Chemistry International

Guide to Drug Financing Mechanisms

J. Dumoulin, M. Kaddar, and G. Velasquez, 1998, vii + 55 pages (available in English; French in preparation) ISBN 92 9036 068 2, CHF 19.-/USD 17.10; In developing countries: CHF 13.30. Order no. 1150461.

This book provides a practical guide to the use of economic criteria to analyze a country's pharmaceutical sector and identify ways to improve the drug supply. Addressed to decision makers responsible for formulating drug policies, the book aims to facilitate the analysis of expenditure on drugs within the context of a government's overall economic policies and priorities. With this goal in mind, the book explains the many complex economic factors that influence the drug supply and identifies the corresponding policy options available for introducing changes in different situations.

Information ranges from a discussion of strategies for avoiding surpluses or shortages of drugs, through a comparison of the advantages and disadvantages of four methods of delivering drugs to pharmacies, to the simple reminder that cost alone should never be the sole criterion for drug selection in national procurement schemes. Throughout the book, recommended policies and strategies are presented in line with the overall objective of ensuring that safe, effective, good-quality drugs are available to those who need them at the least possible cost.

The book opens with a brief analysis of three interrelated systems that shape the pharmaceutical sector: the pharmaceutical supply system, the financing system by which the manufacturers and distributors of drugs are paid, and the information system which influences consumer demand and prescribing practices. Against this background, subsequent chapters explain how these three systems affect the performance of the pharmaceutical sector during the distinct steps of drug selection, procurement, distribution, and prescribing. Each step is discussed in terms of the objectives of a national drug policy, the processes that allow these objectives to be attained, and the structures and organizational arrangements needed to carry out these processes and attain these objectives.

The chapter on selection considers strategies for avoiding drugs of no therapeutic interest, reducing the number of drugs, and increasing the efficiency of available drugs. Methods for measuring drug costs and efficacy are also presented and illustrated with examples taken from different countries. Chapter 2 explains the advantages and disadvantages of three common strategies for drug procurement: blind confidence, systematic distrust, and cooperation. Examples from various countries are used to demonstrate the effects that specific procurement strategies can have on both immediate and future drug costs.

Distribution is covered in Chapter 3, which considers factors that influence geographical, physical, and economic access to drugs. Particular attention is given to the advantages and disadvantages of different options for financing drug consumption and preventing stock shortages, surpluses, and losses of drugs. The final chapter considers lines of action for improving prescribing practice and thus reducing the economic costs of irrational prescribing.

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