Median price ratio

Median Price Ratio

The Median Price Ratio (MPR) is a statistical measure used in health economics and pharmacoeconomics to compare the prices of pharmaceutical drugs and other healthcare products in different markets. It is calculated by dividing the median price of a product in a specific market by the international reference price. The MPR is often used to assess the affordability of medicines and to inform pricing policies and procurement strategies.

Calculation

The MPR is calculated as follows:

MPR = (Median price in the market / International reference price) x 100

The international reference price is typically obtained from a reliable source such as the Management Sciences for Health's International Drug Price Indicator Guide. The median price in the market is the middle price when all prices are arranged in ascending order. If there is an even number of prices, the median is the average of the two middle prices.

Interpretation

An MPR of 1 indicates that the median price in the market is equal to the international reference price. An MPR greater than 1 indicates that the median price is higher than the reference price, suggesting that the product may be overpriced. Conversely, an MPR less than 1 suggests that the product may be underpriced.

Applications

The MPR is used in various applications in health economics and pharmacoeconomics, including:

• Assessing the affordability of medicines: The MPR can provide insights into the affordability of medicines in different markets, which can inform pricing policies and procurement strategies.
• Comparing prices across markets: The MPR can be used to compare the prices of medicines across different markets, which can help identify markets where medicines are overpriced or underpriced.
• Monitoring price trends: The MPR can be used to monitor price trends over time, which can help identify changes in the affordability of medicines.

Limitations

While the MPR is a useful tool in health economics and pharmacoeconomics, it has several limitations:

• It does not account for differences in purchasing power across markets.
• It does not account for differences in the quality of products.
• It does not account for differences in the cost of living across markets.

See also

• Health economics
• Pharmacoeconomics
• Pricing policies
• Procurement strategies