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AFRO-NETS> Equitable Pricing of Newer Essential Medicines

Equitable Pricing of Newer Essential Medicines
From: "Ruggiero, Mrs. Ana Lucia (WDC)" <ruglucia@PAHO.ORG
Equitable Pricing of Newer Essential Medicines for Developing Coun-
tries: Evidence for the Potential of Different Mechanisms
Cheri Grace
Research Associate, London Business School, 2003
Essential Drugs and Medicines Policy (EDM) of the World Health Or-
ganization (WHO) and Department for International Development (DFID)
Health Systems Resource Centre
Available online as Adobe PDF file (83 pp. 600 kB) at:
The study was carried out in support of the wider process of develop-
ing feasible policy options to increase access to essential medi-
The terms 'differential pricing', or 'equitable pricing' can be de-
fined as pricing based on ability to pay.
As it relates to the policy goal of maximizing health impact through 
affordability of medicines, a more accurate term might be 'equity 
pricing', where countries apply a price structure or pricing policy 
according to some principle of fairness or equity. In practice this 
may mean proportionality with income per capita, human development 
index or similar indicators.
The report focuses on the voluntary mechanisms - bulk purchasing and 
competitive tendering; voluntary tiered pricing agreements; and vol-
untary licensing - and on how to more effectively capture advantages 
from these mechanisms. Evidence for the potential impact of other 
mechanisms, including compulsory licensing; delay in patent protec-
tion, as allowed by the Doha Declaration; systematic, government im-
posed patent waivers; and price controls has also been analysed.
In the final section of the report, each mechanism is analysed ac-
cording to a range of factors, such as impact on price reduction, 
possible effect on R&D, product and disease scope, impact on the 
poor, predictability, transparency, and sustainability. The mecha-
nisms are examined individually as well as in relation to each other.

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