In all countries, expenditure on drugs is a critical aspect of health policy. As such, it deserves careful study.

Half of the world’s population lacks regular access to drugs that are absolutely indispensable, and in developing countries this proportion is estimated to be more than 60%. Moreover, in many countries economic deterioration during the last 10 years has made it difficult to increase accessibility to drugs.

An unfavourable balance of payments has severely hampered the drug supply in many countries that import drugs or the raw materials to produce them. Many importing countries prefer to allocate scarce hard currency to production and exports while neglecting the purchase of drugs. This situation parallels that in industrialized countries where pharmaceuticals are an important export and are therefore supported by government policies.

Government policies designed to reduce budget deficits have, in most cases, substantially reduced government expenditures for health. Spending on supplies such as drugs declines first, because spending on personnel cannot so easily be reduced. Yet drug shortages can bring health care systems to a standstill. Hospitals and health centres that are well designed and organized lose credibility-and clients - as soon as drugs are no longer regularly available.

Pharmaceutical policies based on the concept of essential drugs illustrate the economic benefits of rationalizing the health sector. Whatever the general economic context, substantial improvement is always possible within the pharmaceutical system. Poor policy and strategy coordination, ineffective procurement, inequalities in distribution, inadequate quality assurance, prohibitive prices and bad use of drugs are more often the rule than the exception. It is thus absolutely necessary to analyse the rationale for expenditure on health and drugs from within, in order to make the best use of scarce resources.

This book continues the research carried out by WHO’s Action Programme on Essential Drugs on the issue of financing that began with the document entitled Access to drugs and finance: basic economic and financial analysis (1). It will be of interest to all who wish to see drugs made more accessible and affordable to all in need, wherever they may live. It will be particularly useful to those who formulate national drug policies and to those who procure, distribute or dispense drugs.

WHO wishes to thank the three authors for their considerable efforts over a number of years in making this analysis of drug financing possible.

Dr F.S. Antezana
Assistant Director-General/Deputy Director-General ad interim World Health Organization