Effect of Government Mediated Access Pricing on Prices of Targeted Drugs in The Philippines

Jesus N Sarol

Journal of Asian Scientific Research, 2014, vol. 4, issue 9, 473-489

Abstract: Introduction The Philippines implemented the Cheaper Medicines Act of 2008 to improve access to quality drugs. Thereafter, the government placed 5 drugs under maximum drug retail pricing (MDRP) and influenced pharmaceutical companies to reduce by half prices of 16 branded drugs, referred to as drugs under government-mediated access prices (GMAP). The effect of GMAP on prices of drugs carrying similar molecules has not been well-studied. This study compared the price of selected drug molecules directly affected by the MDRP/GMAP policies in 2009 and 2011. MethodsThe study used data obtained from independent surveys conducted by IMS Health Philippines in 2009 and 2011 using a stratified sample of 600 drug stores each. Prices of the following categories of stock keeping units (SKUs) for 11 drug molecules placed under MDRP/GMAP listing were obtained: 1) innovator brand; 2) competitor brand; and 3) cheapest generic counterpart available. Price data was obtained using a mystery shopper approach. Differences in mean and median drug prices between 2009 and 2011 for each drug were calculated. ResultsBeing MDRP/GMAP reference drugs, there were expected compulsory reductions in mean prices of 10 of 11 innovator brands. Reduction of mean prices of competitor drugs occurred on a relatively smaller scale. Mean prices in 2011 of competitor drugs tended to settle near the GMAP reference levels. Mean prices of the cheapest generic drugs all went down significantly. ConclusionGovernment-mediated pricing could be an effective means of reducing prices of targeted drugs in similar fashion as reference pricing.

Keywords: Drug industry; Drug costs; Delivery of health care; Government regulation; Generic drugs; Philippines; Jesus N. Sarol (search for similar items in EconPapers)
Date: 2014
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