Inter-Country Price-Disparity Study May See Moroccan Government Slash Drug Prices Up to 80%

Massive Drug-Price Disparity Revealed in Morocco

A report prepared by the Moroccan House of Representatives for the Finance Committee has not only found drug prices in Morocco to be more expensive than other countries, but also that a massive disparity between different brands of the same molecule exists within the domestic market.

The findings of the report in question have been the result of a study initiated in February 2008, with drug prices in Morocco compared with those in Maghreb neighbour Tunisia, France, and New Zealand. The findings of the report provide an insight into the inequitable access to drugs within the Moroccan market.

The authors of the report found that innovative drug prices in Tunisia can be anywhere between 30% to 189% lower than those in Morocco; similar findings were also apparent for French and New Zealand branded drug prices, where medicines were found to be 20–70% and 2–15% cheaper respectively. The price differential on different brands of the same molecule also fluctuates massively—with up to a 600% difference in prices based on the company and/or point of sale.

Inequitable access is most rampant, as Moroccans seem to prefer brand-name drugs compared to their generic counterparts, in spite of the latter being significantly cheaper. Nevertheless, the cheapest generics in Morocco are still more expensive than equivalent drugs available in Tunisia, France, or New Zealand.

Proposed Solutions to Increase Drug Access

The committee outlined a list of 19 recommendations to help reduce the existing price disparities in the Moroccan pharma market. The key recommendations are as follows:

• The creation of a new government body with the task of setting prices and reimbursement levels on drugs. The body will consist of members of the Ministry of Health (MoH), health insurance authorities, pharmacists, and doctors, and would ensure greater balance in drug prices. The creation of this body would mean that price- and reimbursement-rate-setting functions do not fall under the purview of the MoH anymore.
• Set up centralised procurement policies to give the government greater power in negotiating lower prices for drugs entering the public sector.
• Change the methods currently used for reimbursement, which will see patients no longer reimbursed for purchasing the most expensive brand. Furthermore, the reimbursement band for compulsory insurance should be set to refund the price on drugs 20% above the price of the cheapest generic rather than the current most expensive generic. This would see the prices of drugs across the board reduced by up to 40%.
• Drug prices should not be set in relation to the country of origin, or cost of manufacturing or import, but rather by average affordability for Moroccans. Furthermore, compulsory licences can be issued on expensive patented drugs, particularly those for chronic diseases, given that the domestic consumption of these drugs is increasing year-on-year (y/y) by 40%. The growth rate in the domestic consumption of drugs outside this category is only 5% y/y. The issuance of compulsory licences on the 10 major patented drugs will see prices drop by 80%.

Outlook and Implications

The report has proposed some drastic reforms to the Moroccan health system, with the country's health minister, Yasmina Baddou, even admitting to the fact that the procedures for setting prices in the county needed to be revised. Not surprisingly, the findings of the controversial report have given rise to much debate, with pharmacies and drug firms opposing any price cuts. According to Lghaouti Alogdv, a representative from the national representative body for pharmacists, additional taxes, such as value-added tax (VAT), imposed on medicines in Morocco is the reason for the high prices, in contrast with denials from the MoH, and the findings of the indicated report. Other stakeholders feel that the liberalisation of the Moroccan pharma industry is to blame for the escalation in prices, in contrast with the markets in Tunisia and Algeria, where there is much support for domestic and state-run pharma facilities.

Irrespective of the rationales given for the high drug prices, the report sheds light on the fact that drastic measures are indeed required to ensure that drugs are made more accessible. As part of Morocco's healthcare strategy, Baddou had promised greater access to drugs and promotion of generics use. Although the former goal may be occurring anyway due to the government roll-out of compulsory health insurance, which covers more than half the population, the latter is clearly not happening. Given the government's strategy of increasing treatment access for chronic diseases, 100% reimbursement for most drugs (excluding HIV/ AIDS and diabetes), and increasing the number of people covered under the remit of the national health insurance, the current drug price situation may see the country unable to cope with its rising healthcare bill.

Although the report does address drug prices, it does not address other factors contributing to unequal access to medicine, such as the need for a stronger public healthcare infrastructure, a reduction in counterfeit and black market drugs, which can lead distributors to hoard drugs and sell them at higher than the permissible rates.

Related Article

• Morocco: 5 June 2008: Moroccan Ministry of Health Announces Strategy Prioritising Drug Accessibility, Affordability