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Efficiency of Public Procurement of Medicines in the Philippines

This study examines the efficiency of public procurement of medicines in the Philippines, focusing on pricing and procurement methods. The findings reveal high prices and variability in procurement prices, suggesting possible inefficiency and corruption. Recommendations include increased financing, adoption of more efficient procurement methods, transparency measures, capacity development, and quality assurance.

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Efficiency of Public Procurement of Medicines in the Philippines

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  1. Efficiency of Public Procurement of Medicines in the Philippines Klara Tisocki, Douglas Ball Health Action International

  2. 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

  3. 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

  4. 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

  5. Overall MPR • 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

  6. MPRs by procurement entity – generics

  7. DOH vs. Provincial vs. Municipal – generic procurement prices

  8. Generic medicines – variation between facilities in a region

  9. Ranitidine 250mg tab/cap generic

  10. 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 = 2.9 0.6 Jordan 1.0 Ghana 1.1 Malaysia 1.5 China 1.7 Indonesia

  11. 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

  12. Acknowledgements • Health Action International Global • MargEwen • 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/

  13. Thank you Maramingsalamatpo

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