transparency, and tendering. Less attention and knowledge is concentrated in markup regulation across the pharmaceutical supply chain and distribution and in tax exemptions or reductions. This article quantifies the impact of these price components in the Latin American (LatAm) region and places the findings in the context of economic theory and international policy experiences. METHODS: 2020 retail pharmaceutical sales data from 8 major LatAm markets covered in the IQVIA database were decomposed into ex-factory, distributor markups, and taxes using price build up information and the Price Decipher Methodology developed by the Novartis Global Pricing Governance and Negotiation team. The findings were reviewed by an international panel representing academia, health policy, health economics, patient, and industry. RESULTS: The ex-factory market value of the analyzed markets was $49 billion. Distribution markups added $20 billion and taxes a further $10.5 billion. This represented a 63% increase over ex-factory prices, considered high if compared with 24% for an international benchmark of 35 ex-LatAm countries. Reducing markups for these LatAm countries to 24% would represent up to $19 billion in savings for payers and patients. CONCLUSIONS: There is potential for significant cost reductions associated with tax and distribution markup refinements in the LatAm retail pharmaceutical market. National policies should be informed by additional context-specific research for effective implementation.
RESUMEN
OBJECTIVES: To provide an overview about the current status of health technology assessment (HTA) implementation in Latin American countries and to identify long-term objectives considering regional commonalities. METHODS: We conducted a survey among participants of the 5th Latin American Future Trends Conference in October 2015. Thirty-seven respondents from eight Latin American countries provided insights about the current and preferred future status of HTA implementation related to human capacity building, HTA financing, process and organizational structure for HTA, scope of mandatory HTA, decision criteria, standardization of HTA methodology, mandating the use of local data, and international collaboration in HTA. RESULTS: Survey respondents reported insufficient human resources and public investment for HTA implementation. Organizational structure and legislation framework of HTA differ considerably across countries. According to survey respondents, in the future policymakers should rely more on the assessment of therapeutic value, cost-effectiveness, and budget impact criteria by applying explicit thresholds, potentially in a multicriteria decision analysis framework. HTA should not be restricted to policy decisions of new technologies but it should also be used for the revision of previous decisions. In addition, the quality and transparency of HTA have to be strengthened. CONCLUSIONS: HTA plays an increasingly important role in Latin American countries. Each country needs to record its current implementation status and identify components for improvement. Duplication of efforts can be reduced if international collaboration is integrated into national HTA implementation.