Cost-Containment Mechanisms for Essential Medicines, Including Antiretrovirals, in China - Health Economics and Drugs Series No. 013: Introduction: International open tendering

Cost-Containment Mechanisms for Essential Medicines, Including Antiretrovirals, in China - Health Economics and Drugs Series No. 013
(2003; 30 pages) [French] [Spanish]

Table of Contents

	Acknowledgements
	Terms of reference
	Introduction
		Cost-effective medicine selection
		Price information
		International open tendering
		Voluntary discount agreements
		Voluntary licensing
		Compulsory licensing
		Local state production
		Government price controls
		Reduction of import and other taxes for essential medicines, and rational dispensing practices
		Public investment in R & D for new medicines: A mid- to long-term strategy
	Background and experiences with voluntary agreements
	Country rights to be protected in voluntary agreements for reduction of prices of medicines
	Compulsory licensing - practical aspects and procedures
		Identify relevant patents
		Explore possible sources of supply based on local production
		Identify possible sources of importation of the required medicine
		Marketing approval
		Request for a compulsory licence
		Granting of the compulsory licence by the Patent Administration Department
		Negotiation with patent holder about fee
		Determination of fee by the Patent Administration Department
		Appeal
		Other considerations
	Concluding comments
	List of persons contacted
	Further reading

International open tendering

Open tender is a formal procedure by which quotations are invited from any manufacturer or manufacturer’s representative on a local or worldwide basis, subject to the terms and conditions specified in the tender invitation. In medicines procurement, the use of competitive international tendering has indisputable economic advantages and is one of the classic cost-containment mechanisms. According to the experiences of many countries, international tendering reduces prices by 40 to 50 %².

² Quick et al. Managing Drug Supply. Kumarian Press, 1997.

However, the economic advantages of this mechanism apply mainly to multi-source products where competition exists and not for patented medicines. Open tendering is not an option for medicines, such as the majority of ARVs, that are protected by patents.