Revolving drug funds: Conducting business in the public sector

Cost Containment Through Pharmaceutical Procurement: A Caribbean Case Study

“…This finding, combined with the drain on foreign exchange and high recurrent costs of pharmaceuticals, has led to: (1) policy recommendations for the introduction of pharmaceutical user fees in the public sector (DeFerranti, 1985); (2) explanations of how to price (Litvick et al, 1989) and to implement cost recovery schemes for pharmaceuticals (Cross et al, 1986;Van der Geest, 1992); and (3) major implementation activities, most notably the UNICEF-supported Bamako Initiative which has been launched in a number of African countries (World Bank, 1993). Critics claim that user fees for pharmaceuticals are not a solution in many situations, that they reduce or divert rational demand for health services (Creese, 1992), that they do not provide needed foreign exchange , that the private sector is better able to distribute pharmaceuticals (Vogel and Stephens, 1989), and that there are many practical obstacles to implementation from book-keeping to impending elections (Bennett, 1989;Griffin, 1988;Foster, 1991).…”

Towards equitable access to medicines for the rural poor: analyses of insurance claims reveal rural pharmacy initiative triggers price competition in Kyrgyzstan

“…Sustainable and successful schemes have been described across Africa, South East Asia, and the Former Soviet Union [13-22]. More frequently, however, the literature reveals the failure of revolving drug funds to accomplish their objectives [14,15,22-34]. …”

“…The design and management challenges of revolving drug funds that Cross et al [22] described in 1986 remain relevant today, nearly a quarter of a century later. Most noteworthy for our study is the inability of most schemes to adopt a business approach to their operations and practices, including a failure to assess the potential market and insufficient planning and marketing [22].…”

“…Most noteworthy for our study is the inability of most schemes to adopt a business approach to their operations and practices, including a failure to assess the potential market and insufficient planning and marketing [22]. The concept of revolving drug funds has evolved into more sophisticated, business-focused initiatives, such as the Tanzanian Accredited Drug Dispensing Outlets and the Ghanaian CAREshops [6,35].…”

Current status of medicines procurement

“…Unfortunately, experience has shown that RDFs face a number of problems, which leads to insufficient recovery of funds to replenish the supplies. 73,74 All these point to the importance of addressing drug procurement financing using business principles, careful quantification and planning, and an agreed-upon mechanism to ensure that funds are available when needed.…”