Pharmaceutical pricing policy in Saudi Arabia: findings and implications

Abstract

Introduction: Many countries have introduced policies and strategies to limit pharmaceutical expenditures. These include pharmaceutical pricing policies and related strategies to control medicine prices and to ensure appropriate and stable prices. The aim of this study was to provide an overview of the current pharmaceutical pricing policy for medicines in Saudi Arabia and to provide an evaluation of the impact of this policy on medicine prices. Methods: A description of the current pharmaceutical policy is presented by reviewing the current official documents and regulations related to pharmaceutical pricing in Saudi Arabia. A price comparison between the original brand medicines and their generic versions was conducted for the top six selling medicines in Saudi Arabia during the period of 2010–2015. Results: The findings showed that Saudi pharmaceutical pricing policy takes into consideration several factors including an international price benchmark, internal price referencing, and the price of the medicine in the country of origin when determining medicine prices. Based on this policy, there were large differences in the prices of generic medicines compared to original brand medicines. The generic medicine to original brand medicine price ratio was 0.87–0.30. However, the price of the first generic medicine was close to the price of original brand medicine, with the first generic medicine-to-original brand medicine price ratio was 0.87–0.81. In this study, there were large differences in the prices of generic medicines for the same molecule. In fact, price ratio among the generic medicines for the same molecule was between 0.96 and 0.18. However, some generic medicines imported from high income countries were cheaper than the medicines manufactured locally or manufactured in other countries in the Middle East. Conclusion: Medicine prices are strictly controlled through the pharmaceutical pricing policy in Saudi Arabia. Overall, the current policy has resulted in significant price differences among medicines, including medicines of the same molecule. Due to this large difference, the cost savings will depend on the product prescribed or procured by the health organization.