OBJECTIVE Estimating affordability is not straightforward due to the vagueness of the concept and the data requirements in measurement. This paper draws upon the literature on catastrophic and impoverishing payments to develop two practicable methods to measure the affordability of medicines in developing countries.
METHODS The catastrophic method quantifies the proportion of the population for which expenditures on a certain medicine would take up a too large share of total resources. The impoverishment method looks at the impoverishing effect of the procurement of medicines, in terms of the proportion of the population that is pushed below the poverty line due to procurement of a specific medicine. We illustrate these methods by calculating affordability of glibenclamide, an antidiabetic medicine, in Indonesia and India.
FINDINGS The proposed methods use easily accessible aggregated data and take into account a country’s income distribution and absolute level of income. The results regarding the affordability of medicines can easily be interpreted and compared across countries. The results of the proposed (macro) methods are very close to those produced by household (micro) data analysis. The usefulness of the proposed methods depends on availability of accurate aggregated data.
CONCLUSION The catastrophic and impoverishment method can provide a suitable estimate of medicine affordability for use in situations where the information to carry out more sophisticated studies is not available. The results suggest that when accurate aggregate data is available these methods could be used to obtain informative estimates of affordability that are sufficiently accurate yet still practical. Both methods provide different insights and their application to other areas of healthcare and other settings could also be explored.