E-DRUG: Mefloquine price wars in South Africa

[Andrew Jamieson <aj.plett@pixie.co.za>]

E-drug: Mefloquine price wars in South Africa
---------------------------------------------

Dear E-druggers,

The following Medinfo report on Mefloquine prices in South Africa
might interest you.

.... The Swiss multinational pharmaceutical company Roche has drama-
tically lowered the price of one of its drugs, Lariam or mefloquine.
Amongst other stated reasons for this action, Roche claims it is in line
with the Health Ministry's national pharmaceutical pricing policy. This
reduction is nearly 50%, and seems to be in response to the inroads
made on its sales by a South African company, Cipla-Medpro.
Previously this drug had no competitors at all over the last 5 years,
and retailed for R 192.00. Six weeks after the introduction of the South
African competitor, the price has been reduced to a similar price of its
competitor ie R102.00. What is interesting is that mefloquine had no
research and development costs to Roche, as it had been a molecule in
the public domain. Pharmaceutical companies have historically blamed
high priced medication on the need to recoup R&D costs. If one
assumes they are still making money at current prices, and with the
mefloquine market being R12 million/year in South Africa, at today's
rates Roche has received profited additionally to the tune of some R 30
million over the last 5 years. 

Internationally Roche has had little competition for this product, and
this unprecedented price reduction may be a reaction to the possibility
of major inroads on international , and especially African sales by the
South African company.
 
When the price reduction on mefloquine comes into effect, Roche's
other products will increase in price by 11%, bringing into doubt
Roche's stated reason for reducing the price of mefloquine.
 
Major price differences still exist with their product vs generic
equivalents: Bactrim (Roche) R 78.71 vs co-trimoxazole (Xixia) R 13.67
Tilcotil (Roche) 10's R 63.98 vs Ranbaxy's equivalent R 43.53 Roche's
diazepam 2 mg 100 R 64.66 vs Rolab's local equivalent R 11.06
 
Many pharmacists and doctor's were caught unawares, and are sitting
with stock on their shelves which will have to be sold at a loss. This
has not endeared Roche to them at all. Mr Basil Levy, proprietor of
Parkmore Pharmacy in Gauteng, South Africa is quoted as saying "It's
a disgrace. Pharmacists are up in arms about the personal loss
incurred."

Although the price war looming in this market will ultimately improve
the consumer's lot, it is difficult not to examine the machinations of
the system with a somewhat jaundiced eye.

Andrew Jamieson
Stephen Toovey
MEDINFO, Medical Information Agency
South Africa
Fax +27445826420
e-mail: aj.plett@pixie.co.za
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