From an economic point of view, consumers must be divided into patients (users of drugs) and households (people who may be required to pay for drugs). Payment may be made in three main ways though, in practice, they may be combined.
Consumers pay for drugs
In the first method of payment (Fig. 1), the consumers (as households) pay for the drugs they use (as patients). This is a commercial system.
- satisfies patient demand;
- increases availability of drug stocks.
- restricts economic access.
- for outpatient care;
- by private or public commercial sector;
- for non-essential drugs.
Fig. 1. Consumers pay for drugs
The state or foreign aid pays for drugs
The second payment method is one where drugs are paid for by the state or by foreign aid (Fig. 2).
- promotes economic access as drugs are free of charge;
- promotes rational selection of drugs.
- amount of state financing or external aid may fluctuate, thus risking stock shortages;
- difficult to quantify;
- does not optimize distribution.
- in the hospital sector and preventive care;
- with a limited list of drugs;
- for vital or essential drugs, according to the VEN classification, or drugs for particular diseases such as leprosy or tuberculosis;
- for the poorest population or particularly deprived areas.
Payment for distribution and prepayment
In this case, the prepayment agency, which may be an integral part of the health services or may be autonomous, pays for the drugs. The agency may be financed solely by households or receive a subsidy from the government or from abroad (Fig. 3).
Fig. 2. The state or foreign aid pays for drugs
Fig. 3. Payment for distribution and prepayment
- limits shortages of stock;
- promotes economic access as it is free of charge to patients.
- risk of adverse selection (only ill persons may agree to pay);
- moral risk (difficult for the prepayment agency to know the level of consumption that is essential).
- assumes a high level of management skills equal to the complexity of the system, and confidence on the part of economic agents in the way that funds will be used;
- assumes that the population demands drugs for their therapeutic value;
- assumes that the population has enough confidence in the availability of supplies to be willing to pay in advance.