Does Pharmaceutical Pricing Transparency Matter? Examining Brazil’s Public Procurement System

Abstract

BackgroundWe review procurement and pricing transparency practices for pharmaceutical products. We specifically focus on Brazil and examine its approach to increasing pricing transparency, with the aim of determining the level of effectiveness in lower prices using a tool (Banco de Preços em Saúde, BPS) that only reveals purchase prices as compared to other tools (in other countries) that establish a greater degree of price transparency.MethodsA general report of Preços em Saúde (BPS) and Sistema Integrado de Administração de Serviços Gerais (SIASG) pricing data was created for 25 drugs that met specific criteria. To explore the linear time trend of each of the drugs, separate regression models were fitted for each drug, resulting in a total of 19 models. Each model controlled for the state variable and the interaction between state and time, in order to accommodate expected heterogeneity in the data. Additionally, the models controlled for procurement quantities and the effect they have on the unit price. Secondary analysis using mixed effects models was also carried out to account for the impact that institutions and suppliers may have upon the unit price. Adjusting for these predictor variables (procurement quantities, supplier, purchasing institution) was important to determine the sole effect that time has had on unit prices. A total of 2 x 19 = 38 models were estimated to explore the overall effect of time on changes in unit price. All statistical analyses were performed using the R statistical software, while the linear mixed effects models were fitted using the lme4 R package.ResultsThe findings from our analysis suggest that there is no pattern of consistent price decreases within the two Brazilian states during the five-year period for which the prices were analyzed.ConclusionsWhile the BPS does allow for an increase in transparency and information on drug purchase prices in Brazil, it has not shown to lead to consistent reductions in drug purchase prices for some of the most widely used medicines. This is indicative of a limited model for addressing the challenges in pharmaceutical procurement and puts into question the value of tools used globally to improve transparency in pharmaceutical pricing.Electronic supplementary materialThe online version of this article (doi:10.1186/s12992-015-0118-8) contains supplementary material, which is available to authorized users.

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“…However, improvement in availability of medicines has not been assessed. Experiences with PAHO’s Revolving Fund [60, 61], and centralized procurement mechanisms used in Brazil [62], Argentina, Uruguay, and in Chile [63, 64] have shown that by consolidating product requirements and increasing purchase volumes, purchasers can benefit from economies of scale leading to lower prices and increasing procurement efficiency [61, 65]. Thus, the extended use of pooled procurement has indeed the potential to promote efficiency and reduce variations in medicines prices within the Mexican public sector.…”

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