Measuring Availability and Prices of Locally Produced and Imported Medicines in Sudan

Drugs are often the most important cost of health care expenditure in management process of diseases. Patients that have access to adequate and effective drugs at the time of need are most likely to be happy with treatment they receive. The availability of affordable and effective drugs is, therefore, one the most visible indicators of the quality of health services. Despite significant progress in increasing access to essential medicines in low-and middle income countries during the past decades, many o the health services still lack adequate supplies of basic medicines. Drug shortage and quality problems continue to undermine the performance of health systems through the developing world. ¹ Policy makers in developing world particularly Africa are increasingly exploring and promoting local industrial production of pharmaceutical and medical supplies and looking for improvement on coverage and affordability of quality assured medicines that meet local health needs. Meanwhile, low-income population in Sub-Saharan Africa (SSA) continue to suffer severely inadequate and exclusionary health care undermined by poor access to medicines and supplies.² Median availability of essential medicines 2007 was only 60% overall, and 56% in the public sector of low and lower middle income countries (LMICs) and have changed little in SSA countries, despite major funding efforts for HIV and TB medication. ^{3, 4} Sudan’s epidemiological profile is typical of Sub-Saharan African countries; malnutrition and communicable diseases dominate the health scene with high vulnerability to outbreaks. ⁵ Analysis of health system financing in Sudan indicates that 65% of funding is from private sources, almost all of which is out-of-pocket expenditure. ⁶ Medicines supply maintained by both public and private sectors. In public sector procurement is carried out by the National Medical Supply Fund (NMSF) through national and international tenders and awarded items supplied mainly to federal hospitals and public health facilities. In private sector medicines provided through either local manufacturer which cover only 30% of Sudan market or through direct importation from international companies by local agents and contribute to supply the remaining 70% of medicines need in private sector in Sudan. There is a relatively significant domestic pharmaceutical industry, with 24 licensed pharmaceutical manufacturers operating in the market, all of finished dosage forms, but not active pharmaceutical ingredients. However, the basic capabilities of the local drug makers will make it difficult to achieve self-sufficiency and the supply of more sophisticated medicines will remain mandatory by imports. This current lack of capacity is highlighted by the fact that only 17% of registered pharmaceuticals are produced locally. In Sudan, the law requires marketing authorization (registration) for all pharmaceutical products before marketing from the National Medicines and Poisons Board (NMPB). Manufacturers are licensed; overseas manufacturers are inspected every five years against WHO/GMP guidelines whereas local companies are inspected yearly. Importers, wholesalers/distributors, and pharmacies are also licensed. Prices and mark-ups were regulated throughout the supply chain. Sudan does not apply value added tax (VAT) on medicines. However, import duties of 8% are applied to all imported medicines. Import duties are also applied to API’s. Mark-up profit is (15%) for both importer and local manufacturer. ^{7, 8} In 2016, the number of pharmaceutical products registered in Sudan was 4641. The majority of medicines imported from foreign pharmaceutical companies mainly from Jordan (18%), India (13%), Pakistan (9%), Egypt (8%), European countries (7%), China (7%), Japan (7%), Saudi Arabia (6%), and UAE (4%). ⁹

Increasingly government is supporting local medicine production, expecting that it will result in increased availability and lower prices, as well as industrial and economic benefits. ¹⁰ A presidential decree issued in July 2017 ordered that not to allow any locally produced medicines from being imported from outside Sudan. Accordingly in January 2018; National Medicines and Poisons Board (NMPB); the regulatory authorization in Sudan issued a list of medicines which produced by local industries and supposed to be 'self sufficient' of these medicines, this list is composed of 104 human medicines of different pharmacological group restricted only to local manufacturers and blocked from importation. ^{11, 12}

The objective of this study was to compare the availability and prices of locally produced and imported medicines, in particular after one year from medicines importation restriction and to answer the key questions, did local manufacturers able to coverage national needs of medicines and what is the patient prices for locally produced compared to imported medicines in different sectors and regions of Sudan?. The WHO/HAI methodology  survey tool was adopted with some variations in terms of identification of surveyed medicines by substituting generic and branded medicines with locally produced and imported medicines, to measure their availability and price in order to answer the study questions. For better understanding availability and prices of selected medicines were collected from different regions in Sudan. The data obtained were analyzed and compared and presented as results from public and private sectors and discussed in details in the forthcoming sections. Such studies provide valuable advocacy messages for policymakers, pharmaceutical industries, regulators, prescribers and patients if well shared and delivered in a timely manner.

One of the suggested pathways towards the removal of barriers to quality drugs is the development, or strengthening, of local production systems. Other objectives for industrial policy of local production: the desire to develop a local employment base; the need to increase technology transfer; the wish to become 'self sufficient' in medicines; the need to reduce reliance on imports and manage foreign exchange flow; and the desire to produce medicines for export. ¹⁴ The objective of this paper to provide insight into the availability, price and affordability of medicines in Sudan, comparing the availability and price of locally produced and imported medicines in public and private sectors in different regions in the country, through the use of the WHO/HAI medicine prices survey which allowed the measurement of medicine prices and availability in a reliable and standardized way that enables valid systemic comparisons to be made.

The survey showed low availability of the basket of medicines surveyed in the public and private sectors for imported medicines (I.M), while not achieving WHO’s target of 80 % for locally manufactured medicines (LMM). In the public sector outlets, locally produced products were far more commonly stocked than imported products (47.2% compared to 14%). In the private sector, outlets tended to stock more locally produced products (63.9%) compared to imported products (23.5%). In all six survey regions the availability of locally produced products was higher than for imported products in the public and private sectors. Similar results were obtained from Ethiopian survey where locally produced medicines are more predominant than imported medicines, while opposite results were obtained from Tanzanian survey, that imported medicines are more available than locally produced medicines. ¹⁵ In developing countries particularly Sub-Saharan countries a lot of barriers are well known to business and industrial concern affecting availability and self-reliance in drug production as a mean of increasing access to medicines; such as a weak financial sector (banking/non banking); diminished availability and flows of foreign currency for investment; inflation; taxes; shortage of technical expertise; non stable supply of electricity, gas and other utilities. Also manufacturing settings activities are limited to compounding and packaging, and processing bulk medicines into dosage forms using imported raw materials; on average 40-50% of their cost of goods sold tied up to raw material costs which in turn need to be paid for in foreign exchange. Indeed, machinery, technology, quality control equipment, advertising and distribution networks must often be purchased for foreign exchange. ^{14 & 16}

The survey results show that patients are paying significantly more to purchase imported medicines than locally manufactured medicines in all sectors surveyed. While noting the WHO target that consumers should pay no more than four times the IRPs, we observed that medicine prices were higher for imported medicines compared to IRPs in both public and private sector (4.99 and 5.53 respectively). Overall patients were paying 107% more in public sector and 95% more in private sector for imported products compared to locally produced products. Some individual imported medicines were being purchased at very high prices than locally produced ones e.g. Esomeprazole 20 mg cap were dispensed as imported medicines at a price that was 3.5 times than locally produced price in both public and private sectors.

Compared to information on medicine prices and availability in general, little is known about the impact of local medicine production on prices and availability in different countries. In many countries, studies found locally produced medicines had lower patient prices compared to imports. Kuanpoth found locally produced ARVs had lower patient prices compared to imported ARVs in Vietnam. ¹⁷ Chowdury and Kabir found locally produced over-the-counter essential medicines in Bangladesh had lower patient prices compared to imports. ¹⁸ Sweileh et al. found lower patient prices for antibiotics made locally compared to imports. ¹⁹ One study, conducted by Shafie and Hassali in Malaysia, found some locally produced generics had higher patient prices compared to imports. ²⁰

The apparent consumer willingness to pay higher prices for imported products, as seen in the public and private sector in Sudan, may reflect a perception that imports are of higher quality. To boost local industries, the government needs to ensure and publicise the equivalent quality of locally produced medicines, also the local pharmaceuticals need to spend more money in promotion and marketing of their products and do not depends only on price difference from imported medicines. Supporting local manufacturers through fiscal and/or non-fiscal incentives must be time-bound, developed and implemented in a transparent way, and should not be implemented suddenly or abruptly otherwise it may unintended had a negative effects on the availability. Balancing local production policies is critically important and information on foreign exchange, exports, imports, job demand and other economic and societal indicators need to be evaluated before and after creating local manufacturing capacity; and before and after changes in industrial and/or pharmaceutical policy with regard to local production of pharmaceuticals.

Finally; In-spite of all obstacles facing local production we have to recognize that many advantages of local production for both public health and economic development could be achieved such as improve affordability of quality medicines from known and frequently inspected facilities. It has also the potential to offer other advantages over imports; for example by shortening related supply chains; it can help reduce stock outs and by expanding and diversifying the supply chain, it allows developing countries to secure access in response to growing demands. There is also some evidence that locally manufactured products are more successful in reaching rural populations than imported ones.

Strategic and logistic limitations in our research may have affected the findings . Thus, three main limitations arose, firstly; we did not include the procurement sector, and identifying prices and availability of imported and locally produced medicines procured by the government, secondly we were not differentiate between prices and availability of imported medicines by product type (originator brands, branded generics) and thirdly; patient affordability have not been measured furthermore, price components in the supply chain.

In both the private and public sectors, considerable price differences were seen between LMM and IM. In general, IM were almost 2 times more expensive than the LMM.The availability of the surveyed medicines was extremely low in all sectors as imported medicines and better as locally manufactured medicines.The impact of policy changes made should be measured by establishing a monitoring system to monitor not only regularly the prices, but also the availability and affordability of medicines

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