E-drug: Decentralising pharmaceutical services (cont)
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Dear Wilbert,
In managing pharmaceutical services, one has to balance appropriate drug
selection (which is done best at the local level) and the cost-effectiveness
of pooled procurement (which is done best at some central level (national,
regional, or provincial)). One way to achieve this balance is to conduct
centralized bidding, but regional or local procurement. The system should
have the following characteristics:
1. Drug selection is done by city or district therapeutic committees.
2. By a certain deadline, all these units should submit their drug
requirements to a centralized procurement service.
3. These requirements are then consolidated and bidded out. Since the
volumes are larger, the prices are lower. The suppliers should be
made aware that their prices should hold for 6-12 months and should
include delivery costs to the various local units. A contract is
closed with these
conditions, setting the price of the drug.
4. When local units procure their medicine needs on a quarterly basis, the
medicines are sourced from this sole supplier at the pre-determined price
and are delivered directly to the local unit.
5. Finally, a very accurate stock inventory system is needed to make this
system successful.
Information technology, where feasible, can speed up some of these
processes.
This system has been tried successfully in a province in the Philippines
through the technical assistance of Management Sciences for Health. This
province had 14 hospitals and, by pooling their requirements, were able to
lower their average drug prices by about 80%.
I hope this will be helpful.
Regards,
John Q. Wong, MD, MS
Drug Management Systems Manager
Health Sector Reform Technical Assistance Project
Management Sciences for Health
Philipppines
E-mail: johnw@mydestiny.net
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