Efficiency of Public Procurement of Medicines in the Philippines Klara Tisocki, Douglas Ball Health Action International
Jan 03, 2016
Efficiency of Public Procurement of Medicines in the Philippines
Klara Tisocki, Douglas BallHealth 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 public clinics
Most medicines are purchased in private outlets Social Health Insurance (PhilHealth) coverage for medicines cost is
limited
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 of medicines
– across various levels of the health system – by looking at procurement prices of basket of
essential 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 obtain
procurement price , quantities
– Calculate MEDICINE PRICE RATIO, MPR as an indicator of procurement efficiency
• MPR = MSH supplier price/ local procurement price
Overall MPROriginator Brand (n=
33)
Generic (n= 39)
Median MPR
15.7 2.9*
25th – 75th %ile 4.9 – 33.3 1.9 – 5.3Min MPR 0.9 0.9Max MPR 79.3 40.8
• Originator brands were obtained at almost 16 times the international procurement price
• Generics procured at 3 times MSH prices
• 50% of generics procured between 1.9 and 5.3 times the ref. price
Inclusive of PITC, BLOM
MPRs by procurement entity – generics
DOH (n=5) Provincial (n=6)
Municipal (n=6)
All (n=16)0
2
4
6
Figure 1. Median (IQR) procurement prices for generic medicines at each
procurement level
Me
dia
n p
ric
e r
ati
o
DOH vs. Provincial vs. Municipal – generic procurement prices
CTX tabs
Ceftriaxo
ne
Ranitidine
Ciproflox.
Cefazolin
Amox+Clav
CTX DS tab
s
Capto
pril
Metform
in
Amox. Su
sp.
0
2
4
6
8
10
12
14
DOH-retained Provincial Municipal
MPR
Generic medicines – variation between facilities in a region
DOH
ProvincialPGH PITC
0
1
2
3
4
5
6
7
8
9
10
MPR
Ranitidine 250mg tab/cap generic
MunicipalPGH PITC
0
2
4
6
8
10
12
14
MPR
Discussion & Conclusions• High variability of procurement prices unrelated to
volume of procurement, – WHY? incompetence/inefficiency and/or possible corruption ?
• Public procurement is relatively inefficient and procurement efficiency is affected by level of government
• Summary MPR for generics = 2.90.6 Jordan1.0 Ghana1.1 Malaysia1.5 China1.7 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 greater
accountability and transparency by local entities (LGU level anti-corruption measures)
– CAPACITY DEVELOOPMENT • Increase capacity for technical and financial aspects of the
medicines procurement processes. – QULITY ASSURANCE
• Assure quality and improve acceptance of generics FDA – cGMP inspections , 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.
• Reports available: http://www.haiweb.org/medicineprices/
Thank you
Maraming salamat po