E-DRUG: Medicines financing in Sudan
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Dear e-druggers,
Fee payment for medicines has been seen as a key component of the cost-sharing strategy. In this form of medicine financing, the supply of medicines can be sustained without external funding after first-time capital investment. The Revolving Drug Fund of Khartoum State, Sudan (widely known as RDF) provides a self-financing medicine supply system, which has remained viable for more than twenty years. Today the total number of health facilities operating the RDF is 156 (134 health centres and twenty-two hospitals). This is in addition to eighteen people's pharmacies managed by the programme. During the past three years, a total number of around nine million patients were seen with annual average of 2,983,316 patients out of around five million Khartoum State population. The RDF users used to pay the actual cost of their prescription (direct cost) plus the operating costs (the mark-up on cost up to 38%). An unprecedented development in the RDF took place three days ago, when the Wali (Governor) of Khartoum State declared that the patients at RDF health facilities should pay only 50% of their prescriptions. Currently, the average cost of a prescription at the RDF health facilities is SDG4 (US$2). It is only 3% of the lowest monthly government salary which is SDG125. It should be also mentioned that for the 30% of the population covered by the health insurance, only 25% of the prescription cost must be paid. This decree reduces the costs of medicines by 50% of its current cost (SDG 4, US$2). In a recent study, 6% of patients at RDF health facilities reported that they did not have enough money to obtain the prescribed medicines. This will enhance the affordability for such poor patients. However, after this new policy the RDF would continue to revolve only with a regular injection of balance funds from the government of Khartoum state budget. In a personal communication with RDF manager, he assured that all necessary arrangements and measures to protect the RDF were discussed and agreed up with the Wali himself. The RDF will receive the estimated subsidy on a monthly basis.
Yours sincerely
Gamal Khalafalla Mohamed Ali PhD, MSc, PG Dip. (Health Econ.), B.Pharm (Hon)Mobile +249123039450
Federal Pharmacy and Poisons Board
Secretary General
P.O. Box 11995
Khartoum
Sudan
E-DRUG: Medicines financing in Sudan (2)
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Dear e-druggers,
As someone who had the great fortune to work on the RDF with Dr Gamal, and who witnessed the growth of the RDF, as well as the realisation of a goal, I would like to think that at this point in time (2008), the RDF is sufficiently robust as to withstand this policy decision by the Governor of Khartoum. That robustness should be based on the organism of the RDF itself. The cost- recovery engine will indeed only slow down, but not collapse. Colleagues in the management and supply chain only need to remain focused, and take measures to adapt in line with the decision. That is, you may have to cut or reduce certain activities that are not exactly core to the RDF and the objective of ensuring sustained availability of essential drugs at each of the rural and urban health facilities. Thus, while this increase in the Rx fee will mean less income into the RDF per month, it is hoped that the gap will be covered by input from Khartoum State and Federal Government. In that respect, it will be important for the government to set up a budget line for the RDF as part of the Health Budget, and ensure that the 'RDF Budget' is ring-fenced.
I would also contribute the notion that indeed it is for governments to make these kinds of decisions, even though technical staff may not agree with them. The maturity of a programme such as the RDF is how to be innovative and adapt to fit the new policy decision. Afterall, the Wali did decide to end to the RDF!
Sincerely, and many thanks, Dr Gamal, for this update.
E-DRUG: Medicines financing in Sudan (3)
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Mr Gamal Khalafalla Mohammed,
It was really interesting to read your E-drug posting on medicines
financing.
I am a pharmacist working with the Ministry of Health in my country
Bhutan. Currently I am involved in a small project on health care
costing including pharmaceuticals. You mentioned that in addition to
the actualy cost of medicines there is a mark-up cost up to 38%. How
is the level of that mark-up determined?
We are having some difficulties for costing of medicines. If we take
the rate at which we buy for the government hospitals, the cost is
very minimal, but if we take prevailing market rate, it is too high
for patients. If we decide to add mark up cost on the wholesale rate,
then we are not really sure of what inputs to consider.
Would appreciate if you could give some idea on this, or suggest some
papers to read.
Thanks
Manusika Rai
Program Manager
Essential Drugs Program
Ministry of Health
Bhutan
E-DRUG: Medicines financing in Sudan (4)
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I agree with Bonnie in the sense that if the government -- any
government -- takes a policy decision to reduce the price of medicines
to patients, then that is within their rights to do so. I would
certainly like to read the study referenced in the original e-mail
indicating that only 6 percent of RDF users cannot afford procurement
costs plus the 38 (cumulative?) mark - up. That figure seems low. But,
as indicated, perhaps they are covered by health insurance, ensuring
affordability.
The issue, as pointed out, will come in the mechanics of reimbursement
to the budget centers providing the reduced fee. If these budget centers
must continue to pay procurement costs plus marks ups, then sell to
patients at the 50 percent reduced rate, then, decapitalization will
occur from the bottom up very quickly. Government must make sure that
not only a budget line is approved quickly, but that those funds are
routinely transferred to the affected budget centers which would be
paying more for the drugs than what they are selling them for. This
issue has come up in numerous countries operating RDFs (or cash and
carry systems). Many public sector health services offer exemptions from
drug charges for the elderly, under 5s, antenatal, etc..However, it is
often a cumbersome, slow procedure for the central level MoH operations
to reimburse districts and medicine outlets which go quickly into debt
without timely recapitalization when up to 80 percent of their patients
are exempt from payment.
Regards,
Raja
Raja Rao, Senior Technical Advisor
USAID | DELIVER PROJECT
John Snow, Inc.
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E-DRUG: Medicines financing in Sudan (5)
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Dear Dr. Gamal,
I take this opportunity to inform our E-drug colleagues that we consider RDF Khartoum as one of the successful experiences in cost-sharing and drug financing in the EMRO region, and that this has come as a result of the continuous development of policies and guidelines that support the strengthening of RDF. I really recommend this drug supply financing mechanism as a good model.
An important concept for any cost sharing mechanis is to consider that any unbalanced markup will always affect the affordability of medicines to the patient (this isn't the case in RDF Khartoum). On the other hand, revenues that are generated should remain supplementary funding rather than replacing government funding.
Amjad Wedaa
Pharmacist FInstPM, IDipMBA
Health Planning Department Manager
Directorate of International Health
Sudan Federal Ministry of Health
Phone (Cell) +249912325292Phone Office +249183780651
Fax +249157792176
E-mail: amjadwedaa@gmail.com, ccmsudan@gmail.com