2.1 Context

The prices listed generally apply in the context of bulk procurement i.e. the working unit is one batch. Although batch sizes vary greatly among formulations and manufacturers, the following sizes are typical: capsules and tablets in batches of 100,000 to 500,000 (these are not minimum purchases, batches of over 1 million are not uncommon); vials and bottles in batches of 5,000 to 20,000.

Prices are ex-works (EXW) or free-on-board (FOB). They do not include the added cost of items such as freight, insurance, import duties or taxes. For this reason the prices quoted in this report cannot be compared with consumer prices. Many countries continue to impose considerable import duties and taxes on the price of essential medicines.¹¹ In addition, wholesale and retail markups vary from one country to the other. As a result, the ex-works price is often less than half of the end-price to the consumer.

¹¹ See Policy and programming options for reducing the procurement costs of essential medicines in developing countries, Levinson, L, Boston University School of Public Health, 2003

Price information and exchange rates are subject to variation, and relate to the date at which the offer was made.

2.2 Offers of donation and price reductions

Public pressure, advocacy, competition from generic manufacturers and initiatives from pharmaceutical companies have led to reduced prices of some drugs for developing countries. There is no systematic approach to the differential pricing. Each company determines its own eligibility criteria for countries, sectors and institutions that may benefit from its reduced price. Some companies offer donations of medicines for specific indications such as to prevent mother-to-child transmission of HIV, or to treat certain opportunistic infections affecting PLWAs.

The prices that are quoted in Section 4 of this publication do not necessarily reflect all agreements that may have been negotiated with individual countries. Information on price offers for antiretroviral medicines publicly announced by pharmaceutical manufacturers, including information on countries eligible for the offers and other conditions, can be found in the MSF report “Untangling the web of price reductions: a pricing guide for the purchase of ARVs for developing countries” included in this publication as Annex VI.

2.3 Additional methods of cost reduction

In addition to generic competition and advocacy for the reduced pricing of HIV medicines in line with the purchasing power of countries, important parallel avenues to be pursued by governments include, for example, the active use of compulsory licensing, government use of patents and parallel importation. As agreed by the Member States of the World Trade Organization in 2001, least developed countries (LDCs) are not obliged to enforce pharmaceutical patents until at least 2016.¹² LDCs should make use or avail themselves of this provision to purchase lowest cost medicines on the world market. The Global Fund “encourages recipients to comply with national laws and applicable international obligations in the field of intellectual property including the flexibilities provided in the TRIPS agreement and referred to in the Doha Declaration in a manner that achieves the lowest possible price for products of assured quality.”¹³ Other measures may include reducing or eliminating import duties and taxes, and increasing demand through pooled procurement.

¹² Doha Declaration on the TRIPS agreement and Public Health, paragraphs 6 & 7

¹³The Global Fund to Fight AIDS, Tuberculosis and Malaria, Report of the Third Board Meeting, GF/B4/2, page 25, para 10 (a).

2.4 Information accompanying each medicine

The prices indicated in this report are based on the price data of 1st quarter 2003, unless indicated otherwise.

The following information is provided for each medicine:

• The number of manufacturers that gave an indicative price
• The indicative price

Unit

The price quoted relates to the unit described, for example, if the unit is “tab” the price quoted is for a single tablet.

Maximum price

The maximum price listed represents the highest price among products, with no differentiation among original or generic products.

Minimum price

The minimum price listed represents the lowest price among products, with no differentiation among original or generic products.

Median price

The median price is the middle price, or where there is an even number of prices listed, it is the mean of the two middle numbers. This means that half the prices quoted are above this median price, and the other half are below it.

25th percentile

The value point representing the first quartile of quoted prices in ascending order. It is used to give some indication of the dispersion of prices for a given product.

No. < than 25th percentile

This is used to indicate how many manufacturers can produce the medicine below the 25th percentile price range.

• The Brazilian list price

The Brazilian list price included in this report represents the minimum price payable by Brazilian health institutions for the product and is taken from the Brazilian databank of health purchases. Where the entry reads “none”, this indicates no purchase has been made for that product, therefore no minimum price payable is available.

• The Spanish list price

This price is ex-works and has been calculated by applying the new margins (as stated in the Royal Decree 286/2001) to the consumer price as published by Consejo General de Colegios Oficiales de Farmacéuticos in Spain (www.cof.es). It should be noted that Spanish list prices are generally considered the lowest in Europe. In most cases, the indicative prices listed in the report are a fraction of the comparative prices in the Spanish list.