Key Points
• The average percentage price change for retail pharmaceuticals between December 2021 and October 2022 was found to be 178.6%
• Price increases are highest with generic medicines at 179.7%. These medicines are the backbone of Ghana’s Pharmaceutical sector and the National Health Insurance Scheme (NHIS)
• The national average change in price for chronic disease medication that should be taken for the rest of a patient’s life was found to be 151.3% over the 10 months of the survey.
• Prices of medicines for treating infectious diseases like malaria and typhoid fever had increased by 161.4% in 10 months.
• The average disparity between what the NHIS reimburses and the average prices of medicines in community pharmacies as of October 2022 was found to be 38.7%.
• The current average reimbursement timelines of 2 months to 9 months for health insurance schemes are putting the pharmaceutical sector under severe pressure and may lead to many Community Pharmacies folding up.
• There needs to be a rethink around the current funding model for the pharmaceutical sector to prevent any possible risks to patients. Introduction Healthcare is at the heart of most societies. This is because it drives the productivity of the labor force. It is often said that a healthy workforce is a highly productive one.
Introduction
Healthcare is therefore classified as part of public service goods. The efficiency of the sector is seen by many as a barometer of the quality of governance a country enjoys.
At the heart of healthcare provision, is the use of medicines. Therefore, a high medicine bill can have a significant impact on the cost of healthcare to the population.
This impact is worse in emerging economies where most patients fund healthcare out of pocket. Where insurance schemes exist in many of these emerging economies, the response rate to changes and shocks is generally very slow to mitigate the negative impact on patients.
This, in turn, could influence adversely the country’s ability to achieve Universal Health Coverage by 2030 in line with Sustainable Development Goal 3 which requires among others that there is access to safe and effective medicines and vaccines for all.
In recent months there has been anecdotal evidence that the cost of medicines in Ghana had been increasing at a rate unprecedented in over a decade. However, there was no quantitative data to substantiate this. Our goal is to obtain the relevant data to substantiate or disprove this notion.
Ghana’s pharmaceutical sector is heavily reliant on foreign exchange, with an estimated 70% of all products being imported whilst the remaining 30% is produced locally. With local manufacture, it is estimated that 83% of all materials are also imported, making the sector heavily sensitive to foreign exchange rate fluctuations.
Another contributor to pricing in the sector is the Bank of Ghana policy rate that impacts the cost of borrowing. Historically, there seems to be very little information available on Ghana’s pharmacy supply chainbased inflation.
This, we believe is a disservice as it makes adequate planning and health investment projections unreliable. A request was recently made by the Ghana Chamber of Pharmacy that pharmaceuticals be included in the basket of goods used by the Ghana Statistical Service to measure inflation.
Health funding in the country by citizens is through two main means i.e., through insurance schemes (private and the National Health Insurance Scheme) and out-of-pocket payments. A small percentage of individuals would have their employers offering free healthcare or may enjoy a system where the employer is billed for employee healthcare costs.
There are reports that co-payment which combines insurance and out-of-pocket payments is on the rise too. This project set out to quantify the variation in prices of medicines available in community pharmacies across the country. The distribution of these community pharmacy facilities is uneven across the country with many concentrated in the urban and peri-urban areas.
The north-south divide is also marked by most pharmacies located in the southern sector. Based on data obtained from the Ghana Pharmacy Council 64.3% of all pharmacies were in the Greater Accra Region, 19.6% in Ashanti, with 4.3% were spread between the four regions in the northmost part of the country.
The remaining 11.8% are distributed amongst the other 10 regions. Due to this uneven spread, the country was split into six belts (one for other coastal regions excluding Greater Accra, and Greater Accra, and two each for the middle, and northern belts) to ensure the data capture had a national scope.
Method
Twenty pharmaceutical products were selected to give a balance between generic and proprietary medicines as well as those used for the management of chronic and infectious diseases. This was to enable us to estimate the price change dynamics nationally and the differential impact any pricing variations were having on different segments of the population.
The Data collection spanned the period from December 2021 to October 2022. The data was collected over three weeks in October 2022. Participants were asked to provide retail price information for the selected products bimonthly over the period. A total of 212 pharmacies were included in the survey representing 4.4% of the total number of pharmacies in Ghana.
38 pharmacies (17.9%) were unreachable using the phone numbers provided. The price variation data provided is based on 174 pharmacies. Of this number, 11 (6.4%) opted out, 81 (46.6%) had the full complement of data for the survey period, 35 (20.1%) had partial data covering more than one but less than the six data points required with 47 (27%) providing data for the month of October only.
Using 11 routinely used generic medicines listed on the NHIS Medicines List, we estimated the variance between the reimbursement prices and the mean retail prices across the country based on the data collected.
Findings
On average the percentage price change of retail pharmaceuticals across the country between December 2021 and October 2022 was found to be 178.6%.
There was a steady increase from December 2021 to June 2022 with an accelerated trend between June and October. This trend is in line with the increase in inflation, bank rates for loans, and the depreciation of the Cedi. As these accelerated, there was an acceleration.
The highest percentage change in prices was found in the Coastal belt area around the Greater Accra region. With an average of 205.2% change in prices of medicines between December 2021 and October 2022.
The least alteration in prices occurred in the belt covered by the Central and Western regions (143.6%) upward adjustment in prices over the same period. Though prices in the Middle and Northern belts had also increased significantly they were closer to the national average.
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