Presentation by Prashant Yadav on the medicines supply chain at the launch of the Medicines Transparency Alliance (MeTA), London 15 May 2008

1. Prashant Yadev Making the Pharmaceutical Market Work For The Poor 06/04/09

2. Medicines as a percentage of household health expenditure Source: WHO UK~ 12% Patients in low-income countries spend a disproportionate amount on medicines

3. Intra-country variation in coverage of treatment for common illnesses The lowest income quintiles have poor coverage for essential medicines Source: Gwatkin et al 2006

4. Who avails government subsidized health-care and medicines? Public sector subsidized drug distribution tries fulfill the coverage gap for the poor but doesn’t always reach them effectively Source: Gwatkin et al 2006 15% 26% Poorest 20% Wealthiest 20%

5. Examples of pharmaceutical systems in OECD countries

6. Pharmaceutical distribution structure in the UK Around 45 full-line pharmaceutical wholesalers Three large national wholesalers contribute to over 85% of the market share Large network of pharmaceutical warehouses More than once a day delivery to each pharmacy 800 million prescriptions £6 billion worth medicines dispensed Approximately 12,600 pharmacies

7. UK pharmaceutical system: Financial flows

8. UK pharmaceutical system: information flows

10. US pharmaceutical market: physical flows Source: GAO Report 2006 26% out-of-pocket expenditure on medicines

11. US pharmaceutical market: financial flows

12. US pharmaceutical market: information flows

13. Spain pharmaceutical market: physical flows Source: Farmaindustria 2004

14. Performance indicators in some of these markets

15. Order Fill Rates at the Point of Dispensing Source: European Pharmaceutical Wholesaler Industry, Technical Report 2006 EU-15 average at retail pharmacy Average across low and middle income countries in state-run health clinics?

16. Margins at different supply chain stages Source: Alliance Unichem

18. Pharmaceutical systems in developing countries

19. Low and middle income countries: physical flows

20. Low and middle income countries: financial flows

21. Low and middle income countries: information flows

22. Margins at different supply chain stages in developing countries Data based on small sample analysis of anti-rabies vaccine in Lusaka, Zambia Data based on small sample analysis of antibiotic-vials in Zambia Retail margins are very high for most products. For imported and single-sourced drugs wholesale margins are also often high.

25. What drives channel markups? Based on various published studies, author’s interviews with wholesalers, retailers and pharmacists, C. Goodman thesis, Channel Markups Balance of Power Wholesaler , Retailer or Customer Competitive Intensity at different Levels Channel Cost Structure Fixed vs. Variable Consumer Price Awareness Pull vs. Push

26. Price information and impact on equilibrium prices Public knowledge of price information reduces equilibrium prices http://rx.nyhealth.gov

27. Does the presence of more intermediaries in a supply chain necessarily hurt performance (prices, quality)?

28. Apparel Supply Chain

30. An orchestrator of trust and transparency in the global health network ?