Paying for medicines

Chapter 3.4 explores how pharmaceutical care is financed. Paying for medicines includes how the end-purchase of existing medicines is managed but also the way investment in research and development (R&D) is handled. Key learning includes that
Pharmaceutical innovation draws on substantial public and private resources.
– The public sector primarily supports early-stage research, regulates the industry and incentivizes development.
– The private sector is typically central to development, commercialization, manufacture and marketing. It seeks high profit margins and is not always transparent or responsive to policy priorities.
Novel and specialized therapeutics as well as population ageing are likely to accelerate medicines expenditures. This requires careful management of pricing and reimbursement.
Policy-makers can leverage a mix of push and pull strategies to align industry efforts with societal need including through
– Clear communication of health system priorities
– Transparent incentive and pricing systems and measures to enhance R&D efficiency
– Payment mechanisms that foster equity and sustainability
– Cross-country collaboration including on preparedness, procurement and pricing transparency.