Consultation on Affordable Prices of Medicines, Manila, Philippines, 2-4 August 2006 : report

Consultation on Affordable Prices of Medicines

Manila, Philippines 2-4 August 2006

( . ) World Health ~ Organization Western Pacific Region ~

(WP)PHAlICP/EDM/3.2/001-E RS/2006/GEI19(PHL)

English only

REPORT

CONSULTATION ON AFFORDABLE PRICES OF MEDICINES

Convened by: WORLD HEALTH ORGANIZATION REGIONAL OFFICE FOR THE WESTERN PACIFIC Manila, Philippines 2-4 August 2006

Not for sale Printed and distributed by: World Health Organization Regional Office for the Western Pacific Manila, Philippines December 2008

,\'"rld f·:alth Or9 "Illation

WHOIWPRO LIBRARY MANTLA. PHILTPPINES

o3 FER 2009

NOTE The views expressed in this report are those of the participants in the Consultation on Affordable Prices of Medicines and do not necessarily reflect the policies of the Organization.

Keywords: Drug costs / Drugs, Essential - economics / Price controls

This report has been prepared by the W orId Health Organization Regional Office for the Western Pacific for governments of Member States in the Region and for those who participated in the Consultation on Affordable Prices of Medicines, which was held in Manila, Philippines, from 2 to 4 August 2006.

ABBREVIATIONS AND ACRONYMS

AO API ASEAN BFAD CCF CIF CMS CPI DAV DOH DPCO DPRI DTC DTI EDPMS EML EO FIRCA FNPF FPS

FfA GMP HAl HIF ICCC LPG MAPE MPR MTP MSG NDP NDRC NGOs NHI NHIP NMP NMPM NPCB NPPA OTC

Administrative Order active pharmaceutical ingredient Association of South-East Asian Nations Bureau of Food and Drugs consumer's council of Fiji cost, insurance and freight Central Medical Store Consumer Price Index Drug Administration of Viet Nam Department of Health Drug Price Control Order Drug Price Reference Index drug and therapeutics committee Department of Trade and Industry Essential Drug Price Monitoring System Essential Medicines List Executive Order Fiji Inland Revenue and Customs Authority Fiji National Provident Fund Fiji Pharmaceutical Services Free Trade Agreement Good Manufacturing Practice Health Action International Health Insurance Fund Independent Consumer and Competition Commission lowest priced generic maximum allowable post-manufacture expenses Median Price Ratio monitoring training and planning most sold generic National Drug Policy National Development Reform Committee non-govermnental organization National Health Insurance National Health Insurance Programme National Medicine Policy National Medicines Policy of Mongolia National Pharmaceutical Control Bureau National Pharmaceutical Pricing Authority over-the-counter drugs

PBAC PBPA PBS PEAC PHIC PIB PIC PITC PNDF QALY

RDF RRPs SDL TFF UNICEF USP VAT WTO

Pharmaceutical Benefits Advisory Committee Pharmaceutical Benefits Pricing Authority Pharmaceutical Benefit Scheme Pre-qualification Evaluation and Award Committee Philippine Health Insurance Corporation Prices and Incomes Board Pacific Island countries Philippine International Trading Corporation Philippine National Drug Formulary quality adjusted life year revolving drug funds Recommended Retail Prices Standard Drugs List Tax-Free Factories United Nations Children'S Fund United States Pharmacopoeia value-added tax World Trade Organization

SUMMARY

The prices of many essential medicines are high in relation to local purchasing power in many countries. Most countries lack the means of controlling medicine prices. The challenge in making medicines more affordable must be addressed to ensure regular access to essential medicines in the Western Pacific Region. The WHO Western Pacific Regional Strategy for improving access to essential medicines, which was endorsed at the fifty-fifth session of the WHO Regional Committee for the Western Pacific, Shanghai, September 2004, requires WHO to provide support for countries by disseminating information about existing policies, practices and feasible options on medicine pricing and by helping to develop local and regional medicine price monitoring and information exchange systems. At the Consultation on Affordable Prices of Medicines organized and hosted by the WHO Regional Office for the Western Pacific, from 2 to 4 August 2006, Manila, Philippines, participants from 12 countries of the Western Pacific region exchanged the latest national and international experience in medicine price regulation and policy interventions to regulate medicine prices. They formulated proposals to support the feasible development oflocal and regional systems to monitor and exchange information on medicine pricing and compiled their proposals. Countries were advised to develop or improve their policies and systems to monitor and optimize prices of medicines, with adequate resources and technical guidance, and to explore opportunities for interventions such as rational drug selection and use and social health insurance schemes in order to improve the availability and affordability of medicines. WHO was advised to pilot a regional system to monitor and exchange information on medicine pricing, to support countries in developing or improving their respective systems by providing information and services managed through a website of the regional system, and to facilitate interaction between countries through the regional system with the overall objective of improving the availability and affordability of medicines in their national and mutual interests.

CONTENTS SUMMARY 1. INTRODUCTION ..................................................................................................... 1 1.1 Objectives .......................................................................................................... 1 1.2 Participants ........................................................................................................ 1 1.3 Opening ceremony............................................................................................. 1 2. PROCEEDINGS ......................................................................................................... , 2 2.1 Introduction ....................................................................................................... 2 2.2 WHO and Expert perspectives .......................................................................... 2 2.3 The experience of countries and partners in medicine price regulation and policy interventions for regulating medicine prices .......................................... 8 2.4 Group work 1: Local systems to monitor and exchange information on medicine pricing .............................................................................................. 33 2.5 Group work 2: Regional system to monitor and exchange information on medicine pricing .............................................................................................. 42 3. CONCLUSIONS AND RECOMMENDATIONS .................................................... 47 3.1 Conclusions ..................................................................................................... 47 3.2 Recommendations ........................................................................................... 47 3.2.1 For member countries .......................................................... 47 3.2.2 For WHO ....................................................................... 48 ANNEXES ANNEX 1 ANNEX 2 AGENDA LIST OF PARTICIPANTS, TEMPORARY ADVISERS, OBSERVERSIREPRESENTATNES AND SECRETARIAT PROGRAMME OF ACTNITIES

ANNEX 3

I. INTRODUCTION

A Consultation on Affordable Prices of Medicines was held in Manila, Philippines, from 2 to 4 August 2006 to discuss ways of improving access to essential medicines in WHO Member Countries in the region. 1.1 Objectives The objectives of Consultation on Mfordable Prices of Medicines were to: (1) share country experiences in medicine price regulation and policy interventions to regulate prices; and (2) identifY reliable local and regional systems to monitor and exchange information on medicine pricing. 1.2 Participants

One participant was invited from the authority responsible for national medicines policy and one from the authority responsible for medicine pricing in each of 12 countries. In addition to these 22 participants, two temporary advisers, seven representatives from five partner organizations and five secretariat members attended the consultation.

It was proposed and agreed that the office-bearers for the consultation should be as follows: Chairperson: Ms Sameerah Shaikh Abdul Rahman, Principal Assistant Director, Pharmaceutical Services Division, Ministry of Health (Malaysia) Vice-chairperson: Mr Joshua Ramos, Director, Bureau of Food and Drug Policy/Pharma 50 Project Management Unit, Department of Health (Philippines) Rapporteur: Ms Vasiti Nawadra-Taylor, Principal Pharmacist, Essential Medicines, Fiji Pharmaceutical Services (Fiji) The agenda and the list of participants are attached as Annexes 1 and 2. Annex 3 shows the programme of activities. 1.3 Opening ceremony

Dr Richard Nesbit, Acting Regional Director, WHO Regional Office for the Western Pacific, delivered the Opening Remarks. He said that the Asia Pacific Region bears a significant burden of diseases and the prices of many essential medicines for those diseases are high in relation to local purchasing power in several countries. Many countries lack sound competitive market mechanisms and the means of

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controlling the prices of medicines. He pointed to the need for a uni~e~ approac~ to ensure and monitor the affordability of essential medicines in and across countnes III the regIOn. Dr Nesbit said that one important action of the Regional Strategy for Improving Access to Essential Medicines in the Western Pacific Region 2005-2010 is to start to monitor and exchange information on medicine pricing in the region. He hoped that the consultation would successfully identify the most feasible mechanism for local and regional price monitoring.

2. PROCEEDINGS

2.1

Introduction

Dr Budiono Santoso, WHO Regional Office for the Western Pacific, explained the background and objectives of the consultation. He reminded the participants that WHO and its Member States are required to take action to ensure affordable prices of medicines under the Regional Strategy for Improving Access to Essential Medicines in the Western Pacific Region 2005-2010, which was endorsed at the 55 th session of the WHO Western Pacific Regional Committee in September 2004 in Shanghai, China. To this end, WHO can identify and disseminate existing pricing policies, practices and feasible options; support the development of local price monitoring systems for selected essential medicines and information exchange on prices of essential medicines; encourage Member States to participate in regional and global price monitoring systems; provide Member States with price information; and help Member States implement and improve policies on generic medicines. Jun Yoshida, WHO Regional Office for the Western Pacific, briefed participants about the methodology of the consultation: The participants would first hear the perspectives of WHO and experts and (1) experience of countries and partners in medicine price control and surveys. (2) Having understood national and international contexts, they would then work in groups: Group work 1 would work in respective country groups and each participating country would formulate a plan of action to identify the best local systems to monitor medicine pricing; Group work 2 would work in inter-country groups and would be divided into three groups to formulate proposals to find an optimal regional system to monitor medicine pricing. (3) At the end, the consultation would summarize all the discussions into conclusions and recommendations. 2.2 2.2.1 WHO and Expert perspectives Jun Yoshida, WHO Regional Office for the Western Pacific

He recapped the questionnaire that he had sent the participants to prepare their presentation, explaining how he had developed the idea.

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He compared cycles of drug quality and price control. He said that a cycle of registration and licensing and post-marketing surveillance is similar to a cycle of pricing and restriction and monitoring, that is, a combination of surveys and actions. While it is important for countries to harmonize technical requirements in drug quality control, they also need to choose the best options in relation to national circumstances in drug price control. He looked at cost components of drug prices. He said the price of a drug must recover the cost of production and reinvestment, but it must also be reasonable in relation to the income levels of end-users. Price control is a means of compromise between these two factors. He outlined two approaches to price control: one sets the sales price or reimbursement price of drugs before and after marketing; and the other places restrictions on prescribing and dispensing medicines, limits the scope of useable drugs or setting specific budgets. He added that restrictions on advertising and promotion would also influence the price. He explained different price control methods: (1) Reference pricing establishes the price relative to existing therapies. It considers prices of the same drug or other drugs with similar therapeutic values.

(2) Volume-price agreement establishes the price in relation to estimated sales volume, modifying the price when a defined condition deviates from an agreed limit. (3) Profit-price agreement establishes the price in relation to estimated profits, modifying the price when a defmed condition deviates from an agreed limit. (4) Price floors establish tiered prices for the drug, particularly between innovator and generic products. (5) Mark-up rules establish allowable limits of mark-ups within defmed margins.

(6) Humanity differentiation establishes different prices for different segments of the population, particularly between minors and adults. (7) Restrictive choice establishes a restricted list of drugs, drug formularies or set budgets to limit the scope of usable drugs. He observed that free competitive sales require no intervention, but effective competition can have an impact on prices; voluntary agreement, marketing price authorization, government procurement and reimbursement need interventions and/or make an impact on the consumer. He said that the impact on consumers varies from mechanism to mechanism, but it is possible to identify an optimal combination of mechanisms to ensure affordable prices. He talked about price monitoring. He pointed out that monitoring is different from a survey. A survey collects data, which is then interpreted. It stops there. Monitoring uses that information to plan actions, including price control measures in this case. He said that monitoring is a cycle - a survey to collect data, the interpretation of the data into information, measures taken using the information, and oversight through regular surveys or checks. He then looked at what guidelines to follow in using surveys for monitoring purposes: what data is to be used for; what scope of price, site, drug and product are subject to the survey; what methods of timing, frequency, scale and approach are used. He listed other influencing factors:

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(1) The standard dose and duration of the medication always need attention when multi-strength preparations of the same drug are available in the market because the most frequently-used strength of the preparations depends on that. The availability of alternative drugs of the same therapeutic class can affect future re-pricing of the medicine by reference price method. (2) Co-marketing of over-the-counter (OTC) and prescription for the same drug matters because pricing mechanisms are different. (3) A drug with indications or pharmacological effects falling in different therapeutic classes needs attention in re-pricing by reference price method. (4) The market share of domestic and internationally-distributed products also needs attention because government regulations and policy interventions can be different. (5) It is necessary to distinguish between compulsory and voluntary monitoring requirements, including any informal agreements between the government and industry. Such a distinction would avoid a bias in data interpretation. He said that reliable data processing systems should be set up, including a survey data sheet to collect and input data and to produce processed data for different purposes. The planning and implementation of a survey involves the development of manuals and systems, and the training of those who are to conduct of surveys; annual scheduling of surveys and protocol preparation for each scheduled survey; and the actual conduct of the survey, followed by the processing of data into information. This information can then be used to establish price controls. Finally, he went over with the participants the questionnaire he had sent to collect data on the circumstances of each participating country. The questionnaire had asked the following: 1. Expression of the price of drugs 1-1. Which mechanism( s) does the price of drugs implicate in your country? sales (import, wholesale and retail); govemment'procurement; government reimbursement; or combination of these. 1-2. How many populations are covered for drugs purchased under the mechanism(s) you chose? How much does the patient have to co-pay of the price of drugs under the mechanism(s) you chose? 2. Experience in Price Controls 2-1. If the price of drugs is being controlled in your country, please specify direct control (price setting), in-direct control (prescribing restriction) and their methods (e.g., reference pricing, volume limitation, profit control, price floor, restrictive formularies, prescribing guidelines, budget limitation). Please also specify other influencing factors (e.g., restriction on advertising and promotion, costeffectiveness requirement for marketing authorization). 2-2. Are the above-mentioned price controls based on voluntary agreement or compulsory enforcement?

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2-3. What caused your government to conduct the above-mentioned price controls? 2-4. What approach do you think will be optimal to control the price of drugs in your country? 3. Experience in Price Surveys and Monitoring 3-1. If a survey of drug price had been recently conducted in your country, please specify the protocol- objective, surveyor, scope (mechanism, site and drug) and method (timing and frequency, way of approach, data processing, follow-up, etc.). Please also specify criteria for selection for each component. 3-2. Is the price of drugs being monitored and regularly surveyed in your country? 3-3. Are the surveys of prices based on voluntary agreement or compUlsory enforcement? 3-4. What caused your government to conduct the survey of prices of drugs? 3-5. What systems do you think will be optimal to conduct regular checks on the price of drugs in your country? He hoped, under the next agenda item, the participants will be able to share them. 2.2.2 Margaret Ewen, PartnerlHealth Action International (HAl)

She talked about the WHO-HAl joint project on medicine prices, launched after the World Health Assembly in 2003. She pointed out that although medicines have variable and often high prices, which may be unrelated to a country's income level, little is known about the prices people pay and how these prices are set from manufacturer's selling price to the price patients pay. She said the project has developed a methodology for collecting and analysing prices, affordability, availability and component costs in various sectors and regions in a country. TIlls data is accessible on HAl's website and can be used to compare prices across countries. She summarized the survey tool used in the project. She said that sampling has been systematically conducted from medicine outlets in at least four regions, with a minimum of 10 pharmacies/facilities per area; the survey has covered public sector facilities, private retail pharmacies and another sector; prices of 30 pre-selected commonly used medicines have been surveyed; dose form and strength and recommended pack size have been pre-determined for the survey; the use of a supplementary list of drugs has been encouraged, adapted to local needs; the prices of originator brand and the lowest-price generic medicine have been collected; the availability of the medicine has been studied on the day of survey; all components of price from manufacturer to retailer have been identified; affordability has been assessed for ten pre-selected courses of treatment; and an MS-Excel workbook has been used for data entry and analysis. She also showed a core list of medicines for price comparison. She then said that the HAl price survey has been underway or completed in about 40 countries, including China (Shandong and Shanghai), Fiji, Malaysia, Mongolia, the Philippines and Viet Nam from the Western Pacific Region. She added that two surveys on reproductive health and six on medicines for chronic diseases are underway or have been completed.

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As an approach to international price comparison, she explained that the survey has used the median price ratio, which is the ratio of median price across the facilities surveyed compared to an international reference price. She said that the international reference price is the list of recent procurement prices offered predominantly by not-for-profit suppliers to developing countries for multi-source generic products and that the list is supplied by Management Science for Health International Drug Price Indicator Guide. As examples, she cited the median price ratios for captopril 2Smg tablet surveyed in the public sector, atenolol SOmg tablet surveyed in private retail pharmacies and ciprofloxacin SOOmg capsule, also surveyed in private retail pharmacies. She also gave comparison of availability on glibenclamide Smg tablet and beclomethasone inhaler SOmgldose and comparison of affordability on fluoxetine 40mg tablet per day for 30-day treatment in private retail pharmacies and ranitidine ISOmg twice a day for 30-day treatment in private retail pharmacies. She spoke about taxes on medicines, citing cases in Indonesia, Mongolia and Tajikistan. She gave a comparison of price and price components between originator and generic products of atenolol SOmg tablets in retail pharmacies and as dispensed by doctors in Malaysia. She listed many policy options to make medicines more affordable: purchasing low-priced quality generics of off-patented medicines; using the flexibilities of trade agreements to introduce generics of patented medicines; supporting generic competition by fast-tracking registration, waiving registration fees, etc.; introducing compulsory generic substitution in prescribing and dispensing; eliminating taxation on essential medicines and controlling pharmacists' remuneration by linking it to services; regulating prices by linking manufacturer's selling price to margins in wholesale and retail; educating health providers and consumers on availability and acceptability of generics and publicising the price of generics; and separating prescribing and dispensing. 2.2.3 Klara Tisocki (Temporary Adviser)

She talked about medicine price monitoring in developing countries. She recapped challenges in medicine pricing. She said that for identical products large price variations exist within and between countries, often unexplained by national economic characteristics. She pointed out that lack of transparency on pricing mechanisms by different players, unfair financing mechanisms to reimburse cost of medicines and lack of awareness and know ledge about options of price controls and monitoring are common in many countries. She reminded the participants that many countries have mechanisms in place to control not only price but also demand. Such mechanisms include treatment guidelines and formularies to influence prescribing patterns, generic prescribing and dispensing; fmancial restrictions such as co-payment and reimbursement schemes; and the encouragement of generic competition. She said that most developed countries except the United States of America use some form of medicine price control, adding that the average annual increase in patented medicine prices was below I % between 1996 and 2001 for most countries except the United States of America, where it was S%. She then explained how medicine price information can be used. She said that the pharmaceutical industry determines manufacturer selling price; governments regulate medicine prices and enforce price regulations, where they frequently use reference pricing or negotiate with manufacturers to set prices; and civil society, through consumer organizations, nongovernmental organizations (NGOs) and patient support groups, leads various advocacy

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efforts to increase access by lowering medicine prices and increasing financing pharmaceutical treatments. She showed large impact of availability of low-cost generics for antiretroviral therapy, in which annual cost per person for triple therapy had greatly decreased from US$ 10000 in 1996 to under US$ 1000 in 2002. She then said that according to the World Drug Situation Survey 1999, about half of low and middle-income countries have no policies on ways to regulate medicine prices and that the most common control is on retail plus wholesale mark-ups. She then gave an overview of medicine price monitoring methodology under the WHO/HAl project. The project aims to develop a simple low cost methodology suitable to monitor medicine prices in developing countries and focus on the generation of information on medicine prices for national use. She introduced the project's longitudinal study design; systematic sampling of 20 private and 20 public facilities in each of urban and rural areas; the selection of 30 commonly used indicator medicines in specified dosages, forms and strengths and recommended package sizes; data collection every three months, providing four data points per year; data input and analysis using Ms-Excel workbook; and output price report containing median, maximum and minimum unit prices for selected medicines, price variations over time and quarterly price changes, availability and affordability, and comparisons of public and private facilities as well as urban and rural areas. She added that work is in progress in Kenya, Malaysia and Pakistan. The information gathered from medicine price monitoring systems can be used in several ways. Potential interventions include establishing an authority to monitor prices; exempting essential medicines from taxes and duties; implementing regulations on mark-ups or margins; stimulating competition to lower generic prices; establishing innovative funding mechanisms and reimbursement schemes; educating patients and health professionals about prices; implementing policies for generic substitutions; facilitating the import of affordable generics in countries where little manufacturing exist; and implementing interventions that are aimed at controlling demand. 2.2.4 Questions on the Presentations

Asked if the HAl price survey differentiated brand-name generics from other generics, Ewen responded that brand-name generics were the main subject of the surveys so far conducted. It might be interesting if future surveys were to make such a comparison, she said. Another question related to the possible negative impact of price control, especially in a small market/country, where such control could lead to a decrease in market profitability. Tisocki said there are several relevant studies that can provide suggestions, but it is important to keep the national circumstances in mind when considering what impact price control could have on access to medicines and market competition. Yoshida said research and development incentives, in exchange for regulating medicine prices, are being created in some countries, where voluntary negotiation between the government and industry has created a better collaborative environment. These incentives for the industry need careful attention as well. In assessing the national situation, points to be considered include: any improvements in the availability of medicines; the extent of brand/generic substitution; the structure of the public sector budget; the impact of bilateral agreement; the present-day relevance of legislation designed to make medicines affordable; and the strength of the regulatory authorities. Drug price monitoring must also explore interventions that help consumers make more informed choices between brand-name and generic medicines.

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2.3

The experience of countries and partners in medicine price regulation and policy interventions to regulate medicine prices Cambodia Tep Keila and Ponn Sary made the following presentation:

2.3.1

Cambodia has a population of 13.4 million in a land area of 181,035 square km. There are five national hospitals, 24 provincial hospital departments, 77 operational districts, 69 referral hospitals and 875 health centres. There is a centralized system of medicines supply from the Central Medical Store (CMS) to the operational districts and from the operational districts to health facilities. From 1994 to 1995, drug supply was fmanced by several donors, but since 1996 the supply has been financed from the national budget as well as by donors. In 1999, the national budget covered 54% of the cost. The government's drug procurement and supply follows the next procedures: a list of annual needs of medicines, consumables, reagents, laboratory materials has been established based on the Essential Medicines List (EML) of Cambodia; the Ministry of Health prepares a list of budget needs and sends it to Ministry of Finance, which then approves a budget package; and the Ministry of Health then prepares to process procurement. The forecasting of drug needs for the public sector is monitored through a stock and supply management information system. The government's procurement is governed by the Pre-qualification, Evaluation and Award Committee (PEAC), whose membership includes the Undersecretary of State as Chair, Chief of Minister Cabinet, Director General for Health and Director General for Finances. The Chief of the Procurement Unit and four regulatory staff serve as the Secretariat. The PEAC selects suppliers based on history, quality of medicines (good manufacturing practice, free sale and analysis certificates), pricing, quotation (with specification) and ability to meet the supply deadline. The committee compares suppliers, giving priority to local producers. The result of the evaluation is to be approved by the Ministry of Finance. The United Nations Children's Fund (UNICEF) studied the prices of 15 medicines in Cambodia from 1998 to 2001. The study showed that the prices of drugs procured with the national budget were higher than those procured by UNICEF. The country faces the following constraints: there is no medicine price regulation or policy; there is no system to monitor and collect information on medicine pricing and analysis; prices vary from one year to another, making it difficult to forecast financial needs and manage medicine prices at central and lower levels; public tender leads to higher prices than private sector and international standard prices. It is recommended that Cambodia establish: a system of price control for medicine prices covering both the public and private sectors; and a price monitoring system, including surveys of medicine prices. It is anticipated that the country may need technical and financial support from WHO to set up the medicine prices control system.

When asked why public tender gives rise to a higher price than the private sector, Tep Keila and Ponn Sary said it is difficult to compare the two because fmancing scheme, patient copayment, retail costs, etc. are different. But one influencing factor is a usual delay in the government budget credit, which causes shortage of capital for payments to suppliers.

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2.3.2

China Lu Fengxia made the following presentation:

The purpose of China's medicine pricing policy is to offer good medical services at low costs, combining government control with the market mechanism. The policy is founded on the Drug Administration Law (2001); Regulations for Implementation of the Drug Administration Law (2002); Regulations on Medicine Price Setting by the government; and the List for Medicines, with the price set by the government. The government sets the prices of medicines on the reimbursement list and controlled medicines such as patented medicines, narcotics, psychological medicines and vaccines used in the Expanded Programme on Immunization. There are two medicine pricing formulae used by the government: for controlled medicines, the National Development Reform Committee (NDRC) sets factory price (or border price) and the Provincial Price Authorities set wholesale and retail prices; and for other medicines, these agencies set maximum retail prices. There is a two-tier jurisdiction over medicine price setting, by the central price control authority and provincial price authorities. The basic considerations in setting prices are cost, supply, demand and affordability. There are five principles for price setting: securing a rational profit rate, keeping costs realistic, providing good quality at a good price, encouraging research and development, and reflecting market demand. There are five procedures to be followed in medicine price setting: cost assessment, market price investigation, regional coordination, expert evaluation and price publication. The criteria for good quality at a good price are demonstrated quality, efficacy, safety and reasonable cost. The quality of medicine is carefully examined, clinically validated and demonstrated by experts. There is differential pricing between brand-name medicines and generics, between different dosages, between different strengths and between different packages. The price for inviting bids is based on cost plus ratio for price ofthe bid winner. The cost plus ratio is set by the provincial price authorities. The price is checked by the party inviting tenders. After the presentation, there was some discussion of the link between drug price monitoring and treatment cost, especially for priority diseases. Attention was also paid to the implication of differential pricing between originator and generics, with about 35% of price difference, because it can imply decreasing costs of generics by 35% or increasing costs of the patented medicine by 35%. One question was which counties would be selected for price comparison. They said, for brand-name drugs, North America and Europe would be considered. It was noted that good quality at an affordable price can be achieved if all manufacturers are certified to comply with good manufacturing practice (GMP) by the State Food and Drug

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Administration. On the other hand, a variation in GMP implementation among manufacturers would cause differences in quality of drugs. 2.3.3 Fiji Ane Naulivou and Vasiti Nawadra-Taylor made the following presentation: Mechanisms affecting medicine prices in Fiji are sales (import, wholesale and retail) and government procurement. The government procures essential medicines, which are listed in Fiji's essential medicines list. It also procures non-formulary drugs if requested. Only prequalified suppliers are invited to bid in contractual tender, which requires three quotes. Fiji's population is 848000. Private insurance covers 100000 people (12%). The largest insurer is Fiji Care, which has 75% of the market share. Its prescription scheme requires $5 per visit from members. The insurer also has a capitation system, where co-payment is $1 to $ 5 per visit with selected medicines and generics prescribed. In addition, there is a reimbursement scheme, where any medicine is prescribed with 15% co-payment. Lastly, there is a bulk billing system, where any medicine is prescribed with an annual limit of $ 500. The government procures all essential medicines on free on cost basis. Non-formulary medicines are partly subsidized and their price is marked up by a maximum allowable limit of 35%, adding a value-added tax (VAT) of 12.5%. Drug price control is outlined as follows: for ethical drugs, wholesale mark-up is a maximum of 20% of the approved into store cost and retail mark-up is a maximum of 35% of the wholesale price plus a 45-cent dispensing fees; and for OTC drugs, import and wholesale markup is 15% of imported price, and retail mark-up is 5% of the import price plus 30% of retail price. A template of approved method of costing includes: net value of goods as per supplier's invoice; discounts and commission obtained; co=ission actually paid; freight actually paid; cost and freight; marine insurance; rate of exchange; cost, insurance and freight (CIF); local charges; cartage, bank charges, fiscal duty, import entry charges, etc.; total cost; V AT actually paid; total into store cost; and margin. Price control regulations are published in legal orders outlining requirements to all retailers. Price marking and display for the information of the public and maintaining of records and documentation as evidence of all costs are required. For sales, direct price control through reference pricing, together with the display of costs and variation of costs within localities, is in place. For government procurement, indirect control through essential medicines formulary, standard treatment guidelines and a limited line budget $8.032 million and pricing through volume limitation are in place. These are all compulsory. There are other influencing factors including restriction on promotion and advertisement, delay in administrative process and cost-effectiveness consideration. The optimal solution is to establish a sort of pharmaceutical benefits scheme. No price survey had been done, but one was planned for August 2006. Meanwhile, gazetted PIB inspectors were monitoring through six-monthly inspections, and by investigating complaints and prosecuting offenders.

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There was some discussion of pooled procurement, in which Fiji Pharmaceutical Services purchase drugs for some Pacific Island countries (PICs). The main difficulty faced is a delay in payment. In answer to a question, the participants from Fiji explained that storage capacity for government procured drugs is up to two years, with the tender requiring a minimum 18-month stock of procured drugs.

The custom tariff for imported drugs is 12% of the imported price for the private sector. There is no import tariff for government procurement. Asked if local manufactures produce and supply pharmaceuticals, they said that only narcotics for medical use such as morphine tablets are locally manufactured. 2.3.4 Hong Kong (China) Shirley Shuk-Kwan Yam made the following presentation: Hong Kong (China) is a free trade centre. There are no price controls on medicines and there is no import tax levied on medicines. Medicines are accessible to the people of Hong Kong. As of July 2006, there were 25 licensed good manufacturing practice (GMP) manufacturers, 478 authorized sellers of medicines (pharmacies), 3122 listed sellers of medicines (sellers ofOTC products) and 829 wholesalers of medicines. There are over 20,000 registered pharmaceutical products with valid marketing authorization. Each registered product is given a Hong Kong permit number. The criteria of product registration are safety, efficacy and quality. Manufacturers, distributors or suppliers of medicines the world over may apply for marketing authorization in Hong Kong (China). There are different dosage forms and strengths of medicines on the market. There are also innovative drugs, patent-protected drugs, multisource (generic) drugs, imported drugs and locally-manufactured domestic drugs on the market. There are no restrictions on the number of registered pharmaceutical products or the number of registered pharmaceutical products of a particular therapeutic class. A wide range of medicines are available at wholesale and retail levels. Price competition is very keen and is based on supply and demand in the market. The government's healthcare policy is to safeguard and promote the general health of the community and to ensure the provision of medical and health services for the people so that no one is prevented, through lack of means, from obtaining adequate medical attention. Medicines are procured for public use is through the centralized governmentIHospital Authority procurement. The tendering mode follows the guidelines of the World Trade Organization (WTO) and contract awards are given to bid winners. Medicines are purchased for use over one or two-year periods to strengthen bargaining power in price negotiation and obtain more competitive prices. The mechanism of the centralized procurement of drugs for public sector serves about 90% of the population seeking medical attention.

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Once innovative drugs are off-patent, multi-source (generic) drugs will be prescribed as that will help to save financial resources. Because of government subsidies in the public sector, patients pay a nominal fee ofHK$ 10 (US$ 1.28) per drug item per prescription period, which lasts for a few days to 16 weeks. Fees and charges are outlined as: accident and emergency costs HK$ 100 per attendance (including drugs); in-patient (general acute beds) costs HK$ 50 admission fee for the first day (including drugs) and HK$ 100 per day (including drugs); in-patient care (convalescent, rehabilitation, infirmary and psychiatric beds) costs HK$ 68 per day (including drugs); specialist out-patient care costs HK$ 100 for the first attendance, HK$ 60 per subsequent attendance and HK$ 10 per drug item; and general out-patient care costs HK$ 45 per attendance (including drugs). However, tuberculosis (TB) and chest clinics, social hygiene clinics and maternal and child health clinics are free. Family planning only costs HK$ 1. Recipients of Comprehensive Social Security Assistance are waived from payment of their medical expenses of public healthcare services. Patients facing [mancial difficulties may apply for a waiver of fees. In this way, the prices of medicines are made affordable in the public sector. In general, no patients will be deprived of adequate medical treatment because they cannot afford to pay for the medicines. However, public expenditure on drugs is increasing. The Hospital Authority's expenditure on drugs in 2004-2005 was HK$ 2165 million, which rose in 2005-2006 to HK$ 2186 million in comparison ofHK$ 1279 million in 1997-1998. The Hospital Authority manages 43 public hospitals and institutions, 46 specialist outpatient clinics, 74 general out-patient clinics and 27 765 hospital beds (representing 3.9 hospital beds per 1000 populations). The Department of Health manages 12 TB and Chest clinics, nine dermatology/social hygiene clinics, 18 elderly-heath centres and 31 maternal and child health clinics. The total number of hospital beds in Hong Kong (China) is 31937, of which the Hospital Authority accounts for 89%, Department of Health for 2.3% and private hospitals for 8.7%. The community continues to enjoy a high standard of healthcare service which is sustainable, affordable and accessible to all. With patients only have to pay a nominal fee for healthcare in the public sector, medicines are accessible and affordable. Prices of medicines are adjusted in accordance to supply and demand. Asked about the government's projection to meet the rising payments and subsidies due to increasing public expenditure on drugs, she said the private sector will participate more actively in medical insurance. 2.3.5 Japan Koichi Masuyama made the following presentation: The drug pricing system in Japan is represented by the Drug Price List of National Health Insurance (NHI), which covers universal medical care for all citizens. The drug price is the price

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of reimbursement for medical care facilities and pharmacies and determined by the Minister of Health, Labour and Welfare. About 18 000 brands are currently listed in the NHI Drug Price List and all of the individual brands have their own prices. New drugs are listed in the NHI Drug Price List four times a year, each usually within 60 days and at least 90 days after marketing approval. Generics are listed once a year, and generics approved for marketing before 15 March are listed in July the same year. Drug price surveillance and revisions are regularly conducted because there are differences between the price specified in the NHI Drug Price List and the market price that medical care facilities purchase from wholesalers. The market prices of the NHI Drug Price List are periodically surveyed, usually once in two years, and NHI drug prices are revised according to market prices. Drug price surveys consist of substantial survey, supplementary survey and drug price credibility survey. Under the substantial drug price survey, all retail market prices between medical facility and wholesalers are surveyed. Purchase price at medical service providers under NHI randomly selected at a certain rate are surveyed. Aside from the substantial drug price survey, the supplementary drug price survey is conducted as necessary based on transaction data on magnetic media submitted by major drug retailers that directly deliver drugs to medical service providers under NHI in order to accurately monitor the changes in current market price of listed drugs. Under the drug price credibility survey, officials from the Ministry of Health, Labour and Welfare and governments at prefecture level make on-site visits to drug retailers and inspect the status of reporting required for substantial drug price survey and supplemental survey as necessary. All drug retailers that directly sell drugs to medical service providers under NHI are subject to the substantial drug price survey. In 2005, there were about 4000 such retailers. As purchasers, about 10% of all hospitals are selected by a stratified random sampling method. About 900 hospitals were subject to the survey in 2005. Clinics are selected at a sampling rate of 1% among clinics nationwide by a stratified random sampling method. About 1000 clinics were subject to the survey in 2005. Pharmacies are selected at a sampling rate of 5% among pharmacies with a certain number of monthly prescriptions nationwide by a stratified random sampling method. About 1500 pharmacies were subject to the survey in 2005. All products listed in the NHI Drug Price List were surveyed. All transaction in a given month are surveyed. Retailers are required to submit transaction reports on magnetic media. Purchasers submit the record either on magnetic media or in survey forms. Survey subjects provide retail (purchase) price and amount of listed drugs in survey forms, etc. and submit completed forms to the Ministry for Health, Labour and Welfare. About 1400 retailers registered with the Japan Pharmaceutical Wholesalers Association were subject to supplementary drug price surveys in 2005. All products listed in the NHI Drug Price List were surveyed. Several surveys are conducted in a year on transactions over a one- or two-month period. Survey subjects provide retail (purchase) price and amount of individual drugs in survey forms, etc. and submit magnetic media containing the report to the Ministry. For the drug price credibility survey, survey subjects are selected from all drug retailers that directly sell drugs to medical service providers under NHI. Products to be surveyed are generics in severe price competition. The survey is conducted several times a year. Survey method is on-site inspection by officials from the Ministry and the concerned prefecture government.

- 14-

The existing Drug Price Revision's basic rule is that the revised drug price is determined by building on the average market price and adding consumption tax and adjusted margin (2% of pre-revision price). A second rule is a price reduction for the original drug after listing of generic drug. Original drugs of which prices are revised after the listing of their fIrst generics (not including orphan drugs) are subject to price revision in accordance with the basic rule, followed by a 6-8% further reduction. A third rule is drug re-pricing. It applies to: (i) drugs of which sales have substantially exceeded the initial sales estimations due to considerable change in usage, i.e. change in patient population for which the drug is indicated (re-pricing due to market share increase); (ii) drugs of which primary indications were changed (re-pricing due to indication change); (iii) drugs of which dosage and administration concerning their primary indications were changed (re-pricing due to dosage and administration change); and (iv) drugs of which further manufacturing is difficult due to low price despite high demand in health insurance treatment (re-pricing for unprofItable drug). The basic rule of New Drug Pricing builds on comparator pricing method I. A daily price of a new original drug is set at the same daily price of an existing similar drug. For instance, if a new original drug's two tablets daily are compared to an existing similar drug's three tablets daily at ¥ 150, the price of one tablet of the new drug is calculated as ¥ 75. New drugs with higher effIcacies than similar drugs are subject to premium pricing (innovator premium, effIcacy premium, marketability premium and paediatrics premium). An innovation premium (50%100%) is applicable if the new drug has a novel action mechanism and has demonstrated high efficacy/safety and improved treatment. An efficacy premium (5%-40%) is applicable if the new drug has demonstrated high efficacy/safety or improved treatment. A marketability premium (3%-10%) is applicable if the new drug was designated as an orphan drug. A paediatrics premium (3%-10%) is applicable if the new drug has a dosage and administration for paediatric patients separately specifIed. The second rule is comparator pricing method II. Prices of new original drugs of little novelty are set at the lowest compared to those of similar drugs available during the past few years. Such a new drug oflittle novelty needs to satisfy all of the following criteria: it is not subject to premium pricing, there are three or more comparable drugs and the oldest comparable drug was listed at least three years earlier. The lower of (i) the lowest daily price of comparable drugs listed in the past six years or (ii) the average daily price of comparable drugs listed in the past ten years, is applied in principle. If both these prices are higher than the price of the most comparable drug, the lowest daily price of comparable drugs listed in the past 10 years and the average daily price of comparable drugs listed in the past 15 years, the price is set at the lowest of these three prices. The third rule is the cost calculation method. The cost of raw materials and manufacturing expenses is integrated if no similar drug is available. This could, for instance, include the following cost items: (i) cost of raw materials (active ingredients, inactive ingredients, container/box, etc.); (ii) labour cost (= labour cost per person x working hours); (iii) manufacturing expense (= labour cost x 1.519 [standard factor]); (iv) manufacturing (import) cost; (v) selling expense, research expense, etc. (= [manufacturing cost + selling expense + operating profIt] x 0.407 [standard factor]); (vi) operating profIt (= [manufacturing cost + selling expense, research expense, etc + operating profIt] x 0.188 [standard factor]); (vii) distribution cost(= [manufacturing cost + selling expense + operating profIt +distribution cost] x 0.089 (standard factor); and (viii) consumption tax (5%). The fourth rule is the average overseas price adjustment. The price set in accordance with price determination by comparator pricing methods I, II or cost calculation method is adjusted if it differs substantially from the overseas price. The average overseas price is the average of prices in France, Germany, the United Kingdom and the States of America. The price is reduced

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if it is 1.5 times the average overseas price or higher. It is raised if it is 0.75 times the average overseas price or lower. However, the price will not be increased in the case of price determination by comparator pricing method II, multiple specifications including higher- and lower-priced specifications compared to the overseas average price, etc. The fifth rule is the inter-specification adjustment. In price determination by comparator pricing methods I and II, the price of a non-general specification is determined based on the price of the general specification and the inter-specification ratio of comparable drugs. The sixth rule is the calculation method for newly listed generics. First, the generic to the original drug is listed at a price 0.7 times the price of the original drug. Later, generics to the original drug are listed at the same price as the generic with the lowest price. Masuyama was asked if manufacturers ever document true manufacturing costs to the authority. He said that in the NHI Drug Price reimbursement system replacing the free-market system, manufacturers are willing to collaborate with the authority in order to list their products in the NHI Drug Price List and avoid losing market share. Standard factors used in the cost calculation are available from the pharmaceutical industry. When manufacturers documents the cost calculation for a new drug, they tend to estimate at higher costs, so the documented manufacturing cost calculation is carefully examined and assessed by the authority. Asked what resources are available for the price surveillance, he said that prices are monitored on the basis of a voluntary agreement between government, industry and medical care providers. Such a collaborative situation builds on the NHI drug price reimbursement system replacing the free market. This is also the reason main surveys can ask subject establishments to submit data on retailing or purchasing prices and on-site inspection by officials is conducted only in minor surveys. Asked how the system differentiates plural generics of the same drug, he said that all generics are listed by their brand names in the NHI Drug Price List. Masuyama was also asked what was the objective of the government's drug price control is. He said, in the NHI Drug Price reimbursement system, the objective is to minimize price differences between the price specified in the NHI Drug Price List and the market price that medical care facilities pay wholesalers. About 20% of the medical budget is used for pharmaceuticals. Listing new drugs and new generics in the NHI Drug Price List ensures affordable access to them, but revising existing NHI Drug Prices brings down the costs of medical care. 2.3.6 The Lao People's Democratic Republic Sivong Sengaloundeth made the following presentation: The National Medicine Policy (NMP) was endorsed in March 1993 and revised in August 2003. The NMP, as it currently stands, specifically aims to provide safe and effective medicines of acceptable quality at a reasonable price. The Law on Drugs and Medical Products, Article 4 provides that the supply of drugs and medical products will ensure the quality, safety and appropriate price in order to meet social needs. The country's economic strategies lay particular emphasis on ensuring procurement and distribution of essential medicines of acceptable quality at the lowest prices. The Ministry of

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Health supports and promotes a community-based medicine scheme that uses a revolving drug fund (RDF) and sets a ceiling sales price of medicines at 125% of the manufacture price. The government aims to control the price of medicines by controlling producer prices and margins throughout the supply chain. There are 18 provincial hospitals, 131 district hospitals, 647 health centres and 1940 private pharmacies in the Lao People's Democratic Republic. A drug price study compared the prices of 17 selected essential medicines. The study covered all levels of public health facilities: one provincial hospital, two district hospitals, four health centres and a private pharmacy close to each selected public health facility. The availability and prices of 17 key medicines were checked against a checklist, which includes drug description, unit price and strength, price, manufacturer and country of manufacture. The prices of the key medicines used in public and private health facilities, key medicines used to treat common health problems in public health facilities and key medicines used to treat common health problems in private pharmacies were analysed for comparison between buying and selling prices. The study found that in private pharmacies, price of the same item of medicine from varied place to place; the average profit margin in public health facilities is lower than in private pharmacy; in public health facilities, one third of medicines had higher buying prices compared with buying prices in private pharmacies, but the selling prices of some medicines were lower. At the 6 National Meeting on Medicine, the control of medicine prices will be included as an important issue to discuss, and the same price for the same generic medicines will be the critical issue. Asked what "the same price for the same generic medicines" implies, he clarified that it means that regardless of private or public sector, urban or rural areas, the price of any generic medicine must be the same and it must be an affordable price. The lowest priced generic version could be identified through a comparison of prices. A second question was why in public health facilities, some medicines had higher buying price compared with buying price in private pharmacies. He clarified that it is because the government budget allocation is credited at the bank, sometimes resulting in a delay in the release of funds. A third question was about the decentralization of health system, which sometimes causes drug price fluctuations due to unstable procurement at local level, and the situation of the Lao People's Democratic Republic in this respect. He said that 80% of the essential medicines listed are still purchased by the government, so the situation is not as serious as in other countries that have decentralized their systems. 2.3.7 Malaysia Salmah Bahri and Sameerah Shaikh Abdul Rahman gave the following presentation: Malaysia had a popUlation of 26.7 million as of July 2006, with a total land area of 330 252 square km. th

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As of 2005, there were 128 government hospitals, three university hospitals and 218 private hospitals. There are 18 246 doctors (popUlation ratio 1: 1402) and 3506 pharmacists (population ratio 1:7196). The total Ministry of Health budget increased US$ 1.3 billion in 2000 to US$ 2.4 billion in 2004, which is 8.0% of the total national budget and 2.1 % of gross national product (GNP). Per capita health expenditure is US$ 92.63 and per capita GNP is US$ 4236. The number of drugs registered as of 2005 were as follows: 10,339 prescription drug items - 7205 imported and 3134 locally manufactured items; 7732 non-prescription items - 4297 imported and 3435 local items; and 555 chemical entities (active pharmaceutical ingredients). There are 943 drug wholesalers, 296 drug manufacturers, 652 drug importers, 1595 licensed drug retail outlets in the private sector; and 2876 pharmacies and drug outlets in the public sector. The total Ministry of Health expenditure for pharmaceuticals increased from US$ 91.1 million to US$ 212.6 million in 2004, which corresponds to US$ 8.31 per capita and 12.7% of the total pharmaceutical annual expenditure of the Ministry's operating budget. Comprehensive drug control legislation, regulations and enforcement agencies exist. The National Medicine Policy (NMP) addresses drug affordability as one of the core components in terms of prices of drugs, pricing policy, price information and generic policies. There is a practice of generic substitution in public healthcare facilities. The mechanisms affecting medicine prices in Malaysia are sales (import, wholesale and retail) and government procurement. At the Ministry's health facilities all medicines are dispensed free of charge to all. At university hospitals, patients co-pay the cost of medicines dispensed. At private health facilities, out-of-pocket payment covers all in principle. There is no import tax on drugs in Malaysia. There is no direct control of medicine prices in place. The country relies on market forces and competition within the industry to keep medicine prices stable. But, as indirect control, there is a voluntary agreement for cost containment in the public sector through restrictive prescription through the Ministry'S Drug Formulary, budget limitation, and price setting by tender and negotiation for government procurement. Influencing factors such as regulations on advertisements and promotion are also controlled. The Ministry of Health is studying the various price control mechanisms in force in other countries. The Ministry expects to learn about different approaches to price control from this consultation. The Ministry began monitoring medicine prices in 1999. It listed the maximum sales prices of medicines in the national essential me,dicines list. The Ministry enforced licensing requirements for pharmaceutical manufacturers and importers to submit the Recommended Retail Prices (RRPs) of all registered products to the drug control authority, which are accessible at the National Pharmaceutical Control Bureau (NPCB) website. In 2001, the draft NMP identified monitoring of medicine prices as one of the strategies to ensure affordable access to essential drugs. In 2004, the Ministry of Health set up the Medicine Price Monitoring Unit in its Pharmaceutical Services Division. In 2006, the Ministry introduced the Medicine Price Monitoring System, which is based on voluntary agreement. Continuous medicine price monitoring and surveys are implemented to

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support the NMP component for medicine affordability because the NMP identifies dissemination of independent and objective information on medicine prices to health professionals and consumers as an important tool to ensure affordable access to essential medicines for all. The Ministry of Health pursues optimal approaches to conduct regular checks on the prices of medicines in Malaysia. The objectives of the medicine price monitoring survey conducted in 2006 were to investigate and compare retail prices of medicines in the private sector in different geographical areas of the country, to investigate and compare procurement prices of medicines in the public sector in different geographical areas of the country, and to monitor procurement prices and follow trends in price changes of medicines so as to provide reliable price information to policymakers, health professionals, consumers and pharmaceutical procurement officers. The prices monitored included both free-market retail prices and government procurement prices. The survey covered western Malaysia, representing urban areas, and eastern Malaysia, representing rural areas. Western Malaysia has seen rapid urbanization in the past 30 years and a large proportion of the population lives in, or close to, urban areas. This part of the country has excellent travel facilities. Only 15%-20% of Malaysians live in the eastern part of the country and a large proportion of them live in remote rural locations with restricted travel facilities. The survey covered pharmacies representing providers and selected establishments including government hospital pharmacies, private hospital pharmacies and private retail pharmacies. The products surveyed included single-source (innovators) and multi-source (generics) products, oral and dermal preparations, all brands and all package units. The medicines covered by the survey fell into three groups. Group 1 included 30 commonly used prescription and non-prescription medicines, except psychotropic drugs, for the treatment of prevalent conditions, included in either the national Essential Medicines ListlMinstry of Health Drug Formulary or WHO/HAI core monitoring list, and commonly stocked by both private and retail pharmacies and government hospital pharmacies. Group 2 covered 28 patented medicines before and after inclusion into the Ministry of Health Drug Formulary or used in private, university and government hospitals. Group 3 had 10 specialized medicines that are usually expensive and from single source products used in private, university hospitals and government hospitals with specialists. The survey used the following methodology: the timing of the survey was known at each site; the survey was carried out three-monthly for Group I and six-monthly for Groups 2 and 3; it relied on both the active approach of visits to collect data at selected sites and the passive approach of data submitted from the selected sites. The surveyors came from the existing workforce of trained pharmacists from the states. The following strategies were followed in selecting facilities for Group 1: from West Malaysia, 20 government hospitals and 20 private retail pharmacies within a 5 km radius of the selected government hospitals; and from East Malaysia, 20 government hospitals and 20 private retail pharmacies within a 10 km radius ofthe selected government hospitals. The following facilities were selected for Group 2 and 3: from West Malaysia, the eight largest government hospitals with specialists, five largest private hospitals with specialists and three university hospitals; and from East Malaysia, the eight largest government hospitals with specialists and five largest private hospitals with specialists. Private clinics were excluded. Data was processed on the basis of the WHO/HAI Medicine Price Monitoring Manual using the customized WHO/HAI Excel Workbook. Price monitoring analysis was reported every

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three months and disseminated as hard and soft copies and on the Internet, targeting all relevant stakeholders. Preliminary findings showed that there are differences between the price (median price) of innovator and generic brands from -11.20% to 713.33% in private premises and from -55.00% to 154.00% in public premises; and the median price ratio (MPR) between eastern and western Malaysia is 1.01 in the public sector and 1.09 in the private sector. The survey can partly support the NMP's basic requirement of ensuring affordability. The survey fmdings will help policy-makers to make informed decisions regarding medicine pricing policies and the development of drug reimbursement schemes, health professionals to choose cost-effective treatments, consumers and patients to save time and cost in comparing medicine prices and to use the available information to choose good quality but cheaper alternatives, and hospital pharmacists to negotiate better medicines prices using reliable and up-to-date information on current prices. But the survey covers only a small number of medicines available in Malaysia. The fmdings will mainly determine the variation and trend in medicine prices and serve an advocacy purpose. The survey is not meant to determine the status of affordability. Follow-up actions are needed to identify the trend of medicine prices in the private and public sectors, explore the medicine pricing structure of the suppliers to the various providers and consumers in Malaysia, and address the issue of making medicines affordable to all in Malaysia. In response to a question, the participants from Malaysia said the Medical Advisory Board under the government shall examine all drug advertisements before they are distributed in the market. Legal sanctions would be imposed if this regulation were violated. The selection of sites in the survey was based on WHOIHAI guidelines. The point was to cover all provinces in eastern and western Malaysia, based on popUlation density and convenience of sampling. Once the drug reimbursement system is established, approximately 300 medicines will be controlled. Answering a fmal question, they said it takes six months on average to process an application for drug registration, but less time for fast-track drugs. 2.3.8 Mongolia Munkhdelger Chimedtseren made the following presentation: Mongolia is a country of 2.4 million people living in a territory of 1.56 million square km. Per capita GNP is US$ 476.00. Administration is given at the level of21 aimags (provinces), 340 soums and 1240 bags. From early 1990's to 2002, the country underwent a transition from a centralized to a market economy. In the centralized economic system, the government fixed the price of medicines, with the single price for the whole country. After price liberalization in 1997, there was no more regulation from the government and the price of medicines has gone up. Currently, 85% of the medicines the country needs are imported. A total of 55 medicines to treat 15 kinds of diseases are still provided free of charge through tertiary and secondary hospitals. These include drugs for cancer, kidney problems,

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dialysis and some psychiatric illnesses. The costs of 127 medicines can be reimbursed by the health insurance fund (HIF) based on prescriptions issued by family doctors. The list of reimbursable drugs as well as their prices have been reviewed. The pharmacist charges a designated per cent of the retail cost to the pharmacy to the customer, and also applies for the retail cost of the medicines through the HIF. A new procedure to apply competitive bidding in the procurement of medicines needed by state-run hospitals was introduced in 2002 to improve the efficiency ofthe HIF allocated for medicines. The National Medicines Policy of Mongolia (NMPM) was passed by Parliament in December 2002. The NMPM commits the Government to achieve the priorities set out for the pharmaceutical sector within 10 years of the policy's endorsement. Its policy's overall objective is to ensure the availability of good quality and safe medicines at affordable prices to those who need them and ensure the rational use of the medicines. There are 29 local manufacturers, 90 drug wholesalers, and 807 pharmacies and their branches, most of which are private except state hospital pharmacies and soums phannacies. There are 285 revolving drug funds (RDF) at the soum level. A medicine price survey was conducted in November 2004 as a cross-sectional survey based on a methodology developed by WHO and HAl. The objectives were to list prices of selected medicines in different sectors, geographical areas, health facilities and pharmaCies; identify differences in the prices of innovator brand products and generic equivalents; identify components of medicines prices; and assess the affordability of the medicines. The survey compared the prices of medicines in different health sectors. It examined public and private sectors. It also looked at two prices in the public sector as procurement prices and the prices charged to patients. It measured both wholesale and fmal prices and price structure. It compared prices to the index prices of the MSH price list for generics and Australia for patented prices and compared costs to the salary of the lowest-paid government employees. A total of 52 pharmacies were selected by random sampling for the survey. Sixteen facilities in Ulaanbaatar and three aimags were included. The survey results show that government-procured and public outlet generic prices are lower than private and RDF prices. The availability ofthe lowest priced generic (LPG) equivalents is two to four times lower than that of most sold generic (MSG) equivalents at public, private and RDF outlets. Overall, there is not a big difference in procurement prices between LPG and MSG, but the procurement price of LPG mebendazole 100mg is much higher than the one for its MSG equivalent. All LPGs are available in the public sector while only 10% of MSGs are; but the gap of availability decreases in the private retail sector. There is not a big difference in prices paid by patients in the private retail sector between LPGs and MSGs. In the community RDF, MSG prices are the same or higher than LPG prices. Price mark-ups in the retail sector include a customs duty of 5%, value added tax of 15%, a stamp duty of 1%, a wholesale mark-up of 25% and retail mark-up of 10%, regardless of generic or innovator brand. The survey results show that there is limited scope for domestic and foreign trade as well as poor affordability of medicines by customers; the innovator brand medicine, the key indicator comparative medicine in the survey, is available only in the case of one drug item; MSGs are more easily available in the private sector; LPGs are more easily available in the public sector; the prices purchased by public procurement are reasonable; the prices charged for MSG equivalents in the private sector were almost two times the prices in the public sector, while the prices of LPG equivalents were less than double the price paid by patients in the public sector; the prices of generic medicines vary and the cheapest product is not always the MSG; for a

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month-long course ofMSG Ranitidine to treat peptic ulcer, a patient would need to pay the equivalent 1.7 days' wages (of the lowest paid government employees) at a public sector facility and 3.2 days' wages in the private sector; and part of the reason for high prices is the relatively high duties, tariffs and mark-ups. Chimedtseren concluded the presentation by listing the policy implications of the survey: drug availability and price regulation in the public sector must be improved; appropriate regulations are needed to control drug supply and prices; and a review and reduction of duties, taxes and mark-ups on medicines are necessary. In answer to a question, Chimedtseren said that initially UNICEF, supported by the Japanese Government, distributed medicines free at soum level. Later, UNICEF supported the transition to the self-reliant RDF system. 2.3.9 Papua New Guinea (pNG) Vali Karo made the following presentation: Papua New Guinea has approximately 5.9 million people, 75%-80% of them living in rural areas. In the public sector, drugs are provided at 20 public hospitals, 1000 health centres and 2000 aid posts. The total government drug budget is approximate US$ 20 million. The government procures drugs by tender and distributes them to these facilities, spread throughout the country. In the public hospitals, the standard consultation fee is usually US$ 0.60 per patient and the standard prescription fee is US$ 0.30 per prescription. No fees are charged in the health centres and the aid posts. Private clinics, hospitals and pharmacies purchase drugs on their own. There is no control on mark-ups, so prices vary. The National Drug Policy (NDP) of 1998 addressed the issues of financing drugs in the public sector, prices of drugs, the use of generic drugs and the use of drugs listed in the national essential medicines list. The Medicines and Cosmetics Act of 1999 provided for the registration of medicines, pharmacists, technicians, pharmacy outlets, and of importers, exporters and manufacturers of medicinal products. The Act also seeks to regulate medicine pricing, but such regulation is yet to be enforced. The country has an Independent Consumer and Competition Commission (ICCe), established by the Independent Consumer and Competition Commission Act of 2002. The ICCC aims to promote competition and fair trade, regulate prices for certain goods and services and protect consumer interest. However, this body is not proactive in regulating medicine prices. In conclusion, although legislation addressing price control is in place, there is only indirect control of drug prices through prescribing restrictions (generic prescribing, essential medicines list). Tenders are advertised. There have been no drug price surveys or monitoring so far, only an analysis of medicine expenditures. The challenge now is to collaborate effectively with the ICCC and private pharmacies.

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In answer to a question, Karo clarified that the ICCC Act provides for only general measures of regulation and so there is no specific regulation on prices of medicines. The NDP addressed price control, but nothing is in place to monitor the pricing policy. Asked about the access of 80% of the population living in rural areas to drugs, he said that the aid posts playa pivotal role in the supply of medicines. A kit of medicines is delivered to the aid posts every six months. 2.3.10 The Philippines Robert Louie P. So made the following presentation: The Philippines is an archipelago of 71 07 islands, with a total population, in 2004, of 83.5 million. The administrative structure consist of 79 provinces, 117 cities, 1501 municipalities and 41,962 barangays (villages). The Philippine's total health expenditure was PHP 165.2 billon (US$ 3.21 billion) in 2004, with a per capita expenditure ofUS$ 1979 (US$ 38.47). The funds were sources as follows: PHP 50.1 billion from the government (PHP 26.3 billion from the national government and PHP 23.8 billion from local governments); PHP 15.7 billion from the social insurance (PHP 15.5 billion from Medicare and PHP 0.2 billion from the employees' compensation programme); and PHP 97.5 billion from private sources (PHP 77.5 billion from out-of-pocket, PHP 4.1 billon from private insurance, PHP 8 billion from health maintenance organizations, PHP 5.9 billion from employer-based plans and PHP 2 billon from private schools). Between 35% and 40% of the population lives below the poverty line. The average family income is PHP 147 888 (US$ 2875) and average family expenditure is PHP 123 690 (USS 2405), of which 2.2% is spent on medical care. The size of the pharmaceutical market in the Philippines is between PHP 72 and PHP 80 billion. There are 242 drug manufacturers, 394 drug traders, 28 760 retail outlets and 3319 drug distributors. The retail outlets include 7004 Botika ng Barangay, 1135 Botika ng Bayan, 15450 drug stores, 649 government hospital pharmacies, 1064 private hospital pharmacies, etc. Drug store sales account for 88% of total pharmaceutical sales and hospital sales for 12%. Private hospitals make up 70% of the hospital sales (8.4% of the total), while the remaining 30% of hospital sales (3.6% of the total) come from government hospitals. Pharmaceutical sales of the national hospitals are between PHP 1.0 and PHP 2.0 billion and those of local government hospitals are between PHP 0.9 and PHP 1.4 billion. A glimpse of market failure in the Philippines may include: prevailing monopoly or oligopoly; inconsistent information; imperfect markets as a consequence of geographical and technology divides as well as labour and regulatoryllegal constraints; macroeconomic disruption due to unemployment, poverty and inequality; and non-transparent pricing of medicines. Drug prices are exorbitantly high in the Philippines. The price of a medicine can be 1600% higher than the cost of a similar off-patent product. There is strong brand consciousness, so that a high price is often equated with good-quality drugs. Companies aggressively market and promote their products. Data on retail prices of 100 units (tablets/capsules) of 12 commonly-used drugs collected by HAl in 1995 in Canada, India, Indonesia, Nepal, Pakistan and the Philippines, showed that the price of six of the 12 drugs was the highest in the Philippines. Four years later, a price

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comparison of 12 selected generic drugs in Indonesia, the Philippines and Thailand by the Philippine Departments of Health, and Trade and Industry showed that the price of eight ofthe 12 drugs was the highest in the Philippines. Regulatory and policy interventions to make prices affordable changed in 2000. Interventions to promote the cost-effectiveness of drug selection and procurement before 2000 included the Republic Act (RA) 6675 "Generics Act of 1988" ensuring the adequate supply of drugs with generic names at the lowest possible cost; Executive Order (EO) 49s 1993 directing the mandatory use of the Philippine National Drug Formulary (PNDF) Vol I as the basis for procurement of drug products by the government; and Administrative Order (AO) 51 s 1988 "Implementing Guidelines for DOH Compliance with RA 6675" establishing the formulary system in health facilities and defining the role of the Pharmacy and Therapeutics Committee. Interventions to regulate drugs before 2000 were the national drug policy programme, Bureau of Food and Drugs (BFAD) Law and National Health Insurance Programme (NHJP). Interventions on price monitoring before 2000 were RA 7581 "Price Act," which designates the Department of Health as the lead agency in identifying essential drugs as basic necessities and monitoring their prices; and Drug Price Reference Index (DPRI), which is a basis for reimbursing drugs and medicines in hospital claims and serves as a guide to drug prices and rational drug selection. After 2000, the government initiated programmes to mitigate the high cost of drugs, introducing parallel drug imports through the Philippine International Trading Corporation (PITC) of the Department of Trade and Industry for 72 Department of Health hospitals and three local government units; and creating of 7004 Botika ng Barangay (village drugstores) and 1135 Botika ng Bayan (drugstores in cities and towns) outlets nationwide. These programmes have achieved a 30%-70% reduction in drug prices in comparison with leading private drug stores. Later, to regulate promotional activities in government facilities, the government issued AO 169s 2004 "Implementing Guidelines for the Exclusive Use of Generic Terminology in All Prescriptions and Orders in All Department of Health Facilities" and Department Memorandum 98s 2004 "Guidelines Enhancing Informational Transparency on the Transactional Visits of Sales and Medical Representative in All Department of Health Facilities." These were followed by an AO on "Guidelines Institutionalizing and Strengthening the Essential Drug Price Monitoring System (EDPMS)" and another on Implementing Guidelines for the PNDF System. Social health insurance increased and out-of-pocket spending for drugs decreased. The aims of these interventions are: the PNDF to be used as a basis for drug procurement by government facilities and for reimbursement by social health insurance; prices ofPNDF drugs to be monitored in the EDPMSIDPRJ; rational drug selection and use and cost containment to be improved through the PNDF and EDPMSIDPRJ; economies of scales to be effected in the procurement and unified pricing scheme; the number of outlets providing half-priced quality medicines to be increased; and the national drug policy and the regulatory capacity of the BFAD to be improved to improve access to pharmaceuticals as well as their safety, efficacy and quality. Regulatory requirements need to be enhanced as well. Drug patenting needs to be delinked from drug marketing authorization (registration), the requirements for drug registration need to be streamlined and more attention needs to be paid to post-marketing surveillance. The

- 24-

enhanced regulatory requirements would lower transaction cost, make early entry of drug products possible, increase market competition and lower drug prices. Other points made in the presentation and discussion included the following: national demand estimates of essential drugs are used in price bidding for drug reimbursement; pooled procurement using pooled resources is underway among local government units; the DPRI is being strengthened for the purpose of drug reimbursement; a surveillance of the pharmaceutical industry's input and output at all levels of distribution is underway; regulatory standards are being harmonized to ease trade in pharmaceuticals so that more volume and variety of drug products will compete in the market; and inter-agency and inter-country collaboration to curb counterfeit drugs is being strengthened. In answer to a question, So said the implementation of programmes introduced and regulations passed in 2000 and after was still being monitored and evaluated. He said drug retailers and outlets including Botika ng Barangay and Botika ng Bayan are licensed. He was asked why, although the Generic Law has been in force since 1998, why it took until 2004 to issue the order for the mandatory use of generic names in prescribing medicines. He said that the provision of the law allowed prescribers to use the brand name of a drug and that the public perception of generic drugs was not very positive. This is why it is important to strengthen the BFAD to ensure the high quality of generic drugs and to inform the public that the quality has risen. He was asked if the government allows Department of Health facilities and/or all outlets to provide half-priced quality medicines. He clarified that Botika ng Bayan stores are private outlets and that the government allows half prices for selected drugs at licensed pharmacies and Botika ng Barangay, which serve at community level, with another set of procedures. Another question was if the government had encountered any problems in parallel imports to counteract the increase in the cost of drugs. He said that it had faced lawsuits from drug companies, but some companies proclaimed to decrease prices of drugs. Asked how many essential medicines are included in the basket of price monitoring, So said that the PNDF 7th edition listed 607 active ingredients, including name, strength, formulation; and 2200 specifications. He added that to coordinate for reimbursement by social health insurance, approximate 200 items are chosen for monitoring. Asked which drugs are included in the basket of consumer price index (CPD, he said that the CPI comes from the national index office, which has no coordination with EDPMSIDPRI. Drugs are listed in the CPI regardless of demand and supply needs. He was asked if any action is planned to encourage social behavioural change in drug promotion. He said that budgetary and human resource constraints limited action to advocate ethical marketing and promotion. Asked if the half priced drugs provided by accredited community-level outlets are affordable, he said that a reassessment is necessary against the purchasing power of individuals. It was noted that, as up to 40% of the population lives under the poverty line, it is essential to expand the social safety net and increase social health insurance coverage; that procurement

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has to rely on improved estimates of demands; and that, to make the half-priced outlets sustainable, it is necessary to work out mechanisms such as revolving funds. 2.3.11 Partners

Eufe Tantia (Phannaceutical and Healthcare Association of the Philippines) said to make prices of drugs affordable, governments should strengthen proper implementation of relevant existing laws rather than passing new legislation or amending existing laws. He made recommendations on frameworks to improve accessibility from the industry perspective, citing the fact that 90% of essential medicines are off-patent and that the capacity to manufacture certain formulations, e.g., inhalers, is still limited. He recommended that countries (a) properly implement generic policies and laws; (b) stimulate demand for generic drugs; (c) improve distribution networks and increase retail outlets; and (d) improve health insurance coverage. 2.3.12 Singapore Lee Wei Yan made the following presentation: The population of Singapore increased from about 3 million in 1995 to about 4 million in 2005, together with trends of ageing of the population. The prevalence of selected noncommunicable diseases and risk factors among Singaporeans aged 18 to 69 are as follows: diabetes mellitus 8%; hypertension 25%; cigarette smoking 13%; hyper-cholesterolemia 19%; and obesity 7%. Both public and private healthcare delivery systems support the country. There are 14 private and 12 public hospitals and specialist centres, but only 16% of inpatients use private establishments, with the other 84% using public facitilies. In the primary care sub-sector, there are 1193 private general practitioner clinics and 18 public polyclinics, although distribution of outpatients is 78% in private establishments and 22% in public establishments. Singapore's national health expenditure totaled US$ 2937 in 2004, of which government health expenditure was US$ 1017. Total pharmaceutical expenditure was US$ 515, of which expenditure on prescription-only medicines was US$ 414, and that on branded medicines was US$ 474. The market for generic medicines is small in terms of expenditure, but such medicines account for 40% of the phannaceutical market on a volume-usage basis. Singapore's approach to manage prices of drugs for affordable healthcare builds on economic growth and promotes appropriate drug use, prudent fmancing and market competition. Approaches to promoting appropriate drug use include: drug formulary selection; clinical practice guidelines, monitoring, research, and prescribing controls; and patient education and health promotion activities. As prescribing controls are decentralized based on local needs and circumstances, coordination with standard treatment guidelines needs to be reinforced and monitored. Approaches to promoting prudent financing include: targeted drug subsidies to meet patients' needs, collaboration with voluntary organizations, insurance (Medishield and Eldershield) and safety nets (Medifund and Eldercare fund) at the level of the government; central purchasing and generic substitutions at the level of healthcare institutions; and selfreliance (Medisave and co-payment) and family care at the level of patients and community. Generic substitution is not mandatory but available with the agreement of prescribers and phannacies.

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Approaches to encouraging market competition include: a lack of price, profit or volume controls; and the promotion of a vibrant healthcare service sector. Such a vibrant healthcare system needs to encourage drug manufacturers to do business in Singapore and overseas patients to come to receive healthcare services in Singapore. In the public sector, there is a drug formulary called "Standard Drugs List (SDL)". SDL drugs are essential, cost-effective, clinically relevant and meant for common disease. They are subsidized in the public healthcare institutions for eligible patients. The SDL has two parts: SDL-I lists low-cost essential drugs, for which patients co-pay S$ 1.40 per item per week; SDLII lists high-cost essential drugs, for which patients co-pay 50% of the charges.

There has so far been no monitoring of medicine prices. One way to do this could be to use the pharmaceutical consumer price index because drug price monitoring would be efficient if carried out together with consumer price index (Cpn surveys that are routine, nation-wide and able to measure impacts on consumers/patients. New technologies using a varying basket of drugs would be necessary; price distortions due to subsidies would need to be adjusted; and additional administrative costs would be incurred. Answering a question, Lee Wei Yan said approximately 500 items are listed in SDL-I and about 100 in SDL-II to indirectly control the volume of demand from the public sector. He was asked how comprehensive the current CPI surveys are and what drugs they cover. He said that in each survey performed over one to two weeks, clients document all the purchases, which include mainly OTC drugs, so it is not reflective of drug prices currently, but useful as a reference to assess health care costs. In answer to a third question, he said there is no list of drugs in the private sector equivalent of the SDL. Healthcare is a matter of choice in Singapore.

He was then asked how market regulation of drugs, if introduced in Singapore, would relate to drug registration. He said that the Health Sciences Authority, which is responsible for drug administration, and enforces drug registration and inspection, would take a certain responsibility. A fifth question was how effectively prescribing practice could be monitored and evaluated. He said that it is currently possible for prescribers to change the consultation fee. For instance, a doctor may charge S$14 consultation fee, but if substituting generics for a branded drug, the doctor may mark up the consultation fee to S$18, or still charges the brand price for the substituting generic drug. This causes a doctor and a patient to opt to consult for optimal choices that benefit both of them. This would be one point to monitor and evaluate. If monitoring prices of drugs at general practitioners, it would also be necessary to itemize drugs. The last question was about the separation of prescribing and dispensing practices in Singapore. He said that currently there is not enough demand from citizens to close down dispensing doctors even though there are an adequate number of 24-hour pharmacies. Patients value doctors' skills and so are willing to pay their consultation fees. 2.3.13 VietNam Nguyen Thanh Lam made the following presentation: In the past, because of subsidies, drug prices were relatively stable in Viet Nam. As a result ofthe newly introduced market economy, drug prices are now established by the market

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itself. Drug prices vary widely depending upon supply and demand. No administrative measures have been taken by the government to control drug prices so far. Total sales of medicines in Viet Nam were approximately US$ 726 million in 2005, projected to increase to US$ 1 billion by 2008. Since 2000, the market has grown an average of about 12% per annum. Per capita drug spending increased from US$ 5.40 in 2000 to US$ 9.85 in 2005. There has been growth in both the domestic market and imports, and the domestic share is estimated at approximate 48% (2005). Drug price control measures were introduced in 2003, when large medicine price hikes led to public concern, media attention and questions in the National Assembly the responsibility of Ministry of Health to controld drug prices. The Decree on Drug Price Control No. 120 was issued in 2004 and the Revised Pharmaceutical Law Article 5 was endorsed in 2005. In accordance with the principles of drug price control that inform the degree and the revised law, the state respects pricing competition among manufacturers, traders and importers of medicines, but the state is entitled to use necessary measures to stabilize prices, setting the prices for some essential medicines to protect the legitimate rights and benefits of the consumers, producters, importers, traders and the state.

The drug price control measures include the following provisions: (1) Manufacturers and importers must report to the Ministry of Health drug prices and changes in drug prices before drugs are marketed or when they apply for marketing authorization, must ensure that drug prices are not higher than the drug prices in other countries in the region with similar medical and commercial conditions as Viet Nam and must take legal responsibility for the declared prices. (2) Wholesale prices and retail prices of drugs must be publicly and clearly posted up and wholesalers and retailers must not sell at higher than posted prices. (3) reported. Competent state authorities shall make public the drug prices that have been

(4) Procurement of medicines by public hospitals must go through a bidding process as stipulated by law, the bid price must be lower than the retail prices of the medicine on sales at the time and the bid price must be adhered to at all the public healthcare institutions in the concerned province. There has been greater price stability since 2004. Price increases on average appear to be consistent with the CPl. But some challenges remain: (1) There have been sporadic price increases for specific drugs from time to time.

(2) Policy initiatives are not fully implemented, leaving concerns about ongoing price stability and raising questions about whether current prices are reasonable. (3) in the market. (4) implemented. There is lack of confidence that published prices reflect actual prices prevailing

Price cap provisions based on international comparisons have not yet been

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(5) Price transparency through registration with the Drug Administration of Viet Nam (DAV) is not seen as effective because manufacturers inflate the prices they report. (6) Tendering guidelines for hospitals are not implemented effectively enough to ensure reasonable drug prices. There are many options to consider in finding ways to overcome these challenges. First, strengthen data collection and analysis to: prepare regular, quarterly reports for DAV use on trends in drug prices using various measures such as CPI and pharmaceutical prices, changes in prices registered with DAV and changes in prices in hospital tendering; prepare special reports or analyses as necessary on specific public complaints or reports of exceptional price hikes; collaborate with other countries by sharing information on drug prices; and conduct regular analyses to identify trends as international data becomes available. Second, identify the comparator countries that have similar medical and commercial conditions to Viet Nam, develop methodologies for price comparisons, conduct price analyses and comparisons, and consult with affected groups. Third, strengthen drug price reporting to ensure that the reported prices are meaningful and represent the upper limit on prices prevailing in the market, reduce incentives to inflate the reported prices, assess how widespread the problem is, require suppliers to provide evidence that the reported price is the prevailing price, and publish studies comparing reported prices to those paid by institutions. Fourth, strengthen controls on price increases to restrict the frequency with which a supplier may report a price increase to DAV and to limit price increases, for example by basing prices on the CPI or freezing prices subject to supplier providing sufficient evidence to justify an increase. Fifth, consider more strict sanctions for violations of the regulation on drug price control. Sixth, review the tendering practices in hospitals to determine if more can be done to benefit from competition, especially on imported products, for example by examining the potential for joint tendering by several regions, negotiating volume agreements on single source products and considering national buying for single source products for hospitals and institutions. Seventh, in the longer term, as the national health insurance system expands and its coverage is broadened to cover a larger percentage of drug spending, there will be a greater opportunity to use it to influence drug prices and expenditures through: price negotiation using the leverage of formulary listing; cost effectiveness requirement; reference pricing systems; and more appropriate and cost-effective prescribing and use. Asked if the public hospitals are still allowed to procure drugs by tender on their own, particularly in relation to tuberculosis (TB) programme, it was learned that the local hospitals would choose specific anti-TB drugs, but that other hospitals have boards, which work together with the DAV to procure drugs. There was some discussion of price capping for essential medicines, which could lead to price increases of generic medicines. This would depend on the extent of discounts and rebates being offered by pharmacies in Viet Nam.

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Asked which countries were currently assumed to be comparator countries - these could be from the Association of South-East Asian Nations, but that the methodology for declaring comparator prices is still under development. It was observed that access to price information in comparator countries would be important to make sure pricing was transparent. Another question asked about the formula for the cost structure mechanism to calculate drug prices. The Viet Nam delegation said a survey was required, but for imported drugs, if the mark-up above the cost, insurance and freight (CLF) price was more than 40% the price calculation was questioned. An additional question was how long the notified retail prices was valid. They said that as a bidding cycle takes six months to one year, the same period would be considered appropriate. 2.3.14 India

Iun Yoshida, WHO Regional Office of the Western Pacific, delivered the following presentation on the Pricing of Medicines in India (prepared by Dr P. V. Appaji, Director, National Pharmaceutical Pricing Authority [NPPA], Ministry of Chemicals and Fertilizers, India, who was not able to attend the consultation. India's domestic pharmaceutical market size is US$ 4.5 billion with a 10% growth rate, 300 units of manufacture, 25 multinational companies, 550 active pharmaceutical ingredients (APls) used, 400 APIs manufactured and 20000 medicines marketed. The growth of the pharmaceutical industry is the responsibility of the Ministry of Chemicals and Fertilizers. Major decisions on investment patterns, production and prices of medicines have been announced through the drug policies of 1978, 1986, 1994 and 2002. The pricing of medicines is subject to the Drug Price Control Order (DPCO) 1979, 1987 and 1995. The latest DPCO has listed 74 bulk drugs and 74 drugs category-wise under control, which cover 50% of the market. DPCO 1995 permits 100% mark-up as maximum allowable post-manufacture expenses (MAPE) for domestic drugs and 50% for imported drugs. Under DPCO 1995, three criteria are used to classify drugs for price control purposes: drugs of mass consumption; inadequate competition; and monopolistic nature. The availability of medicines marketed in the country is monitored by the NPPA. The State Drugs Controllers send shortage reports, if any, to the NPPA periodically. The NPP A promptly advises the manufacturers to rush stocks to the reported areas of shortage. Shortages are temporary, brand specific and localized. A scheme of DPCO 1995 shows that: it selects 74 active pharmaceutical ingredients (APIs) under price control; all medicines containing any of the 74 APIs are under price control; the price of API is notified after a cost-cum-technical study; the price of medicine (formulation) is determined on a cost-plus basis; and the manufacturer is free to fix its own price for decontrolled medicines. The pricing of scheduled bulk drugs follows the following procedures: the collection of production and cost data from companies; scrutiny of submitted data and its verification by plant visits if necessary; an estimation of the normative cost of production based on actual costs and technical parameters of studied units; and a determination of a fair price after allowing returns as opted for by the individual manufacturer.

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The pricing of scheduled formulations follows the following procedures: cost of indigenous production assessed as per a fixed formula; fixed ?ercentage as M~E allowed to cover post-manufacturing expenses including profit; and for Imported formulatIons, a fixed margin allowed on the landed cost of imports. Calculation of retail price is expressed as: retail price = (material cost + conversion cost + cost of packing material + packing charges) x (1 + MAPE/IOO) + excise duty. Prices are fixed as ceiling prices/individual prices. The ceiling prices are fixed for commonly-used pack sizes, and every manufacturer is required to sell at the same price. The individual prices are applicable to a specific medicine of a specific manufacturer, which are uncommon packs/formulations. In the case of imported medicines, if the medicine is under price control and no ceiling price is available, a separate price is fixed. A fixed margin is allowed on the landed cost of import. The manufacturers are required to print the maximum sale price of each medicine on its label. No person can charge a price higher than the printed price. Consumers have to pay local taxes separately. The trade margin for scheduled formulations is fixed at 16% to retailer. Although margins are not fixed to wholesalers, the prevailing margin is 8%. It is permissible to fix prices of non-scheduled bulk drugs and formulations if this is in the public interest. The NPP A monitors the prices of about 20 000 medicines marketed in trade charmels regularly. The manufacturer is asked to justity a price increase wherever considered necessary. Information on price requirements is disseminated through press releases, the website of the NPPA, drug control agencies and letters to maj or manufacturers. The NPPA was created as per a policy statement of the government in 1994. It was set up in August 1997 as an independent body and is empowered to make the fmal decisions on pricing. The NPPA's functions include: fixing the prices of scheduled drugs; monitoring the prices of decontrolled drugs and formulations; monitoring the availability of drugs, identitying shortages and taking remedial steps; collecting and maintaining data on production, exports and imports; implementing and enforcing the provisions of DPCO 1995; conducting studies on the pricing of drugs; and advising the central government on drug and pricing policies. Jun Yoshida shared some indicative prices of some major brands antibiotics, antiinflammatory, cardiac therapy, anti-ulcers, anti-diabetic, hypotensive, psycholeptics, anti-fungal and analgesics. A database was presented to show the movement of prices of medicines and market price trends in pharmaceuticals (wholesale price paid by retailers) as compared with the wholesale price index. Indicative data on trends of the API-wise market share of medicines was given. As the number of APls increases from one to five, the market share of each decreases from 56% to 2.5%, but once the number of APIs is over five, the market share of each increases to 9.5%.

2.3.15

Australia Desmond Threlfall, Temporary Adviser, talked about the pricing regulation of

ph~aceuticals in Australia, done through the Pharmaceutical Benefit Scheme (PBS), which is a

natIOnal subsidy scheme to provide a comprehensive range of drugs and medical preparations for the treatment of Australian patients. About 95% of prescription drugs in Australia are purchased through the PBS. Under the PBS, general patients are required to pay a co-payment of AUD 29.50 per prescription, which is usually for one month's supply or per course of therapy, while patients eligible for concessional prices are required to pay a co-payment of AUD 4.70. The PBS provides a safety net to help people with high medicine costs. Once a general patient in need of a lot of medicines reaches the safety net threshold of AUD 960.10, he/she pays the concessional rate (AUD 4.70) for further PBS prescribed items for the rest of the calendar year. Once a patient eligible for concessions reaches the threshold of AUD 253.80, further PBS prescribed items become free for the rest of the calendar year. The PBS enables drug items to be subsidized for specific indications only, or for certain patients only, to ensure acceptable cost effectiveness and avoid possible abuse. Currently, more than 2000 brands are included in the PBS schedule. The Pharmaceutical Benefits Advisory Committee (PBAC) recommends to the Minister the drugs and medicinal preparations to be listed for pharmaceutical benefits. The Minister cannot list items without the recommendation of the PBAC. The aims of the legislation governing the PBAC are to require consideration of effectiveness and cost, including comparison with alternative therapies, and to preclude from recommending a more expensive drug unless there is improved effectiveness or reduced toxicity. The PBS is different from the registration for marketing process. For registration for marketing, it is necessary to consider the benefit to harm ratio in tenns of quality, safety and efficacy. A PBS subsidy is granted after a consideration of the benefit to cost ratio, particularly comparative effectiveness, comparative toxicity and comparative cost. Submissions to PBAC need to demonstrate the new drug is no worse than the current drug, or to establish the degree of any additional benefit and compare this with the incremental cost. When it is claimed that the new drug is no worse than a currently listed drug, the submissions need to demonstrate similar efficacy, similar safety and similar cost and to establish the dosage relativity for therapeutic equivalence. Equivalent effective doses based on clinical trials can be used in calculating prices. The nominated equi-effective doses can be based on product strengths, for example 50mg sertraline compared with 20mg fluoxetine, or they may be averaged over trials, for example, 8.73mg reboxetine against 25.67mg fluoxetine. To determine cost effectiveness, one can estimate an incremental cost effectiveness ratio based on outcomes in clinical trials, e.g., AUD 60 000 per additional sustained viral response or AUD 200 per extra hypoglycaemic event avoided per patient per year. It is, however, difficult to compare across different clinical situations, e.g., the cost per hip fracture avoided against the cost per heart attack avoided. So, it is necessary to include a utility measure, and, for example, calculate incremental costs per quality adjusted life year (QALY) gained. A case study of a new drug depicting "acceptably cost effective, but not less cost per outcome" was presented. Supposing a new drug costs AUD 8744 per year with QALYs gained

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14.305, while an old drug costs AUD 7021 per year with QALYs gained 14.182. Cost per QALY would become AUD 611.25 for the new drug and AUD 495.13 for the old drug. Incremental cost per QALY would be calculated to AUD 14,008. Threlfall next presented an overview of the Pharmaceutical Benefits Pricing Authority (PBPA). Its objective is to secure a reliable supply of PBS items at the most reasonable cost to Australian taxpayers and consumers. It recommends prices for new drugs selected by the PBAC for listing and reviews the prices of listed drugs annually. Factors taken into account by the PBPA include: advice on clinical effectiveness and cost effectiveness from the PBAC; prices of alternative drugs; costs information from suppliers; prices in other countries; and prescription volumes and economies of scale. Pricing methods used by the PBPA are reference pricing based on relativities of one drug to another and cost-plus method for stand alone items. Reference pricing is used for products accepted on a cost minimization basis. It could also be used in cases where one drug deserves a small premium over an existing drug. Reference pricing is based on the clinical data presented to the PBAC and the equivalent-effective doses demonstrated. A case study of reference pricing showed that delavirdine had been accepted on the basis that 400mg three times daily is equivalent to nevirapine 200mg twice daily. In the case, 30 days' supply or 60 times nevirapine 200mg cost AUD 271.58, thus 360 times delavirdine 100mg, or 30 days' supply, was listed at AUD 271.58. A voluntary agreement for sharing the risk between the government and sponsor (industry) takes place where there is uncertainty over the total net cost to the PBS, where there is likelihood of use outside the PBS restriction, and where the net cost to the PBS is close to AUD 10 million per annum. Three types of risk -sharing agreements were presented: the first is weighted according to indications to assign different worth for different uses; the second agrees to an upper limit (in value or volume terms), then reduces price by a set cash amount or percentage; and the third agrees to an upper limit in price, then lowers price for excess and weight. PBPA relativity sheets were explained. They contain advice on relativities used by the PBP A in pricing reviews. Details are published and available on the department website, and can be changed by presentation of further data. Relativity sheet examples were given. Lansoprazole 30mg was listed on the basis of equivalence to omeprazole 20mg. Pantoprzole was listed on the basis that its 40mg is of similar safety and efficacy to omeprazole 20mg, its 20mg of similar safety and efficacy to omeprazole lOmg and lansoprazole 15mg. Rabeprazole sodium lOmg and 20mg were recommended for listing on a cost minimization basis compared to omeprazole/omeprazole magnesium 10mg and 20mg, respectively. In Australia, there is no direct-to-consumer advertising on prescription-only drugs, and drug promotion and use are closely monitored by the authorities. The dispensed price of a drug must be labelled. Discounts and rebates can be offered in transactions at the pharmacy level. PBS-dispensed prices include a 10% wholesale margin, 10% mark-up for pharmacists plus professional fee. The wholesaler margin has recently been reduced to 7% and the pharmacy mark-up for expensive items is now 4%.

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Asked how generics use and competition can be promoted in Australia, Threlfall explained that generic prescribing is encouraged by the Government and generics are dispensed by pharmacists. There is a brand premium arrangement whereby innovator manufacturers are able to charge a premium, which is paid for by the patient, once a generic brand has been listed. The first generic item can be approved to the PBS once the patent of a PBS brand item expires, and the second and third generics of the same drug can follow. He added that an innovator may have a generic version of its brand registered and this can be sold in the market even before the patent expires. Under a new generic drug policy, the first generic brand, whether this be a "true" generic or a so-called "pseudo generic" is required to reduce the price-to-pharmacist by 12.5% to be listed under the PBS. There is a proposal from the generic manufacturers to promote the use of generics through differential co-payment between originators and generics. Asked about the effect of the US-Australia Free Trade Agreement (PTA) on the process for listing and pricing of drugs in Australia, he said that many of the requirements included in the FTA were being introduced or were already part of the current process. One new requirement was the need to have available a review mechanism in relation to decisions to reject applications by the PBAC. While such a mechanism has been established, it is unlikely to have little real influence, as the results of the review are re-considered by the PBAC and thus it would be possible that the same decision could result. 2.4 Group work 1: Local systems to monitor and exchange information on medicine pricing

Participants from each of the participating countries were asked to work in an exercise to formulate a preliminary plan of actions for locally-optimized systems to monitor and exchange information on medicine pricing. 2.4.1 Orientation

Margaret Ewen recapped her presentation from the first day of the consultation, with a focus on data and survey tools available from the Internet. She showed group members, from the website of the Management Science for Health, the list of international reference prices, which gives recent procurement prices offered predominantly by not-for-profit suppliers to developing countries for multi-source generic products. She also showed, from the website of the Health Action International Medicine Prices database, the availability and affordability of medicines, and survey tools including data sheets that were actually used in project countries. Klara Tisocki recapped her presentation, also made on the first day, with a focus on policy interventions. She said that every opportunity for a policy intervention can be utilized to include the rational use of medicines, sustainable funding of medicines and reliable medicine supply systems. The options include demand control through restrictive medicines lists and formularies, and direct pricing control suited to individual systems. Jun Yoshida, WHO Western Pacific Regional Office, recapped the questionnaire to reveal that its implications were to scan the national context. He said, by studying the questionnaire, each of the participants had automatically looked at opportunities, threats, strengths and weaknesses in relation to the development of local systems and had tried to prioritize options. He said that the next step is to align objectives given national circumstances, adding the list of objectives and activities for local systems to monitor medicine pricing. He asked

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participants to try to formulate the national plan of actions or to articulate activities for local systems using the attached working sheet. He offered the following guidance: (1) through. (2)

Recap elements of monitoring medicine pricing, which have already been gone

Scan respective national contexts, which have already been discussed. Align objectives and priorities within the given national circumstances. Identify activities for local systems monitoring medicine pricing. Prepare a presentation and report to the plenary.

(3) (4)

(5)

He asked temporary advisers, partners and other secretariat staff to give support as necessary. The working sheet is attached as Annex 4. 2.4.2 Working in country groups Each plan of actions is attached as Annex 5. Cambodia Its plan of actions is to set up a system to regulate medicine prices by conducting a survey and developing a mechanism of price control and regular control activities. Group participants identified the following activities: (l) a survey to assess medicine pricing, including data collection, analysis and reporting, planned for the first quarter of 2007 and requiring US$ 4500 from external resources; (2) a workshop to disseminate survey results and defme mechanisms and methods for medicine price control, planned for April 2007, requiring US$ 3000 from external resources; (3) regular control of medicine prices beginning in the third quarter of2007, requiring government resources and US$ 6000 for two years from external resources; (4) the introduction of a standard price list, to be revised in two years, and the prequalification of suppliers for public hospitals' procurement of medicines through tender, both planned for the second quarter of 2007 and together requiring US$ 2000 from external resources; and (5) technical assistance to set up a medicine price control system in Cambodia.

The group analysed the following key national circumstances:

- 35 -

(1) Free sales of medicines take place at hospitals (80% of the total sales) and retail pharmacies (20% of the total sales).

(2)

Preparations such as vaccines are procured through the government.

(3) About 2000 medicines, which are under controlled prices, account for over 50% of the total sales of medicines. (4) There are co-payments with medical insurance for city employees and with collective medical insurance for the rural population. (5) government. The ceiling retail prices of certain medicines are directly controlled by the

(6) The price approved by the government is mandatory and sales of medicines at higher prices are not be allowed. (7) fund. (8) A survey of the price (manufacturer's price, wholesaler's price, retailer's price and procurementlbidding price) is compulsory, and the National Development and Research Commission monitors prices at market as reference to set ceiling retail prices. Price increases are placing a heavier burden on medical costs and the insurance

Its plan of actions is to improve and strengthen the accessibility and affordability of quality, safe and efficacious medicines for the people of Fiji. The plan has the following four objectives: (1) (2) (3) scheme. Reassess the pricing policy for medicines. Register all medicines entering Fiji. Introduce health fmancing using the Fiji National Provident Fund (FNPF)

(4) Promote the rational use of medicines in the public and private sectors based on agreement with professional bodies to promote generic prescribing and substitution. The group identified the following activities to help meet these objectives: (I)

To reassess the pricing policy for medicines:

(a) stakeholder consultation to refme the list of medicines under price control, planned for December 2006 and requiring resources from the Ministries of Finance, Health, and Trade and Commerce as well as from professional bodies and the Consumers Council of Fiji (CCF); (b) the issue of an intention notice to receive submissions from all stakeholder groups and individuals, planned for February 2007, requiring resources from the Ministry of Finance or the Prices and Incomes Board (PIB);

- 36-

(c) a national consultation to publish and distribute an updated pricing list, planned for March 2007, requiring resources from the Ministry of Finance or the PIB, the CCF and NGOs; and (d) a draft policy for endorsement by the Ministry of Finance to implement and monitor a new price control order, planned for May 2007, requiring resources from Ministry itself or the PIB and tax-free Factories (TFF). (2) To register all medicines entering Fiji:

(a) legislation to be passed in parliament, planned for December 2006, requiring resources from the Ministries of Health and Justice; (b) a drug register policy framework, to be established in February 2007, requiring resources from the Ministries of Health and Social Welfare as well as from stakeholders in the private sector; (c) public consultation and awareness to better control private pharmacies and market, planned for March 2007, requiring resources from the Ministries of health and Finance, and from the PIB and professional bodies; and (d) all medicines on the private market to be assessed and compiled for registration and harmonization with the Fiji Inland Revenue and Customs Authority (FIRCA), planned for June 2007 and requiring resources from the Ministry of Health, FIRCA and the Ministry of Finance or the PIB. (3) To introduce health fmancing using the FNPF scheme:

(a) a national consultation to compile fmdings, planned for March 2007, requiring resources from all government departments, the FNPF, the Cabinet or Upper House, unions, NGOs and professional bodies; (b) the Appropriate Act amended and passed with a policy framework pertaining to health fmancing via the FNPF, planned for May 2007 and requiring resources from the Ministry of Health; (c) administrative issues pertaining to health financing implemented, planned for June 2007 and requiring resources from the Ministries of health and Finance, and the FNPF; and (d) monitoring of the health financing system, which is currently ongoing, requiring resources from the Ministry of Health and the FNPF. (4) To strengthen the rational use of medicine in the public and private sectors based on agreement with professional bodies to promote generic prescribing and substitution: (a) a survey and publication of pharmaceutical indicators and medicine prices, planned for September 2006, and the publication of a new approach to measurement planned for December 2006, requiring resources from the Ministry of Health, the Ministry of Finance or the PIB, professional bodies and retail pharmacies; (b) inclusion in legislation, planned for December 2006, requiring resources from the Ministries of Health and Finance;

- 37 -

(c) an awareness programme, to be conducted in December 2006, requiring resources from the Ministry of Health, members of the public and NGOs; and (d) regular monitoring, which is currently ongoing, requiring resources from the Ministry of Health and the Ministry of Finance or the PIB. It was noted, in particular, that improving registration would help to manage medicine prices. Hong Kong (China) Its plan of actions aims to control increasing public expenditures on drugs. To this end, the group identified the following activities: (I) Attempt to limit the number of prescribed drugs achieving similar efficacy of a particular therapeutic class (e.g., antihyperlipidemic drugs). (2) Attempt to persuade patients of middlelhigh income groups to utilize and switch to healthcare resources in the private sector. (3) Attempt to encourage people to buy (private) healthcare insurance.

Its plan of actions aims to reduce expenditure on drugs by increasing the use of generic medicines. The following activities were identified to meet this objective: (1) (2) Offer incentives to purchasers (hospitals, clinics and pharmacies). Educate patients, doctors and pharmacists about the merit of generic medicines.

Attention was paid to the revised prescribing that came into effect as ofApril 2006, where any prescribing doctor is now required to check on the prescription whether or not the doctor agrees that a generic version of the prescribed drug may be dispensed if it is available. Lao People's Democratic Republic Based on the fact that the country has a National Medicines Policy and a Law on Drugs and Medical Products, its plan of actions identified the following two objectives: (1) (2) improve the available indirect medicine pricing system; improve access to good quality, safe and effictive essential medicines at reasonable prices.

The following activities were identified: (1) Develop the regulation on medicine pricing control, planned for 2007-2008, requiring resources from WHO. (2) Develop the law on consumer of essential medicines protection, planned for 2007-2011, requiring resources from WHO and United States Pharmacopoeia (USP).

- 38 -

(3) WHO. (4) from WHO.

Develop a national formulary, planned for 2007-2008, requiring resources from

Develop hospital formulary control, planned for 2007-2008, requiring resources

(5) Develop guidelines of good hospital pharmacy practice, planned for 2008-2009, requiring resources from WHO and the USP. (6) Strengthen the functioning of the Drug and Therapeutics Committee (DTC) and monitoring, training and planning (MTP) interventions, planned for 2007-2011, requiring resources from WHO. (7) WHO. A medicine price assessment, planned for 2007-2009, requiring resources from

(8) (9)

Provide additional equipment and supplies, planned for 2007-2008. Improve access to Internet and email, planned for 2007-2011.

Attention was paid to the need to study the availability of essential medicines. Although there is still no national medicine formulary or essential medicines list in place, improving service in hospitals through promoting the DTC and the MTP could save funds. The development of a national medicine formulary and essential medicines list would further increase savings. Malaysia Given that national medicines policy, national medicine formulary and national medicine use survey are already in place, its plan of actions is to continue and enhance the current medicine price monitoring system established in the country to: (1) set up baseline data on medicine prices to identify trends and variation in medicine prices at different levels of health care; (2) provide a tool for price negotiation;

(3) study the current medicine pricing structure to explore opportunities for improvement; and (4) foster healthy medicine price competitiveness in the pharmaceutical industry.

It identified the following activities: (1) a price monitoring survey - on-site data collection in the private sector and submission of medicine price data in the public sector, which is currently ongoing, requiring funds and human resources from the government as well as external consultancy; and (2) a study of the current medicine pricing structure, planned by mid 2007, requiring further resources from local pharmaceutical industry and association.

Mongolia Its plan of actions is to establish a regular monitoring system for prices, availability and affordability through a comprehensive survey based on a methodology developed by WHO and HAl. The plan includes the following activities: (1) (2) Choose a collaborating organization, planned for October 2006. Set up a morutoring advisory group, planned for October 2006.

(3) Develop methods and select medicines to morutor, planned for November to December 2006 and requiring government resources. (4) Select volunteer pharmacies in each of the regions, planned for December 2006.

(5) Conduct training for pharmacists of the selected pharmacies, planned for January 2007 and requiring government resources. (6) Collect data regularly, planned for every three months in 2007 and requiring external resources. (7) Analyse data every three months, requiring government resources.

(8) Post all results on the Ministry of Health website and publish them in the press, to be done every three months and requiring government resources. (9) Prepare an annual report on prices, availability and affordability, planned for December 2007 and requiring government resources. (10) Expand the monitoring system, planned for 2008.

Papua New Guinea Its plan of actions is to document medicine pricing policy in collaboration with the Independent Consumer and Competition Commission (ICCC) and other stakeholders. The plan includes the following activities: (1) conduct a price survey with stakeholders, planned for the fourth quarter of 2006 and requiring the government resources; (2) hold a stakeholder workshop, planned for the fIrst quarter of 2007 and requiring resources from the government and technical assistance from WHO; (3) draft a pricing policy document, planned for the second quarter of2007 and requiring government resources; (4) circulate the draft, planned for the second quarter of 2007 and requiring government resources; and

- 40 -

(5) implement the pricing policy, beginning in the fourth quarter of 2007 and requiring government resources. The feasibility of this schedule needs careful review because it would take at le~~t six months to prepare for the conduct of a price survey that would also study the affordability and availability on medicines. The Philippines Its plan of actions is as follows: (1) Approve Administrative Order No. 2006-0009 "Guidelines Institutionalizing and Strengthening the Essential Drug Price Monitoring System." (2) Make information technology available in the market.

(3) Promote strong collaboration among the National Drug Policy Programme, Bureau of Food and Drugs, Philippine Health Insurance Corporation (PHIC), WHO and other stakeholders. The plan includes the following activities: (1) Develop an information and database system for data capture on drug prices and inventories of essential drugs, which are those reflected in the Philippine National Drug Formulary, considered essential commodities as provided for in the Price Law. This activity is planned for August to December 2006 and requiring resources from the government (human resources, equipment, advocacy and training) and WHO (funding and technical assistance). (2) Establish a computer-based system operational in all regional hubs and all drug establishments, planned for January to June 2007 and requiring government resources (training and instructional materials). (3) Fully implement the computer-based system for inventory and price capture as a mandatory requirement for drug establishment licensing (make the electronic submission of data as a regulatory requirement), planned for July 2007 and requiring resources from the government (audit and inspection) and external income from software installation and post-market violations. (4) Analyse drug product access in terms of inventory and prices at different levels of the distribution chain (cost structure of the pharmaceutical industry) and determine the optimum price in relation to supply and demand. This activity is planned monthly from August 2007 and requires government resources (administrative support of research unit to be jointly funded by PIDC and the Department of Health). (5) Use domestic drug inventory and price analysis as a policy trigger mechanism (e.g., price referencing for reimbursement and procurement negotiation), to be introduced in November 2007 and requiring government resources (administrative support of research unit to be jointly funded by PHIC and the Department of Health). (6) Develop drug security survey forms and system (e.g., drug expenditure in relation to drug category, disease, socio-economic class and other demographic data), planned for August 2006 and requiring government and external resources (workshop and consultation requirement).

- 41 -

(7) Develop data analysis tools on drug inventory and price, planned for August to October 2006 and requiring government and external resources (workshop and consultation requirement). Attention was paid to the need for transparency in introducing and implementing mandatory requirement for licensing establishments in the public and private sectors to submit price data. An investment in information technology was considered essential. Singapore Its plan of actions is to manage drug prices and usage and optimize patient care by improving the efficiency of existing processes, drug price monitoring and outcome analysis. The plan includes the following activities, each of which requires government resources and collaboration with universities and other research institutions and centres: (1) promoting active collaboration between different players in the supply chain, which is currently ongoing; (2) promoting collective leadership to develop and implement holistic solutions, as currently ongoing; (3) (4) (5) studying the technical feasibility of a consumer price index (Cpr) for drugs; identifYing and prioritizing areas of concern on drug use and prices; and developing methods to quantifY outcomes of drug-related measures.

It was noted that the CPI could be used to adjust patient co-payment of drugs if it could be

successfully set for drugs. VietNam Given that legal provisions for regulating drug prices are in place and there is government and public interest in drug prices, its plan of actions is to set up a system to monitor drug prices. The plan includes the following activities, each of which requires government and external resources: (1) From the third fourth quarter of 2006 to the second quarter of 2007, set up a system for the collection and analysis of drug price data with

(a) (b) (c) (d)

a database and software, a methodology for regular and special reporting, the identification of information sources such as the CPI, and legal provisions on mandatory reporting.

(2) From the second to the fourth quarter of 2007, improve the drug prices reporting system with a six-monthly or annual

- 42-

(a) (b) procurement, (c) (d)

survey of drug prices in the market, collection and analysis of data on the bidding prices in public hospital

review and comparison of the reporting prices, and strengthening of the legal provision related to drug price reporting. Review the tendering practices in public hospitals to identify problems, planned

(3) for 2008.

(4) Consider stricter sanctions and amend the regulation for more effective management of drug prices, planned for 2008. (5) Develop the criteria and methodology to identify comparator countries for international price comparisons, planned for 2008. 2.5 Group work 2: Regional system to monitor and exchange information on medicine pricing

All the participants were asked to break out into three inter-country groups to work on proposals for a regional system to monitor and exchange information on medicine pricing. 2.5.1 Orientation

Jun Yoshida, WHO Regional Office for the Western Pacific, explained the mechanics of work in inter-country groups. He first recapped the Regional Strategy for Improving Access to Essential Medicines in the Western Pacific Region 2005-2010, which requires WHO to: encourage Member States to participate in regional price monitoring and provide Member States with price information; disseminate existing pricing policies, practices and feasible options; support the development of local price monitoring systems; and help countries to implement policies on generic medicines. To propose an optimal regional system to monitor medicine pricing, he asked the participants to defme, among other things, the purpose, principles and criteria for information. He said that the purpose would be to determine what the system helps countries to achieve; the principles would be what the system should and should not do; and criteria of information would be what information the system collects and disseminates, giving provisional examples. He summarized the guidance for the exercise: (1)

Go through a round of introductions of group members. Appoint a rapporteur. Review presentations and discussions made under agenda items 3, 4 and 5.

(2) (3)

(4) Work to propose the contents of a regional system to monitor and exchange information on medicine pricing in terms of purpose, principles, criteria for information, among other things, using the working sheet provided for this purpose. (5) Prepare a group presentation and report to the plenary.

- 43 -

He presented the following grouping plans, which were three inter-country groups with two facilitators assigned for each: Group 1 Facilitators: Desmond Threlfall and Budiono Santoso Members: Participants from Fiji, Lao Peoples' Democratic Republic, the Philippines and Viet Nam, and Lucille Nievera (WHO Philippines) Group 2 Facilitators: Margaret Ewen and Chroeng Sokhan Members: Participants from Cambodia, Hong Kong (China), Malaysia and Papua New Guinea Group 3 Facilitators: Klara Tisocki and Jun Yoshida Members: Participants from China, Japan, Mongolia, Singapore and the Health Action Information Network, and Sun Jing (WHO China) The working sheet is attached as Annex 6. 2.5.2 Working in three inter-country groups Proposals from each working group are attached as Annex 7. Group 1 Their proposals were: Purpose: • to ensure the affordability, accessibility and availability of safe, efficacious, quality medicines; to encourage rational prescribing and use of medicines leading to cost-effective medicine expenditure; and

•

• to establish and implement a system of exchange of drug prices and drug pricing policy interventions in the region. Principles: • voluntary participation; • adoption of agreed standard and methodology; • verified and validated information;

- 44-

• scope to include both public and private sectors; • system to be Internet-based and easily accessible for all; • periodic updates to be made by all participating countries through their designated focal points/offices; and • when applicable, consultations to be with stakeholders Criteria for information: • Information should be shared on price and pricing interventions/policies. • There shall be an agreed list of indicator drugs to be monitored, to be reviewed within a specified period of time. • Prices to be monitored shall include drug prices from retail outlets (both private and public) and government bidding price at least every six months. • Submitted prices may include annotations specific to country situations. • Reporting of information shall be based on an agreed template. Others: • Other sources of drug price information/policies should be linked to the website (e.g. information from regulatory agencies, WHO, etc.). • A follow-up consultation should be held on the progress of the initiative. Discussion: The group was asked if posting an update of government bidding price every six months would be feasible. They replied the update frequency would be voluntary because circumstances are different from country to country. The group was asked what kind of verification processes for information would be proposed. The group replied mechanisms to verifY information received from and disseminated to countries would be further discussed because the information needs to be reliable and legitimate to be acceptable to the participating countries and WHO. The group was asked what could be suggested for a list of indicator drugs. They replied a standard indicator drug list would be used for comparability of prices among countries, but a drug list based on local needs would also be necessary. Group 2 Their proposals were: Purpose: • The purpose would be to provide member countries with information on medicine prices, availability and affordability to facilitate the following:

- 45-

• •

price transparency; development, implementation and evaluation of policies/regulations related to medicine pricing; and availability of affordable medicines to providers and consumers.

• Principles:

• Establish a regional system to monitor and exchange information on medicine prices and regulation including any mechanism for price control. • The information shall be: • • provided by member countries in a consistent format; and available through a website managed by WHO, updated regularly, and accessible by all.

• WHO will help to establish, and provide support for, a price monitoring network. Criteria for information: • responsible organizations and persons (national): • • name and contact details of focal person URL of national and other related websites

• current status of national price regulation and policies (if any): • • • situational analysis using standard questionnaire mechanism for updating country information

country experiences in conducting price monitoring and any price surveys: • • standard questionnaire self update (mechanism needed) or WHO collects the information

•

outcomes of national price monitoring: • • standard price monitoring mechanism capacity building to use the standard price monitoring mechanism and to develop evidence - based policies national price monitoring data is sent to WHO in a timely manner WHO to develop a database and regularly update it

• •

- 46-

• Discussion:

infonnation on new policies sent to WHO for lodging on to database

The group was asked if the system would give guidance to drug manufacturers and consumers. They replied the system would initially be used at the level of making policy interventions, and consumers would have access to the website and could provide inputs for policy making. Group 3 Their proposals were: Purpose: • Share infonnation on different types of medicine price regulatory and monitoring systems to support Member States' price regulatory and monitoring initiatives.

Principles: • Facilitate comparison of prices to meet local policy needs and operational requirements. • Support local advocacy efforts on price monitoring, and contribute to changing attitudes towards the exchange of infonnation on medicine prices and policies. • Facilitate collaboration and transfer of skills and knowledge on medicine price monitoring and policies (e.g. exchange visits) between Member States and WHO. • Develop a collaborative network based on trust and mutual respect, to share infonnation on different types of medicine prices in both public and pri vate sectors. • Demonstrate to stakeholders Governments' commitment to ensure the affordability of essential medicines as part of their overall efforts to improve accessibility of essential medicines to their people. Criteria for infonnation: • Price data should be relevant to local needs and easily understood. • Member States will decide on types of price data to share based on the need to respect data confidentiality and protect national interests. • Price data may include prices from public and private sectors (e.g. ex-manufacturer, wholesaler, retailer, government procurement, government reimbursement prices). Others: • Establish closed email network among interested Member States.

- 47 -

• Work tow~ds fu~~er interaction among personnel involved in central purchasing of essentIal medicmes for Governnrents who will directly benefit from the regional price information network. Discussions: The group was asked what mechanism would be necessary to secure the confidentiality of local information being shared among countries. They replied a national focal point could be appointed to decide sources for their local information to be submitted from. They said mutual trust would have to be fostered through a network of information-sharing among countries and parties. It was also noted from the experience of the WHOIHAI project that many countries and parties who joined it had expressed their willingness to share their respective information with the rest of the world.

3. CONCLUSIONS AND RECOMMENDATIONS

The Secretariat presented the draft conclusion and recommendations based on the discussions that took place during the consultation. The Consultation on Affordable Prices of Medicines, which was organized and hosted by the WHO Regional Office for the Western Pacific, 2-4 August 2006, Manila, Philippines, and attended by 22 participants from 12 countries of the Western Pacific region, two temporary advisers, seven representatives of partner organizations and six WHO secretariats, concluded as follows: 3.1 Conclusions

The participants exchanged perspectives on mechanisms to manage medicine prices and systems to monitor medicine pricing. They also shared the latest national and international experience in medicine price regulation and policy interventions to regulate medicine prices. The participants worked in country-by-country exercises to examine the national context and identify opportunities, objectives and priority actions for the feasible development or improvement oflocally-optimized systems to monitor medicine pricing. They formulated preliminary plans of actions for each country (attached). The participants worked in inter-country groups to examine the feasible development of a regional system to monitor and exchange information on medicine pricing to support countries in their efforts to ensure the affordability of medicines. They compiled proposals (attached) containing objectives, principles and the criteria for information of a system that would meet the needs of countries. 3.2 Recommendations

3.2.1 For member countries (1) Countries should develop or improve their poliCies and systems to monitor and optimize prices of medicines. These efforts should be supported with sufficient resources and technical guidance.

- 48 -

(2) Countries should explore every opportunity for intervention, from monitoring and optimizing prices of medicines to rational drug selection and use and social health insurance schemes, in order to improve the availability and affordability of medicines. (3) Countries should cooperate with WHO to develop a feasible regional system to monitor and exchange information on medicine pricing to facilitate the development of their respective feasible systems. 3.2.2 ForWHO (1) WHO should pilot a regional system to monitor and exchange information on medicine pricing to encourage countries and parties to actively participate in the development of the regional system. WHO should support countries in developing or improving their respective (2) systems to monitor and optimize prices of medicines by information and services operated through a website of the regional system. WHO should facilitate interaction of countries by a network managed through (3) the regional system to improve the availability and affordability of medicines in their national and mutual interest. Discussion The secretariat was asked about the provisional timeframe for the recommended actions. They replied they would like to pilot a regional system for fIrst or second quarter of 2007. The secretariat was asked ifthey would expand the regional system to other WHO regions. They replied they would like to do so in the future, but they would fIrst pilot the system in the Western PacifIc Region.

ANNEXl AGENDA

1. 2. 3. 4.

Opening ceremony Introduction WHO and expert perspectives The experience of countries and partners in medicine price regulation and policy interventions for regulating medicine prices

• Cambodia, China, Fiji, Hong Kong (China) • Japan, Lao People's Democratic Republic, Malaysia • Mongolia, Papua New Guinea, the Philippines • Partners

• Singapore, Viet Nam, India • Australia 5. Group work 1: Local systems to monitor and exchange information on medicine pricing

• Orientation • 6. Working in country groups Group work 2: Regional system to monitor and exchange information on medicine pncmg

• Orientation • 7. 8. Working in three intercountry groups

Conclusions and recommendations Closing ceremony

ANNEX 2

LIST OF PARTICIPANTS, TEMPORARY ADVISERS, OBSERVERSIREPRESENTATIVES AND SECRET ARIAT

1. PARTICIPANTS

CAMBODIA

Mr Tep Keila, Deputy Chief of Essential Drug Bureau, Department of Drugs and Food Ministry of Health, No.8 Street 109 Phnom Penh Tel: (855) 23 880969 Fax: (855) 23 880696 Email: .tep_keila@online.com.ph Mrs Ponn Sary, Deputy Chief, Procurement Unit, Ministry of Health, 151-153, Kampuchea Krom St., Phnom Penh Tel: (855) 12 600055

CHINA

Ms Lu Fengxia, Vice Director Centre for Drugs Pricing, National Development and Research Commission No. 59 Yuetan South St., Xicheng District Beijing, 100045 Tel: (86) 10 685 10916; Fax: (86) 10 685 10916 Email: lux9007@yahoo.com.cn Ms Chen Xingyu, Director, Department of International Cooperation. State Food and Drug Administration, A38 Beilishilu, Beijing 100810 Tel: (86) 10 683 11986; Fax: (86) 10 68337662 Email: chenxy@sda.gov.cn

HONG KONG (CHINA)

Ms Shirley Shuk-Kwan Yam, Senior Pharmacist Pharmaceutical Service, Department of Health Hong Kong Goverrunent, 3JF Public Health Lab Centre, 382 Nam Cheong St .• Shek Kip Mei Kowloon Tel: (852) 223 15231; Fax: (852) 280 72764 Email: sskyam@dIl.gov.hk

Annex 2

FIJI

Ms Ane NauJivou, Secretary, Prices and Incomes, P.O. Box. 1312, Suva Tel: (86) 10 330 9266; Fax.: (86) 10 330 3227 Email: anaulivou@pib.org.fj

M.s Vasiti Nawadra-Taylor, Principal Pharmacist Essential Medicines, Fiji Pharmaceutical Services Centre, Lot 1 Jerusalem Road, Suva Tel: (679) 338 8000; Fax.: (679) 338 8003 Email: vnawadra@health.gov.fj JAPAN

Mr Koichi Masuyama, Deputy Director Medical Economics Division, Health Insurance Bureau, Ministry of Health, Labour and Welfare, 1-2-2 Kasumigaseki, Chiyoda-ku Tokyo 100-8916 Tel: (813) 3595 2577; Fax.: (813) 3508 2746 Email: masuyama-koichi@mhlw.go.jp Mr Somthavy Changvisommid, Acting Director General, Ministry of Health, Vientiane City Tel: (85621) 214 013; Fax.: (85621) 214 015 Email: drug@laotel.com Mr Sivong Sengaloundeth, Head of Administration Division, Ministry of Health, Food and Drug Department, Vientiane City Tel: (85621) 214 013; Fax: (85621) 214 015 Email: drug@laotel.com

LAO PEOPLE'S DEMOCRATIC REPUBLIC

MALAYSIA

Dr Salmab Babri, Principal Assistant Director Pharmaceutical Services Division, Ministry of Health Malaysia, Jalan Universiti, 46350 Petaling Jaya, Selangor Darul Ehsan Tel: (603) 7968 2257; (6012) 681 2995 Fax.: (603) 7968 2222 Email: salmahbahri@hotmaiJ.com eesaI58@yahoo.com

Annex 2

Ms Sameerah Shaikh Abdul Rahman, Principal Assistant Director of Pharmaceutical Services Division, Ministry of Health Malaysia Jalan Universiti, 46350 Petaling Jaya Selangor Darnl Ehsan Tel: (603) 7968 2257; (6012) 681 2995 Fax: (603) 7968 2222 Email: sharmeerah@yahoo.com MONGOLIA Ms Munkhdelger Chimedtseren, Head Pharmaceutical and Medical Devices Department, Ministry of Health 210648 Zasgiin, Gazriin VIII Bair Olympiin Gudamj 2, Sukhbaatar Duureg Ulaanbaatar Tel: (97611) 261 682; Fax: (97611) 323 541 Email: munkho@hotmail com

Ms Altantuya Davaa, Senior Inspector State Specialized Inspectorate, Ministry of Health, 2Il2388 Builders' Square 13 Ulaanbaatar Tel: (97699) 174310; Fax: (97611) 325048 Email: a1taa@yahoo.com

PAPUA NEW GUINEA

Mr Vali Karo, Acting Director Medical Supplies Branch, Department of Health P.O. Box 807, Waigani Tel: (675) 301 3886; Fax: (675) 323 1631 Email: valikaro@health.gov.pg Mr Elari Kou, Senior Purchasing Officer Medical Supplies Branch, Department of Health P.O. Box 807, Waigani Tel: (675) 301 3886; Fax: (675) 323 1631 Email: elarikou@healtlr.gov.pg

PHILIPPINES

Mr Joshua Ramos, Director, Bureau of Food and Drug, Policy/Pharma 50, Project Management Unit, Department of Health, BFAD, Civic Drive, Filinvest Corporate City, Alabang, MuntinIupa City Tel: (632) 741 1366; Fax: (632) 741 1366 Email: joshua8479@yahoo.com

Annex 2

Dr Robert Louie P. So, Head Executive Assistant, Office of the Secretary National Drug Policy/Pharma 50, Project Management Unit, Department of Health DOH Building I, San Lazaro Compound Sta. Cruz, Manila Tel: (632) 741 1366; Fax: (632) 741 1366 Email: pharma50@yahoo.com hpsomd@yahoo.com SINGAPORE Mrs Ek Huar Chan, Director, Phannaceutical Purchasing, Singhealth Services Pte Ltd 11 Third Hospital Avenue, #07-00 Singapore National Eye Centre Bldg., Singapore 168751 Tel: (65) 6326 6366; Fax: (65) 6222 1917 Email: chan.ek.huar@singhealth.com.sg Mr Wei Yann Lee, Regulatory Pharmacist Health Sciences Authority, 11 Biopolis Way #11-03 Helios, Singapore 113867 Tel: (65) 6866 3535; Fax: (65) 6478 9069 Email: leeweiyan@hsa.gov.sg VIETNAM Mr Nguyen Thanh Lam, Expert of Drug Trading Control Department, Ministry of Health, Giang Vo St., Hanoi Tel: (844) 846 1525; Fax: (844) 823 4758 Ms Luong Thi Anh Van, Staff of the Cabinet of Drug Administration of Viet Nam Ministry of Health, Hanoi Tel: (844) 736 6483; Fax: (844) 689 0269 Email: luonganhvan@yahoo.com

2. TEMPORARY ADVISERS

Dr Klara Tisocki, Assistant Professor Department of Pharmacy Practice Faculty of Phannacy, Kuwait University P.O. Box 24923, Safat, Kuwait Fax: (965) 534 2807 Email: ktisocki@yahoo.ie;lisocki@hsc.edu.kw

Annex 2

Mr Desmond Threlfall, Consultant to the Pharmaceutical, Benefit Branch, Department of Health and Ageing, G.P.O. Box 9848 Canberra, A.C.T. 2601, Australia Tel: (617) 3880 4510; Fax: (617) 38804510 Email: desthrelfall@bigpond.com

3. OBSERVERSIREPRESENTATIVES HEALTH ACTION INTERNATIONAL (HAl) Ms Margaret Ewen, Principal, Jacob van Lennepkade 334T, 1053 NJ Amsterdam The Netherlands Tel: (31) 204891846; Fax: (31) 20 685 5002 Email: marg@haiweb.org

HEALTH ACTION ~ORMATIONNETWORK

Dr Edelina del a Paz, Executive Director 26 Sampaguita Ave., Mapayapa Village II Brgy Holy Spirit, Quezon City Tel: (632) 952 6409; Email: hain@hain.org delen27@yahoo.com Mr Eufe Tantia, Assistant Vice President Unit 502 One Corporate Plaza, 845 Pasay Road Makati City Tel: (632) 815 0325; Fax: (632) 8192702 Email: emt@phap.org.ph Mr Jesus Cantos, Vice President for Logistics and Supply Chain, 2nd floor, NDC Building 116 Tordesillas St., Salcedo Village Makati City Tel: (632) 8189801 Ms Cecille Sison, Manager for Business Development, 2nd floor, NDC Building 116 Tordesillas St., Salcedo Village Makati City Tel: (632) 8189801

(HAIN)

PHARMACEUTICAL AND HEALTHCARE

ASSOCIATION OF THE PHILIPPINES, INC. (pHAP)

PHILIPPINE INTERNATIONAL TRADING CORPORATION (PITC)

Annex 2

UNITED NATIONS CHILDREN'S FUND (UNICEF)

Dr Marisa M. Ricardo, Designated Procurement Service Officer, UNICEF Manila Yuchengco Tower 1, RCBC Plaza 6819 Ayala Ave., Comer Sen. Gil Puyat Makati City Tel: (632) 901 0100 Mr Wilfredo G. Nuqui, Project Officer Local Policy and Institutional Department UNICEF Manila, Yuchengco Tower 1 RCBC Plaza, 6819 Ayala Ave., Comer Sen. Gil Puyat, Makati City Tel: (632) 901 0100 4. SECRETARIAT Dr Budiono Santoso (Responsible Officer) Regional Adviser in Pharmaceuticals World Health Organization, Western Pacific Regional Office, 1000 Manila, Philippines Tel: (632) 528 9846; Fax: (632) 526 0279 Email: santosob@wpro. who. int Mr Jun Yoshida, Technical Officer, Pharmaceuticals, World Health Organization Western Pacific Regional Office, 1000 Manila Philippines Tel: (632) 528 9846; Fax: (632) 526 0279 Email: yoshidaj@wpro.who.int Dr Eva-Maria Christophel, Medical Officer Malaria, Vectorbome and Other Parasitic Diseases World Health Organization, Western Pacific Regional Office, 1000 Manila, Philippines Tel: (632) 528 9723; Fax: (632) 526 0279 Email: christophele@wpro.who.int Dr Chroeng Sokhan, Short Term Professional Pharmaceutical, World Health Organization Western Pacific Regional Office, 1000 Manila Philippines Tel: (632) 528 9846; Fax: (632) 526 0279 Email: sokhanC@wpro.who.int

Annex 2 Ms Lucille Nievera, Programme Officer WHO Representative Office in the Philippines National Tuberculosis Centre Building. 2nd Floor, Building 9, Department of Health. San Lazaro Hospital Compound. Sta. Cruz. Manila Philippines Tel: (632) 743 8301; Fax: (632) 731 3914 Email: nieveral@Phl.w.pro.who.int Dr Jing Sun, National Programme Officer

WHO Representative Office in China Building 23, Dongzhimenwai Ave., Beijing 100600 People's Republic of China Tel: (8610) 6532 7191; Fax: (8610) 6532 2359 Email: SunJ@chn.wpro.who.int

ANNEX 3

PROGRAMME OF ACTIVITIES

2 August 2006, Wednesday 0800-0830 0830-0845 Registration Opening ceremony Address by the Acting Regional Director Self-introduction by participants Election of officers Administrative announcements Group photo 0845-0915 0915-0935 Coffee break Adoption of Agenda Introduction 0935-1045 1045-1215 WHO and expert perspectives Experience of countries and partners in medicine price and policy interventions for regulating medicine prices Lunch break Experience of countries and partners (continuation) Coffee break Experience of countries and partners (continuation) Welcome cocktails

1215-1330 1330-1500 1500-1530 1530-1700 1730-1900

3,\ugust2006, Thursday

0800-1000 1000-1030 1030-1215

Experience of countries and partners (continuation) Coffee Break Group work 1: Local systems to monitor and exchange information on medicine pricing Orientation for group work Working in country groups

Annex 3

1215-1330 1330-1500

Lunch break Group work 1 (continuation) Plenary: presentation by each country group

1500-1530 1530-1700

Coffee break Group work 2: Regional system to monitor arid exchange information on medicine pricing Orientation for group work Working in three inter-country groups

4 AUIWst 2006, Thursday

0800-0930

Group work 2 (continuation) Working in three intercountry groups

0930-1000 1000-1130 1130-1200 1200-1215 1215-1230

Coffee Break Group work 2 (continuation) Break Conclusions and recommendations Closing ceremony Address by the Acting Regional Director