2. Improving Rational Use through Efficient Procurement: Review of the Existing Evidence

3. Libby Levison, Richard Laing, Brenda Waning, Warren Kaplan
Boston University School of Public Health, WHO/EDM
Review paper for RPM-Plus

4. Study goals Review literature on pharmaceutical procurement
Summarize evidence on procurement methods
Identify factors that impact procurement performance
Identify health systems which are “best method” examples
Identify future research priorities

5. Methods Medline, EMBASE & International Pharmaceutical Abstracts
Articles published
Internet:
Discussion groups: E-Drug, IP-Health
Web-published papers from NGOs
Comparison with other disciplines:
General procurement & supply chain management at Business School Library
NGOs: WHO, UNICEF, The World Bank, Management Sciences for Health, John Snow, Inc., etc

6. Outline Participants & system structure Procurement process
Planning: coordination & resources
Recent developments
Research priorities
Quantity of available literature indicated from + to +++

7. 1. Participants & structure
Public sector
Private non-profit
Private for-profit
Public-private partnerships
System structure
Centralized/decentralized
Regional/pooled procurement
Pluses indicate roughly the volume of publications on this topic

8. Procurement process Selection ++ Quantification + Tender format +
Pre-qualification (+)+
Tender quantities
Market intelligence
Analyzing costs
Many of these are covered by the same 3 or 4 papers…

9. Procurement process Payment + Contract specification (+) Adjudication
Reception & quality control
Monitoring procurement
Continued quality monitoring
Contract: excellent reference publication, not case study: World Bank contractual documents

10. Example: Van der Veen & Fransen
Studied final cost variations for different tendering methods of STD drugs
Prices of generics 3-6 times higher for ministries doing national tendering than for international procurement agencies

11. Planning and resources
Procurement planning
Human resources
Access to adequate resources
Evidence for HR in other procurement lit, not in pharm procurement

12. Lessons learned Scarcity of published evidence
Little evidence for well-established procedures
Need for easily accessible case studies
Need metric to assess and compare procurement systems

13. How to improve rational use:
Decentralization sub-optimal for procurement
Base selection on EML
Reduce work and prices with
pre-qualification and restricted tender
Implement QC at reception:
% of procurement cost
Access to market data lowers costs
Strengthen Purchaser terms in contracts
Improve communication in system
Provide training, resources to procurement
Decentalization: see MSH Philippines data
Selection: see DSPRUD
QC: DSPRUD and Bangladesh
Market data: Includes Internet
Contracts: no info
Communication: between parties.

14. Future studies: Over 60 study outlines listed in paper
Focus on gathering evidence to inform implementation choices
Each proposed study contains:
Problem description
Previous studies
Required knowledge
Outline of study with suggested variables
New developments provide new options for who procures, what is procured, and processes available to carry out procurement

15. Study: Tendering Type Cross-sectional comparative Population
Proc offices: public, private, NGO
Sample size
20-25
Variables:
Cost differences among tender formats
Impact tender format on efficiency? On cost?
Relationship between tendering method and order delays
Goal
Understand how tender process determines price variations

16. Study: Taxes Type Cross-sectional comparative Population All countries
Sample size
As many as possible
Variables:
What taxes are levied?
What form of taxes (VAT, GST)
Exemptions: by product, by purchaser
Cost of tax and exemption system?
Tax system history
Goal
Gather knowledge of tax systems to inform policy decisions on EMs

17. Conclusion: goals achieved
Limited literature on pharmaceutical procurement
Summarized documented procurement methods in practice
Identified the few factors that impact procurement performance
Found <10 health systems which are “best method” examples
Suggested future research priorities