E-DRUG: Medicine Procurement Prices in UNRWA for Palestine Refugees in the Near East (2)
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E-Druggers,
May I commend UNRWA, the consultants and the national staff involved in producing this report. Comparing prices across countries and systems is always difficult but this report can serve as a model of a robust repeatable method.
The consultants identified the most used medicines across the five areas UNRWA is active in, collected the actual prices and then compared the prices item by item with a number of comparators. These were MSH International Drug Price Indicator Guide, International Dispensary Association Foundation (which is a large non-profit essential medicines supplier based in the Netherlands), the Jordanian Joint Procurement Department (which procures for the Jordanian Ministry of Health, the defense forces, and major hospitals) and the Gulf Cooperation Council (which is a large pooled procurement system for the Gulf countries). The UNRWA system includes both central and local purchases and so the analysis covered both types of purchases. The analysis compared median prices for all products and for individual products.
The results are impressive showing that for most products the UNRWA price ratios are comparable to these other much larger procurement organizations. There were outliers for which higher or lower prices were being paid. Both situations will need investigation as high price ratios 20.93 or low ratios 0.08 may reflect specific problems either in procurement or in quality assurance. The report goes further than just describing the different ratios and answers the what if question. They quantify potential savings if UNRWA purchased the same volume of products from different suppliers. While this might not be possible in practice it provides a measure of potential savings. Of course the other organizations could use the data in this report to answer the question as to their potential savings if they used UNRWA prices! The authors also compared local and central purchase prices and demonstrated a mixed result. Some prices were lower and others higher.
One other question that was examined was the effect of volume on price. While there is a widespread belief that increased volume results in lower prices for pharmaceuticals, empirical evidence to support this position is weak. Brenda Waning studied many Global Fund procurements and found very little effect. In this UNRWA study the authors compared prices and volumes from the same suppliers to different agencies and the results were mixed. In some cases larger volumes were associated with lower prices but for other medicines larger volumes were charged higher prices. My conclusion from this data is that volume and price are either not related or are weakly related and that other factors must be more important.
The report describes the UNRWA procurement and QA system and makes a number of context specific recommendations that may or may not apply in other environments.
But what excites me about this report is that the data sources and methods used can be applied by any procurement agency to evaluate their own performance and compare how they are doing with international comparators and regional organizations.
Overall everybody involved in this activity emerges with credit. UNRWA which operates in a challenging environment are doing well. IDA, JPD and GCC all offer competitive prices for many products though for each opportunities exist for savings. The emphasis in the report on transparency and improved quality assurance in the procurement systems is welcome.
I would hope that this report will become a model that will be widely used in much the same way as the WHO/HAI pricing manual or the WHO/INRUD manual on how to investigate drug use in health facilities have been used.
My congratulations and thanks to all who were involved.
Richard Laing (Medical Officer)
Department of Essential Medicines and Pharmaceutical Policies
World Health Organization
CH-1211 Geneva 27, Switzerland
Tel 41 22 791 4533
Fax 41 22791 4167
E-mail laingr@who.int