Operational principles for good pharmaceutical procurement
In many countries drug expenditure constitutes a large proportion of health expenditure. Drug procurement is therefore a significant factor in determining total health costs, and it is important to develop a system that helps to ensure efficient procurement for the public sector. However, most of these policies can also be used in the private sector.
WHO, UNICEF, UNFPA and the World Bank have issued an interagency document with 12 operational principles for good pharmaceutical procurement30 (see Box 6).
These principles are based on four strategic objectives:
1. Procure the most cost-effective drugs in the right quantities.
2. Prequalify reliable suppliers of high quality products.
3. Ensure timely delivery.
4. Achieve the lowest possible total cost.
Box 6
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Operational principles for good pharmaceutical procurement
Efficient and transparent management
1. Different procurement functions should be separated and performed by different offices or committees.
2. Procurement procedures should be transparent, following formal written procedures.
3. Procurement should be planned, and performance monitored and audited regularly.
Drug selection and quantification
4. Public drug procurement should be limited to a national essential drugs list.
5. Procurement documents should list drugs by their generic name.
6. Order quantities should be based on a reliable estimate of actual need.
Financing and competition
7. Mechanisms should be put in place to assure reliable financing for procurement.
8. Procurement should be done in the largest possible quantities.
9. Public procurement should be based on competitive procurement methods.
10. Members of the purchasing groups should respect supply contracts.
Supplier selection and quality assurance
11. A system of supplier prequalification and monitoring should be in place.
12. Procurement should assure quality according to international standards.
Source: Operational principles for good pharmaceutical procurement. Geneva: World Health Organization; 1999 WHO/EDM//PAR/99.5 (interagency document).
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Price information for finished products
Market intelligence is of enormous benefit for drug procurement and strengthens the purchaser’s bargaining power. In this regard the International price indicator guide31 presents up-to-date information on the world market price of most essential drugs. Similarly, information on new drugs and their registration status in the country of origin can be valuable. Information on product interchangeability is set out in the guidelines on registration requirements for establishing interchangeability adopted by the WHO Expert Committee on Specifications for Pharmaceutical Preparations.29 UNICEF, WHO, the Joint United Nations Programme on HIV/AIDS (UNAIDS) and Médecins Sans Frontières (MSF) jointly publish price information on drugs used in the treatment of HIV/AIDS.38
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