Tuesday, October 02, 2007

The most expensive medicine in the world

A report by University of El Salvador released last week determined that medicine in El Salvador costs more than any place in the world. The study evaluated the price of drugs purchased at more than 100 sources throughout El Salvador, split equally between the public and the private sectors. Drug prices for name brand drugs, still under drug company patents, averaged 50 times the international reference price. Generic drugs, while cheaper, were 20 times the international reference price. The price levels made the cost of drugs in El Salvador the highest anywhere.


To put this cost in practical terms, the study looks at how many days a worker would need to work at minimum wage in a country to purchase a course of treatment for 4 common maladies. In India, it would take 1.5 days, in the Sudan and Philippines between 5 and 6 days, but in El Salvador it would take a full nine days of wages to purchase the necessary medicines.

A 2003 report by Strategies for Enhancing Access to Medicines described the issue in El Salvador's healthcare system:

Pricing and affordability issues are a major concern throughout the public health system. At the central level, which still handles procurement for MSPAS primary care facilities, El Salvador routinely purchases pharmaceutical products at prices above the international median; the SEAM assessment found that, for a list of tracer items, MSPAS central-level purchase prices for pharmaceuticals was 82 percent above median international purchase prices. Decentralized hospital purchase prices were another 23 percent higher overall than the prices paid by central-level purchasers, placing a great financial burden on patients and hindering hospitals' ability to maintain adequate stock.

When MSPAS facilities run out of medicines, patients turn to private pharmacies to fill their prescriptions, paying even higher prices. This creates an even heavier economic burden for workers and their families, particularly for the 28 percent of the Salvadoran population living on less than minimum wage.

Whether your political views come from the left or the right, this is a system in drastic need of reform. Government inefficiency, incompetence or corruption in drug purchases is evident. Any market forces at play are not creating competitive pressures to move prices downward. And thousands of Salvadorans go without necessary drugs because they cannot afford them, or the system has run out of them.

3 comments:

Anonymous said...

any market forces...

Dude, market is at work here
prices were not compared against first world prices which are overall much higher than ES
So market is working alright: ES which invents no medicine whatsoever, yet gets lower prices than the countries that do invent the medicine. Fair deal!

If you read the actual paper, any perceived "overprice" is at the drugstore margin. Why? There is NO free market! In ES, you can retail medicine only if the government issues you a license to do so. Therefore there is limited competition.

Government failure, not market failure, my friend

Anonymous said...

OK I COULD NOT FOUND A PLACE FOR THIS COMMENT SO, HERE IT IS, YEAH I AM GLAD THAT SOMEONE IS STARTING TO SEE THAT SOMETHING IS WRONG, I AM NOT FOR ANY POLITICAL PARTY , HOWEVER YES THERE ARE SOME ANORMALITIES LIKE THE PRICES IN THE MEDICINE IN EL SALVADOR,FOR YEARS AND STILL THE SAME PROBLEMATIC SITUATION, AND LET ME SAY SOMETHING ELSE THE PEOPLE STILL GOING TO THE U.S.A. ( BECAUSE I DONT KNOW IF IS THE PEOPLE WHO IS BLIND AND LET THE GOVERMENT HAVE ALL THE POWER AND NOT SPEAK OUT THEIR NECESITY) LOOKING FOR A BETTER LIFE , WHICH I DONT KNOW U.S.A. IS NOT IN ITS BEST MOMENT, BUT I WANT TO MENTION SOMETHING, THE GANGS, ?MANO DURA? MMMM, WILL SOMEONE BE AGREE WITH ME THAT THEY SHOULD BE PUNISHED WITH THE DEATH PENALTY, BECAUSE IT SEEMS TO ME A VICIOUS CIRCLE, THEY STAY AT JAIL, KEEPING CONTACTS , THEY GO OUT OF JAIL AND DO IT AGAIN, AND AGAIN KILLING PEOPLE THAT IS TRYING THEIR BEST WORKING, BUT MOST IMPORTANT MAKING YOU FEEL DEPRIVED FROM YOUR FREEDOM OF GOING OUT AND HAVE A GOOD TIME, LIVE PEACFULLY FOR THE CHILDREN FOR THE PRESENT THAT COULD CREATE A VIOLENT RESPONSE BUT SO WHAT DONT THEY DO IT NOW ANYWAYS, THEY SHOULD BE STOP AND NOT LET THEM MANAGE THE WHOLE NATION AS THEY PLEASED.

Anonymous said...

It's hardly a normal market. Frequently the "consumers" are hospitals and insurance providers, not the general public.

And since there is no accountability for pricing drug companies can charge whatever they want, citing costs and risks of development. Patents protect this artificially high price for 6 years. Are you familiar with the concept of a monopoly?? Becuase that's what a drug company with a new drug is.

They can put any price on a medicine because we put an infinate price on health/life.