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Letter to the editor

Editor, The article by Dr G. Vaughan (Aust Prescr 1995;18:69-71) on the Australian drug regulatory system was informative and mentioned common pressures on the regulatory authorities such as the limits on the time to evaluate a drug. In Australia, the cost of the drug is not considered during registration. If this article is not read with the article by Dr D. Graham on the Pharmaceutical Benefits Scheme (Aust Prescr 1995;18:42-4), it may give the impression that the process before the drug reaches the patient does not include a consideration of the cost. This is not true, as cost effectiveness is evaluated before the drug is included in the Pharmaceutical Benefits Scheme. This pattern is almost universal in the developed world; the drug is registered and then negotiations occur between the pharmaceutical company and the buyer (departments of health, state sponsored/regulated insurance schemes, etc.).

In developing countries, there are important differences which have serious implications for the cost of pharmaceuticals. Applications for registration of drugs are generally considered on the criteria of efficacy, safety and quality. If a drug is approved, it reaches the patient with no negotiation on price; the pharmaceutical company charges whatever price the market in the private sector will bear. In the developing countries of the Asia Pacific region, the private sector is substantial and provides from 40-95% of health care and the health insurance schemes are rudimentary, the patient directly bears the full cost of the drug. This can lead to enormous differences in price; in Sri Lanka, the difference in price between a generic and a branded diazepam is 10 000%. When we have tried to include cost in the registration process, we are told this is not part of the registration process in other countries.

Articles on the registration of drugs in the developed world should therefore highlight the important fact that prices of drugs are tightly controlled. This would be useful to the countries in the developing world trying to regulate prices.

K. Weerasuriya
Professor of Pharmacology, University of Colombo, and
Secretary, Drug Evaluation Subcommittee
Ministry of Health
Sri Lanka