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Pricing of Medicines in Kenya
1. The Impact of
Pricing and
Affordability of
Medicines on
access to
healthcare in Kenya
Esbon Gakuu
Pharmaceutical Policies in Health Systems
Institute of Tropical Medicine-Antwerp
2. Objectives
• To describe Pharmaceutical value chain
in Kenya with a focus on the pricing,
availability and affordability of Essential
Medicines
• To outline key issues in the value chain
• To propose recommendations to ensure
equitable access to Essential Medicines
providing evidence from other Low &
Middle Income countries
3. Health Financing Indicators- Kenya
Total population(2019) - ˜47.6 million1
Gross National Income per Capita (Current US$)(2018) 1,620 2
Per capita expenditure on health (Current US$)(2016) US$78.6 2
The total health expenditure (THE) (% of GDP)(2016) 5.2% 3
The Government Health Expenditure (GHE) (% of THE)(2016) 37% 3
Out of pocket Health Expenditure (% of THE) 2016 26.1% 3
Pharmaceutical Expenditure (% of THE) 20.8% 3
1.Kenya National Bureau of Statistics (KNBS). 2019 Kenya Population and Housing Census http://www.knbs.or.ke.
2. World Bank Group. Kenya | Data. https://data.worldbank.org/country/kenya
3. Ministry of Health. Kenya National Health Accounts 2015/2016.
4. Pharmaceutical Landscape in Kenya
Kenyan Patient
Public Health Facilities Mission Health Facilities Private Facilities & Pharmacies Traditional
KEMSA (Gov) MEDS (Mission) Wholesalers (Private)
Importers Local Manufacturers
International Pharma
• Competitive negotiation
• Direct procurement
• Open/Restricted tendering
5. Key Issues
Inadequate Essential Medicines Supply in
the Public Sector
Large “out of pocket” payments for
pharmaceutical products
No pharmaceutical pricing regulation
policy
Very high mark-ups Medicines in the
private sector
6. ‘Hidden Costs’ of Pharmaceutical Procurement
Aitken, M. (2016) Understanding the Pharmaceutical Value Chain. Pharmaceuticals Policy and Law. Doi: 10.3233/PPL- 160432.
0
10
20
30
40
50
60
70
80
90
100
Brazil India Indonesia Kenya Netherlands Russia South Africa
2013 Value weighted Average
Net Manufacturer Selling Price CIF, Import tariffs & charges Distributor margin Retailer Margin Taxes
7. Affordability by Provider
0.4
1.1
1.6
0.5
2.7
3.2
P UBLIC S E C T OR P A T IE NT P RIC E S NGO P A T IE NT P RIC E P RIVA T E S E C T OR P RIC E
LOWEST PRICED GENERICS FOR DIABETES-1
MONTH'S COURSE
Glibenclamide 5mg Metforming 500mg
0
2
4
6
8
10
12
14
Public Sector Patient Prices NGO patient Price Private Sector Price
Lowest Priced Generics for Hypertension -
1 Month's Course
Furosemide 40mg Daily Atenolol 50mg Daily
Enalapril 10mg twice daily Hydrochlothisazide 25mg daily
Nifedipine retard 20mg twice daily Lorsatan 50mg daily
No
of
Day’s
wages-Lowest
Government
worker
Health Action International Africa, World Health Organization. A survey of Medicines Prices in Kenya 2004.
9. Possible
Recommendations
1. Policy Level
• Regular medicine price surveys to monitor effects of policies & other effects on
interventions on medicines prices.
• Promote presribing & use of medicines by generic name in all sectors & enshrine in law.
• Development & Implementation of a medicine pricing policy to achieve greater
transparency, uniformity & predictability in the pricing of medicines in Kenya.
• Consider reference pricing for medicines in the private sector-Comparison with other
countries with similar GDP & health coverage
• Regular medicine price surveys to monitor effects of policies & other effects on
interventions on medicines prices.
Public Sector
• Allocate more funding for pooled procurement of medicines in the public sector.
• Revolving Drug Funds(RDF)??- Mixed results(Laos+, Vietnam+,Sudan+)
• Enhance efficiency of the public Medical Supplies procurement agency
• Regular medicine price surveys to monitor effects of policies & other effects on
interventions on medicines prices.
Private Sector
• Gropu Purchasing Organization
While there may be clinical advantages of one treatment option over the other, for patients paying out-of-pocket
and in particular when a medicine is not available in the public sector, patients may be unable to afford the preferred treatment.
Cf Medicine pricing policy in Thailand
The basic underlying expectation is that this liberal pharmaceutical pricing regulation encourages stiff completion amongst suppliers resulting in highly competitive consumer prices.
Medicine prices and mark-ups in Kenya are not regulated.