The WHO pharmaceutical price build-up


The text that follows is owned by the site above referred.

Here is only a small part of the article, for more please follow the link



In defining and measuring the elements of the value chain, an initiative between the World Health Organization (WHO) and Health Action International (HAI) has established a useful methodology to classify the level of medicine price build-up at each step.

According to the WHO/HAI there are six key components which contribute to the price build-up of medicines (see Exhibit 1). These are as follows:

1. Manufacturer selling price: the net acquisition cost of the medicine from the manufacturer, reflecting all discounts, rebates or other reductions in price.

2. Cost, insurance, freight charges (CIF), import tariffs and charges: the cost of importing a finished pharmaceutical product (FPP) or active pharmaceutical ingredient (API) into a country.

3. Importer margin: applied by the importer who is tasked with procuring and receiving delivery of imported goods. Elements of the medicine value chain 2

4. Distributor margin: applied by wholesalers and sub-wholesalers to perform the logistical role of storing and subsequently transporting medicine to point of sale.

5. Retailer margin: applied by retailers in the final step of the distribution chain, the point at which medicines are dispensed to patients.

6. Taxes: the final component of the price build-up which can include both national and regional taxes.



Leave a Reply

Your email address will not be published.