Policy and Programming Options for Reducing the Procurement Costs of Essential Medicines in Developing Countries
(2012; 52 pages)

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.

 
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