Drug Prices in Kenya Sickeningly Expensive
Thursday, September 8, 2005
Kenyans pay up to 17 times the internationally-recommended prices for some branded medicines, and up to three times for their generic forms, reports Dagi Kimani
COMPETITION AMONG KENYA’S 600-odd registered pharmacies as well as a vibrant drug manufacturing sector have failed to lower the cost of medicines in the country, says a Ministry of Health survey.
According to the survey, Kenyans pay up to 17 times the internationally-recommended prices for some branded medicines, and up to three times for their generic forms.
“Today, the lowest paid government worker needs between 1.1 and 27.5 days’ pay to afford model treatments, for example for gastric ulcer, hypertension and asthma, from private pharmacies,” says the survey. “These treatments are even less affordable for the majority of the population.”
The survey, entitled A Study of Medicine Prices in Kenya – 2004, was carried out between October and November last year by staff from the ministry, the World Health Organisation and Health Action International. It involved 53 government hospitals, 57 private-for-profit outlets and 47 mission health facilities. Although the private-for-profit outlets were found to be the best stocked, they were also established to be prohibitively expensive.
Kenya is home to at least a dozen drug manufacturing facilities, with the sector estimated to be valued at $160 million. The country has 1,650 registered pharmacists and at least 3,000 pharmaceutical technologists, many of whom work for the government and operate unlicensed outlets as well.
The failure of market forces to drive down drug prices, the survey notes, is most explicit in Nairobi, where medicines on the whole are more expensive than anywhere else, “yet competitive pressure would otherwise have been expected to drive prices lower.” Virtually all of Kenya’s drug manufacturers are situated in the city.
“There is a wide variability in medicine prices, which calls into question the price-setting mechanisms through the supply chain,” says the survey. “There is an obvious need to establish a form of reference pricing for medicines in the private sector to prevent excessive pricing.”
Speaking to The EastAfrican, the director of Kenya’s Consumer Information Network, Samuel Ochieng, blamed the situation on several factors, including taxation of raw materials, poor procurement in the public sector as well as the lack of a price index to guide clients.
MEDICINES ARE A COMPLEX subject for most people, with just one type having many brands and formulations in the market,” Mr Ochieng said. “It is difficult for people to keep track of the prices of drugs without an authoritative guide.”
According to Mr Ochieng, the failure of the public sector to meet the health needs of the majority of the people – mainly as a result of corruption in procurement and financing shortfalls – has also created demand pressures in the private sector, giving an opportunity for unscrupulous retailers to raise their prices.
Local manufacturers on their part blame several infrastructure factors for raising the cost of locally manufactured medicines, including sporadic power and low quality water supply and poor roads.
“We operate in an environment where we often have to invest in such things as boreholes and power generators, thus raising our costs of production,” Dr Prakash Patel, managing director of Cosmos Ltd, one of Kenya’s leading medicine makers, told The EastAfrican last December. “These are cost elements that medicine manufacturers elsewhere do not have to face.”
Despite such concerns, most observers, however, agree that the problem lies in the lower end of the retail chain, where some pharmacists and illegal retail outlets have taken advantage of the lack of a national medicines pricing policy to raise their prices arbitrarily.
“The current situation where we expect market forces to drive down medicine prices is not practical,” Mr Ochieng said. “If you walk into a pharmacy in pain or to buy emergency medicines, it is unlikely that you will be in a position to bargain.”
According to Mr Ochieng, “In the absence of an ethical and moral concern on the part of medicine retailers to adhere to the correct prices, some level of government intervention to reduce drug prices will be needed in the short run.”
