Procurement Institutions and Essential Drug Supply in Low and Middle-Income Countries

Wang, Lucy Xiaolu; Zahur, Nahim Bin

doi:10.2139/ssrn.3926761

Cited by 8 publications

(8 citation statements)

References 35 publications

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“…The principle for the impact of centralized procurement on hospitals’ drug utilization lies in the reshaping of the market pattern under the alliance mechanism—the influence of the centralized procurement mechanism on drug market varied by existing competition patterns, drug attributes, and buyers’ demands ( Dubois et al, 2021 ; Wang and Zahur, 2022 ). Existing literature noted that centralized procurement mechanism demonstrated no limit on product choices of healthcare providers ( Callea et al, 2017 ; Wang and Zahur, 2022 ), nor did we observe in this study; therefore, reasons exist to believe that changes in drug utilization may be largely derived from the increased efficiency of the procurement system and improved rationality of decision-making about drug procurement ( Bandiera et al, 2008 ; Huff-Rousselle, 2012 ). In China’s current public procurement practice, our findings indeed indicated significant changes in drug utilization of policy-related drugs after the implementation of the centralized drug procurement policy, and the variations in drug use structure among healthcare settings and geographical regions were gradually diminished.…”

Section: Discussionmentioning

confidence: 99%

The change of drug utilization in China’s public healthcare institutions under the “4 + 7” centralized drug procurement policy: Evidence from a natural experiment in China

Jian-cheng

Long

Shen³

et al. 2022

Front. Pharmacol.

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Background: Improving drug accessibility and rational drug use are major challenges for China’s healthcare reform. In 2018, the Chinese government introduced a novel nationwide policy of centralized drug procurement for off-patent drugs, focusing on improving drug utilization patterns of public medical institutions.Objective: To estimate the impacts of the Chinese centralized drug procurement policy (the so-called “4 + 7” policy) on drug utilization in public medical institutions.Methods: A retrospective natural experimental design and difference-in-difference method were applied using cross-region data extracted from the national procurement database. Eleven “4 + 7” pilot cities (intervention group) and eleven non-pilot provinces (control group) were matched. In addition, “4 + 7” policy-related drugs (n = 116) were selected as study samples, including 25 drugs in the 4 + 7” procurement List (“4 + 7” List drugs) and their alternative drugs (n = 91) that have not yet been covered by centralized procurement policy. Then, the “4 + 7” List drugs were divided into bid-winning and non-winning drugs according to the bidding results, and they were sorted into generic and original drugs. Defined daily dose (DDD) was used to standardize the quantity of drugs used.Results: In the 1-year procurement period, the overall completion rate of agreed procurement volume reached 191.4% in pilot cities. Owing to policy impact, the consumption increased by 405.31% in bid-winning drugs (β = 1.62, p < 0.001) and decreased by 62.28% (β = −0.98, p < 0.001) in non-winning drugs. The overall use proportion of bid-winning drugs increased from 17.03% to 73.61% with statistical significance (β = 1.48, p < 0.001), and increments were also detected in all healthcare settings, regions, and anatomical therapeutic chemical (ATC) categories (all p-values < 0.05). Generics and originators were detected with 67.53% increment (β = 0.52, p < 0.001) and 26.88% drop (β = −0.31, p = 0.006) in consume volume. The use proportion of generics increased from 59.23% to 78.44% with significance (β = 0.24, p < 0.001), as well as in tertiary hospitals (β = 0.31), secondary hospitals (β = 0.23), and primary healthcare centers (β = 0.11) (all p-values < 0.001). The use proportion of relatively quality-guaranteed drugs (i.e. bid-winning and original drugs) increased from 56.69% to 93.61% with significance (β = 0.61, p < 0.001), and similar increments were also detected in all healthcare settings, regions, and ATC categories (all p-values < 0.05).Conclusion: Healthcare providers demonstrated good compliance with the “4 + 7” policy in completing contracted procurement volume. Centralized drug procurement policy promoted drug consumption gradually concentrated on bid-winning drugs, generic drugs, and more importantly, quality-guaranteed drugs.

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Section: Discussionmentioning

confidence: 99%

The change of drug utilization in China’s public healthcare institutions under the “4 + 7” centralized drug procurement policy: Evidence from a natural experiment in China

Jian-cheng

Long

Shen³

et al. 2022

Front. Pharmacol.

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“…HIV-related investments in strengthening national health commodity procurement and supply chain management [75] proved highly valuable in the response to COVID-19, enabling the procurement and shipment of oxygen, ventilators, protective equipment and laboratory equipment [28,75]. The HIV response is a pioneer of pooled procurement of medical commodities for low-and middle-income countries [76], an approach that has been shown to lower prices, reduce delays and minimize the risk of commodity stock-outs, and which could improve commodity access in the next pandemic [77,78].…”

Section: Procurement and Supply Chainmentioning

confidence: 99%

Leveraging the HIV response to strengthen pandemic preparedness

Collins

Isbell²,

Karim

et al. 2023

PLOS Glob Public Health

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The COVID-19 pandemic and the expectation of future pandemic threats have generated a global dialogue on strengthening pandemic preparedness and response (PPR). Thus far, this dialogue has largely failed to fully consider the critical role that established, disease-specific programs played in national and regional COVID-19 responses, and the potential for these programs to contribute to stronger pandemic preparedness for the future. The HIV response is an important example of a global health initiative that is already making substantial contributions to PPR. Both the infrastructure and core principles of the HIV response have much to contribute towards pandemic preparedness that is more effective and equitable than seen in the response to COVID-19. This review examines how HIV-related resources and principles can support communities and countries in being better prepared for emerging disease threats, with a specific focus on evidence from the COVID-19 pandemic. Drawing on the current literature, the review explores the clear, multi-faceted intersection between the HIV response and the central elements of pandemic preparedness in areas including surveillance; supply chain; primary care; health care workforce; community engagement; biomedical research; universal access without discrimination; political leadership; governance; and financing. There are many opportunities to be more strategic and purposeful in leveraging HIV programs and approaches for preparedness. Avoiding the longstanding temptation in global health to create new siloes, PPR initiatives, including the new Pandemic Fund at the World Bank, should invest in and build out from existing programs that are already making health systems more inclusive and resilient, including the global response to HIV.

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“…Also, significant differences were observed in the decrease of bid-winning prices among different INNs. Several factors might influence bidding price, findings derived from cross-country studies reported that more potential competitors, decentralized market, and older generation drugs were generally associated with lower centralized bidding prices (Dubois et al, 2021;Wang and Zahur, 2022). Evidence from China indicated that originators are likely to gain lower prices than generics in centralized bidding (Li et al, 2021;Sun et al, 2022).…”

Section: Significant Price Decline Of the Bid-winning Drugs After Cen...mentioning

confidence: 99%

Changing Characteristics of Pharmaceutical Prices in China Under Centralized Procurement Policy: A Multi-Intervention Interrupted Time Series

et al. 2022

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Objective: National centralized drug procurement organized by the Chinese government currently represents the largest group purchasing organization worldwide, to establish a reasonable price formation mechanism. This study aimed to evaluate the effects of centralized procurement policy on drug price and price ratio in China.Method: Monthly drug procurement data of public medical institutions were extracted from the national procurement database, including 11 pilot cities and 36 months from January 2018 to December 2020. Centralized procured INNs (International Nonproprietary Names) (n = 25) and their alternative INNs (n = 96) were selected as study samples. Centralized procured INNs were divided into bid-winning and non-winning products according to the bidding results. Drug price, price distribution, and price ratio were measured. Multi-intervention interrupted time series analysis was performed to estimate the policy impacts in two centralized procurement periods.Results: The price of centralized procured INNs showed an immediate drop of 44.57% (β = -0.59, p < 0.001) at the policy implementation, among which bid-winning drugs decreased by 61.71% (β = -0.96, p < 0.001). No significant change in the price level or trends was found for non-winning products and alternative drugs in the first-year procurement period (all p-values > 0.05). During the second-year procurement period, alternative drugs in four therapeutic categories detected significant increases in the price level (all p-values < 0.05). The overall coefficient of variation of price distribution exhibited upward trends after policy implementation. Among the most centralized procured INNs, the price ratio between certificated generics (generics that have passed the consistency evaluation) and original drugs declined significantly after policy intervention (p < 0.05), whereas the price ratio between uncertificated and certificated generics increased significantly (p < 0.05).Conclusion: Chinese government-organized group purchasing resulted in prominent price reduction of bid-winning drugs. The policy observed a short-term “spillover” effect of synergistic price reduction, while the effect wore off after 1-year procurement period. The extremely dispersed price distribution, as well as unreasonable price ratios, requires further effective price regulation means.

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Procurement Institutions and Essential Drug Supply in Low and Middle-Income Countries

Cited by 8 publications

References 35 publications

The change of drug utilization in China’s public healthcare institutions under the “4 + 7” centralized drug procurement policy: Evidence from a natural experiment in China

The change of drug utilization in China’s public healthcare institutions under the “4 + 7” centralized drug procurement policy: Evidence from a natural experiment in China

Leveraging the HIV response to strengthen pandemic preparedness

Changing Characteristics of Pharmaceutical Prices in China Under Centralized Procurement Policy: A Multi-Intervention Interrupted Time Series

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