Up to 90% of people in developing countries still buy medicines through out-of-pocket payments. Spending on medicines can be catastrophic. Medicines also constitute a major part of national health budgets (second only to staff costs). For these reasons, ensuring low and affordable medicine prices is crucial for all countries seeking to move towards universal health care, and to reduce economic burdens on households.
Securing adequate supplies of medicines is a shared responsibility. It is dependent upon national governments implementing the right policies, pharmaceutical companies producing affordable and appropriate medicines, and the international community promoting policies to ensure developing countries can obtain quality medicines at affordable prices. This is where recent progress on driving down medicines costs in Burkina Faso offers some interesting insights.
The ‘Burkinabe’ system is based on a rationalised supply structure combined with a policy to promote generic medicines, with prices set each year by ministerial decree. This ensures generic medicines are available throughout the country at a reasonable price. According to the World Health Organisation (WHO), countries could save up to 5% of their health expenditure by reducing unnecessary expenditure on medicines and using medicines more appropriately. Underuse of generic medicines is a key driver of inefficiency. Generics cost between 20% and 90% less than branded medicines and promoting rational use is an effective method to reduce health spending.
In Burkina Faso all medicines supplied to the public health sector come through CAMEG (Office for the Purchase of Essential Generic Drugs), a private not-for-profit organization that exclusively sells generics. An exception is made for hospitals to allow the procurement of brand name medicines from private wholesalers when needed, e.g. when no generic version exists. As well as supplying the public sector CAMEG also caters for private pharmacies, NGOs, and the Global Fund, which use it as an intermediary for the supply of medicines for HIV, tuberculosis and malaria. CAMEG is highly effective and efficient in its procurement strategies. While African governments typically pay 34% above the international reference price, a 2010 study on the prices, availability and affordability of medicines in Burkina Faso shows that the prices offered by CAMEG are similar to international reference prices.
In terms of availability, Burkina Faso scores quite well. The same 2010 study shows that a basket of 50 medicines was available in 73% of the health centres, compared to an average availability of 40% in the African region and less than 60% in all WHO regions. However, while in the lower level facilities availability is very good, hospitals worryingly lack medicines (65% for generics and 1.2% for branded medicines). As a consequence patients who cannot be treated in lower level facilities are forced to buy their medicines from private pharmacies where prices are considerably higher.
Access to medicines to treat chronic non-communicable diseases such as cancer or diabetes and newer HIV/AIDS medicine is also problematic. These medicines are often protected by patent rights in key producing countries such as India, South Africa and Brazil, and so generic equivalents are not available for countries like Burkina Faso. In order to address this challenge Burkina Faso should urgently follow the advice of UNAIDS, WHO and UNDP by fully implementing available TRIPS flexibilities. This should include nullification of any intellectual property rules for pharmaceuticals, since as a least developed country, Burkina Faso is not required to implement TRIPS consistent legislation for medicines until at least 2016. At present, the country, by adhering to the Bangui agreement, is exceeding its obligations under TRIPS. This policy should be reviewed. In the future, when the Government must fully accede to TRIPS, it should make full use of compulsory licensing to ensure its population has access to such medicines.
Burkina Faso has achieved major success in driving down the cost of medicines, at least in the public sector. However, mark-ups along the supply chain often result in final prices at the point of delivery being considerably higher. The system is also still largely based on cost recovery and 37% of medicines costs are financed by the patient. Medicines remain the single largest healthcare cost for households. Given that the majority of the population lives on less than $1.25 a day, the cost of medicines, even at low prices, represents a major challenge.
Affordability of medicines could be improved by addressing the various mark-ups in the system, improving medicines availability in hospitals and in the longer term through investments in local production of medicines either at the national or regional level. In the short term however, Burkina Faso is dependent on imports of generic medicines especially from India. This is another reason why India should not accept European demands to introduce stricter intellectual property protection, which is likely to hinder generic competition and lead to higher overall prices for importing low-income countries.
 TRIPS is the Intellectual Property framework to which all members of the World Trade Organization have to adhere. However, in order to protect public health, some flexibilities and safeguards have been explicitly introduced. These were reconfirmed in the Doha Declaration on TRIPS and public health.
 The Bangui Agreement (1977) governs intellectual property in the 16 member states of the African Intellectual Property Organization (AIPO). This agreement is incorporated as national law. It was revised in 1999 to bring the legislation into line with the TRIPS Agreement.
 Compulsory licensing is when a government allows a third party to produce the patented product or use the patented process without the consent of the patent holder. This is one of the flexibilities provided in the WTO Agreement on TRIPS on patent protection. While under the WTO agreement the compulsory licence would be open to manufacturers all over the world, the Bangui agreement limits its use to manufacturers in the African region. Considering the region’s limited production capacity, this should be reviewed.
Katrien Vervoort was the Essential Services Policy Officer for Oxfam Solidarité, Belgium until December 2011.