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