How to reduce risks for manufacturers, reduce prices for patients and make essential medicines more accessible in low- and middle-income countries?

How do you increase access to health commodities in in low- and middle-income countries? How do you lower prices and ensure the most effective medicines are accessible to patients across LMICs?

Globally, two billion people lack access to essential medicines, resulting in death from diseases that are entirely preventable. Coupled with this, patients in LMICs typically pay upwards of 10x the international reference price for generic health products. This is often because manufacturers and procurers are caught in a low-volume, high-price cycle – manufacturers produce insufficient supply for a market because they have limited visibility into demand, and they face high transaction costs trying to enter new, sometimes fragmented markets. This dynamic leads manufacturers to charge high prices to account for the perceived risk associated with serving variable, uncertain markets.

Risk mitigation instruments, namely guarantees, have been used to minimise risk for manufacturers, allowing them to invest in ramping up production, achieving economies of scale and offering products at lower prices. Guarantees have been used to achieve significant price reductions for the pneumococcal vaccines (~90% reduction), Rotaviarus vaccines (~67% reduction) and Dolutegravir – HIV treatment (10-15% reduction) to name a few. The MedAccess team will share learnings from a recent transaction conducted in partnership with the Bill and Melinda Gates Foundation which contributed to a 40% reduction in price for a next-generation anti-malarial bed net used to prevent the transmission of malaria across East- and West-Africa.

Supporting Materials

• MedAccess website
• FT - Innovative finance schemes increase access to medicine

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