Access to medicines in the context of the right-to-health framework 2013, para. 27
Paragraph- Paragraph text
- States also exercise other forms of direct regulation through cost-based pricing, which is based on actual costs of production, a profit margin and a percentage, fixed or regressive, towards distributors' mark-ups. Determining actual costs of production, however, requires reliable and documented evidence of actual local costs of production, which is difficult to obtain given the global dimension of pharmaceutical production. Alternative methods to determine costs of production have included proxies, for example tax paid on manufacturing costs through excise returns and customs duties on landed costs of active pharmaceutical ingredients (APIs). Transparency in providing costs of production is important to ensuring fair pricing of medicines, while allowing for a profit margin that sustains the industry. However, accounting manipulations, use of transfer pricing by companies, and corruption in government agencies pose additional challenges to ensuring a transparent system of cost-based pricing.
- Legal status
- Non-negotiated soft law
- Body
- Special Rapporteur on the right of everyone to the enjoyment of the highest attainable standard of physical and mental health
- Document type
- Special Procedures' report
- Means of adoption
- N.A.
- Topic(s)
- Economic Rights
- Governance & Rule of Law
- Health
- Person(s) affected
- N.A.
- Year
- 2013
- Paragraph type
- Other
- Reference
- SR Health, Report to the HRC (2013), A/HRC/23/42, para. 27.
- Paragraph number
- 27
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