Efficiency of Public Procurementof Medicines in the Philippines
Klara Tisocki, Douglas Ball
Health Action International
Background
Prices of medicines are high in the Philippines
Out-of pocket expenditures are high,
Stock-outs, shortages of essential medicines common in publicclinics
Most medicines are purchased in private outlets
Social Health Insurance (PhilHealth) coverage for medicines cost islimited
Medicines procurement in the public sector
devolved with government decentralization
Limited to centralized procurement for vertical programs e.g.vaccines,
Fragmented procurement of essential medicines at provincial,district and municipal level
Lots of political attention to price/affordability –diverging solutions tested and failed
Objectives
•To assess efficiency of public procurement ofmedicines
–across various levels of the health system
–by looking at procurement prices of basket ofessential medicines
Methods
•WHO/HAI survey methodology:
•Total of 5 DOH, 6 Provincial, 5 Municipal facilities
–Selected List (basket) of 50 medicines
•Specific ingredient, dosage form and strength
•Originator brand and lowest-priced generic
–Obtain validated procurement prices
•Review original invoices, payment records to obtainprocurement price , quantities
–Calculate MEDICINE PRICE RATIO, MPR as an indicatorof procurement efficiency
•MPR = MSH supplier price/ local procurement price
Overall MPR
OriginatorBrand (n=33)
Generic
(n= 39)
MedianMPR
15.7
2.9*
25th – 75th %ile
4.9 – 33.3
1.9 – 5.3
Min MPR
0.9
0.9
Max MPR
79.3
40.8
•Originator brands wereobtained at almost 16 timesthe internationalprocurement price
•Generics procured at 3times MSH prices
•50% of generics procuredbetween 1.9 and 5.3 timesthe ref. price
Inclusive of PITC, BLOM
MPRs by procurement entity –generics
DOH vs. Provincial vs. Municipal –generic procurement prices
Generic medicines – variationbetween facilities in a region
Ranitidine 250mg tab/cap generic
Discussion & Conclusions
•High variability of procurement prices unrelated tovolume of procurement,
–WHY? incompetence/inefficiency and/or possible corruption ?
•Public procurement is relatively inefficient andprocurement efficiency is affected by level of government
•Summary MPR for generics = 2.9
0.6 Jordan
1.0 Ghana
1.1 Malaysia
1.5 China
1.7 Indonesia
Recommendations
–FINANCING
• Increase financing of health & reform payment mechanisms
–PROCUREMET MECHANISMS:
•Use more efficient procurement methods Centralise?, pool,revolving funds?
–TRANSPARENCY
•Develop efficient monitoring systems to ensure greateraccountability and transparency by local entities (LGU level anti-corruption measures)
–CAPACITY DEVELOOPMENT
•Increase capacity for technical and financial aspects of themedicines procurement processes.
–QULITY ASSURANCE
•Assure quality and improve acceptance of generics FDA – cGMPinspections , bioequivalence, post-marketing surveillance
Acknowledgements
•Health Action International Global
–Marg Ewen
–Aiza Morales-Buncag –research assistant, Manila
•DOH
–Atty. Alexander A. Padilla, Dir. Maylene M. Beltran, Dr.Robert Louie P. So, Dr. Dennis Quiambao
•Governors, Mayors, LGU officials
•Doctors, pharmacists, nurses, administrators, etc.
Thank you
Maraming salamat po