Project assistance completion report : regional pharmaceuticals management project

The project succeeded in demonstrating the practical benefits of regional integration of common services. The pharmaceutical service and pooled tendering system resulted in an average savings of 44% on the unit price of drugs during the first tender cycle and even greater savings in the second. Subsequent cycles focused primarily on containing costs and improving quality. The project significantly upgraded the central medical stores (CM''s) by improving inventory systems and training hundreds of pharmacists and other CMS staff in drug supply forecasting. In fact, when the Lotus-based system initially used to manage CMS inventories proved inadequate, the project designed a tailored software package for tracking purchase orders, drug needs, supplier performance, and financial account status. The project also produced a regional drug formulary that is updated biannually and a newsletter and drug information system. In sum, although it would be misleading to suggest that the CMS's are operating at optimal efficiency, the means to improve inventory management are well in hand. Whether the project's improvements will be institutionalized will depend on several factors -- including the motivation of CMS managers to improve the systems and the willingness of secretaries of health and others to use the management information system available to them to monitor this very expensive part of their annual budgets. The primary lesson learned is that regional cooperation does not require political integration. The project also demonstrated that cost-containment efforts can contribute to cost- effectiveness as much as or more than price reductions. A number of activities (e.g., the adoption of a regional formulary, studies of the cost-effectiveness of various treatment therapies, and improvements in inventory management) will ultimately have a greater economic impact than the initial cost savings of the pooled tendering system.