Price is just one of many factors affecting access to healthcare. We know that novel pricing models and generic medicines can help expand access, and both are part of our access programs.
Equitable commercial models in lower-income countries
Our access strategy framework was approved by the Access to Medicine Committee and the Pharmaceuticals Executive Committee in 2015. This defines a set of tools to develop equitable pricing strategies for lower-income countries, according to the purchasing power of patients and payors. These strategies are applied to key innovative products within our pharmaceuticals portfolio that address the disease priorities in these countries. The goal is to maximize patient reach with sustainable commercial models, while minimizing the lag time between introduction in higher and lower-income countries.
We are tracking the implementation of these efforts through a set of indicators that measure the number of patients with access to our products, as well as the prices patients are actually paying for them. As affordability is also impacted by factors outside of our control – including markups, taxes, tariffs, etc. – our local teams use this data to engage with distribution partners in an effort to reduce markups on Novartis products before they reach patients.
Differential pricing for sustainable access
Differential pricing can help make medicines accessible — a treatment that is sold at full price in developed markets can be provided at a subsidized price in the poorest countries.
As part of our Malaria Initiative, Novartis provides its antimalarial medicine at not-for-profit prices for public sector use. Since 2004, thanks to economies of scale in sourcing and manufacturing, significant cost reductions were achieved, which allowed the price to be reduced by half for public-sector buyers over the years.
Patents and licensing in least developed countries
Novartis does not file or enforce patents in least developed countries (LDCs) or low-income countries (LICs). Novartis will grant non-exclusive licenses to qualified third parties to supply our patented products exclusively to LDCs and LICs.
The United Nations designates LDCs as highly disadvantaged in their development process, for structural, historical and geographical reasons. LDCs are also characterized by their vulnerability to external economic shocks, natural and man-made disasters and communicable diseases.
For the 2017 fiscal year, the World Bank defines low-income countries as those with a gross national income (GNI) per capita of USD 1,025 or less in 20151.
High-quality generic medicines
Generic medicines can expand access by offering affordable treatments with the same safety and efficacy after a patent expires.
Novartis is the only major healthcare company with leadership positions in both patented and generic pharmaceuticals. Our Sandoz Division is the second-largest producer of generics, with a portfolio of approximately 1000 products.
Sandoz and its affiliate 1A Pharma often compete in tenders, where the lowest price product with the best delivery conditions usually wins the contract. Sandoz and 1A Pharma have successfully tendered bids in numerous African countries.
Sandoz is the leader in biosimilars, which helps improve access to biopharmaceuticals after patent expiry.