“Let us be frank about it: essential and life-saving drugs exist while millions and millions of people cannot afford them. That amounts to a moral problem, a political problem and a problem of credibility for the global market system...”

Director-General Dr Gro Harlem Brundtland, Statement to the Executive Board at its 105th Session, January 2000. ²²

Secure and sustainable access to essential drugs depends on:

• Rational selection and use ³⁴ based on development of a national essential drugs list, so that health facilities focus drug purchasing and prescribing on drugs that represent the best balance of quality, safety, efficacy and cost.

• Affordable prices to ensure that the drug expenditure of governments, other health care providers and consumers is cost effective and represents best value for money.

• Sustainable financing through equitable funding mechanisms such as government revenues and social health insurance (involving prepayment and pooling of financial risk) and through transitional measures such as development assistance and drug donations.

• Reliable supply systems incorporating a mix of public and private supply services, to ensure regular supply of essential drugs of assured quality in health care facilities, and sufficient research and development for new drugs.

Each of the above four critical elements must be firmly in place if access to essential drugs is to be increased (see Figure 12). Too often, manufacturers who could reduce drug prices blame poor access on the unreliability of supply systems. Policymakers who could influence drug financing blame the high drug prices imposed by drug manufacturers. Meanwhile, health care managers who could improve supply systems put the blame on inadequate financing. But the reality is that all of these stakeholders must combine their efforts and expertise, and work towards common solutions.

Figure 12: Increasing access to essential drugs a framework for collective action

Regarding rational selection, it should be noted that evidence-based treatment guidelines and essential drugs lists are not static but need to be constantly updated. Updating is dependent on research and development (R&D) efforts, which ensure that new drugs are brought to the market. For instance, new drugs are needed for new diseases such as HIV/AIDS, and for “old” or “neglected” diseases for which existing drugs are no longer effective, not produced in sufficient quantity or not adapted to field conditions in developing countries. ³⁵

Tuberculosis, malaria and a number of other tropical illness represent “neglected diseases” for which R&D has been insufficient. WHO is involved in several new public - private initiatives to stimulate R&D for new medicines and vaccines, including the Medicines for Malaria Venture and the Global Alliance on Vaccines and Immunization.

Within WHO, stimulating development of new medicines, vaccines, diagnostic tools and other technology is handled by one of several departments, depending on the target condition and type of technology demanded. Currently, departments in the Health Technology and Pharmaceuticals Cluster, Communicable Diseases Cluster, and Family and Community Health Cluster are the most active in medicines and vaccines development.

Within the WHO Medicines Strategy, rational selection and use are considered under the rational drug use objective. The remaining three elements are dealt with below.

Component 3: Access strategy and monitoring for essential drugs

Help countries to ensure and monitor access to essential drugs, focusing on diseases of poverty, such as malaria, HIV/AIDS, tuberculosis and childhood illnesses

Table 4 Examples of policy options to increases access to essential drugs for priority health problems

Table 5 Collaborating to increase access to drugs for priority health problems

* “Equity pricing” (also known as differential pricing or market segmentation) is the concept that poor populations should pay less than wealthier populations for life-saving drugs .

Progress

Access to essential drugs has increased considerably in the past 20 years. Nearly two-thirds of the world's population can now obtain full and effective medical treatment with the drugs they need. In absolute terms, the number of people estimated to have access to essential drugs grew from roughly 2 billion in 1977, to 4 billion in 1997. And whereas in 1975, only a dozen countries had what would now be considered a national essential drugs list, today nearly 160 countries have adopted such a list. Of these, more than 80% are new or have been updated within the last five years. WHO's Model List of Essential Drugs has proven to be of great value in this respect. ³⁶

WHO has elaborated and tested a number of policy options to boost access to essential drugs with high public health impact (Table 4). It has also extended collaboration on this issue with other UN programmes, such as Roll Back Malaria, the Stop TB Initiative and UNAIDS, and launched a multitude of activities to get medicines to where they are most needed (Table 5).

WHO has also been responding to Member States' increasing concern about the potential impact of new global trade-related agreements, including the WTO TRIPS Agreement, on access to pharmaceuticals. As the leading agency in health, WHO has provided policy guidance and produced a number of technical publications to raise awareness of the issues involved, and the actions countries can take to at least maintain current levels of access to essential drugs. ³⁷ WHO's position regarding pharmaceuticals and trade agreements is that essential drugs are part of the broader right to health care and not simply just another commodity. Patents for pharmaceuticals should therefore be managed so as not simply to protect the interest of the patent holder, but also to protect public health. WHO is also helping countries to apply the safeguards incorporated in the TRIPS Agreement.

Challenges

However, despite these promising trends, securing access to essential drugs remains an enormous challenge. One-third of the world's population - almost exclusively in low-and middle-income countries - continues to lack regular access to essential drugs. In the poorest parts of Africa and Asia, this figure rises to over 50% (Figure 13). The reasons are well known and include inadequate financing and poor health care delivery. For countries mired in foreign debt or struggling with an ailing economy, the prospects for improving access to essential drugs are bleak. This is especially so given that total pharmaceutical expenditure, as well as other health expenditure, is linked to the economic development level of a country, and tends to increase only when gross domestic product increases. ⁵

Figure 13: Access to essential drugs has grown but inadequate financing and poor health care delivery are still constraining factors

The statistics are equally alarming for communicable diseases. For the 20% of the global population that lives in poverty, 60% of deaths are due to diseases such as malaria and HIV/AIDS. ¹⁰ The disease burden associated with these two diseases is particularly overwhelming. More than 33 million people live with HIV and 90% of them live in developing countries, without access to the drugs that could reduce their suffering and prolong their lives. Similarly, every year, more than one million people in developing countries die from malaria - simply because they do not have access to effective treatment. ³⁸ (The main challenges relating to access to drugs are summarized in Table 5.)

Confronted with this unacceptable burden of ill health, the international community has become increasingly committed to reducing health gaps between rich and poor. WHO will likewise maintain its focus on the identified priority health problems of the worst off, and help countries act quickly and effectively to make essential drugs available and affordable. ³⁰ That said, the attainment of health also requires that other sectors such as education and agriculture also receive their due share of public resources. Too often, though, scarce resources are used instead to build up military capacity or yet further increase the well-being of a minority.

Trade is another sector that impacts heavily on health. New global trade agreements - not only the WTO TRIPS Agreement - are likely to affect drug prices, technology transfer, and levels of resources available for research and development into tropical diseases. WHO will continue to help countries understand the potential impacts of such agreements, and to protect health interests during the globalization process. ⁴⁰ Careful monitoring of all these issues is also called for.

“It is an indication of the topsy-turvy world in which we live that the doctor, the school-teacher or the nurse feels more threatened by financial conservatism than does the general and the air marshal”.

1998 Nobel laureate in economics Amartya Sen, World Health Assembly 1999, keynote address. ³⁹

Expected outcomes for 2000 - 2003

3.1: Increased access to essential drugs for priority health problems, particularly for poor populations through close collaboration between a wide range of partners.

• Work with international and national programmes concerned with malaria, tuberculosis, HIV/AIDS and childhood illness to ensure a comprehensive and coordinated approach to securing access to essential drugs, based on the four-point framework of selection, affordability, finance and supply systems.

3.2: Increased access to newly developed and abandoned essential drugs through expanded collaboration with development partners.

• WHO will work with global partners, such as UNICEF, the World Bank, WTO, generic drug manufacturers and the pharmaceutical research industry to develop new strategies and agreements to increase access to “new” essential drugs for priority health problems in low-and middle-income countries, and to continue production of “old” essential drugs.

3.3: Standard indicators to measure equitable access to essential drugs developed and tested through operational research for use by governments and NGOs in developing countries to monitor access at various health care levels.

• After developing a set of simple, easily applied, standard indicators, based on the outcome of operational research, and in consultation with governments and NGOs, WHO will promote their use by monitoring systems worldwide. This will help identify obstacles and constraints to improving the availability and affordability of essential drugs.

3.4: Access to drugs promoted within international trade agreements by advising countries on their options under, for example, the WTO TRIPS Agreement, and helping them to monitor the impacts of such agreements on access to essential drugs.

• WHO will develop standardized methods and sentinel systems, which can be adapted for use at national level, for monitoring the impacts on pharmaceuticals of the WTO TRIPS Agreement. WHO will also advise countries on how to implement TRIPS safeguards, amend and review national legislation to take account of these safeguards, and continue to collaborate with other organizations concerned about the impact of globalization.

Component 4: Financing mechanisms and afford-ability of essential drugs

Ensure the implementation of national strategies to finance the supply and increase the affordability of essential drugs, in both the public and private sectors

Progress

WHO continues to be heavily involved in efforts to increase drug financing, both publishing guidance on drug financing mechanisms and putting it into practice. Efforts have included assessment of public financing for drug benefits within social health insurance schemes, a review of experience with user fees for drugs, and greater input into the planning of development bank loans for pharmaceutical projects. Box 5 distils WHO experience in this important area.

One particularly promising trend supported by WHO is the growth in health insurance coverage and expanded drug benefits in countries as diverse as Argentina, Egypt, Georgia, India, the Islamic Republic of Iran, the People's Republic of China, South Africa, Thailand and Viet Nam. Some insurance programmes have special arrangements for rural and low-income populations. ⁴² Increasingly, WHO is working with such programmes to apply the essential drugs concept and to address the particularities of drug management within health insurance. The aim is to reduce drug costs.

Indeed, concerns about drug costs remind us that although sustainable financing is critical, drug costs must be affordable for governments and consumers if access is to be maintained. A number of measures have been successfully developed to contain the drug prices paid by governments and the drug costs of health insurance programmes. Many of them can also be used to contain direct consumer expenditure. They include pooled procurement arrangements, generic^b substitution and improved price information.

^b A generic medicine is a pharmaceutical product, usually intended to be interchangeable with the innovator product, which is usually manufactured without a licence from the innovator company and marketed after the expiry of patent or other exclusivity rights. ⁴³

Generic substitution, in particular, has considerable potential for contributing to increased financial access. In fact, it is a proven cost-effective strategy for containing drug expenditure. ⁴⁴ The average price of generic drugs can fall by as much as 30% of the innovator drug price when the number of generic versions of the drug on the market increases. ⁴⁵ WHO is therefore actively encouraging development of drug policies based on the promotion of generic medicines of assured quality. Competition among chemically different but therapeutically similar patented drugs can also reduce the prices of patented products. The results of a study illustrated in Figure 14 show that the price of antiretroviral products fell by 73% in five years once a number of antiretroviral products had become available. ⁴⁶

Challenges

High-income countries spend substantially more per capita on drugs than low and middle-income countries. As shown in Figure 15, public spending on drugs in over three dozen countries is less than US$ 2 per capita per year. In such countries, inadequate and misdirected financing is arguably the greatest barrier to access to life-saving essential drugs. The need is to persuade their governments that they have a vital role to play in financing health services and drug provision, and to help them carry out that role.

Thus although user fee schemes for drugs in public health services are becoming increasingly common, they should be seen only as transitional measures towards the long-term aims of more equitable prepaid public financing and social health insurance. This is because user fee schemes can exacerbate existing inequity - especially for impoverished populations. They may also create financial incentives for health care providers. User fees should therefore complement rather than replace government allocations for drugs. In the meantime, perceived service quality improvement will also be essential to encourage users to take advantage of services offered. ⁵

Social or universal health insurance is of course vastly preferable to user fees since it promotes equity, solidarity and affordability. Almost all the health systems of developed market economies feature social health insurance. But in low-income countries overall coverage continues to be low: a mere 10.3% in sub-Saharan Africa, and 27.3% in Asia (excluding China and India). ⁵ And when health insurance schemes do exist, drug expenditure can easily amount to 25 to 70% of their total costs, making them very difficult to sustain. ¹⁰ But by introducing the essential drugs concept to these schemes, WHO could help improve their sustainability and their attractiveness to governments.

Figure 14: Competition reduces drug prices - the example of antiretrovirals in one major market

Source: B. Samb, 2000.⁴⁶

Figure 15: In over 3 dozen countries public drug expenditure is less than US$ 2 per capita - inadequate by most estimates

Low health insurance coverage indicates that out-of-pocket spending on drugs is likely to be high. ⁵ In fact, in lower-income countries, household (out of-pocket) expenditure on drugs accounts for between 61 and 80% of total health expenditures (Figure 16), and can be a major source of impoverishment. ^{47, 48}

Affordability of drugs could be increased substantially, however, by eliminating or reducing import duties, distribution costs and dispensing fees. These can account for up to 80% of the total price paid for drugs. In particular, import duty can be as high as 30%, while value-added and other national and local taxes can amount to 20% of a drug cost. ⁴¹ At the same time, generic markets could be encouraged. This would require not only appropriate legislation and regulations, but also reliable quality assurance capacity, professional and public acceptance of generic drugs and economic incentives and information (for both prescribers and consumers). ³²

Information is also crucial if maximum value for drug expenditure is to be assured, and governments and consumers enabled to lobby for fair drug prices. Various international organizations do regularly produce price lists, and some countries include drug prices in therapeutic manuals or print the maximum retail prices on packages. But dissemination of price information for finished products and raw materials, in particular, is minimal in most low-income countries.

Not surprisingly, in view of the difficulties involved in drug financing, drug donations have become a popular means of tackling specific diseases, including river blindness, elephantiasis, leprosy and other diseases targeted for eradication. Drug donations do indeed contribute to health progress in the short term. But on a long-term basis, self-sufficiency is the only viable means of tackling increasing disease burdens. ⁴² In the mid-term, therefore, drug donations should be planned as a sustainable component of the drug supply system.

Figure 16: In transitional and developing economies, drugs are the largest out-of-pocket household health expenditure

Expected outcomes for 2000 - 2003

4.1: Planning and advocacy for public sector drug financing and implementation of national drug financing strategies.

• Work will include technical assistance to countries and capacity-building in forecasting drug requirements at national level, advocacy for appropriate levels of sustainable public drug financing, facilitating national and regional meetings on national drug financing, and encouraging countries to develop prepaid drug-financing mechanisms that are appropriate to their socioeconomic context.

4.2: New drug-financing strategies developed through operational research and promoted.

• WHO will actively support development of alternative drug-financing mechanisms to improve use of public resources, the quality of services and access to primary care with drug provision, with a special focus on poor populations. Development of endowment funds for eradication and control of specific communicable diseases in least-developed countries will be investigated.

4.3: Increased affordability of essential drugs in public and private sectors through generic policies, pricing policies, local production (where appropriate) and other mechanisms.

• WHO will work with countries and other partners to develop public-private partnerships to make low-cost and good-quality pharmaceutical products available in both the public and private sectors, and to all groups of society. Cost-effective procurement at subregional level, where feasible, will also be promoted.

4.4: Expanded coverage and improved drug benefits within health insurance through operational research, development of policy guidance, and production and dissemination of training materials on introducing and implementing health insurance schemes.

• WHO will help countries: undertake operational research into implementation of drug benefit mechanisms; consider national and local health insurance schemes based on the essential drugs concept; and facilitate national and regional workshops on health insurance based on a core set of training materials.

4.5: Increased drug price information and guidance on drug price policies through market intelligence, dissemination of price information on raw materials and finished products, and operational research and policy guidance in the field of price information and pricing policies.

• Activities will include the building of capacity in market intelligence services and drug price monitoring systems at national level, and technical assistance to implement and monitor national drug price policies. Distribution of price information on raw materials and finished products will also be increased.

Component 5: National and local public sector drug supply systems and supply capacity

Support countries to run efficient public sector drug supply systems, ensuring the availability of essential drugs at all levels of the distribution chain

Progress

The fouth critical element for securing access to essential drugs is a reliable mix of public and private drug supply. In the last decade, four types of drug supply system, in addition to traditional Central Medical Stores, and with increasing levels of private sector features, have been developed (see Box 6).

These systems vary considerably with respect to the role of the government, the role of the private sector, and the incentives, if any, for efficiency. ³² But whatever system is developed, it aims to ensure continued availability of essential drugs with low rates of drug stock-outs, and low total drug costs for a given level of service. Controlling costs by introducing private sector features to public systems (such as outsourcing, or by decentralizing storage and distribution) helps achieve these goals. For an increasing number of countries, including Benin, Colombia, Guatemala, the Newly Independent States, South Africa and Thailand, a public - private mix is working well. ⁴⁹

Recent WHO activities to improve drug supply have included publication of guidelines and manuals, and support to international training courses (Managing Drug Supply for Primary Health Care) and a distance learning programme (in collaboration with several organizations) to upgrade the drug supply management skills of government officials.

With emergency relief activities increasing during the last decade, WHO has also been active in drug supply programmes - for example in former Yugoslavia, Haiti and Iraq - that seek to ensure that pharmaceutical needs are met. It has also promoted the standardization of emergency health kits (e.g. The New Emergency Health Kit and the essential drugs kits used in former Yugoslavia).

“Substantive improvements in the supply and use of pharmaceuticals are possible. In most health systems, the potential for improving the supply process is tremendous, reflecting in part the magnitude of current inefficiencies and waste.”

Management Sciences for Health/World Health Organization, 1997.⁵⁰

Challenges

Despite many promising developments in drug supply, many countries continue to struggle with a mix of inefficient public supply systems (intended to serve the entire country) and private supply systems (which mostly serve urban areas). Decentralization of public services has sometimes compounded the problem. And although more efficient drug supply systems have been introduced, it remains to be documented whether they have succeeded in increasing access throughout the public health care system to affordable good-quality essential drugs.

Nevertheless, following good procurement practices would help improve national drug supply significantly. The Operational Principles for Good Pharmaceutical Procurement ⁵¹ produced by the International Pharmaceutical Coordination group in 1999 indicate the critical steps in the procurement process and elaborate twelve operational principles. The document now needs to be widely disseminated and acted upon. Principal target groups include national and local procurement agencies. The drug supply operations of international organizations, and international and national NGOs, could also be improved if they followed these principles.

Drug production facilities are also of concern. In many developing countries they are still found in the public sector - a relic of past strategies to improve drug supply and availability. But if they are to function optimally, countries must critically evaluate their operation, particularly in terms of compliance with good manufacturing practices, production capacity and their range of products.

Drug donations are another form of drug supply and can do much to alleviate suffering and save lives. Moreover, the growing number of natural disasters and new and continuing armed conflicts suggest that the need for drug donations will not diminish. However, whether a rapid response to an acute emergency or as an element of development aid, supply must match demand. In 1996 WHO produced Guidelines for Drug Donations to improve the quality of drug donations. A survey of the impact of the guidelines showed a very positive impact. The second edition of the guidelines, produced in 1999 in collaboration with 15 international agencies, must now be fully endorsed and adhered to by all drug donors, be they governments, organizations or large corporations. ⁵²

Expected outcomes for 2000 - 2003

5.1: Enhanced drug supply management capacity through development of training materials, and provision of international, regional and national training programmes in drug supply and distribution management for national governments and not-for-profit health care organizations.

• WHO will continue to actively support existing drug management training courses, as well as development of regional, national and local initiatives on drug management capacity-building, in collaboration with national institutions, NGOs and other WHO partners.

5.2: Improved drug supply management as part of health sector reform through global guidance, and international, regional and national training programmes, with emphasis on drug supply issues within decentralized health care systems.

• WHO will provide technical assistance to countries, facilitate meetings and workshops on public - private drug supply options in decentralized health care systems, and support operational research activities to improve drug supply systems.

5.3: Adherence to good pharmaceutical procurement practices through promotion of use of a list of essential drugs and informed decision-making through increased availability of reliable price information.

• Activities will include technical assistance to countries and training in good procurement practices, facilitation of regional, national and local meetings and workshops on good procurement practices, and collection and distribution of reliable price information on raw materials and finished pharmaceutical products.

5.4: Cost-effective and reliable local drug production promoted where and when appropriate.

• WHO will support feasibility studies to guide countries as to their role in drug production, and to provide recommendations on the relevance of starting or maintaining local drug production.

5.5: Adherence to good drug donation practices among donors and recipients through advocacy, international networking, monitoring, and assistance to countries to develop national drug donation guidelines.

• WHO will continue to distribute and advocate adherence to the interagency revised Guidelines for Drug Donations 52 and the interagency Guidelines for Safe Disposal of Unwanted Pharmaceuticals in and after Emergencies. ⁵³ It will also monitor donation practices worldwide.