E-drug: Research paper available: the hidden costs of procuring
essential medicines
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Dear E-Drug members,
I posted a request for information on retail and wholesale markups on
pharmaceuticals a couple of months ago. That information was needed for
research I was doing with Dr. Richard Laing into the hidden costs of
procuring pharmaceuticals -- the costs incurred between the manufacturer
and the patient, for example: tariffs, taxes, shipping, procurement method,
markups, storage, expiry etc.
I am writing now to tell you that the paper is finished and available. The
research found that hidden costs can frequently more than double the
procurement costs of pharmaceuticals and is supported by data from 10
countries.
The paper abstract and access information is included below. For anyone
without Web access, please email me at libby@theplateau.com or
llevison@bu.edu, tell me whether you prefer Word, Zipped Word or PDF,
and I will send you a copy directly. For anyone who is inspired to
send parallel
data from their country, I would be happy to collate it for future reference.
An especially large "thank you" to the E-Druggers who contributed their
data and comments and made the research possible.
Regards,
Libby Levison
Paper title: Policy and programming options for reducing the procurement
costs of essential medicines in developing countries.
Author: Libby Levison
URL:
http://dcc2.bumc.bu.edu/richardl/IH820/Resource_materials/Web_Resources/Levison-hiddencosts.doc
(Long URL -- you will have to "repair")
Abstract: Essential medicines are central to a health system's success and
the care it provides its clients. An estimated one third of the world's
population lacks access to essential medicines, due in part to their
cost. While poor infrastructure and distribution systems make delivery
difficult, the cost of essential medicines remains the largest obstacle to
access. This paper investigates hidden costs inherent in the procurement
process that diminish purchasing power. Data collected and presented from
ten countries illustrates that hidden costs can frequently more than double
the price of essential medicines between manufacturer and patient. Faced
with fixed budgets and limited financial resources available, countries
must reduce costs in order to increase access to essential medicines.
This paper identifies nine policy and programming options available to
governments and pharmaceutical procurement offices to lower the costs of
the essential medicines they procure. When available, these policies are
supported by evidence from developing countries; when evidence is lacking,
suggestions are made for studies. Specific actions for public health
officials are also proposed.
By reducing hidden costs, countries will increase purchasing power and
provide more essential medicines to a greater portion of their
population. Once implemented, these policies will also turn the spotlight
on the next barrier to access: the manufacturer's price.
Libby Levison
MPH candidate, Boston University School of Public Health
llevison@bu.edu
(or libby@theplateau.com)
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