Estimated costs of production and potential prices for the WHO Essential Medicines List

Abstract

IntroductionThere are persistent gaps in access to affordable medicines. The WHO Model List of Essential Medicines (EML) includes medicines considered necessary for functional health systems.MethodsA generic price estimation formula was developed by reviewing published analyses of cost of production for medicines and assuming manufacture in India, which included costs of formulation, packaging, taxation and a 10% profit margin. Data on per-kilogram prices of active pharmaceutical ingredient exported from India were retrieved from an online database. Estimated prices were compared with the lowest globally available prices for HIV/AIDS, tuberculosis (TB) and malaria medicines, and current prices in the UK, South Africa and India.ResultsThe estimation formula had good predictive accuracy for HIV/AIDS, TB and malaria medicines. Estimated generic prices ranged from US$0.01 to US$1.45 per unit, with most in the lower end of this range. Lowest available prices were greater than estimated generic prices for 214/277 (77%) comparable items in the UK, 142/212 (67%) in South Africa and 118/298 (40%) in India. Lowest available prices were more than three times above estimated generic price for 47% of cases compared in the UK and 22% in South Africa.ConclusionA wide range of medicines in the EML can be profitably manufactured at very low cost. Most EML medicines are sold in the UK and South Africa at prices significantly higher than those estimated from production costs. Generic price estimation and international price comparisons could empower government price negotiations and support cost-effectiveness calculations.