COST-CONTAINMENT THROUGH PHARMACEUTICAL PROCUREMENT - A CARIBBEAN CASE-STUDY

This article discusses the potential for health sector cost containmen t in developing countries through improved pharmaceutical procurement. By describing the specific example of the Eastern Caribbean Drug Serv ice (ECDS), which provides a pooled procurement service to nine minist ries of health in the small island nations of the Caribbean, it examin es the elements of the procurement operation that allowed ECDS to redu ce unit costs for pharmaceuticals by over 50 per cent during its first procurement cycle. The analyis of ECDS considers: (1) political will, institutional alliances, and the creation of a public sector monopson y; (2) pooling demand; (3) restricted international tendering and the pharmaceutical industry; (4) estimating demand and supplier guarantees ; (5) reducing variety and increasing volume through standardizing pac k sizes, dosage forms and strengths; (6) generic bidding and therapeut ic alternative bidding; (7) mode of transport from foreign suppliers; (8) financing mechanisms, including choice of currency, foreign exchan ge, and terms of payment; (9) market conditions and crafting and enfor cing supplier contracts; and, (10) the adjudication process, including consideration of suppliers' past performance, precision requirements in the manufacturing process, number of products-awarded to suppliers, and issues of judgment. The authors consider the relevance of this ag ency's experience to other developing countries by providing a bluepri nt that can be adopted or modified to suit other situations.