E-drug: Re: MSH-Bill Gates Foundation Essential Medicines Franchise (cont)
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June 11, 2002
Dear E-druggers:
Management Sciences for Health welcomes the stimulating comments to date on
essential drugs franchising under the Strategies for Enhancing Access to
Medicines Program (SEAM). We appreciate the contributions from members of
the "e-drug" network and the opportunity to discuss this initiative with the
essential drugs community.
However, it is important that we all understand the nature and intent of
this initiative.
First, it is important to state that the "franchise idea" does not represent
an "either/or" alternative to the public sector. A private sector franchise
will never, and should never, be the sole solution to improving access to
essential drugs, but may well be part of the solution to lack of access to
quality drugs and pharmaceutical services in some countries. While it is
generally recognized that the public sector often is not able to provide
essential drugs access to the entire population in most developing
countries, a large proportion of the population in many countries is
currently accessing pharmaceuticals through the private sector and will
continue to do so for the foreseeable future, no matter what additional
financial support may be provided from the donor community. It surely is
incumbent on those interested in improving public health to promote better
practices in the private sector.
The main idea behind our efforts with essential drugs franchising is to
determine if this is a viable mechanism by which private sector drug
distributors can be induced to promote public health goals by offering high
quality essential drugs at an affordable price, and can be trained and
supervised to improve the quality of services offered. The effort is purely
a private sector initiative, but it operates in the framework of the
pharmaceutical law and policy of the country where it is implemented, under
the scrutiny of the Ministry of Health and other relevant authorities. It is
not trying to replace any existing public sector service or initiative.
The most important element of a franchise is monitoring and supervision,
which is what is most often missing in drug distribution systems in
developing countries. To cite the example that Patrice Trouiller used,
McDonald's constantly supervises its fast food franchisees to ensure they
are complying with all rules and standards. No McDonald's can prepare a
hamburger differently from the McDonald's approach, or use substandard meat,
and get away with it. It is expected in a pharmaceutical franchise that
this quality guaranty would apply to both dispensing drug practices and drug
quality.
The essential drugs franchise model as conceived for the SEAM Program effort
is a mode of enforcement of the national drug policy in the private sector.
Key elements of the model include:
(1) Essential drugs list-The franchise only distributes products on the
national essential drug list. In addition, if there are national
restrictions to the list for certain kinds of distributors and retailers,
these restrictions are scrupulously respected in the franchise.
(2) Promotion of generics-All the essential drugs distributed in the
franchise are generics, sold under their generic name. To clarify, the
concept of "branding" that was referred to in Patrice Trouiller's
communication actually relates to branding the franchise as a way of helping
consumers recognize that the outlet is a source of quality products and
services at reasonable prices.
(3) Quality control-All the drugs entering the franchise are checked for
quality, either by the procurement agent from who the franchise purchases,
or the franchise itself. Franchisees can only distribute the drugs of the
franchise, thus helping to ensure quality.
(4) Rational dispensing practices-All franchisees are trained in rational
dispensing, essential drug management, and outlet management. Rational
dispensing is closely monitored and supervised.
(5) Competence and update of competence-The franchise trains all outlet
managers before they become "franchisees," and regularly thereafter based on
issues identified during supervision visits.
(6) Price control-The drugs sold in the franchise are sold at the lowest
possible price to keep the network sustainable. All prices are set by the
franchise for all shops, publicly displayed, and routinely monitored.
The franchise model implemented by the Cry for the World Foundation (CFW) in
Kenya, with the support of MSH, has all these features, and in addition
incorporates a "pharmaceutical information system" by which all sales are
documented and patient files are kept.
We believe the incentives for franchisee adherence to the above model are
several:
(1) Franchisees accrue prestige as a member of a recognized high quality
system and as a contributor to public health goals.
(2) Franchisees receive training to be able to perform well.
(3) Franchisees are guaranteed a regular supply of high quality generic
products, procured at the lowest possible price through economies of scale.
(4) Franchisees are supported and monitored and can take pride in performing
better than other distribution operators.
(5) Franchisees become part of a network of similar outlet managers and can
get support and advice from their peers.
(6) If franchisees do not abide by the franchise rules they lose the right
to use the "franchise brand" and the access to franchise support and
services.
The success to date of the CFW shops in Kenya, despite the limited list of
products they carry, seems to show that they offer a service valued by the
population served. As the franchise model continues to evolve based on
lessons learned, these lessons will be applied as other country
opportunities are considered.
Essential drugs franchising is still in its infancy, and improvements and
refinements will of course be needed. There will be a continuing effort to
assure equity in access, which is obviously a major challenge when
considering private sector health initiatives of any kind.
For E-druggers interested in reading more about franchising of health
services, you may want to refer to the following article -- Dominic Montagu,
"Franchising of health services in low-income countries," Health Policy and
Planning: 17(2): 121-130. You may also want to visit the Web site of the
Alternative Business Models Evaluation Project at the Carolina Population
Center, University of North Carolina at Chapel Hill (
www.cpc.unc.edu/projects/abm ). This project is assessing the effectiveness
and cost-effectiveness of alternative business models in three developing
countries.
We hope that all of you who have contributed ideas and comments - and wish
to continue to contribute - to the debate started on "e-drug" will help us
as we refine and improve the model.
Thanks again for all your comments.
Jim Rankin
Director, Center for Pharmaceutical Management
Management Sciences for Health
4301 North Fairfax Drive, Suite #400
Arlington, VA 22203
USA
E-mail: jrankin@msh.org
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