Pricing and Distribution comes without barriers in Kenya.  Thus, one is able to make as much or as little as one chooses.  This allows for competition in the industry.   This provides for an open competitive market in terms of pricing. 

Unofficially the mark-up for manufacturers on pharmaceutical medicines is 10%, while distributors/wholesalers mark-up at 15%, and retailers enjoy 33%.  VAT on medicines and medical commodities is zero rated.  This elimination of VAT reduces the cost of the medication at all stages of the supply chain.

Under the Competition Act of Kenya, minimum price setting of products and services is prohibited.  Thus, it is an open market in terms of pricing.  The reason for this is to allow for market forces of demand and supply to play out.  There are certain scenarios that occasion exemptions being granted.  The Pharmaceutical Society of Kenya has applied for an exemption, and currently this is being processed by the Competition Authority of Kenya.

 Pricing

A median price ratio (MPR) was calculated as an assessment tool.  It was found that public sector procurement prices for the lowest priced generic medicines was 0.61 times international reference prices, while at the public facilities it was 1.99 times international references prices. 

In the private sector, prices for lowest priced generics were found to be 3.33 times international reference prices.[1]

NGO procurement prices for lowest priced generic medicines were found to be 0.74 times international references prices. While NGO patient prices were found to be 2.73 times international reference price.

This information is reflected in the table below.  Here it can be seen that patient prices are lower in the public sector than NGOs.

Table X. The Median Price Ratio for lowest priced generics in Kenya in the public and private sector[2] 

[2] MSH, International Drug Price Indicator guide (2003), See http://erc.msh.org