AnImperativeforPublicHealthCareImprovingtheMedicineSUPPLYCHAINIntroductionMedicinesplayanimportantroleinpublichealthcareprograms,savinglivesanddrawingpeopletohealthfacilities,wheretheycanalsoreceivepreventivetreatment.Medicinescanalsohelpkeephealthcarecostsdown.Manyinsurancecarrierswouldratherpayfordrugtreatmentthanforpotentiallyriskyandmoreexpensivesurgery.Andthecostofcomplicationsfromnottreatingillnesswithmedicineintheearlystagescanultimatelybedoubleortripletheexpense.Butthehighcostofmedicinesisputtingincreasingpressureonhealthcarebudgets.Forexample,inmanyindustrializednationstheelderlypopulation(thoseolderthan65)isexpectedtodoubleinthenext50years.Usually,thissegmentofthepopulationhasapproximatelyfourtimesthehealthcareexpendituresofthoseunder65years.Additionally,inmanydevelopingeconomies,theepidemiologicalprofileischanging—evolvingfrominfectiousandlessexpensivediseases,whichcanbetreatedthroughmassivenationalcampaigns,tochronicdegenerativediseasessuchascanceranddiabetes,whicharemoreexpensivetotreat.Addingtotheproblem,mostpublichealthcareprogramssupplydrugsthroughinternal,antiquatedandcomplexsupplychains.Asaresult,criticaldrugsmaynotbeavailablewhenpatientsneedthem.Thesefactors,whencombined,meanthatpublichealthcareprogramsfaceamassivestruggleinprovidingpatientswithaconsistentflowofmedicine,whilekeepingcostsdownandmaintaininghighlevelsofservice.Thispaperdiscusseswaystoimprovethemedicinesupplychainindevelopingcountries.Itoffersaseven-pointsolutiontorelievingpressureonhealthcarebudgetsinthesecountries,whilereducingthecostofmedicineandimprovingkeyelementsofthedrugsupplychain.ImprovingtheMedicineSupplyChain..Publichealthprogramscoverthehealthcarecostsofmuchofthepopulationworldwide.Forexample,inLatinAmerica,onaverage,52per-centofthehealthcarebudgetin2000waspaidforbypublicfunds(seefigure1).Unfortunately,thesefundsarenotsufficienttomeettheneedsofgrowingpopulations—andaredwindlingfurtherduetothemanyeconomiccrisesofthepastthreedecades.Today,asnationsstrivetomakemedicinesavailableandaffordabletoallcitizens,andsimultaneouslyrunacost-effectiveorganization,theyfaceanarrayofcomplexissues—fromlackofavailabilityandhighprices,toantiquatedsup-plychainsanderroneousmedicalprescriptions.Despitethechallenges,anumberofcountriesaremakingprogressinimportantareas.Indeed,inourresearchandexperienceworkingwithcountriesandpublichealthcareorganizationsaroundtheworld,therearesevenelements,orbestpractices,thatarekeytoreducingcostsandimprovingservicelevelsinthedrugsupplychain.1.AdoptanationaldrugstrategyTakingabig-pictureviewoftheirsituations,leadingcountrieshaveadoptedanationaldrugstrategy.Thesestrategiesspecifythegoalssetbythegovernmentforthepharmaceuticalsector,theirrelativeimportance,andthemainactionsneededforattainingthem.Theyreflectthecommitmenttoanobjectiveandofferaguideforaction.By1999,accordingtotheWorldHealthOrganization,66countrieshadformu-latedorupdatedsuchastrategyinthepast10years,upfromjust14countriesin1989.Thegoalsofanationaldrugstrategyarefairlygeneralandrelatetothreeissues:access,qualityandrationaluseofdrugs.Forexample,onegoalmightbetomakeessentialmedicinesavailableandaffordabletothosewhoneedthem.However,thestrategiesforachievingthegoalsarequitespecific:Thepublicsectorcanimprovethesupplyofessentialmedicinebyincreasingthebudget,introducingcost-sharingmechanismsorallocatingmoreresourcestounderservedpopu-lationsandareas.Goalsandstrategieswillvaryfromonecountrytoanotherduetostructuraldifferencesinthehealthcaresystems.Indevelopedcoun-tries,accesstomedicinesisnotadominantissue,sothegoalsandstrategieswillfocusmoreoncontainingcosts.Forexample,theCanadiangovernmentcreatedanationaldrugstrategytoencouragetheuseofgenericdrugstohelpreducecostsofthemedicines—astrategythatgeneratesannualsavingsofmorethanUS$1billionforthegovernment.Inless-developedcountries,wheretotalspendingonpharmaceuticalproductsislow,thegoalsandstrategiestendtofocusonincreasinggovernmentspendingandcoverageofmedicalservices.Forexample,MexicorecentlyinitiatedPopularHealthInsurancetoprovidemedicinesandmedicalservicestothepoorestpeopleinthecountry,whilegeneratingadditionalandmuch-neededfunds.Oncebasiccomponentsofapolicyhavebeenidentified,choicesmustbemadeaboutthemostappropriateactivitiesforeachlevelofthesystem.Countriescanchoosefromanumberofdifferentapproaches.Tanzaniadevelopedafive-yearmasterplanforitspharmaceuticalsector,whichoutlinesboththegeneralapproachandspecificactivities,suchasbudgetdetailsandresponsibleagencies.Othercountriesbreakdownthevariousstrategiesandimplementdifferentplansfordifferentagencies.ImprovingtheMedicineSupplyChain..Thedecisionregardingwhichapproachtotakeislargelypolitical;itdependsontimingandthesupportthecurrentgovernmenthasfromdifferentstakeholders.Forexample,whenpoliticalleadersenjoyastableenvironmentandthefavoroftheirconstituents,theycangenerateamasterplanthatcommunicatesthesector’sdesireddirectionoverthelongterm.Inmoredifficultsituations,thebestoptionmaybetogenerateaone-yearplanfordiffer-entagencies.Thefollowin