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[e-drug] Two Vaccines - why Price Discounts for Developing Countries Show Limits (2)

E-DRUG: Two Vaccines - why Price Discounts for Developing Countries Show Limits 

Dear colleagues,

There is a vibrant private health care sector in most developing countries, and 
its presence appears to an answer to a number of reasons, least not being the 
desire by the (small) middleclass for choice in healthcare service. In some 
cases, this private sector has been run based on costs that clients can afford 
to pay, and often these costs are not the same as those that apply in Western 
countries. Similarly, the price of medicines through pharmacies and the private 
clinics and hospitals is a mix, depending on what product is being sold 
(generic or not), what other duties/taxes apply, or whether there are retail 
price controls in place or not. Suppliers of goods and services to the private 
sector in these settings will know what the local market can afford for goods 
and services.  
The cost of private healthcare (goods and services) can also be looked at from 
the point of view of access to essential healthcare package (goods and 
services). In the situation where there are no government controls on the 
private sector, the private sector may exploit that situation and inflate 
prices of goods and services. Access becomes even more restricted and 
exclusive, denying the growing middleclass the very choice they seek and want 
to exercise.  
So, while I am happy to support the growth in private sector healthcare 
business, players in this area need to be conscious of the fact the issues that 
have led to an active, more accessible public healthcare environment also do 
apply to the private sector, but without the desire to try and stifle or 
restrict private enterprise. But to offer a vaccine at prices mentioned (e.g., 
USD 150 for Synflorix in Uganda), one wonders whether that price was based on a 
market analysis of Uganda, which showed that significant number of people in 
Uganda could afford to buy the product at that price. Is the size of the 
private sector in Uganda that well endowed as to afford a vaccine at that 
price? May be it is? Did the company mislead itself, or was there naivety on 
their part, leading to accusations of exploitation?   
I do not believe that anyone is asking for the private sector to offer their 
goods and services at the same price as the cost of goods to the public sector. 
Doing so would most likely kill off the private sector. It would also be naive 
to suggest that line of action. A fair and reasonable trade between the public 
and the private sector suppliers of healthcare goods and services is what 
everyone is looking for, specifically the growing middleclass who would want to 
spend their money locally, and in turn, grow local industry and local private 
sector enterprise. 

One of the measures to consider is what MeTA has been looking at over the last 
2 months or so: What goes into setting the retail price for medicines? If what 
goes it into the retail price is known by the general public, and it is 
recognised as reasonable, fair and acceptable, the retail price would be 
considered by many as a fair price. 

Bonface Fundafunda PhD., MBA., B.Pharm
Manager, Drug Supply Budget Line
Ministry of Health,
P.O. Box 30205,
Ndeke House,
Tel: +260 211 25 41 83
Fax: +260 211 25 33 44
Mobile: + 260 979 25 29 00
Email: bcfunda@hotmail.com

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