Controlling medicine prices in Sudan: the challenge of recently established Medicines regulatory authority

Controlling medicine prices in Sudan: the challenge of recently established Medicines regulatory authority Gamal Khalafalla Mohamed Ali, PhD Ahmed Yagoub, B. Pharm

Background • Above 45% of the population are below the poverty line. • More than 70% pay out-of-pocket to meet their medical needs. • In 2001, the government passed an Act regulating prices of medicines. • Prices of medicines were found to be unacceptably one of the highest prices in the East Mediterranean Region (EMRO)

Aim of the Investigation The aim of this study is to evaluate the capacity of the current medicine pricing mechanism applied by the National Medicines and Poisons Board (NMPB) in controlling price of imported medicines.

Specific Objectives • to check the conformity of the prices of medicines with those approved by the NMPB. • to assess the adherence of pharmacies to the prices. • to compare prices of generic medicines with those of the brand ones. • to compare prices of medicines with the International Price Indicator and British National Formulary (BNF).

Structure and Process of Regulating Medicine Prices Pricing system in Private Sector Pricing system in Public Sector

Method: Time and Place of Study • A price survey was conducted in Khartoum State between July and September 2008

Method: Sample size and selection Criteria • Prices of the most sold 50 innovator brands and generics in 2007. • Medicines recommended by the WHO/HAI methodology were included (total of 174 items). • A total of 39 presentations were excluded because they had missing information with regard to their prices.

Method: Sources of Data • Certificates of registration to collate C&F prices • Invoices to the pharmacies to gather data about whole and retail prices • Observations of the actual price displayed on studied products by pharmacy. • All policies and legislations namely National Medicines Policy, laws, regulations, ordinances, decrees, and circulars, regarding medicine prices were included. The main sources of those documents were the NMPB, CMS, and community pharmacies.

Why did the Interviews with key informants Interviews with key informants were conducted in order to further understanding of the pricing mechanism and the reasons behind higher prices reported by WHO

Data Analysis • To measure the extent of compliance or deviation from the approved prices, we have set theoretical whole price (WP) and retail price (RP). • These prices were calculated by topping up government's charges to the registered C&F price for each item. • Theoretically, the WP and RP should be 1.5 and 1.8 times the C&F price respectively

Data Analysis • To compare the prices of selected medicines with the median price of their equivalents that have been published in the IRP, medicine price ratios (MPR) were constructed for each medicine by relating prices derived from the survey to IRP. • MPR is calculated as follows: MPR = Medicine Price (whether it is C&F, whole or retail prices) ÷ IRP.

Data Analysis • Microsoft Excel 2007 for Windows, in an Excel workbook was used to store data and perform analysis. • WHO set an arbitrary benchmark for the analysis of the medicine prices in the countries of its EMRO. • We use the same benchmark to measure the efficiency of the current pricing mechanism by comparing the prices of selected medicines with those have been published in the IRP

Results: C&F and Whole prices • Only 15 out of 104 importing companies approved their whole and retail prices by the NMPB. • The C&F price of 23% of selected medicines was more than 10 times the IRP. • 71% of these items were generics. • The whole price of almost 40% of studied medicines was less than 1.5. • 88% of these items are generics.

Results: Retail price • The retail prices of 47% of the selected medicines is less than 1.8. • 87% of these items are generics. • The retail prices of 11% of these items were less than their registered C&F. • The retail prices of 7% of the items was three or more times their registered or approved C&F price. • 56% of these items were generics. • Retail prices of some innovator medicines are cheaper than their generics.

Results: Retail price • Retail prices of 11 out of 12 originator medicines in Sudan were found equal to or more than their prices published in the BNF. • Of these, 9 items were 2 or more times their BNF prices. • Primolut -N ® (innovator) was a 4 times higher than the price of BNF 56. • The C&F price of a generic ranitidine tablet imported from Egypt was 500% of that published in the BNF.

Results: Actual consumers’ price • 9% of the 135 studied medicines were sold at prices less than their C&F prices. • The retail prices of 62 items (46%) is either double (43 items), or more than twice (19 items) their C&F price. • The actual retail price to the consumers of up to 75% of the selected items is more than the retail price declared by the wholesalers.

Results: Medicine prices in Sudan compared to International Reference Prices • The C&F price of more than one-fifth of the studied items were found to be more than 10 times the IRP. • 71% of these items were generics. • The C&F prices of certain medicines were extraordinary high, up to 100 times IRP. • The retail prices determined by the wholesalers of around 60% of selected items were between 5 and 10 times higher than the IRP. • 78% (31 out 40 items) of these items were generics.

Results:CMS price • The whole price of the CMS’s medicines, on average, was 2-fold their C&F. • The mark-up of CMS on the C&F price of selected items ranges from 71% to 2,096%. • CMS neither publishes retail prices of its medicines on the invoice nor prints it on the outer pack.

Results: Promotion/Propaganda Allowance (Bonus) • The value of free medicines imported to Sudan, during the first 6 months of the year 2008, was US$ 17.6 million (i.e. 30% of the medicines imported by private sector). • The origins of these medicines are mainly Jordan, India, and Pakistan. • some importers give from 50% to 100% free medicines per invoice.

Conclusion • Current pricing system was considered of limited benefit in controlling escalating medicine prices in Sudan. • Price regulation should be considered to avoid stretching what are already inadequate household's resources. • Lower prices at CMS do not help much in controlling of prices in private sector.

Conclusion We acknowledge the work done and contributions made by many officers who worked with the NMPB from its inception up till now. We thank NMPB for funding this study. They also appreciate support of Abobakr Abdelraof, Mohamed Abdelrahman, and Abdelhamid Ibrahim for their help and advice.

Table 1: Component of medicines prices in public sectors * had been removed, since 2009

Table 2: Comparison between retail price of originator and their generic version

Table 3: Comparisons between retail prices of some brands medicines in Sudan with those published in the BNF

Table 4: Source and amount of free goods received during the first six months in 2010

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Controlling medicine prices in Sudan: the challenge of recently established Medicines regulatory authority