drug costs

In Kenyatta National Hospital, a leading hospital in Kenya, over 30% of expenditure is currently allocated to medicines, and this needs to be optimally managed. We used inventory control techniques, ABC (Always, Better, and Control), VEN (Vital, Essential, and Non-essential) and ABC-VEN matrix analyses to study drug expenditure patterns. Of an average of 811 medicine types procured annually, 80% were formulary drugs and 20% were non-formulary. Class A medicines constituted 13.2–14.2% of different medicines procured each year but accounted for an average of 80% of total annual drug expenditure. Class B medicines constituted 15.9–17% of all the drugs procured yearly but accounted for 15% of the annual expenditure, whilst Class C medicines constituted 70% of total medicines procured but only 5% of the total expenditure. Vital and essential medicines consumed the highest percentage of drug expenditure. ABC-VEN categorization showed that an average of 31% of medicine types consumed an average of 85% of total drug expenditure. Therapeutic category and morbidity patterns analysis showed a mismatch between drug expenditure and morbidity patterns in over 85% of the categories. We concluded that Class A medicines are few but consume the largest proportion of hospital drug expenditure. Vital and essential items account for the highest drug expenditure, and need to be carefully managed. ABC-VEN categorization identified medicines where major savings could potentially be made helped by therapeutic category and morbidity pattern analysis. There was a high percentage of non-formulary items, which needs to be addressed. Inventory control techniques should be applied routinely to optimize medicine use within available budgets, especially in low- and middle-income countries.

Market intelligence data, United Nations Commodity Trade Statistics for insulin trade, the International Medical Products Price Guide for prices of human insulin and additional web searches were used as data sources. A total of 34 insulin manufacturers were identified. Most countries and territories are reliant on a limited number of supplying countries. The overall median government procurement price for a 10‐ml, 100‐IU/ml vial during the period 1996–2013 equivalent was US$4.3, with median prices in Africa and low-income and low‐ to middle‐ income countries being higher over this period.This research shows the high variability of insulin prices and the reliance on a few sources, both companies and countries, for global supply. In addressing access to insulin, countries need to use existing price data to negotiate prices, and mechanisms need to be developed to foster competition and security of supply of insulin, given the limited number of truly global producers.

The Government of Cameroon and its partners have made major investments in the last decade in prevention, treatment, and care of HIV-infected patients. However, unmet need for antiretroviral therapy (ART) among HIV-positive pregnant women remains high at 66%. Critical to satisfying this need is ensuring adequate availability of prevention of mother-to-child transmission (PMTCT) commodities for rollout of new Option B+ guidelines. This study examines options for improving the supply and availability of these commodities. Supply chain operational data was collected in July 2014 from central (CENAME) and 4 regional warehouses (CAPRs); 10 district stores; and 30 service delivery points (SDPs), including ART and PMTCT sites. The study also included seven central private-sector logistics firms. In addition, SC cost data was obtained from CENAME and CAPRs financial statements. Data collected served for analysis of three options to improve effectiveness of delivering PMTCT commodities. Asset utilization within the cost recovery system ranged between 73% and 89% while inventory turnover was at 1.5. Therefore, a reliable supply of medicines to SDPs is ensured. However, for PMTCT and ART commodities, distribution to the SDPs was unreliable (in 2013, 40% of prescriptions remained unfilled). Meanwhile, results of the options analysis indicated that the model of CAPRs delivering PMTCT commodities to SDPs was the most desirable. Although the distance traveled was higher, the need for network storage space was minimal. Moreover, its total cost and human resource requirements were more favorable. As a result of disseminating the findings, the Ministry of Health adopted Option 2.

In 2014, the budget for high cost drugs in the Dominican Republic was USD 107 million, accounting for 51% of the Ministry of Health (MoH) budget for medicines. Resources allocated for the 2015 budget were USD 49 million, leaving a shortfall of USD 62 million. The MoH requested technical assistance from the USAID-funded SIAPS project to conduct an evidence based analysis of the 98 products included in the list.

 In 2013 the Global Drug Facility reduced the price of the second-line drugs it supplies for multidrug-resistant tuberculosis (MDR TB): the overall cost of the longest and most expensive treatment regimen for a patient decreased by 26%, from US$7,890 in 2011 to US$5,822 in 2013. The price of treatment for MDR TB was reduced by consolidating orders to achieve large purchase volumes, by international, competitive bidding and by the existence of donor-funded medicine stockpiles. The rise in the number of suppliers of internationally quality-assured drugs was also important. The savings achieved from lower drug costs could be used to increase the number of patients on high-quality treatment.

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