Practical measurement of affordability: an application to medicines.

OBJECTIVE To develop two practical methods for measuring the affordability of medicines in developing countries. METHODS The proposed methods--catastrophic and impoverishment methods--rely on easily accessible aggregated expenditure data and take into account a country's income distribution and absolute level of income. The catastrophic method quantifies the proportion of the population whose resources would be catastrophically reduced by spending on a given medicine; the impoverishment method estimates the proportion of the population that would be pushed below the poverty line by procuring a given medicine. These methods are illustrated by calculating the affordability of glibenclamide, an antidiabetic drug, in India and Indonesia. The results were validated by comparing them with the results obtained by using household micro data for India and Indonesia. FINDINGS When accurate aggregate data are available, the proposed methods offer a practical way to obtain informative and accurate estimates of affordability. Their results are very similar to those obtained with household micro data analysis and are easily compared across countries. CONCLUSION The catastrophic and impoverishment methods, based on macro data, can provide a suitable estimate of medicine affordability when the household level micro data needed to carry out more sophisticated studies are not available. Their usefulness depends on the availability of accurate aggregated data.

[1]  Adam Wagstaff,et al.  Catastrophe and impoverishment in paying for health care: with applications to Vietnam 1993-1998. , 2003, Health economics.

[2]  Steven Russell,et al.  The economic burden of illness for households in developing countries: a review of studies focusing on malaria, tuberculosis, and human immunodeficiency virus/acquired immunodeficiency syndrome. , 2004, The American journal of tropical medicine and hygiene.

[3]  M. Whitehead,et al.  What are the economic consequences for households of illness and of paying for health care in low- and middle-income country contexts? , 2006, Social science & medicine.

[4]  W. Brouwer,et al.  Quantifying the Impoverishing Effects of Purchasing Medicines: A Cross-Country Comparison of the Affordability of Medicines in the Developing World , 2010, PLoS medicine.

[5]  W. Brouwer,et al.  Better measures of affordability required , 2009, The Lancet.

[6]  G. Carrin,et al.  Assessing the reliability of household expenditure data: results of the World Health Survey. , 2009, Health policy.

[7]  A. Tandon,et al.  Health Financing in Indonesia: A Reform Road Map , 2009 .

[8]  J. Halpern,et al.  Water, Electricity and the Poor: Who Benefits from Utility Subsidies? , 2005 .

[9]  Comment--defining health insurance affordability: unobserved heterogeneity matters. , 2008, Journal of health economics.

[10]  Michael E. Stone,et al.  What is housing affordability? The case for the residual income approach , 2006 .

[11]  C. Murray,et al.  Household catastrophic health expenditure: a multicountry analysis , 2003, The Lancet.

[12]  Yuki Murakami,et al.  Accessibility and Affordability of Tertiary Education in Brazil, Colombia, Mexico and Peru within a Global Context , 2008 .

[13]  Magnus Lindelow,et al.  Analyzing Health Equity Using Household Survey Data: A Guide to Techniques and Their Implementation , 2007 .

[14]  Samuel Fankhauser,et al.  Can poor consumers pay for energy and water? An affordability analysis for transition countries , 2007 .

[15]  M. Ranson.  Reduction of catastrophic health care expenditures by a community-based health insurance scheme in Gujarat, India: current experiences and challenges. , 2002, Bulletin of the World Health Organization.

[16]  K. Hancock.  'Can Pay? Won't Pay?' or Economic Principles of 'Affordability' , 1993 .

[17]  Martin Ravallion,et al.  Measuring Aggregate Welfare in Developing Countries: How Well Do National Accounts and Surveys Agree? , 1999, Review of Economics and Statistics.

[18]  R. Carruthers,et al.  Affordability of public transport in developing countries , 2005 .

[19]  Aparnaa Somanathan,et al.  Effect of payments for health care on poverty estimates in 11 countries in Asia: an analysis of household survey data , 2006, The Lancet.

[20]  Jonathan Halpern,et al.  Water, Electricity, and the Poor: Who Benefits from Utility Subsidies? , 2005 .

[21]  E. van Doorslaer,et al.  Coping with Health-Care Costs: Implications for the Measurement of Catastrophic Expenditures and Poverty , 2008, Health economics.

[22]  C. Whitehead.  From Need to Affordability: An Analysis of UK Housing Objectives , 1991 .

[23]  G. Picone.  Social reinsurance. A new approach to sustainable community health financing , 2004 .

[24]  Christopher J. L. Murray,et al.  Limitations of methods for measuring out-of-pocket and catastrophic private health expenditures. , 2009, Bulletin of the World Health Organization.

[25]  M. Lipton.  Poverty and policy , 1993 .

[26]  Nandinee K. Kutty,et al.  A new measure of housing affordability: Estimates and analytical results , 2005 .

[27]  D Ross-Degnan,et al.  Medicine prices, availability, and affordability in 36 developing and middle-income countries: a secondary analysis , 2009, The Lancet.

[28]  D. Dror,et al.  The Role of Communities in Combating Social Exclusion , 2007 .