Global Comparative Pharmaceutical Expenditures with Related Reference Information - Health Economics and Drugs Series No. 003
(2000; 84 pages)

Almost every country has a mixture of public and private involvement in the financing and supply of its drugs. In low income and transitional countries in particular, household spending on drugs is a major component of total spending on health. Understanding the structure and dynamics of this mixed market is essential for successful policy to improve its overall working. This paper provides a broad overview of the nature of national and global drugs markets. Though primarily descriptive in purpose, some analyses have been made using data from the WHO discussion paper "Public-private roles in the pharmaceutical sector" (WHO/DAP/97.12).

National expenditure aggregates often give a misleading picture of how the financing and provision of drugs actually happen. The level and composition of private spending on drugs often differ substantially between better-off and poorer people. Private drugs purchases often involve very small quantities of drugs and may cost patients several times more than publicly supplied equivalents. Public expenditures may be officially targeted to lower-income households, but sometimes fail to reach their destination. And comparisons based only on spending levels can be misleading. For example, they can conceal the fact that public sector drug expenditures often consist largely of bulk procurement of well-selected generic drugs, and represents much greater therapeutic value for a given level of cost. This is especially likely to apply to countries with well-developed national essential drugs programmes.

As an increasing number of countries develop National Health Accounts and conduct regular household surveys on health spending, better information on the financing, provision and consumption of drugs will emerge. In the meantime, this paper assembles the available evidence on pharmaceutical spending. Beginning with the sources and levels of total spending for health, the paper then looks at the public and private shares in pharmaceutical spending. Selected household survey data on pharmaceutical spending are then presented, and tabulations of local drugs production and generic drugs are given. By providing an initial and incomplete picture of what is known about drugs markets it is hoped to stimulate debate, data collection and analysis of drugs markets in countries as a basis for more informed national drug policy.

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