Abstract
BACKGROUND:
Medicines are an integral part of the health system and the accessibility hugely depends on affordability and availability of medicines. Oral health is an integral component of overall well-being but is ironically often one of the most neglected areas of healthcare. There is paucity of data on the pharmaceutical cost components of dental disease, so this study aims to address this lacuna on the pricing of medicines.
OBJECTIVE:
This research study can be considered a partial economic evaluation that focuses on an estimation of costs associated with medicines used in the treatment of selected oral diseases to suggest policy measures to reduce out-of-pocket expenditure on medicines.
METHODS:
Using cost analysis research design on the PharmaTrac dataset and cross-comparing it with public procurement rates of the Rajasthan Medical Services Corporation (RMSC) indicates that the pharmaceutical cost of treating caries and periodontitis is approximately three times higher if median retail prices are considered instead of RMSC public procurement costs.
RESULTS:
Medicine cost of treating a single episode of caries or periodontitis using RMSC medicine rates at all levels of care is approximately 1.9–2.5 times lower than retail prices of the same formulations.
CONCLUSION:
Our results strongly suggest that centralized public procurement of dental medicines with an efficient monitoring and control can reduce the out-of-pocket expenditure.
Introduction
Medicines are scientific innovations which have saved a lot of lives and greatly reduced the burden of many diseases. Provision of medicines to patients is one of the key functions of an efficient health system. Though the issue of equitable accessibility and affordability of essential medicines is a global concern today, it seems to be more critical in developing nations due to inadequate public healthcare funding, inefficient supply chain management system, poor governance and lack of accountability.
In India approximately 4 percent of gross domestic product is spent on health care. The government contribution to the public health system is around 1 percent gross domestic product. The households contribute around 71 percent of total health expenditure in India [1]. Household expenditure on health has been growing at nearly 14 percent overall, and research shows that nearly 70–80 percent of health care expenditure is on drugs [2]. Out of this huge expenditure the health expenditure on allopathic medicines is 55 percent on allopathic system of medicine [1]. Thus ensuring access to affordable medicines is essential to provide financial risk protection and improving health indicators.
Oral health is an integral part of overall wellbeing. It is also true that oral health is the most commonly neglected area of health not only because of ignorance but also due to financial constraints. In many developing countries, access to oral health services is limited and teeth are often left untreated or are extracted because of pain or discomfort. Despite improvements over several decades, oral diseases still persist as huge problems.
India is facing a dual burden of chronic as well as communicable disease. In order to reduce morbidity and mortality it is essential to increase the public funding in healthcare. Rising health care costs, inelastic nature of healthcare demand and limited resources have made it mandatory to make efficient allocation of scarce resources. Sound decisions based on cost analysis are the basis of health policy formulation.
One of the key barriers to accessing treatment to dental conditions may be the cost of medicines. The proposed research focuses on the economic burden to the society due to selected dental diseases. The aim is to collect information for evidence based decision making by performing a cost analysis of medicines of selected dental diseases and to find out innovative methods of financing to provide increased access to health.
The analysis will include study of retail prices as well as rates at which the same medicines are procured through the public health system. Based on the study results necessary policy recommendations to reduce the OOP expenditure on dental medicines are suggested.
Costs differ from different points of view. In economics cost generally refers to the sacrifice made when a given resource is consumed in a program or treatment. It is based on the value that would be gained from using resources elsewhere. This is also termed as opportunity cost. So it becomes important to not only capture expenditures which are clearly visible but also to capture resources such as patients' leisure time and volunteer time.
In a cost analysis it is important to distinguish between the direct cost, indirect cost and intangible cost.
Direct cost: Medicine, diagnostic tests, staff time, equipment, transportation cost, out-of-pocket expenses. Indirect cost: Productivity loss, family person productivity loss. Intangible cost: Pain, suffering, adverse effects.
In the world of limited and scarce resources – people, time, money, knowledge and equipment – decisions concerning committing resources to one use instead of another is based on sound scientific and economic principles. Without systematic analysis, it is difficult to identify clearly the relevant alternatives.
For an evaluation of the efficiency it is important to ask the following questions:
Is this health service or program worth doing in terms of the resource consumption in comparison to the alternate use of the same resources? Is the method by which the healthcare resources are spent efficient in comparison to other methods?
The objective of the study is to understand the difference in the market retail price and drug procurement price of RMSC using the standard treatment guidelines of selected dental diseases. The aim is to provide a valid, replicable and scientific tool to evaluate the best possible choice in order to maximize health gains from the budget available.
Literature review
Caries is a Latin word that means rotten. Dental caries, also called tooth decay or cavity, is an infectious microbiologic disease that causes demineralization of the calcified portion (enamel, dentin and cementum) and destruction of the organic portion of the tooth. The mechanism for tooth destruction is by acid production due to bacterial fermentation reaction of debris accumulated on the tooth surface. There is a constant process of demineralization and re-mineralization that goes on. But if the rate of demineralization exceeds re-mineralization cavities develop leading to food accumulation and further acid production and caries development.
Despite great achievements in the medical sciences, there is still a high prevalence of oral health burden globally. Dental caries is the most common oral health problem throughout the world. It affects almost around 60–90 percent of school children in most of the developed nations and even almost all adults are affected by caries worldwide [3]. In many parts of Asia and Latin America dental caries is highly prevalent [4]. The overall trend of dental caries is higher in developed nations in comparison to low-income countries. But with modifications in dietary habits and lifestyles it is expected that even the developing countries will have an increase in the incidence of dental caries especially in low fluoride zones of the world.

Changing caries trend seen in 12-year-old children in developing and developed countries [4].
Worldwide, approximately 2.43 billion people (36 percent of the population) have dental caries in their permanent teeth [5]. It is the second most common cause of tooth loss and is found universally, irrespective of age, sex, caste, creed or geographic location. The prevalence of dental caries in India was 50–60 percent in 2012 [6].
Periodontitis, commonly called pyorrhea, is a set of inflammatory diseases affecting the periodontal tissues that surround and support the teeth. The disease leads to progressive loss of the bone supporting the teeth which can cause loosening of the teeth, periodontal pockets and eventually edentulism. Periodontitis is the second most common dental disease worldwide. Chronic periodontitis affects about 750 million people or about 10.8 percent of the population as of 2010 [5]. Globally, it is seen that around 30 percent of people in the age group of 65–74 years lose all their natural teeth and become fully edentulous [3]. Severe periodontitis which can eventually lead to tooth loss is seen in 15–20 percent of adults during their middle-age [3]. It is seen universally that most children have signs of gingivitis. In India the prevalence of gingivitis is 80-90 percent, and the incidence of chronic periodontitis is 21–28 percent. Prevalence of chronic periodontitis increases steadily with age from 35.7 percent for 30–39 year olds to 89.2 percent for 80–90 year olds. The prevalence of aggressive periodontitis is below 1 percent [7].
Per capita expenditures on medicine in 2005–2006 was approximately US$ 7.61 in low-income countries and it was around US$ 431.6 in high-income countries [8]. The rate of change in pharmaceutical expenditure as compared with 1995 statistics showed a greater increase in middle- and low-income countries. The proportion of total health expenditure spent on medicines is higher in low per capita income countries. On average 24.9 percent of total health expenditure is spent on medicines globally [8].
This was a cost analysis study that targeted the Indian adult population (age above 18 years). Diseases examined in this study are dental caries and periodontitis. Data sources used in this study are: PharmaTrac dataset, RMSC procurement sheets, burden of disease in India from the National Commission on Macroeconomics and Health [9], published secondary data review.
The Rajasthan Medical Services Corporation Limited is a public enterprise established under the Companies Act, 1956. The objective of setting up this corporation was to efficiently manage procurement and distribution of drugs, medicines, and surgical and suture items in Rajasthan [10].
The medicine market price and sales data was analyzed from AIOCD AWACS. This is a joint venture pharmaceutical market research company formed by All Indian Origin Chemists & Distributors Ltd. and Trikaal Mediinfotech Pvt. Ltd [11].
The initial step was to prepare a list of medicines used in the selected dental lesions according to the standard treatment guidelines. This is a clinical protocol or a clinical practice guideline document systematically developed to assist clinicians and patients in making correct decisions regarding the diagnosis, management and treatment of specific clinical conditions. The guidelines were developed for four levels of health care in conformity with the Indian Public Health Standards. The levels of care are Level 1 – Solo: Physician clinic, Level 2 – Six to ten bedded healthcare facility, Level 3 – Thirty to hundred bedded healthcare facility, Level 4 – Hundred or more bedded healthcare facility.
In the next step the above mentioned list of medicines was broken down into the formulations based on the medicines and their specific dosage forms and strengths. Next, for each formulation, the relevant pack size was identified in the PharmaTrac database.
The data of PharmaTrac provided maximum retail price (MRP) and price to retailer (PTR) as per the pack size. It was observed that several brands have more than one pack size. Therefore, the next step was to calculate MRP and PTR per unit by dividing the given MRP and PTR by the number of units in a pack. The next step after calculating the MRP and PTR was to calculate median MRP and median PTR. A list of medicines used in the treatment of the selected dental lesion as per the standard treatment guidelines was prepared mentioning the dosage along with the schedule and length of treatment. The total number of units for every medicine used was calculated by multiplying the number of units prescribed per day with the length of treatment. Once the unit prices of the selected medicine formulation was calculated from the 2012–2013 dataset of PharmaTrac and the official Rajasthan Medical Services Corporation procurement documents, the total cost of each medicine used in the treatment of the selected dental lesion was calculated separately for the Rajasthan Medical Services Corporation procurement rates and retail market prices by multiplying per unit cost of medicine with the total number of units of medicines used for treatment of the selected dental disease.
The total treatment cost of the selected dental diseases was calculated separately for Rajasthan Medical Services Corporation procurement rates and retail market prices by adding the total cost of all the medicines used as per the standard treatment guidelines' schedule. The percentage difference in the cost of treatment of the selected dental disease in the retail market prices from the cost of treatment of the selected dental disease in the RMSC procurement cost was calculated. The percentage difference in the cost of each medicine in the retail market prices and the RMSC procurement cost was also calculated. The macro cost of the treatment of the selected dental disease was also calculated by multiplying the burden of the selected disease in the Indian population by the treatment cost separately for the RMSC procurement cost and retail market price. The percentage difference in the macro level cost of treatment of the selected dental disease was calculated for RMSC procurement rates and retail market prices. The ratio of the macro cost of treatment of the selected dental disease using RMSC procurement rates and retail market prices was also calculated to examine the impact of the centralized procurement system.
Standard treatment guidelines for dental caries
Standard treatment guidelines for dental caries
Source: Standard treatment guidelines [7].
Standard treatment guidelines for dental periodontitis
Source: Standard treatment guidelines [7].
Difference in prices of medicines used in the treatment of dental caries between retail price and RMSC procurement rates
Difference in prices of medicines used in the treatment of dental caries between retail price and RMSC procurement rates
The pharmaceutical cost of the treatment of dental caries at all levels of care is approximately three times higher if the median market prices are considered instead of the RMSC public procurement costs for the medicines prescribed as per the standard treatment guidelines in 2013. The percentage difference in the medicine cost of treatment of dental caries at initial stages (Levels 1–3 of care), taking into account the burden of dental caries in India, comes out to be approximately 1.9 times. So the medicine cost of the treatment of dental caries at initial stages treated in Levels 1–3 of care would be 1.9 times lower if the public procurement prices of RMSC are taken into account instead of the retail market prices. In a few drugs used in the treatment of dental caries it was observed that there was a lot of variation in the market prices. For instance, for the Capsule Amoxycillin 500 mg used in the treatment of dental caries, the range of prices observed was wide, with the lowest priced brand being Intas Pharmaceuticals Company selling at Rupees 1.94 and the highest priced brand being Hetero Healthcare Limited selling at Rupees 41.59. It was observed that the percentage difference in the individual prices of medicines (used in the treatment of dental caries) between market prices and RMSC procurement rates varied in the range of 3.3 times (Tablet Paracetamol 500 mg), 2.4 times (Capsule Amoxycillin 500 mg), 1.7 times (Chlorhexidine Mouthwash 0.2 percent concentration), 59.11 percent (Tablet Ibuprofen 400 mg), and 46.98 percent (Tablet Metronidazole 400 mg). The difference in the value of medicines used for treating a single patient's dental caries using RMSC procurement rates at Levels 1–3 of care is Rupees 1.1 times lower than market prices of the same formulations. Similarly, the difference in the value of medicines used for treating a single patient's dental caries using RMSC procurement rates at Level 4 of care is Rupees 115.24 lower than market prices of the same formulations. The percentage difference in the value of medicines used for treating a single patient's dental caries using RMSC procurement rates at Levels 1–3 of care is approximately 1.9 times lower than market prices of the same formulations. Similarly, the percentage difference in the value of medicines used for treating a single patient's dental caries using RMSC procurement rates at Level 4 of care is approximately 1.87 times lower than market prices of the same formulations.
Differences in the pharmaceutical cost of treatment of dental caries between retail market prices and RMSC prices at the macro level considering the burden of disease
Difference in prices of medicines used in the treatment of dental periodontitis between retail price and RMSC procurement rates
The pharmaceutical cost of the treatment of dental periodontitis at the initial stages (Levels 1–3) is approximately three times higher if the median market prices are considered instead of RMSC public procurement costs for the medicines prescribed as per the standard treatment guidelines in 2013. The percentage difference in the medicine cost of treatment of dental periodontitis at the initial stages (Levels 1–3), taking into account the burden of dental caries in India, comes out to be approximately 2.1 times. So the medicine cost of the treatment of dental periodontitis at the initial stages treated in Levels 1–3 of care would be 2.1 times lower if the public procurement prices of RMSC are taken into account instead of retail market prices.
In a few drugs used in the treatment of dental periodontitis it was observed that there was a lot of variation in the market prices. For instance, for the Tablet Ciprofloxacin 500 mg used in the treatment of dental periodontitis, the range of prices observed was wide, with the lowest priced brand being Franklin Laboratories India Private Limited Company selling at Rupees 1.57 and the highest priced brand being Ranbaxy Laboratory Limited selling at Rupees 16.93.
The difference in the market prices and RMSC procurement rates of medicines used in the treatment of dental periodontitis was about .46 times (Tablet Metronidazole 400 mg), .59 times (Tablet Ibuprofen 400 mg), 1.7 times (Chlorhexidine Mouthwash 0.2 percent concentration), and 3.6 times (Tablet Ciprofloxacin 500 mg). The difference in the value of medicines used for treating a single patient's dental periodontitis using RMSC procurement rates at Levels 1–3 is Rupees 90.42 and at Level 4 Rupees is 177.68 times lower than market prices of the same formulations.
The percentage difference in the value of medicines used for treating a single patient's dental periodontitis using RMSC procurement rates at Levels 1–3 of care is approximately 2.1 times lower than market prices of the same formulations. Similarly, the percentage difference in the value of medicines used for treating a single patient's dental periodontitis using RMSC procurement rates at Level 4 of care is approximately 2.5 times lower than market prices of the same formulations.
Differences in the pharmaceutical cost of treatment of dental periodontitis between retail market prices and RMSC procurement rates at the macro level considering the burden of disease
The estimated costs given in this study may not be the actual costs. We found that the medicine Tablet Tinidazole was not procured by RMSC and used the ATC DDD code, and was thus replaced by Tablet Metronidazole, which also belongs to the Imidazole group and is therapeutically substitutable. The disease burden data is a prediction and was taken from [6]. These figures may differ from actual numbers. Hence it is just an approximation of the cost burden of disease. Some information was missing from the PharmaTrac dataset for few formulations. Because of this, our analysis also did not include the formulations for which data was missing or could not be identified in the PharmaTrac dataset. Based on the analysis we cannot comment on whether the formulations have fallen out of the production or the whether the PharmaTrac database has failed to capture them. The quality of services is a big factor in the success of a service delivery model [12], but this paper does not look into the quality of the medicine aspect.
The findings of the study suggest that the centralized procurement system of medicines backed up by efficient supply chain management and effective monitoring is the way to remove the economic barrier to access medicines. Similar conclusions were drawn by Selvaraj et al. [13] stating that state and central governments must aim to procure drugs at a centralized level in each state. Centralized procurement gives the benefit of economies of scale and markedly reduces the price of medicines. The successful models of centralized medicine purchase by the states of Rajasthan, Tamil Nadu and Kerala was emphasized proving that eliminating intermediaries from the supply chain can make medicines affordable and accessible. As discussed by Tripathi et al. [14], procurement in the public sector is quite economical with the median MPR for all medicines being 0.75 and the 25th to 75th percentile range being 0.43 to 1.02.
Conclusion and recommendations
Various observations were made and conclusions were drawn as a result of the findings of the study. It is undoubtedly true that there an increasing trend is seen in health expenditure around the world and a very high segment of health expenditure is spent on medicines. So it becomes unavoidable to find ways to reduce the overall expenditure on medicines and thereby health expenditure.
Moreover, to ensure access to essential affordable medicines there is a need to increase the overall public expenditure on health along with efficient policies to ensure centralized procurement of medicines and stringent laws to eliminate irrational use of drugs. The treatment cost of dental and oral diseases is extremely high. In fact, it is the fourth most expensive disease to treat in most industrialized countries. Most of the services comprise curative care with a little emphasis on preventive techniques. Most of the resources are directed towards emergency oral care and pain relief. Constant efforts should be made to prioritize preventive care with an aim to control or eliminate risk factors. Increased economic burden and unaffordable care further reduces the access to dental services. It was evident that medicines purchased in a systematic centralized procurement system will remarkably reduce the prices of the medicines used in the treatment of dental diseases. Making the medicines affordable will inevitably increase the accessibility without increasing the cost burden. This can only be done by reducing the price and quantity of medicines purchased. Therefore the need to address the rational use of medicines is critical to reduce the economic burden of the disease. Generic drug prescription will also reduce the economic burden of dental diseases.
The centralized procurement system should be backed by monitoring and evaluation. Strict vigilance in quality control and cost control of medicines is mandatory for any system for effective results. It is also evident that generic drugs should only be prescribed as per the standard treatment protocols. This further reduces the cost. There should be standard treatment guidelines and medical protocols for all oral and dental diseases. An effective monitoring mechanism to ensure adherence to standard protocols is required. This not only reduces the cost burden but also decreases the irrational prescriptions and drug resistance. Lastly, there is a paucity of research on cost in dental procedures and medicines. There should be supportive measures to strengthen scientific research in the area of oral and dental diseases and its economic burden. The recommended strategies include formulating standard treatment guidelines and protocols for all diseases with effective implementation in all regions of India. Supportive measures to strengthen scientific research in the area of oral diseases is required. Efforts are needed to increase public awareness of risks factors to oral diseases. Formulating effective policies for the centralized procurement of all the medicines including dental medicines is necessary. Ensuring a balance in action between government, community and individual to achieve accessible, affordable health for all is required. Generic drugs should only be prescribed to reduce the economic burden of medicines.
Footnotes
Acknowledgements
We are thankful to the Public Health Foundation of India for sharing the PharmaTrac dataset.
Conflict of interest
None to report.
