The latest UN General Assembly saw José Gabriel Carrizo Jaén, Minister of the Presidency of Panamá, calling on member states to set a price limit on medicines which, he claimed, “should be considered a basic human right instead of a luxury good”. His comments came weeks after his government sealed a deal with the pharmaceutical industry to reduce the price of 170 medicines by 30% after thousands of Panamanians were travelling to Colombia to acquire medicines at lower prices.
A healthcare procurement official in Panama commented, “The prices of medicines in Panama are six times higher than in countries like Colombia, Mexico or Spain. It’s hardly surprising that people were travelling abroad to acquire medicines.” A former Minister of Health in Panama elaborated, “Drug prices in Panama have been high for a long time, despite the regulatory changes that have been made. The reasons could be several. It is said that pharmaceutical companies set sales prices according to market economic indicators by country, but these do not consider national inequalities. This results in high drug prices affecting the entire population some of whom cannot afford basic subsistence, including healthcare.”
“Drug prices in Panama have been high for a long time, despite the regulatory changes that have been made.”
Former Minister of Health, Panama
Like Panama, Brazil registered an increase in medicine prices by 6.17% in 2021, due to strong cost pressures on raw materials, logistics disruptions, higher energy costs, and local currency weakness. Latin America has suffered the most which medical price inflation, recording a 13.2% increase, well over the 8.1% global average and Colombia’s 4% figure, but behind the regional leader Mexico which registered a 19% increase in medicine prices.
An economist and financial analyst in New York commented, “Almost 8% of households spend more than 10% of their income on health expenses, a situation that causes 1.7% of the population to fall below the poverty line.”
According to Fitch, the global ratings agency, a reduction of medicine prices can be achieved through streamlining the procurement process and reducing unnecessary regulatory barriers to grant access to basic medicines. The agency claimed that a multiplicity of actors, resulted in spiralling drug costs, uncoordinated decisions and a fragmented procurement process which significantly increases financial and regulatory costs.
The economist agreed that more could be done to lower costs, “The pharmaceutical market across Latin America needs more meticulous surveillance by the government and especially by public policy makers in order to simultaneously ensure that laboratories also innovate and supply enough to guarantee access to quality medicines for everyone at affordable prices.”
“The first thing to do is to modify the cultural acceptance regarding the use of generic drugs […] a 10% increase in the share of generics could result in a 12% drop in prices.”
Executive, pharmaceutical company, Ecuador
Wider adoption and acceptance of generic medicines could also help, according to a pharmaceutical company executive in Quito, “The first thing to do is to modify the cultural acceptance regarding the use of generic drugs. A report by the Centro Estratégico Latinoamericano de Geopolítica (“CELAG”) on drug prices in Latin America estimated that ‘a 10% increase in the share of generics could result in a 12% drop in prices’.”
Despite these recent price increases, pharmaceutical spending in Latin America continues to grow.