High prices for medicines in Africa is partly caused by little competition between suppliers © Corbis/Getty Images
High prices for medicines in Africa is partly caused by little competition between suppliers © Corbis/Getty Images

Africa paying 30 times more for drugs

20 June 2019

Procurement inefficiencies mean African countries could be paying as much as 30 times more than other countries for basic drugs, a report said.

The report by the Center for Global Development (CGD) said inefficiencies in procurement systems leave some of the poorest countries paying more.

Purchasers in countries such as Senegal and Zambia can pay up to 30 times over the minimum international reference price for generic medicines such as omeprazole, used to treat heartburn, and paracetamol, a common pain reliever.

The report said: “Despite its importance, procurement is an underappreciated health system function. Today’s procurement systems are hobbled by inefficiencies that leave some of the poorest countries paying some of the highest drug prices in the world.”

Part of the reason for high prices is that there is little competition between suppliers in small-to-middling economy countries, the report continued.

Markets are often dominated by a single or small number of suppliers, directly affecting prices paid by public procurers and consumers.

Lower-middle income countries “often cannot rely on regulatory systems to keep poor-quality drugs off the shelves”, and many opt for branded medicines to signal reputation and quality, the report said.

Currently branded generic medicines, which command higher prices, make up two thirds of the market in both volume and spend in lower-middle income countries.

However in countries such as the UK and US, unbranded generics – often the least expensive option – make up 85% of the market by volume but only a third in cost, the report found.

It also highlighted the impact of policies adopted by some countries on preferences for domestic manufacturing of medicines.

The CGD said policies can limit the amount of competition, particularly where the domestic pharmaceutical industry is immature or poorly regulated.

“By limiting competition, purchasers may pay significant premiums over international market rates for basic generics or may receive substandard products,” it said.

Last year, Soteri Gatera, the industrialisation chief for United Nations’ Economic Commission for Africa, said the continent must urgently grow its pharmaceutical sector to become less dependent on imported medicine.

The CGD called for global cooperation to address challenges and support for lower-middle income countries to reform procurement policies.

“Access to medicines, diagnostics, devices, and equipment is driven in large part by the efficiency of their procurement. Procurement is, therefore, central to the efforts of low and middle-income countries to improve health, meet the Sustainable Development Goals, and achieve universal health coverage,” it said.

Earlier this year, Eliud Muriithi, director of commercial services at the Kenya Medical Supplies Agency, urged Kenyan counties to buy generic medicines to make quality healthcare more affordable for the public.

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