Health Emergency and Drug Accessibility in Underprivileged Communities: Tiered Pricing of Pharmaceutical Drugs as a Price-Reducing Policy Tool

The current COVID-19 pandemic has put the problem of equitable access to health technologies in the limelight because governments, even in the economically advanced countries, are struggling to meet the health needs of their vulnerable populations. The main focus of the debate on equitable access to health technologies is on implications of intellectual property system for development and affordability of innovative medicines and other health technologies. The prices and availability of drugs also depends on certain other factors that are not related to intellectual property protection. Differential pricing – the concept of selling health technologies at lower prices in developing countries as compared to developed countries - is one such mechanism that cannot be explained in terms of IP protection or the cost of production. Tiered pricing of innovative health technologies, which involves the division of markets into different tiers or groups, provides a legitimate policy tool to alleviate some of the COVID-19 financial burdens on global health systems. Differential pricing denotes the practice of companies to charge different prices for the same product depending on the different classes of purchasers. This paper examines the legality and practical significance of tiered pricing as a price-reducing policy option and discusses some of the key limitations of this important policy tool. This study proposes the adoption of a global framework for sustainable pricing and tiered pricing of innovative health technologies. The proposed global framework will help in achieving a balance between fair access and fair profit levels