Managing Drug Supply Training Series, Second Edition

Participants Guide

Introduction:
Drug Management for Successful
Public Health Outcomes

Selection

Use

Management
Support

Distribution

MI

Procurement

Copyright 2000 by Management Sciences for Health, Inc.

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International Development.

This session is derived from Chapter 1, Toward Sustainable Supply and Rational Use of Drugs,
and Chapter 2, Historical and Institutional Perspectives, in Managing Drug Supply: The Selection,
Procurement and Use of Pharmaceuticals, 2d ed., revised and expanded, by Management Sciences
for Health with the World Health Organization (West Hartford, CT: Kumarian Press, Inc., 1997).
Used with permission. ISBN 1-56549-047-9
To order Managing Drug Supply, contact:
Kumarian Press, Inc.
14 Oakwood Avenue
West Hartford, CT 06119-2127
US

MI

Telephone: (860) 233-5895

Fax: (860) 233-6072
E-mail: kpbooks@aol.com

This training module is based on materials from Managing Drug Supply, second edition. The
chapters pertaining to this module are highlighted below.
Part I
Introduction

Part II
Policy and Legal
Framework

Part III
Drug Management
Cycle

Chapter 1: Toward Sustainable Supply and Rational Use of

Drugs
Chapter 2: Historical and Institutional Perspectives
Chapter 3: Economics for Drug Management
Chapter 4: Pharmaceutical Supply System Assessment

Part IV
Management Support
Systems

Purpose and Content

This session introduces the concept of drug management as different from the management of
other commodities. The efficient and effective management of drugs can improve important
public health outcomes and reduce expenditures. The activities of the drug management cycle
selection, procurement, distribution, and use of drugsare also interdependent. The optimal
functioning of the cycle requires the careful management and coordination of these activities.
This session also introduces the idea of indicator-based assessments for monitoring and
evaluating the performance of the drug management cycle. The interest in being able to evaluate
the performance of the public-sector drug system is fostered by the challenges posed by recent
health care reforms and the concern for achieving equity and financial sustainability of new
programs. Managers will be required to improve the efficiency of their programs, manage for the
most rational use of drugs, and develop mutually beneficial relationships with the private sector
to assist in ensuring the availability of important drugs to the public.

Objectives
Upon completion of this session, you will be able to:

Discuss why drug management is important to control costs and prevent morbidity and
mortality.

Describe the drug management cycle.

Understand the importance of indicator-based pharmaceutical sector assessments for

monitoring and improving performance.

Preparation
Read:

Managing Drug Supply, Chapter 1, Toward Sustainable Supply and Rational Use of Drugs.

Managing Drug Supply, Chapter 2, Historical and Institutional Perspectives.

Introduction: Drug Management for Successful Public Health Outcomes

Topics

Introduction

The Importance of Drugs for Public Health

The Drug Management Cycle

Improving Drug Management

New Challenges for Public Drug Supply

Activity One: Improvement Project

Summary of Session

Managing Drug Supply Training Series: Participants Guide

Activity One
Improvement Project
Rationale
You will return to this sheet during the course as you more clearly define the problem area to be
addressed or the goal to be achieved and the most appropriate approach to addressing it.
Instructions
1. List your personal and professional objectives for this course. Objectives may be stated as
specific problems you hope to help solve in your program.

2. Consider which component in the drug supply cycle you will be addressing in your project.
Can you define a problem to be addressed or a goal to be achieved?

3. List some improvement projects you might be interested in pursuing as a course project.
Throughout the course, you will have opportunities to review your list and narrow your
choice to one or two of the ideas you identify.

Introduction: Drug Management for Successful Public Health Outcomes

Managing Drug Supply Training Series: Participants Guide

Slide 1

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Managing Drug Supply

Introduction

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Slide 2
Unit Objectives

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1. Discuss why drug management is important

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2. Describe the drug management cycle

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3. Identify potential areas for improvement and

interventions

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4. Identify new challenges for improved public drug

supply

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INTRO 1

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Slide 3
Unit Outline
A. Introduction
B. The Importance of Drugs for Public Health
C. The Drug Management Cycle
D. Improving Drug Management
E. New Challenges for Public Drug Supply
F. Activity One: Improvement Project
G. Summary of Session

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INTRO 2

Introduction: Drug Management for Successful Public Health Outcomes

Slide 4

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Why Is Drug Management Important?

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Drugs can save lives and improve health

Drugs are different from other consumer products

Drugs are costly

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Drugs promote trust and participation in health

services

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Substantive improvements in the supply and use of

drugs are possible

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INTRO 3

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Slide 5
Drugs Are Unique Commodities

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Consumers often do not choose the drug

Consumers are not trained to judge drugs
Practitioners are not often equipped to assess drugs
for effectiveness and efficacy
Fear of illness can lead to poor purchase choices by
consumers and practitioners
Consumers do not generally know the consequences
of not obtaining a needed drug

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INTRO 4

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Slide 6
Drugs Are Costly

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Major out-of-pocket expense

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Can represent as much as 20 percent of total

national health expenditures, 60 percent of total
recurrent health expenditures

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Drug expenditures are often second only to

personnel salaries and benefits

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INTRO 5

Managing Drug Supply Training Series: Participants Guide

Slide 7

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Pharmaceutical Expenditures
Region

Per capita
(US$)/yr

As %
of GDP

Private
expenditures
as % of total

Africa

$8

0.86

68

Asia

$12

0.59

76

LA/C

$31

0.87

75

Developed
Economies

$137

0.65

33

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INTRO 6

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Slide 8
Drugs Promote Trust and
Participation in Health Services
A major determinant of health services utilization
Can be more important than health workers
Productivity of health workers depends on the
availability of drugs and supplies

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INTRO 7

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Slide 9
The Drug Management Cycle

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Selection

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Use

Management
Support

Procurement

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Distribution

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INTRO 8

Introduction: Drug Management for Successful Public Health Outcomes

Slide 10

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Assessments, Monitoring, Evaluations

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Use of objective, standard, or adapted indicators

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Comparison of actual performance to target

performance

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Comparison with the performance of other

programs

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INTRO 9

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Slide 11
Categories of Indicators

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Drug policy

Logistics

Formularies

Utilization of services

Budget and finance

Quality assurance

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Procurement

Private-sector
participation

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INTRO 10

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Slide 12
Definitions of Efficiency

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Allocative efficiency: the distribution of services

within the population

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Technical efficiency: the ability to produce the

greatest output for a given level of resources

therapeutic efficiency

operational efficiency

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INTRO 11

Managing Drug Supply Training Series: Participants Guide

Slide 13

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How an Intervention Affects
the Drug Supply System

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Example: drug lists and formularies

estimating drug requirements
competitive procurement by generic name

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planning distribution to different levels of health

facilities

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promoting rational prescribing and use

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INTRO 12

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Slide 14
Increased Efficiencies: STGs
2
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0

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ORS
Lactated R inger's
Tetracycline
D oxycycline
C otrimoxazole susp
Existing
Treatm ent
Practices

W H O Standard
Treatm ent
Practices

D rugs Total

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Annual drug costs in a Latin American country for treatments during a

cholera epidemic, costs in millions of US$ (1991)
Source: Managing Drug Supply, 1997

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INTRO 13

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Slide 15
Increased Efficiencies:
Pooled Procurement

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70
60

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50
40

Avera ge Pric e
Reduction (%),
198 9

30
20
10
0

Performance of Six Eastern Caribbean Countries

Source: Managing Drug Supply, 1997

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INTRO 14

Introduction: Drug Management for Successful Public Health Outcomes

Slide 16

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What Is Known about Drug Management?

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Wise drug selection underlies all other

improvements
Effective management saves money and improves
performance
Rational drug use requires more than drug
information
Systematic assessment and monitoring are
essential

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INTRO 15

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Slide 17
Challenges for Improved
Public Drug Supply

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Health reform, equity, and financial sustainability

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Efficiency

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Rational use

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Changing roles of public and private sectors

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INTRO 16

10

Managing Drug Supply Training Series: Participants Guide