Our plan to bring down the cost of medicines through open contracting

The pandemic put unprecedented strain on global public health systems, and in recent years dozens of countries have faced shortages of critical medicines. Rather than making progress towards the United Nations General Assembly’s goal of Universal Health Coverage by 2030, we’ve actually seen 1 billion people fall behind in their access to healthcare due to rising costs and the unprecedented pressures on budgets and public health services.

WHO research has shown that inadequate procurement is a top barrier to supplying affordable treatment, and the sector is prone to corruption with the medical industry being the second most prosecuted under the OECD Anti-Bribery Convention.

It’s hard to overstate the human cost of the inefficiency, waste and fraud in the sector. As activist Dmytro Sherembei of Ukrainian patient organization 100% Life said: “In healthcare, corruption is very simple: Something gets stolen, somebody dies. The cancer patient does not receive chemotherapy, the HIV patient does not get antiretroviral drugs.” 

How can we change this status quo and save lives?

This is where open contracting can make a real difference by transforming medicine procurement from an opaque, slow, paper-based compliance chore to an open, patient-centered, cost-effective digital system.

We know it works: open contracting champions in Ukraine, Moldova and Chile have implemented reforms that have resulted in reducing corruption risks, increasing competition, bringing down prices, and ensuring best value for money in medicine prices. All of this boosts treatment access, sometimes as much as doubling the number of patients receiving treatment for the same budget. We have seen price reductions, in the case of Chile, by as much as 80% for some critical medicines and of nearly 20% for critical HIV drugs in Moldova. 

Our top ten insights from early adopters shed light on some of the things we can do now to get started:

1. Review treatment regimens with public health experts to ensure the ideal balance of effective, quality treatment with value for money 
2. Simplify the  registration process for medicines of internationally recognized quality to boost competition
3. Use Generics. Encourage generic uptake to increase affordability of medicines
4. Work with Patient Advocates. Develop working groups where patient advocates and public health experts can work together with health officials under procurement lists and review technical procurement documentation to secure accountability and put patient interests front and center
5. Eliminate regulatory barriers that increase procurement prices, for example by using centralized procurements, eliminating tax exemptions, encouraging direct procurements from manufacturers, or accepting international packaging, – to name just a few!
6. Use transparent, digitized procurement processes such as an e-procurement system where everyone can see plans, tender documentation, supplier proposals, concluded contracts, and the changes made to these over time (bonus: make sure that these are published as open data using OCP’s Medicines Extension)
7. Disclose unit prices for medicines and make these publicly available by active pharmaceutical ingredients, formulation and dose.
8. Direct but accountable negotiation. Inform pharmaceutical companies of upcoming procurement plans and negotiate price reduction. Don’t forget about civil society’s ability to encourage more companies to engage and negotiate resulting in more competitive pricing!
9. Civic monitoring. Encourage civil-society monitoring and analysis of medicine procurement data and prices and support these efforts by embedding analytical dashboards and intelligence tools
10. Build the capacity of medicine procurement agencies through training in data analytics and digital tools so they are able to take full advantage of market insights that can lead to iterative improvements and solutions to remaining barriers to efficient, cost-effective medicine procurement

What will it take to transform medicine procurement?

We have a wealth of early insights into what works, but there is still no unified approach to the format of medicine price transparency or who should have access to medicine price data itself. And based on our partner surveys, we know that there is a clear demand to create dedicated guidance on how to implement open contracting for medicine procurement and convene peer networks of practitioners to share experiences. 

To meet this need, this autumn we’ll be releasing new step-by-step explainers, detailed guidance materials and country case studies, and we will be kicking off a series of peer learning sessions for medicine procurement professionals to connect.

Because ultimately, to transform medicine procurement and improve and expand treatment, we need to build on our early insights, promote global good practices and – most importantly – involve you, our community, in bringing these reforms to life for impact. With your support and collaboration, we can make change happen! Get in touch with our Senior Program Manager Zoia Zamikhovska via email to get involved and learn more.