The expansion of social insurance coverage to drug purchases opens up a variety of strategic options for governments (see case study J, “Drug Coverage in Ghana’s National Health Insurance Scheme”). But especially where buyers are less sophisticated, reformers need to be aware of the “law of unintended consequences.” It suggests that those adversely affected by a reform will try to find ways around the new system and in the process will decrease its effectiveness. That is exactly what happened in Ghana when the national health insurance scheme set price ceilings for products on its essential medicines list. To enforce those prices, it forbade co-payments by patients for those products. In some cases, providers responded by ceasing to carry the inexpensive generic versions on the list and sold patients more expensive brands of the medicine instead. That allowed the sellers to make a substantial profit, while still complying with the rule barring co-payments (Seiter and Gyansa-Lutterodt 2008, 23, 25). A final set of possible retail payment reforms are directed at the prices themselves. Some have proposed regulating retail margins—insisting on lower percentage margins for higher-priced goods (“regressive margin” rules)—to lessen sellers’ incentive to push more-expensive products. Others have proposed trying to do away with margins entirely and having retailers sell at cost plus a fixed dispensing fee. Any of those approaches can encounter the difficulty noted above of defining the cost of individual products. It also is not easy to inspect retail outlets for medicines, because of the large number of outlets and the lack of good record keeping in many countries. An alternative is simply to regulate private sector prices themselves—if not everywhere, then at least in a limited number of franchised or certified drug shops (see case study F, “Converting Basic Drug Shops to Accredited Drug-Dispensing Outlets in Tanzania”). That gets around the problem of having to inspect records to determine margins, but it raises the possibility of creating serious inequities among shops with different wholesale costs. Requiring such shops to post regulated prices on the wall allows consumers to take on some of the enforcement burden. And because checking prices is technically easier than checking margins, local officials in the district offices of the ministry of health could take on that task. That would greatly simplify the logistics of inspection and enforcement. Finally, in some settings the government is the seller, not the buyer, most noticeably in its own dispensing activities from government facilities. In those places, governments can control what people pay, and for equity reasons prices are often low—for example, consisting of copayments that are much less than retail prices. When governments are willing to charge more, they can consider using the equivalent of tiered 138
Pharmaceutical Reform