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Effect of Government Mediated Access Pricing on Availability and Pricing of Drugs in the Philippines



Abstract:

Introduction: The Philippines implemented Republic Act 9502, known as the “Cheaper Medicines Act of 2008” to improve access to cheap quality drugs.  The government placed 5 drugs under maximum retail drug pricing and influenced pharmaceutical companies to reduce prices of 16 other drugs by half.  This study compared the availability and price of selected drug molecules affected by the government-mediated access pricing (GMAP) in 2009 and 2011. Methods: The study used data obtained from independent surveys conducted by IMS Health Philippines in 2009  and 2011 using a stratified sample of 600 drugstores each.  Stratification was based on retail type (chain or independent) and location (Metro Manila, Luzon, Visayas and Mindanao).   Three stock keeping units (SKUs) each for 11 drug molecules were selected:  1) product with highest sales volume; 2) highest-priced product competitor; and 3) cheapest generic counterpart available.  Ten of 11 most saleable drugs were in the GMAP list.  Drug availability and price data were obtained using a mystery shopper approach. Results: Mean prices went down for all most saleable drugs, except for one drug not included in the GMAP list.  Availability of these drugs generally did not significantly change. For competitors, marked decline in availability was observed for some, in particular, those that resisted price reduction.  The availability of cheapest drug counterparts increased considerably while their mean prices all decreased. Conclusion: Government mediated pricing can be effective in reducing drug prices.  However, it can adversely affect availability of some drug products.  Availability of generic drugs has evidently increased.

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