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A win-win solution?: A critical analysis of tiered pricing to improve access to medicines in developing countries

BACKGROUND: Tiered pricing - the concept of selling drugs and vaccines in developing countries at prices systematically lower than in industrialized countries - has received widespread support from industry, policymakers, civil society, and academics as a way to improve access to medicines for the p...

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Autores principales: Moon, Suerie, Jambert, Elodie, Childs, Michelle, von Schoen-Angerer, Tido
Formato: Online Artículo Texto
Lenguaje:English
Publicado: BioMed Central 2011
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3214768/
https://www.ncbi.nlm.nih.gov/pubmed/21992405
http://dx.doi.org/10.1186/1744-8603-7-39
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author Moon, Suerie
Jambert, Elodie
Childs, Michelle
von Schoen-Angerer, Tido
author_facet Moon, Suerie
Jambert, Elodie
Childs, Michelle
von Schoen-Angerer, Tido
author_sort Moon, Suerie
collection PubMed
description BACKGROUND: Tiered pricing - the concept of selling drugs and vaccines in developing countries at prices systematically lower than in industrialized countries - has received widespread support from industry, policymakers, civil society, and academics as a way to improve access to medicines for the poor. We carried out case studies based on a review of international drug price developments for antiretrovirals, artemisinin combination therapies, drug-resistant tuberculosis medicines, liposomal amphotericin B (for visceral leishmaniasis), and pneumococcal vaccines. DISCUSSION: We found several critical shortcomings to tiered pricing: it is inferior to competition for achieving the lowest sustainable prices; it often involves arbitrary divisions between markets and/or countries, which can lead to very high prices for middle-income markets; and it leaves a disproportionate amount of decision-making power in the hands of sellers vis-à-vis consumers. In many developing countries, resources are often stretched so tight that affordability can only be approached by selling medicines at or near the cost of production. Policies that "de-link" the financing of R&D from the price of medicines merit further attention, since they can reward innovation while exploiting robust competition in production to generate the lowest sustainable prices. However, in special cases - such as when market volumes are very small or multi-source production capacity is lacking - tiered pricing may offer the only practical option to meet short-term needs for access to a product. In such cases, steps should be taken to ensure affordability and availability in the longer-term. SUMMARY: To ensure access to medicines for populations in need, alternate strategies should be explored that harness the power of competition, avoid arbitrary market segmentation, and/or recognize government responsibilities. Competition should generally be the default option for achieving affordability, as it has proven superior to tiered pricing for reliably achieving the lowest sustainable prices.
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spelling pubmed-32147682011-11-15 A win-win solution?: A critical analysis of tiered pricing to improve access to medicines in developing countries Moon, Suerie Jambert, Elodie Childs, Michelle von Schoen-Angerer, Tido Global Health Debate BACKGROUND: Tiered pricing - the concept of selling drugs and vaccines in developing countries at prices systematically lower than in industrialized countries - has received widespread support from industry, policymakers, civil society, and academics as a way to improve access to medicines for the poor. We carried out case studies based on a review of international drug price developments for antiretrovirals, artemisinin combination therapies, drug-resistant tuberculosis medicines, liposomal amphotericin B (for visceral leishmaniasis), and pneumococcal vaccines. DISCUSSION: We found several critical shortcomings to tiered pricing: it is inferior to competition for achieving the lowest sustainable prices; it often involves arbitrary divisions between markets and/or countries, which can lead to very high prices for middle-income markets; and it leaves a disproportionate amount of decision-making power in the hands of sellers vis-à-vis consumers. In many developing countries, resources are often stretched so tight that affordability can only be approached by selling medicines at or near the cost of production. Policies that "de-link" the financing of R&D from the price of medicines merit further attention, since they can reward innovation while exploiting robust competition in production to generate the lowest sustainable prices. However, in special cases - such as when market volumes are very small or multi-source production capacity is lacking - tiered pricing may offer the only practical option to meet short-term needs for access to a product. In such cases, steps should be taken to ensure affordability and availability in the longer-term. SUMMARY: To ensure access to medicines for populations in need, alternate strategies should be explored that harness the power of competition, avoid arbitrary market segmentation, and/or recognize government responsibilities. Competition should generally be the default option for achieving affordability, as it has proven superior to tiered pricing for reliably achieving the lowest sustainable prices. BioMed Central 2011-10-12 /pmc/articles/PMC3214768/ /pubmed/21992405 http://dx.doi.org/10.1186/1744-8603-7-39 Text en Copyright ©2011 Moon et al; licensee BioMed Central Ltd. http://creativecommons.org/licenses/by/2.0 This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/2.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
spellingShingle Debate
Moon, Suerie
Jambert, Elodie
Childs, Michelle
von Schoen-Angerer, Tido
A win-win solution?: A critical analysis of tiered pricing to improve access to medicines in developing countries
title A win-win solution?: A critical analysis of tiered pricing to improve access to medicines in developing countries
title_full A win-win solution?: A critical analysis of tiered pricing to improve access to medicines in developing countries
title_fullStr A win-win solution?: A critical analysis of tiered pricing to improve access to medicines in developing countries
title_full_unstemmed A win-win solution?: A critical analysis of tiered pricing to improve access to medicines in developing countries
title_short A win-win solution?: A critical analysis of tiered pricing to improve access to medicines in developing countries
title_sort win-win solution?: a critical analysis of tiered pricing to improve access to medicines in developing countries
topic Debate
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3214768/
https://www.ncbi.nlm.nih.gov/pubmed/21992405
http://dx.doi.org/10.1186/1744-8603-7-39
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