Pharmaceutical Price Regulation Policy: Recommendations for Georgia

Abstract

Pharmaceutical expenditure is rising globally on a daily basis. Most high-income countries have exercised price adjustment and procurement strategies to ease the cost burden. Low- and middle-income countries (LMICs), however, usually have less regulated pharmaceutical markets and often lack feasible pricing or purchasing strategies and therefore they are less affordable. In high-income countries, the majority of pharmaceutical costs are covered by the government or health insurance institutions. In LMICs, most pharmaceutical expenditure is covered by out-of-pocket payments. Many different options for drug pricing and purchasing policies work, but they also have accompanying risks. It is advisable to select a combined method depending on the specific context of the country. It is desirable that successful pharmaceutical policies and pricing mechanisms are locally tailored, transparent, stable and predictable. Strengthening the legal system is essential for the development of pricing and procurement policies. This should include pharmaceutical sector regulation, competition and anti-corruption law to create a level playing field to ensure a fair and competitive market. Price regulation through healthy competition has clear advantages over direct price regulation. It is also desirable to develop and widely use transparent healthcare information systems in low- and middle-income countries to facilitate the implementation, monitoring and evaluation of pharmaceutical drug pricing and purchasing policies.