Public ARV Procurement Data: Using Information to Obtain Lower Prices

1. Public ARV Procurement Data:Using Information to Obtain Lower Prices Brenda Waning March 6, 2008 Open Society Institute Seminar Kiev, Ukraine Funded by United Kingdom Department of International Development, Medicine Transparency Alliance (MeTA) Project

2. Countries typically struggle with medicine procurement Unreliable suppliers, unknown medicine quality Insufficient funds and financial systems Unsure of fair, market price (information asymmetry) Result is enormous variation in price and across countries Global Fund (GF) Offers Level Playing Field “Sufficient” financing Public posting of prices paid by all recipients Limited # pre-qualified ARVs and suppliers Expect little price variation in this environment Background to Procurement Practices

3. Reality and Remedy • Extreme price variation exists for identical ARV products across countries • 2 Publicly available databases can provide price information historically impossible to obtain • Global Fund Purchase Price Report • WHO Global Price Reporting Mechanism

4. Public ARV Procurement Databases • Global Fund Purchase Price Report • ARV procurement transactions reported by GF principle recipients • WHO Global Price Reporting Mechanism • Includes GF data PLUS ARV procurements reported by international procurement agencies (IDA, UNICEF), WHO country offices, John Snow, MSH, etc. • Both available on the web in Excel format

5. Merged GF & Global Price Reporting Mechanism (GPRM) Data Sets Country Date of order Generic name Strength Dosage form Total # units Price per unit Type of package Manufacturer Country of manufacturer INCO term Expanded data set created at Boston University Price per unit calculated Year of procurement WHO Region of country World Bank Income of country ARV drug class Fixed-Dose Combination Generic/Brand PEPFAR country Clinton Foundation eligible Differential Price eligible WHO 1st/2nd line regimens 2003 & 2006 guidelines Daily dose Using Existing Data to Assess ARV Prices Final Data Set: 9,731 procurements July 02 – Oct 07 103 countries $636 million Extensive Data Cleaning

6. High price outliers: screens to assess efficiency, policy, governance stavudine 15mg Guyana high outlier prices verified volume price per tablet lamivudine 150mg 76 similar high price outliers removed nevirapine 200mg Russia 20x times more expensive than median price volume volume price per tablet price per tablet

7. Extreme Price VariabilityHighest Price/Lowest Price

8. Percentile Definition & Comparisons • 25th percentile • 25% of prices paid for that particular ARV were equal to or less than the price you paid • 75th percentile • 75% of prices paid for that particular ARV were equal to or less than the price you paid • If we compare each procurement made by a country with the global price distribution for that exact same product, the desire is to be in the <25th percentile (few countries paid less than you)

9. Country Benchmarking Prices for July 2006-June 2007

10. Amount of Money Spent in Excess of Global Median Price (7/06-6/07)*

11. % Generic Procurements

12. stavudine 40mgGlobal Median Price = $0.05/tablet July 2006 - June 2007 *Brand Name ARV

13. efavirenz 600mgGlobal Median Price = $0.65/tablet July 2006 - June 2007 *Brand Name ARV

14. zidovudine 300mg/lamivudine 150mgGlobal Median Price = $0.19/tablet July 2006 - June 2007 *Brand Name ARV TJ: $151 pp/year KZ: $274 pp/yr Russia: $958 pp/yr

15. lopinavir 133mg/ritonavir 33mgGlobal Median Price = $0.33/tablet July 2006 - June 2007 *Brand Name ARV

16. Comparison of WHO 2003, 2006, and 2008 ART Guidelines • WHO 2003 ART Guidelines • 12 ARVs • 10 regimens: 4 first line, 6 second line • WHO 2006 Revised ART Guidelines • 23 ARVs • 108 regimens: 24 first line, 84 second line • WHO 2008 2nd Line Prioritization • 20 ARVs (1st and 2nd line) • 42 2nd line regimens (10 Urgent, 22 High, 10 Important)

17. WHO First line regimens: generic price < brand (Median Prices July 2005-June 2006) 2003 WHO regimens Generic: $170-$431 Brand: $500-$619 Low range of cost of brand regimens is higher than upper end of cost generic regimens 2006 WHO regimens Generic: $170-$1,234 Brand: $431-$1,393 Upper end of cost of generic regimens is 3 times higher than 2003 2006 STG big potential $ impact, even for 1st line

18. WHO 2nd line regimens: generic price > brand (Median Prices July 2005-June 2006) 2003 WHO regimens Generic: $2,913 - $4,117 Brand: $1,714 - $2,351 2006 WHO regimens Generic: $948 - $4,245 Brand: $865 - $2,577 Mostly due to price of protease inhibitors

19. WHO 1st and 2nd line RegimensMedian Prices Paid July 2006-June 2007 • Prices changing dramatically • Decisions about country adoption MUST involve price, among other things • Median 1st line prices • Generics range $102-$730 pp/year • Brand range $595-$1,015 pp/year • Median 2nd line prices range • Generics range $540-$6231 pp/year • Brands range $880-$2,044 pp/year Generic PIs more competitive with brands, except Lop/r

20. Multiple Regression to Examine Predictors of Price • Regression model included 7 variables: • volume (divided in tertiles) • year of procurement • INCO terms • generic/brand • CHAI-eligible • Differential price-eligible • Country World Bank income stage

21. Higher Volume does NOT mean Lower Price Only 4 of 24 dosage forms showed volume-price association

22. Abacavir 300mg Didanosine 100mg Didanosine 200mg Didanosine 400mg Efavirenz 50mg Efavirenz 200mg Indinavir 400mg Lamivudine 150mg Nelfinavir 250mg Nevirapine 200mg Ritonavir 100mg Stavudine 20mg Stavudine 30mg Stavudine 40mg Sta+lam 30+150mg Sta+lam 40+150mg Sta+lam+nvp 30+150+200mg Tenofovir 300mg Zidovudine 100mg Zid+lam 300+150mg Remaining 20 Dosage FormsNo Price-Volume Association

23. CHAI Generic Prices Compared to Non-CHAI Generic Prices • 11 comparisons • 1 (EFV 600mg) CHAI 22% less expensive Non-CHAI • 4 ARVs CHAI 8-13% less expensive Non-CHAI • 6 ARVs CHAI price was <5% less than non-CHAI

24. CHAI Inferences: CHAI Setting Market Prices for All? Oct 2003 Jan 2006

25. Differential Prices (DP) • 19 ARVs available under DP scheme • Most less expensive than brand prices when DP not available • 7 of the 19 DP-ARVs compared to generic prices • 5 of these 7 DP ARVs more expensive than generics DP Offers little savings over generics for most ARVs

26. Summary & Conclusions • Transparency of medicine prices using electronic databases can potentially lead to increased access to medicines • Knowledge can be power • BUT only if information is accurate, comprehensive (this data represents ~40-50% of all GF procurements), • High level political commitment needed from donors to mandate data be reported • No Policy from World Bank or PEPFAR to report (although SCMS is voluntarily reporting)

27. Summary & Conclusions (2) • Databases have potential to inform and create accountability • donors, countries, and programs • Rapidly changing market place; requires constant monitoring • Need to understand how data can be most useful to implementers • User-friendly interfaces • Accessible in low resource settings • Incorporate into procurement system

28. Acknowledgements: Funding: United Kingdom Department for International Development Michael Borowitz (DFID) Research team: Warren Kaplan, Matthew Fox, Alexis King, Danielle Lawrence, Richard Laing, Bert Leufkens, Rose Radin, Sapna Mahajan Thank you! Brenda Waning: bwaning@bu.edu