Improving access to drugs: Fitting the solution to the problem


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Patricio Marquez’s post correctly  identifies lack of access  to quality medicines as one of the  constraints to poor people’s health in Africa.    But the  solutions he recommends—more public money for “essential drugs benefits”, building  resilient institutions,  and providing  physicians  with better  scientific information  and guidelines  about  drug  prescriptions—are   unlikely   by    themselves  to   improve poor   people’s   health  outcomes.

More public money.  Patricio notes that out-of-pocket expenditures are about 40 percent of total health expenditures and most of this is spent on outpatient drugs.  He assumes the reason is that countries have not adopted a program of essential drugs benefits, and the reason for the latter is lack of public resources.  But consider the following facts. 

These facts suggest that there are serious problems with the way public money is currently being spent.  And the reasons have to do with incentives.  Drugs are worth a lot in the open market, and they are easy to steal—which is why poor people don’t get them for free.  Likewise, doctors are paid regardless of whether they show up for work.  And when they are at work, they give low quality service that encourages patients to go to their private clinics, where they are charged.  Furthermore, in Indonesia, India and Tanzania, there is no correlation between measures of structural quality (like the availability of medicines) and the quality of medical advice.
In such a setting, how would allocating more public money for drugs improve poor people’s access to quality health care?

Building resilient institutions.  Acknowledging that there are “institutional weaknesses in the health system”, Patricio suggests building “resilient institutions and systems to facilitate access to and promote the rational use of medicines.”  Some of the proposals do not address the fundamental problem of incentives to deliver quality services to the poor.  For instance, he cites the use of a scratch-off labeling system in Nigeria that reduces the flow of counterfeit drugs.  That’s fine, but how will this reduce the leakage rate? Or absenteeism among doctors?  Likewise, giving physicians more knowledge and adopting clinical guidelines may improve the quality of care, since they don’t seem to be using the knowledge they already have. 

He mentions a pilot project in Zambia where district-level planners manage orders and deliver drugs more efficiently.  But this suggests the problem was lack of planning, rather than one of incentives.  When the pilot is scaled up, what incentives will the district-level planners have to deliver drugs efficiently?  And why would we favor such a system to logistics run by private sector pharmacies (Coca-Cola appears in every village in Africa with no problems) combined with direct fiscal subsidies to households for particular drugs?

Patricio’s example of using Coca-Cola’s distribution system to deliver anti-AIDS drugs in Tanzania begins to get to the heart of the matter.  The reason Coca-Cola has such an efficient supply chain is that customers pay for their drinks, so the “providers” have an incentive to deliver.  Most drugs too are private goods (in that the only beneficiary is the patient) but, in our effort to make sure poor people get access to them, we provide them for free—to everybody.  This creates a huge “rent”—the difference between the value of the drug and its market price—that is then captured by the non-poor—including the people who steal the drugs from the clinic and the doctors who are absent.  As a result, the poor—the very people the policy was intended to benefit—lose out. 

The solution therefore is not to pour more money into a leaking bucket—or provide absentee doctors with better information—but to empower poor people with the ability to hold health workers and drug providers accountable.  One way would be to charge market prices for drugs*, but give poor people (and only poor people) vouchers or additional cash to buy the drugs.  And why not do the same for clinical services?  The details will depend on country circumstances, and such schemes will face political resistance from those whose accountability is increased, but the simple principle of “money following the patient” (rather than the doctor or drug provider) could go a long way to improving poor people’s access to drugs.

* In 1982, two researchers in the Dominican Republic noticed something funny going on in the country’s primary health care centers1.  Not only was the number of daily consultations very low (14), so that doctors spent 56 minutes per day seeing patients, but the utilization of the clinic was erratic, with 20 consultations some weeks and 140 in others. The reason?

“According to the attending physician, when people knew the monthly supply of medicines had arrived, they hastened to the clinic, not in search of diagnosis but to request free medicines. In conversations with villagers we found that it was not infrequent to given chickens the antibiotics received at the clinic.”

The researchers went ahead and bravely introduced a user-cost for medicines after ensuring that particularly poor people were exempt. Subsequently,

  1. The number of consultations was minimally affected (declines of 5.7%).
  2. The fluctuations died out and consultations became more even.


1. Ugalde A and N Homedes.  Medicines and Rural Health Services: an Experiment in the Dominican Republic. In S. van der Geest and R. Whyte (eds). The Context Of Medicines In Developing Countries:  Studies In Pharmaceutical Anthropology.  Kluwer Academic Publishers. Pp: 57-79.


Shanta Devarajan

Senior Director, DEC and Acting World Bank Group Chief Economist

Jishnu Das

Lead Economist, Development Research Group, World Bank

Join the Conversation

October 24, 2012

Patricio: Exactly! By making medicines "free" you actually exacerbate the problem of unnecessary treatment that could harm future populations. You may also be interested in a paper showing that increasing the price of ACTs for malaria decreased their unnecessary use (
Where we don't agree is that we need central channels of selection, procurement, distribution and prescription. We would welcome clear evidence to the effect that such centralization delivers better care.

October 24, 2012

vaporizer agrees with "Anonymous" very much on what you said, especially with the supply chain ,) and in the article/post I think that the poor poverty stricken people, should get there meds for free, or rather for really cheap, and the non poverty stricken people should be the ones paying the burden of the poor... hence the poor people will be able to there meds for free.... and with the right supply chain management, things should pick up much easier ,) in there country.

Patricio V. Marquez
October 24, 2012

By focusing on the “leakage” of drugs and other materials before it gets to the patient, Shanta and Jishnu raise a valid concern about the cancer of corruption in the health sector. In my blog, I did recognize this to be a common problem in some countries. But I would argue that the problem is more acute. If one also considers the information asymmetries that exist between the doctors and the patients, where the decision to prescribe is sometimes “influenced” by the suppliers of the medicines, then we have a situation in which ineffective medicines and medicines with doubtful efficacy as Patel et al. 2005 found in India are being prescribed and administered or excessive prescribed leading to the waste of limited resources and in some cases to negative health outcomes (e.g., chronic use of antibiotics that contribute to the emergence of resistant strains of bacteria or the malaria parasite). And this happens in developed and developing countries alike. Take the case of the US: studies show that financial ties between the pharmaceutical industry and doctors (e.g., free trips and fees paid to attend conferences) can influence the practice of medicine as well as research results (Archives of Internal Medicine, May 11, 2009 & April 26, 2010). I think that the discussion should go beyond the “public vs. private” dichotomy, as what I am proposing in my blog can be delivered equally through public or private channels. But in either channel, systems and tools need to be in place for the appropriate selection, procurement, distribution, prescription and use of medicines. Incentives are important, but well run systems in either public or private channels are critical to deliver the correct medicine to the patient that needs it.

Rob Yates
October 24, 2012

Given the multiple factors that impact on population health it is difficult to attribute changes in health outcomes to any one particular policy. Also most of the examples of countries removing user fees have occured in only the last 7 years and DHS's are usually only conducted every 5 years.

But in saying this there is a lot of evidence emerging of fee removal with increased public financing leading to large increases in health are utilisation which then results in large improvements in health indicators. The examples of Thailand, Brazil and Mexico have been well documented and take a look at this recently from Niger:…

The figures from Burundi (see the latest DHS) are even more impressive and follow the introduction of free health care for pregnant women and children in 2006.

In fact I and many others are convinced that this phenomenon is one of the major contibutory factors to what the Ecomonist recently called The best story in development:
Note how this acceleration in improvements in child mortality happened over the last 7 years when so many of these countries replaced private financing (fees) with public financing. Also the authors single out rapid increases in coverage of bednets as one of the major factors in improving health outcomes but this only happened in Africa when governments switched from selling nets through social marketing to giving them away in mass FREE distributions. Perhaps this is an area of where the World Bank could do some more research

Andreas Seiter
October 23, 2012

I agree with the principle "money follows patient" as a first step to align demand with need. Public sector supply systems may not be able to keep up with the increased demand, therefore facilities will soon start buying from private providers, using the cash from the voucher income. Given the erratic pricing and quality problems in many countries, it would help if there is a central agency that negotiates prices for quality medicines, so that facilities can buy from one or more defined suppliers based on agreed price lists. In developed countries, this is called "pharmacy benefit management". I would like to introduce this term into our health systems glossary of terms and look at it as a distinct element at the interface of financing, payment system and service provision that is critical for ensuring access to quality medicines and cost-efficient use of resources.

Miles Mudzviti
October 23, 2012

I would agree that giving more knowledge and adopting clinical guidelines may improve the quality of care. You mention the tendency by physicians to provide low quality service to drive patients to their private clinics, which I feel drives more and more people to bypass their service (at least via public health institutions for those who cannot afford their private fees) and knowing that for most people in sub-Saharan Africa, probably the first point of contact with the health system is via a community pharmacist, I feel empowering pharmacists to improve the interventions they bring to healthcare delivery should be a integral part of promoting the rational use of medicines. Poor service, coupled with high user fees, tends to increasingly drive patients to self prescription and here you will also find 'pharmacists' ready to oblige.

You also mention the huge "rent" ie difference between the market price and value of the drugs. Given that the majority, about 90%, of the budget for drugs purchases in most sub-Saharan African countries are financed by donors (public funding), what role do funders programmes have in creating that false economy. One particular focus should also be what role local manufacturers can play in improving access to medicines and specifically, how funders programmes, some of which have no doubt been effective in reducing prices for therapies like ACTs, can also speak to local manufacturing concerns on the false drugs economy that perhaps some of these programmes help to shape.

October 25, 2012

Rob: Many thanks for your further comments, which give us the opportunity to clarify further. Your comments also convinced us that we need a broader piece on user-fees, which we will put out shortly, and hope that you will contribute to it with your valuable insights.

First, infant mortality in Africa has indeed declined rapidly in the new millennium. The World Bank has been working on this, and the Economist article you highlight was partly provoked by, and cites, the work of our colleague, Gabriel Demombynes, who along with Michael Clemens at the Center for Global Development has been doing valuable analysis on this front.

Second, as you point out, there are multiple pathways to better health. The one thing we know from all the OECD experience is that big declines in infant mortality happen when governments focused and committed to reducing population exposure to infectious diseases. Typically, this was done through the provision of "big public goods"--clean water, better sanitation, draining of swamps, more and better vaccination.

Our post, and all of our responses to comments, are highly supportive of government action to solve problems of under-provision of preventive measures to reduce exposure to infectious diseases.This is also what we appear to be seeing in Africa. One example is the recent improvement in sanitation (though still short of the MDG), which helps reduce illnesses like childhood diarrhea. Another is the large-scale provision of ITN bed-nets, which help reduce the spread of malaria. In the case of malaria, the arrival of artemisinin-combination therapies (ACT) was also, no doubt, a contributor.

Let us be absolutely clear about this: There is a fundamental role for the government to play in the financing of public goods that are under-provided due to contagion externalities. In fact, we believe that these goods are over-privatized: For instance, the public goods of draining swamps and improving sewage systems in urban areas may be a better alternative than providing (private) bed-nets.

Third, careful evaluations of what drives health outcomes are necessary precisely to understand the specific pathways and therefore guide policies in the future. As we know from Clemens and Demombynes’ critique of the Millennium Village Project, infant mortality declines in the project villages were no larger than in comparable areas in Kenya--despite the fact that the original article published in Lancet showed huge improvements. The studies we have pointed to try to get at these issues by constructing the necessary and careful counterfactuals for each of these policies, and they should make us think very hard about how to move forward.

Fourth, when it comes to curative care, we are never advocating that poor people should be paying for all of their health care. For us, that violates fundamental notions of equity and what it means to fight towards a world free of poverty. Yet, we also hold in great respect the decisions that the poor make, particularly given the oft-onerous conditions under which these decisions are forced on them. And in many countries in Sub-Saharan Africa and South Asia, the poor choose in favor of fee-paying private services ( Unless we also argue that the poor cannot make informed judgments (something on which there is very little evidence), this is a telling remark about the quality of services in the public sector that is available to them.

The fundamental question then is: What are the set of institutional arrangements, or the process of institutional change, that can lead to better quality health care for the poor--whether from the public or private sector. Some of this may require greater accountability from communities. Some of it may require more top-down accountability measures in public clinics. Some of it may require financial incentives for providers (as in Rwanda) and, yes, some it may require separating the financing of health care from its provision--whether through instruments such as vouchers or subsidized private insurance (as in India). To what extent these subsidies should be focused on medical advice versus medicines and for what illnesses should medicines be subsidized are all hard policy choices that require a clear understanding of the conditions under which the poor can receive better care, as well as a framework of the rationales for government action.

But what is absolutely critical is that we experiment and evaluate moving forward, so that we don't repeat the mistakes of the past. Such a repetition would continue to represent a tragedy, one that we can ill-afford at this time.

Jishnu and Shanta

Patricio V. Marquez
October 25, 2012

Given ongoing south-south learning exchanges that are taking place between some of the African and Latin American countries, particularly with Brazil, perhaps it would be of relevance to highlight the Brazilian experience:

--As it widely acknowleged, the reliable distribution of AIDS treatment drugs through the public system in Brazil has contributed since the early 2000s to significantly reduce AIDS-related hospitalizations, incidence of opportunistic infections, and mortality.

Also, it would be appropaite to cite the results of a cross-sectional study using WHO drug indicators by Oliveira Silva Naves and Silver (Rev. Saúde Pública vol.39 no.2 São Paulo Apr. 2005) in the Federal District of Brazilia, that has a population of 2 millon inhabitants. The results show:

--Significant progress has been achieved in assuring a fair drug stock for most primary care centers, physician's compliance with the Essential Drug List, and use of the generic denomination while prescribing: Of prescribed and non-dispensed drugs, 85.3% and 60.6% were on the local essential drug list (EDL) respectively. On average 83.2% of 40 essential drugs were in stock. The mean number of drugs per prescription was 2.3, 85.3% of prescribed drugs were on the EDL, 73.2% were prescribed using the generic denomination.

--Drugs for specific vertical programs such as tuberculosis, as well as for contraception programs, were regularly supplied to the centers.

--The observed proportion of antibiotics (26.4%) and injectable drugs (7.5%) prescribed may be considered acceptable according to WHO recommendations (20-30% and less than 10%, respectively). Moreover, most antibiotics and injectable drugs prescribed were recommended for primary care treatment.

But, there is still much to be improved. The most dramatic problems identified by the study at that time were related to the extremely poor level of patient knowledge and understanding. Less than one in five patients understood what drug they were to take and how to take it. Similar results were found in other Brazilian cities such as Campo Grande, Salvador, Ribeirão Preto, and Fortaleza. As noted in the study, this low level of information can have serious consequences regarding the effectiveness and efficiency of the investment in essential drugs. Silva et al in another study cited in this study reported that, after outpatient visits in Rio Grande do Sul, only 34% had good knowledge regarding the drugs obtained. According to Fletcher, the term compliance refers to the degree in which patients follow the prescribed medical advice.

Although initial analysis indicates that noncompliance to prescribed actions might suggest negligence or unwillingness to submit to medical advice, the study rightly notes that in fact many factors may contribute to that such as inadequate knowledge or prescription understanding. That, in turn, may be related to factors such as short visit and dispensing times, no pharmaceutical care practices in place, no pharmacy-generated labelling at the time of prescription, high frequency of illegible prescriptions, illiteracy, poorly trained workers performing the task of drug dispensing and low population schooling. Again, as suggested in my blog, this calls for strengthening processes and systems, including the adoption of clinical guidelines tied to funding allocations to the facilities or teams (an incentive to promote rational use of drugs).

--The study concludes by stating that major progress in the quality of pharmaceutical assistance can be achieved by relatively low cost through investments in improving information to patients and more rational use.

October 24, 2012

Thanks for your comment. The only problem with your proposal is that governments have a limited amount to spend on health, so that an extra dollar devoted to chronic illness will reduce the amount spent on infectious diseases. Yet, the poor are 3-5 times more likely to contract infectious diseases as chronic illnesses (which affect the rich and poor equally). Furthermore, infectious diseases are, by definition, infectious. If left untreated, they can spread further through the population. Chronic illnesses do not have this property. Finally, the biggest “bang for the buck” with chronic illnesses is by making sure people get diagnosed in time—something that rarely happens, and is one of the biggest life-saving interventions for the poor (see Das, Jishnu and Jeffrey Hammer, “Chronic Illness in India,” in Kaushik Basu, ed., The Oxford Companion to the Economics of India, Oxford: Oxford University Press). 
Our proposal: Instead of focusing on drugs for the rich, focus on diagnosis for the poor.

October 24, 2012

Andreas, we could not agree more that there is something fundamentally immoral with the way drugs are priced in different countries, and one of the major roles of international agencies should be to make drug prices more equitable (as was done for HIV/AIDS).
This really struck us when we started looking at the excellent work put together by health action international (, which collects drug-prices for the same drug in multiple countries. For instance, in their global briefing note on insulin (… ), the lowest prices for a 10ml vial of soluble human insulin ranged from $2.57 to $5.87, and among the six countries with the lowest prices, 3 were in South Asia (India, Pakistan and Nepal)---all of which are fed by competition from the huge generic drug industry in India. The highest prices are in Congo with $47.60, West Bank/Gaza with $42.67, and Indonesia with $39.50.
Why do we ask poor people in Congo to pay 15 times more than in Nepal?

October 24, 2012

Rob: The "vast research" on this topic only reveals that lowering user fees increases use. In Kenya, charging for bed-nets decreased their use, as we would expect for any commodity, such as apples. That people buy fewer apples when the price goes up is well-accepted and, in fact, the elasticities that these studies find with respect to price declines are well within the ranges for normal goods. 
There is much less consensus about whether lowering user fees improves health outcomes, which is what we care about.
1. A 2009 RCT from Ghana shows that removing user fees increases use, but not outcomes (doi: 10.1371/journal.pmed.1000007.)
2. Alessandro Tarozzi and Aprajit Mahajan's work from Orissa shows that lowering prices of bednets increases their use (as in the original Cohen-Dupas study), but has no impact on either malaria or anemia (something that was not measured in Cohen-Dupas). Http://
3.  Dupas' own new work shows that once people learn about the efficacy of bednets, they are much more likely to purchase them. This argues for an introductory subsidy, which the private market would figure out (as it has for soap, for mosquito repellants etc.), if market distortions and poor policy didn't rule them out. Http://
4. You may be interested in our own comments on price-declines and policy in the Boston Review (… )
We refer to a 30-year old study precisely to point out that good lessons were lost.
Finally, it’s important to conceptually separate financing and provision. Our post argued that there are no efficiency or equity rationales for provision of medicines in public clinics, and that financing should be means-tested. In fact, by coupling medication with advice, the quality of advice--which is in short supply--may actually suffer.
Bottom-line: It’s worth discussing provision versus financing and subsidies for better medical advice and subsidies for better medicines given the new literature over the last decade.

Rob Yates
October 23, 2012

What I find astonishing about this blog is that charging user fees for medicines and basic services with exemptions for the poor is presented as a new idea. Everyone knows that these policies were inflicted on the developing world by the Bank in the late 1980s and were a complete failure. Access to essential health services plummeted and because exemptions for the poor were unenforceable this meant that poor and vulnerable were effectively excluded. Rather than quote a small thirty year old study I would suggest checking the vast research literature on this topic - MIT's Poverty Action Lab is a good place to start with lots of large RCTs. Also you may want to refer to the Bank's latest HNP strategy which, in para 105, says that the Bank will support countries that want to remove user fees.

Krystal Musyoki
October 24, 2012

Undoubtedly the issue of increased access to drugs is am important one,and as has been at top of developing states agenda with increasing enthusiasm.While many of the problems cited in this article apply across the board,possible solutions may not.Moreover,while the idea that empowering the poor does carry a lot of merit.It is still ambiguous in its assistance and unhelpful to those who urgently require treatment.This is not to undermine the power that empowerment endows upon people.The issue here is facilitating treatment for someone in need of it presently to enable them to better the quality of their or their children's lives. More so,as is the reality of many developing states,especially the poor,empowerment is only useful to the extent that the empowered can exercise it,a problem further compounded by illiteracy, and, the futility of seeking out the individuals or institutions to hold to account when patients are too sickly to or even dead.Therefore,while ideologically it is a understandable approach to ensuring treatment,it does not deal with the real problem that is, those who are already tasked with ensuring these services.A possible solution to this would be the part privatization of Health systems,performance linked remuneration.

Ranu Dhillon
November 22, 2012

I have worked in India and several African countries mainly as a health administrator, clinician, and policy advisor and secondarily as a researcher. I am all for evidence-based thinking and have seen how this is sorely lacking in the formulation of health policy. Having suffered the frustrations of managing public systems where significant effort is spent motivating people to do what they are already paid to, I am also strongly attracted to market and performance-based mechanisms that use incentives to compel performance.

With that said, I find this discussion narrow in its perspective and focused on the ‘trees’ of specific theoretical points with a need to take a step back and look at the overall ‘forest.’ When I read some of what is proposed about fees, even when seemingly supported by research studies, the conversation seems to be describing a situation at odds with the reality I see on the ground. That makes me think that either I am grossly misperceiving reality and/or the research, in composite, is not forming a coherent picture or is missing angles of analysis not readily conducive to theory or focused empirical research.

With this in mind, a few thoughts:

The reason why health systems underperform is multifactorial with different issues playing a greater or smaller role in different settings. Lack of political will and leadership. Weak institutions and operations. Poor planning, management, and implementation capacity. Lack of adequate resources. Absence of internal and public accountability. Inability to attract talent. Undignified salaries. Etc.

While incentives created through health financing policy can go a long way in spurring improvements on many of these issues, financial incentives alone cannot resolve these problems and also come with considerable tradeoffs, especially in poor communities where market and public accountability mechanisms are weak.
Fees, in particular, create financial barriers for the poor making access to care prohibitive for many. Poor people cannot protest unreliable service delivery by withdrawing money that never had in the first place. Potential mitigating strategies like targeted subsidies or even comprehensive public financing of non-public service provision entail additional challenges and implications that merit serious consideration (I examine this below).

Furthermore, while financial incentives could help induce some performance improvements, they cannot wholly absolve the need for building institutions that work, strengthening supply chains, establishing appropriate monitoring and supervision, bolstering management capacity, etc. Achieving improved outcomes and making health systems work is a complex and requires many factors that are necessary, but may not be independently sufficient (and, hence, why many initiatives do not achieve changes in outcomes when done in isolation). No health financing policy may work as a ‘magic bullet’ that single-handedly corrects all health system deficiencies or adequately aligns incentives without generating unacceptable equity costs.

Targeting subsidies to the poor is a great theoretical idea but ‘exemption’ programs like this have been tried and have rarely worked. This is because of the challenge of identifying who can or cannot pay in communities with ubiquitous poverty and income that is precarious, seasonal, and informal and, thus, insecure, highly variable even within the same year, and difficult to measure. This makes subsidy-targeting extremely challenging and time, effort, and cost-intensive (particularly if done at scale). I have worked on subsidy-targeting programs in Rwanda and Ghana and can attest to this. In Rwanda, such wealth ranking has had more success but that is in part due to unique preexisting community organizational structures (with households already administered in localized units of 10 to 20 households), high population density even in rural areas, and uniquely effective public administration that enjoys strong authority and popular trust.

The idea of attaching subsidies to particular medicines or illnesses is also problematic. Patients will usually not know what illness they have or medicines they will need until after a healthcare worker sees them. Since many illnesses can present with similar symptoms, they will not know whether the care they are seeking will be ‘covered’ until they have already been seen, at which point, if the diagnosis is an ‘uncovered’ illness or requires ‘uncovered’ medicines, they are stuck with a bill. This would discourage care-seeking behavior generally. For this reason, any medication or diagnosis-specific subsidy would have to cover a range of conditions (i.e., the entire spectrum of basic primary care infections) or a comprehensive package of essential medications. This is what many countries are already trying to do. For boosting the quality of diagnosis and treatment, training and supervision (particularly of prescribing habits) is indispensable and cannot be substituted for by financial incentives.

An approach where every person’s healthcare needs were publicly financed and service delivery provided by the private and NGO sector could theoretically work and use market mechanisms to produce competitive, quality services. However, this scenario would require strong oversight and regulation of non-public healthcare delivery to prevent inappropriate and unsafe practices (i.e., women sent for unnecessary c-sections) and guard against the emergence of a two-tiered system where wealthier people who can ‘top-up’ their public insurance get better care and the poor who are solely publicly funded receive lower quality services. In addition, governments contracting out provision in this way must ensure that a sufficient range of care is reliably provided for remotely located, poor, or otherwise marginalized populations where financial incentives may not be sufficient to attract private and NGO providers (i.e., private doctors in India who refuse to treat low-caste patients no matter how much money they are offered, a situation that I have personally encountered and is not exceptional). This type and degree of oversight and regulation requires remedying the same institutional failures, corruption, and weak public administration that undermine direct public service delivery and compel the call for non-public provision in the first place.

The research showing that people will pay for private care in the face of non-performing public systems makes an obvious point. However, in my experience, a greater proportion of people go without any care at all in the face of unaffordable fees for private or public services and non-performing public services. In my experience, the brunt of undue mortality, particularly child and maternal deaths, happens at home among patients who never reach any kind of care at all. Misdiagnosis, while certainly an issue, is not the problem in these cases; no diagnosis is.

Even if no barriers to access are faced and service delivery is optimized, many communities may still not adequately seek care due to a limited history of interfacing with formal health systems, cultural barriers, and low health awareness. Increasing demand – by removing fees, considering CCTs, tackling health-seeking behavior – would create the strongest incentive for service delivery to perform with underperformance met with public outcry. Fees, at this stage, would be less a weapon of accountability and, in many places, discourage already weak demand.

October 23, 2012

Besides poverty, the delivery of medicines for chronic patients and after hospital discharge is essential and targets a large groups of patients, mainly elderly despite the low life expectancy. This delivery system can be improved by improving the management of the supply chain by integrating information between hospitals and pharmacies, thus avoiding primary care centers where the problems of absenteeism is higher. Also, it would decrease bad prescription and adverse events for these patients, and then increase adherence.

On the demand side, the vouchers are a good idea, but linking them to income level may be more difficult than linking them to type of medicine. Tax payers with high and medium levels of income should have also the right of free medicine for "unavoidable" treatments, such as cardiovascular, cancer, ...

November 15, 2012

According to the World Health Organization, about 10 million people—most of them in low- and middle-income countries—die needlessly every year because they do not have access to existing medicines and vaccines. Countless others suffer from neglected tropical diseases, such as sleeping sickness, lymphatic filariasis, and blinding trachoma, for which there are still too few safe or effective medicines. Drug companies have traditionally been reluctant to develop drugs for neglected diseases because the patients are too poor to pay for them, so there is no financial incentive for drug development.

Comprehensive solutions are thus needed to increase both access to existing medicines and research on neglected diseases. These solutions must involve strengthening health-care systems in poor countries, increasing financial flows for the most pressing public health crises, and better matching our research and development efforts to the needs of the poor. The challenges of making such wholesale changes are daunting. First, it is important to note that for any given product, a pharmaceutical company's bottom line would remain relatively intact. Equitable Access Licensing works by dividing the world pharmaceutical market between rich and poor countries. Consider, for example, any university innovation that has been developed into a drug. That drug can remain under patent protection in high-income countries, where the pharmaceutical industry earns the vast majority of its revenue. Generic competition is allowed only in markets where there is little access—and, therefore, little revenue—in the first place.

Let me know what you think about this report


Ms. Nisha Agrawal
November 05, 2012

My colleagues at Oxfam and I were appalled to read this post advocating for user fees for essential medicines -- and other essential health services -- in developing countries. The blog ignores the large and growing body of evidence that these "out of pocket" fees block access to health services, especially for the poor and for women, and overlooks evidence that it is extremely difficult to target the poor effectively with subsidies or vouchers. In fact, new research from the Lancet shows that no country has achieved universal health coverage so long as the health system relies predominantly on out-of-pocket payments.

In India, evidence from across the country shows that the poor are affected disproportionately by user fees. The Common Review Mission of the National Rural Health Mission found that in specific states like Madhya Pradesh and Chhattisgarh, only 2.47% of patients were exempted from charges for services on the basis of "Below Poverty Line" (BPL) status, although the BPL proportion of the population is 37%. On the other hand, a simulation analysis of 20 African countries published in the British Medical Journal in 2005 calculated that the abolition of user fees could prevent approximately 233,000 under-5 child deaths annually. And there is ample evidence from Africa showing a substantial increase in utilization of services after fees were abolished, including in the 12 countries that have abolished fees for maternal and/or child health over the last decade.

The blog also presents various ideological and ill-supported claims as facts, tying the use of public health financing to doctor incompetence and lack of effort, and to health worker absenteeism. It also makes the argument that people use medicines (and other health services) frivolously when these are offered free of charge. There is little evidence to show that user fees prevent frivolous demand. Rather, user fees have been an ineffective, inefficient and inequitable financing mechanism that, in the words of WHO's Margaret Chan, have "punished the poor." This blog takes us back 25 years, to the days when the Bank was pushing user fees in developing countries, with disastrous consequences for the world's poorest people.

The World Bank has moved on from those days. Its current Health, Nutrition and Population strategy says the Bank will support interested countries to remove user fees (although it puts up too many obstacles to providing that support, such as already having financing and planning in place), and the Bank has done fantastic work in some countries, such as in Sierra Leone where it recently supported a promising program to remove fees for maternal and child health, which is seeing early success. Furthermore, President Kim made a speech at the UN last month in which he acknowledged that high out-of-pocket healthcare expenditures are among the leading causes of poverty. So what is the Bank's real policy on this issue?

Nisha Agrawal
Executive Director
Oxfam India

Bob Yates
November 12, 2012

Yes I would be delighted to contribute to your next piece on user fees and might I suggest that you also consult policymakers in developing countries, because I am concerned that what you are advocating is going against global trends.

Rather than increasing the role of private voluntary financing of heath care (including for medicines) the trend across the developing world is for governments to socialize health financing, both in terms of raising revenues and purchasing of services. This is because publicly organized financing systems (but not necessarily service providers) are more efficient and equitable than private systems, which leave purchasing decisions to individual health care consumers. I don’t doubt that currently many poor people bypass inadequately financed public health providers for fee charging providers particularly when the former lack essential medicines. This is perfectly rational behavior.

But given the huge information asymmetry between providers and purchasers, patients are extremely vulnerable to being ripped off in the private market. I know this from a recent experience when a family member was charged $130 by a doctor for 3 medicines to treat a throat infection and even then the wrong antibiotic was prescribed. Will poor people given additional purchasing power with vouchers or additional cash fare any better?

Recognising these inherent market failures countries across the globe are trying to take the financial incentives out of prescribing medicines and diagnostic tests. This has happened in countries across Latin America (most famously in Brazil and Mexico), Asia (Malaysia, Thailand, Nepal, Sri Lanka) and increasingly in Africa too (South Africa, Ghana and many countries now providing free care to pregnant women and children) .

China is a fascinating example of a country which previously had a publicly financed system, allowed private medical sales to take over and is now re-socialising its financing system with the specific objective of removing financial incentives to oversupply medicines Furthermore learning from all these lessons India is about to launch its UHC reforms with a massive initiative to provide free generic medicines to all citizens.…

All these countries have recognized that the health care market is different to other markets for goods and services and requires strong state intervention to protect consumers and ensure that the healthy wealthy cross-subsidise the sicker poor. Increasingly Governments are therefore looking to replace inefficient and inequitable private voluntary financing with compulsory, pre-paid, public mechanisms such as tax revenues and social insurance contributions. For all the countries mentioned above plus the whole of the OECD (with one glaring exception) this is proving to be the key to achieving universal health coverage.

Drug Mark
February 20, 2013

Perhaps even more alarming is the fact that while most illnesses - especially infectious diseases - are preventable or treatable with existing medicines, the World Health Organization (WHO) estimates that over 1.7 billion people - nearly one-third of the world's population - have inadequate or no access to these essential medicines.3 Moreover, another study recently found that 10 million children a year die from preventable diseases and conditions, with almost all these deaths occurring in poor nations.4 Another study found that prompt diagnosis and treatment of health problems in Africa and Southeast Asia alone could save approximately 4 million lives each year.5 In addition, resistance to existing treatments due to improper use or over-exposure plays a significant role in increasing the severity of the public health crises in many nations.6 Other studies link health with the economic prosperity of nations and persuasively demonstrate the dramatic role the HIV/AIDS epidemic has played in the declining economic growth in sub-Saharan Africa.7 The consequences of the vicious cycle between poverty and illness are clear8 and the situation will become even more untenable unless the world comes together to resolve the public health crisis engulfing much of the developing world.

Fortunately, and in large part due to the tireless efforts of several well-funded non-governmental organisations (NGOs),9 health-related issues of developing countries, and more particularly the issue of accessibility to essential medicines, have garnered much worldwide attention in recent years.10 Unfortunately, public debate on the issue is most often limited to blaming the pharmaceutical industry and patent regulations under the World Trade Organization (WTO) and its Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)11 for the lack of accessibility and affordability of much needed drugs in developing countries. While it may be 'in vogue' to attack the pharmaceutical industry, TRIPS and the WTO more generally,12 such attacks are usually simplistic, myopic and apart from adding little substance to the debate, they divert precious time and resources away from efforts that really count toward alleviating the suffering caused by the devastating health crisis. In reality,the impact of patents on public health is moot for many in the developing countries where inadequate healthcare and health infrastructure poses a much more immediate and significant problem. Put simply, patents do not even come into consideration if one cannot get a diagnosis by virtue of the fact that they do not have access to a doctor, or more accurately, a properly trained and equipped doctor.

March 26, 2013

he blog also presents various ideological and ill-supported claims as facts, tying the use of public health financing to doctor incompetence and lack of effort, and to health worker absenteeism. It also makes the argument that people use medicines (and other health services) frivolously when these are offered free of charge. There is little evidence to show that user fees prevent frivolous demand. Rather, user fees have been an ineffective, inefficient and inequitable financing mechanism that, in the words of WHO's Margaret Chan, have "punished the poor." This blog takes us back 25 years, to the days when the Bank was pushing user fees in developing countries, with disastrous consequences for the world's poorest people.

The World Bank has moved on from those days. Its current Health, Nutrition and Population strategy says the Bank will support interested countries to remove user fees (although it puts up too many obstacles to providing that support, such as already having financing and planning in place), and the Bank has done fantastic work in some countries, such as in Sierra Leone where it recently supported a promising program to remove fees for maternal and child health, which is seeing early success. Furthermore, President Kim made a speech at the UN last month in which he acknowledged that high out-of-pocket healthcare expenditures are among the leading causes of poverty. So what is the Bank's real policy on this issue?

March 26, 2013

Yes more it is available, less is the competition in the market, it works on simple logic of demand and supply.

May 14, 2013

correctly identifies lack of access to quality medicines as one of the constraints to poor people's health in Africa. But the solutions he recommends--more public money for "essential drugs benefits", building resilient institutions, and providing physicians with better scientific information and guidelines about drug prescriptions--are unlikely by themselves to improve poor people's health outcomes.