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Health Policy and Planning Advance Access published online on October 20, 2009
Health Policy and Planning, doi:10.1093/heapol/czp042
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Published by Oxford University Press in association with The London School of Hygiene and Tropical Medicine © The Author 2009; all rights reserved.

Medicine prices in urban Mozambique: a public health and economic study of pharmaceutical markets and price determinants in low-income settings

Giuliano Russo1,* and Barbara McPake2

1Instituto de Higiene e Medicina Tropical, Health Systems Unit, Lisbon, Portugal.
2Professor and Director, Institute for International Health and Development, Queen Margaret University, Edinburgh, Musselburgh EH21 6UU, the UK.

* Corresponding author. Instituto de Higiene e Medicina Tropical, Health Systems Unit, Rua da Junqueira 96, 1349-008 Lisbon, Portugal. Tel: +351-21-365 2600. Fax: +351-21-363 2105. E-mail: grusso{at}ihmt.unl.pt

It has been suggested that medicines are unaffordable in low-income countries and that world manufacturing and trade policies are responsible for high prices. This research investigates medicine prices in urban Mozambique with the objective of understanding how prices are formed and with what public health implications. The study adopts an economic framework and uses a combination of quantitative and qualitative methods to analyse local pharmaceutical prices and markets. The research findings suggest that: (a) local mark-ups are responsible for up to two-thirds of drugs’ final prices in private pharmacies; (b) statutory profit and cost ceilings are applied unevenly, due to lack of government control and collusion among suppliers; and (c) the local market appears to respond effectively to the urban population's diverse needs through its low-cost and high-cost segments, although uncertainty around the quality of generics may be inducing consumers to purchase less affordable drugs. We conclude that local markets play a larger than expected role in the determination of prices in Mozambique, and that more research is needed to address the complex issue of affordability of medicines in low-income countries. We also argue that price controls may not be the most effective way to influence access to medicines in low-income countries, and managing demand and supply towards cheaper effective drugs appears a more suitable policy option.

Key Words: Health economics, health sector reform, pharmaceutical industry, pharmaceutical policy, regulation

Accepted for publication 23 July 2009.


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