Every eight minutes somewhere in the world a woman dies during delivery of her baby, due to bleeding, mostly in poorer countries. In certain countries in Africa a woman who has given birth is first congratulated with her survival, and only then with the new baby.
Why are the good medicines that are used in rich environments, not available worldwide? Hint: It is not just price!
Let’s look at oxytocin, recommended by the World Health Organization to prevent bleeding: Many products already have a low quality at shipment. But even the good ones lose effectiveness quickly, if not transported and stored below 25 degrees Celsius.
Procurers and donors tend to look at price first and then at quality and as a result they often buy cheap, bad quality products. And even good products are often not refrigerated.
But, why are affordable quality products not available in many countries? First, limited understanding of the relationship price-quality: One effective high-quality product worth 30 cents is cheaper than three ineffective ones that cost 15 cents each.
Secondly, refrigerated shipping and storage cost money: There’s no need to put oxytocin on ice, but a container must keep the contents below room temperature, even when parked in the sun for several days. And cold storage in a tropical environment means a refrigerator.
Thirdly, corruption is still an issue in certain countries: Money comes under the table from manufacturers of low quality products. One company told us not to be interested in a higher quality standard, “because we know the minister and we supply our own health system anyway with our product.”
Of course health ministers tell the population that their priority is access and availability of all essential medicines. However, the lower echelons of government are often primarily concerned about the budget, because that is what is most easily measured. There is in many cases no incentive for government officials to look for a high-quality, low-price product.
So what can be done? Here are some practical actions:
1. The public sector needs to be open to market- and business-based approaches. Learn from the private sector, which has been successful in bringing products to market. Why, in some places, are essential medicines are not available, while we can always get a soft drink.
2. Procurers and donors need to know the products they order. Where are they made, what is the quality, what is the price, what are the storage conditions, etc. And very important: What is the relationship between quality and price?
As a rule: quality first and price second. In our private lives we don’t buy spoiled rice when it is cheaper, so don’t do it while buying medicines with donors’ money.
3. Government officials must follow their own rules. Make sure all needed products are registered. In a recent study many products in a hospital pharmacy were not approved by the regulatory agency, let alone were they of good quality.
4. Use centralized and/or pooled procurement, to increase volume and to lower prices and inspection costs. Recently a manufacturer did not bid on a tender because the requested amount of drugs was 50,000 packs, while the batch size of the company is 100,000. Two months later the government of a neighboring country also wrote a tender for 50,000 packs. Had these tenders been combined, both countries would have had a good product for a lower price, and the company would have had a nice order.
The same can be said about quality control: Products from one company were controlled for quality when coming into the port of country A. When part of the shipment reached the border of country B overland a few days later, exactly the same controls were carried out.
5. Build incentives along all parts of the chain. Reward manufacturers with a slightly higher price for a quality product, give a small provision to the local supply chain company for doing a good job, make promotions of government officials also dependent upon the timely registration of a product, on collaboration with a private distributor and of the quality of the medicines provided, reward local health workers for good storage and appropriate use of the products, even with a small amount, and so on.
We have been successful with dual pricing: When working with the public sector, the price must remain very low, making it unattractive to a producer. However, the manufacturer can be allowed to ask a higher price for the same product in private markets, subsidizing the lower price in the public sector.
6. Build relationships. In a recent workshop, where we brought manufacturers, government officials and donors together, it quickly became clear that the different groups did not trust each other. That is, until they talked to each other! Then they found they had a number of common goals, including getting a good product for a decent price in a good way to patients who need it.
When officials heard the challenges of manufacturers, such as small tenders, different regulatory requirements in different countries, and so on, they started to understand. And when manufacturers were asked how to guarantee quality after WHO PreQualification, how pricing works, and so on, they got a better understanding of the concerns of the government. Although websites can be very useful, face-to-face meetings create trust.
7. Let a local private company take care of logistics. They work faster, are more flexible, highly motivated and they allow clinicians to do their clinical work.
Finally, mobilize the public, the end-users, for whom funding by donors and support by governments is intended. If they realize that the money for medication can be better spent on good quality medicines than on bad ones and that women don’t need to die when giving life, they can talk to their local governments, and to their members of parliament, to hold them accountable.
Making Markets Work is an online conversation to explore what’s being done to make global health care markets accessible to people at the base of the pyramid. Over 10 weeks, we will amplify the discussion around effective health financing, analyze key challenges blocking universal market access in the health care supply chain, and explore the key strategies to make markets more effective. Join us as we look at this important issue, and share your thoughts by tagging #MakingMarketsWork and @Devex.