WHO backs state plan to cut drug prices

Governments, patients and insurers pay unnecessarily exorbitant prices, health agency says

In Summary

• WHO to launch a public consultation to define what constitutes fair price of drugs.

• In Kenya, medicines constitute 40 per cent of health expenditure, makeing it difficult to achieve universal health coverage.

Health CS Sicily Kariuki
BETTER HEALTH: Health CS Sicily Kariuki

Kenya’s move to tame the high cost of medicines has received a boost from the World Health Organisation.

WHO said it will launch a public consultation to define what constitutes a fair price of drugs in the coming weeks.

“Medical innovation has little social value if most people cannot access its benefits,” said Mariângela Simão, WHO assistant director general for medicines and health products.

Last month, Health CS Sicily Kariuki said Kenya would create an essential drugs list, with a fixed price for each commodity.

WHO said most governments, patients and insurers are paying unnecessarily exorbitant prices compared to the production cost of drugs on the Essential Medicines List.

“This is a global human rights issue – everyone has a right to access quality healthcare,” Simao said at a global forum on fair pricing and access to medicines, co-hosted by WHO in South Africa last week.

Affordability of medicines has long been a concern for developing countries.

 WHO said each year, 100 million people fall into poverty across the world because they have to pay for medicines out-of-pocket.

In Kenya, the government says medicines alone constitute 40 per cent of health expenditure, which makes it difficult to achieve universal health coverage.

“Affordability is a key pillar of UHC. Most Kenyans lack reliable access to needed medicines. High prices are particularly burdensome to patients who have to pay for drugs themselves,” Kariuki said recently.

Health insurers say most developed countries utilise an average of 10 to 20 per cent of their health budgets on pharmaceuticals.

“This means that Kenya is spending almost double what developed countries are spending on pharmaceuticals,” says Dr Elijah Matolo, head of provider partnerships at Jubilee Insurance.

Matolo complains most private hospitals in Kenya prescribe more than 70 per cent of branded medicines, yet generic drugs can be up to 80 per cent cheaper.

“A quick look at OECD health statistics for 2017 shows that developed countries are using a significantly high proportion of generic medicines. The United States is at 86 per cent, Germany at 81 per cent, United Kingdom at 78 per cent and Canada at 73 per cent,” he said in a recent article.

He says, typically, outlets like hospitals or a pharmacies are allowed to charge a mark-up of 33 per cent on the wholesale price of a drug, a price referred to as the recommended retail price.

“However, a survey of private hospitals and pharmacies will usually reveal that the RRP is hardly ever adhered to and the mark-ups may go as high as 1, 000 per cent in some instances,” Matolo says.