Drug Cost Containment

Abstract

In the absence of a well implemented Drug Policy, paucities in access, affordability, efficiency, quality and effectiveness of health services and limited resources continue to handicap the functioning of the health system. Higher accessibility and quality is taken to be synonymous with higher costs. The main objective of the study was to study the impact of a drug policy on availability of essential drugs and cost containment in a tertiary care hospital from 1996 through 2007. The interventions consisted of selection of list of essential drugs and procurement through centralized pooled system in 1996–1997, followed by setting up of Drugs & Therapeutic Committee (1997). Average drug expenditure increased slightly from 3.63 per cent to 5.16 per cent while there was 6-fold rise in hospital patient attendance. Drug expenditure reduced by 47 per cent, without any compromise on key drug availability which increased to 94.6 per cent. Despite high expenditure on key drugs (75.89 per cent) mean availability was 67.48 per cent but after intervention with the same expenditure (77.68 per cent) it increased to 95.28 per cent. Number of drugs out-of-stock decreased from 27.57 per cent to 19.57 per cent of minor duration only and no stock out of vital drugs. ABC analysis revealed 3.33 drugs only in category A consuming 74 per cent budget which increased markedly to 9.63 drugs consuming 79.53 per cent budget after intervention along with reversal of previous trend of non-essential among top 10 drugs where only vital drugs represented top 10 drugs.

The present study showed cost-containment accompanied by increased availability of essential drugs is possible and optimizes the value of limited government funds and thereby empower and support government in making basic medicines available to all. Managerial interventions such as limited list of essential drugs, efficient procurement, through Drugs and Therapeutic Committee (DTCs) have a vital role in improving day-to-day care of patients and can serve as an effective strategy in curtailing inappropriate drug use, reducing drug expenditures and serve to increased availability and accessibility to essential medicines thus optimizing the value of limited government funds.