Data-enabled public procurement monitoring leads to more affordable medicines
A community of civic actors used open data as evidence to advocate for change, and a new law was introduced that allowed the country’s biggest medicine buyer to deal directly with private pharmacies and cap retail prices. This slashed the agency’s drug spending and saved the government over $9 million in the first year. Savings are now directly passed on to citizens.
Key open contracting strategies
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| Accessible and standardized open data across the entire public procurement process | Partnerships for reforms: civil society engagement including development of new platforms | A focus on improving critical public services such as medicine procurement | Improving access to government contracts for SMEs and women-owned businesses | Establishment of a civil society observatory |
Summary
Challenge
Uncompetitive practices and vested interests in medicine procurement had long restricted patients’ access to affordable treatment.
Open contracting approach
A community of civic actors used open data as evidence to advocate for change, and a new law was introduced that allowed the country’s biggest medicine buyer to deal directly with private pharmacies and cap retail prices. This slashed the agency’s drug spending and saved the government over $9 million in the first year. Savings are now directly passed on to citizens. The country’s procurement agency ChileCompra has worked with civil society organizations including Observatorio Fiscal, Chile Transparente, and others to boost transparency and red flag monitoring and integrity in public expenditure. The government is expanding reforms to build back better from the pandemic and will be investing $8 billion into public infrastructure.
Results
- After investigations of medicine procurement disclosed direct awards, a lack of competition, and conflicts of interest by key decision-makers, reforms saw increased competition and drug prices drop.
- 60% of medicines purchased at up to 80% cheaper
- Savings of 6.6 billion Chilean Pesos (approx US$9 million)
Key data
| Cheaper medicines | 60% of medicines purchased at up to 80% cheaper |
| Government cost savings | Total savings of 6.6 billion Chilean Pesos (approx US$9 million) |
| New participants are entering the market | 17 of the 60 suppliers had not been awarded contracts in the previous period |
“In my work, change is coming in the world of healthcare, so that regardless of the type of insurance you have, regardless of where you live or the social class you are in, you can receive good, quality medications at the time that you need them.”
At a glance
