Sun Kim, SEOUL NATIONAL UNIVERSITY

Lead Author: Sun Kim
Organization: Graduate School of Public Health, Seoul National University
Country: Republic of Korea

Abstract

The purpose of this contribution is to show that notwithstanding the capitalistic structure hinders access to medicines, the ‘Publicness of Pharmaceutical Production and Supply Regimes (PPPR)’ could ensure access to medicines.

For this purpose, this contribution, first, conceptualized PPPR and measured it among 25 leading countries of pharmaceutical consumption. Second, this contribution identified varieties of PPPR through a typological analysis and examined the historical and institutional contexts of the typical countries of each types. Finally, this contribution examined PPPR configurations which ensure access to medicines through a necessary-sufficient condition analysis. Fuzzy-set Ideal Type Analysis (Fs/ITA) and Fuzzy-set Qualitative Comparative Analysis (Fs/QCA) was used for each analysis.

Submission

The purpose of this contribution is to show that notwithstanding the capitalistic structure hinders access to medicines, the ‘Publicness of Pharmaceutical Production and Supply Regimes (PPPR)’ could ensure access to medicines.

For this purpose, this contribution, first, conceptualized PPPR and measured it among 25 leading countries of pharmaceutical consumption. Second, this contribution identified varieties of PPPR through a typological analysis and examined the historical and institutional contexts of the typical countries of each types. Finally, this contribution examined PPPR configurations which ensure access to medicines through a necessary-sufficient condition analysis. Fuzzy-set Ideal Type Analysis (Fs/ITA) and Fuzzy-set Qualitative Comparative Analysis (Fs/QCA) was used for each analysis.

The ‘Pharmaceutical Production and supply Regimes (PPR)’ include not only actual production and supply, but also policies and managements like financing and regulations which are indispensable for production and supply. It goes beyond the division between ‘pharmaceutical industry’ and ‘public policy’, and catches the fact that formal and informal (regulative and normative/cultural-cognitive) institutions are systematically interwoven. The ‘publicness’ approach focuses on ‘realization of public values’, rather than on ‘fixing market failures or government failures’. One could overcome the tautology of publicness concept by understanding it as a constructive, compositive and dimensional concept, not as equal of ‘the degree of the role of public sector’, and by distinguishing between ideal and real type of publicness.

Because every modern countries are capitalistic, PPPR could be regarded as a contextual condition, which is in the middle of causal pathway from capitalistic structure to access problem. Also, it could be regarded as an another structure and mechanism itself, which could be explained by historical and institutional contexts.

Based on human rights and public interest theory as philosophical bases, and on publicness theory as a conceptual base, PPPR in a broader sense was defined as compositive concept which consists of following elements: ① public values (publicness of social values), ② institutionalized public values (publicness of institutions) and ③ realized public values (publicness of realized outcomes). In a narrower sense, PPPR was understood as limited to institutionalized public values (publicness of institutions).
Here, PPPR as public values (publicness of social values) was defined as “universal and equitable access to medicines and the obligation of states to ensure it”. And PPPR as realized public values (publicness of realized outcomes) was defined as “states’ ensuring of universal and equitable access to medicines and the outcomes of it.”

PPPR as institutionalized public values (publicness of institutions), which refers to PPPR in a narrower sense, was understood with integration of descriptive and normative sense of publicness. In this sense, PPPR integrates ‘influences of political authority (mix and amount)’ and ‘attachment to public values’, and could be identified with configurations of ownership, funding and control dimensions. Each dimensions of PPPR was defined as follows respectively: ① collective organizational publicness of organizations interacting in PPR, ② government financing to PPR and ③ political control to fulfill states’ obligation of ensuring of universal and equitable access to medicines.

Based on hypothetical mechanisms about impacts of PPPR on access to medicines, ownership, funding and control dimensions of PPPR was measured with following indexes respectively: ① existence of State-Owned Pharmaceutical Companies (SOPC), ② public spending as % of total pharmaceutical expenditure and ③ Pharmaceutical Intellectual Property Protection index (PIPP index) and/or Pharmaceutical Research and Manufacturers of America index (PhRMA index).

Based on the concept of ‘access to medicines’, access to medicines was measured in 2 dimensions: ‘access to essential medicines’ and ‘availability as market access’. The former was measured in 2 dimensions with WHO World Health Survey data: ‘universal access to prescribed medicines’ and ‘protection from catastrophic pharmaceutical expenditures’. The latter was measured in 3 dimensions with Danzon & Furukawa (2008) data: ‘availability of generics’, ‘availability of new drugs’ and ‘market access speed of new drugs’.

Results of Fs/ITA and Fs/QCA showed that there are varieties of PPPR notwithstanding capitalistic structure, and these varieties lead to qualitative and quantitative differences in access to medicines. This implies the possibilities and necessities of public structure and mechanism in PPR, rather than capitalistic structure and mechanism. The detailed results of Fs/ITA and Fs/QCA were as follows.:

1) Results of typological analysis (by Fs/ITA)
Based on configurations of three dimensions of publicness, eight ideal types were constructed. The results of fuzzy-set ideal type analysis were as follows: s*p*i type as a case of Thailand, s*~p*i type as a case of Indonesia, ~s*p*i type as a case of South Korea, s*p*~i type as a case of France, s*~p*~i type as a case of Poland, ~s*p*~i type as a case of Germany, and ~s*~p*~i type as a case of US. Different regimes showed different political, economic, social and cultural contexts, including public health, health care system and pharmaceutical industry.

2) Results of necessary-sufficient condition analysis (by Fs/QCA)
Public pharmaceutical expenditure ensures both ‘universal access to prescribed medicines’ and ‘protection from catastrophic pharmaceutical expenditures’, because it reduces out-of-pocket payments and increases affordability of medicines. Under the resource scarcity however, combination of SOPC and control of pharmaceutical Intellectual Property rights (IPR) and price also ensures both ‘universal access to prescribed medicines’ and ‘protection from catastrophic pharmaceutical expenditures’, because it increases both availability and affordability of medicines.

Market-dependent PPR may have a comparative advantage in ensuring availability of medicines, especially in case of new drugs, but it could do so through lots of resources, because of inefficiencies in pharmaceutical spending. Also, it could lead to a problem of access to medicines, like inequality of access to medicines, because it reduces affordability of medicines.

In PPR where SOPC and control of IPR and price are combined, ‘market access speed of new drugs’ is fast in spite of low ‘availability of new drugs’. High ‘availability of new drugs’ inevitably needs lots of resources, and it could lead to inefficiencies in resource allocation, considering the fact that not all new drugs are innovative. Control of IPR and price may lead to low ‘availability of new drugs’, but under the resource scarcity, it is the result of efficient resource allocation, rather than a problem of access to medicines.

Under the resource scarcity, combination of SOPC and control of IPR and price also ensures ‘availability of generics’. It could lead to ensuring affordability of medicines, because generics are inexpensive than new drugs, and even lower the price of new drugs after market entry. SOPC contributes to the ‘availability of generics’ not only through ‘production and supply’, but also through granting motives and authorities for controlling IPR and price.

In high income countries where public spending as percent of total pharmaceutical expenditure is high, both ‘availability of new drugs’ and ‘availability of generics’ are low, in spite of low control of IPR and price. But these countries control pharmaceutical spending (e.g., by health technology assessment), instead of using direct price control. Low availability in this context, is the result of efficient resource allocation, rather than a problem of access to medicine

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