G-Watch Monitors 14 DOH-Retained Hospitals' "Drug Procurement"

Objective of the Study: 14 DOH-RETAINED HOSPITALS' "DRUG PROCUREMENT PROGRAM-2001".

 G-Watch focused on each hospital's "Drug Procurement Program" and sought to answer the following questions:

1. What drugs did these hosiptals buy?

2. Did they buy according to plan?

3. Did they buy the righ drugs?

4. How much did the drugs cost?

5. How were the drugs distributed?

6. Is there an effective drug data management system in said hosptals?

Criteria for the Selection of DOH-Retained Hospitals: Selection was done through:

1. Consulation with the DOH Oversight Committee on Procurement

2. Consultation with the Offices of the Undersecretary and the Director of DOH.

Documents and Reference Materials accessed/used in the study:

1. HSR - Hospital Statistical Report

2. APP - Annual Procurement Plan

3. PO - Purchase Orders (Also: PO Logbook and Acceptance Invoice)

4. MCR - Monthly Consumption Report

5. PRHR - PhilHealth Report on Hospital's Refund f.] PNDF - Philippine National Drug Formulary.

Conclusions: The major findings of the Study are as follows:

Hospital Drug Expenditure: The largest expenditures were spent on:

1. Anti-Infective Drugs: 30%

2. Drugs Acting on the Nervous System: 19%

3. Solutions Correcting Water Electrolyte, Acid-Base and Caloric Disturbances: 7%

4. Cardio-Vascular Drugs: 7%

5. Ophthalmological Preparations: 5%

Amount of Drug Purchases outside of the APP:

1. The amount of drugs purchsed outside of the APP ranged from P/108,750 to P/1.5 Million.

2. Drugs in the APP which however were not bought ranged from 32 - 126 types of drugs

3. Average excess purchases in terms of quantity ranged from 58 to 421%, with the highest recorded discrepancy of 1,700%

4. Two (2) hospitals did not even have APP, which constitues a serious administrative shortcoming.

The biggest purchase of "Anti-Infective Drugs" correlates with several cases of Penumonia in the monitored hospitals.

Several hospitals had big purchases of "Ophthalmological Preparations" but only 2 hospitals reported "Cataract" in the Top 10 Causes of Discharge. Three (3) hospitals did not purchase "Anti-Cancer" drugs, even though Cancer is included in the Top-10 Causes of Discharge. Sixteen "Non-PNDF" drugs were identified in 6 hospitals' drug purchases.

Type of Procurement employed:

1. Public Bidding: 63%

2. Exclusive Distributorship: 30%

3. Moreover, there were some hospitals wherein Exclusive Distributorship is more often used

4. Some hospitals did not use Public Bidding at all, reasoning that Public Bidding is more costly.

Dominant Suppliers: Among 90 national suppliers:

1. Zuellig: 48% (P/91.2M)

2. Phil. PharmaWealth: 8.28%

3. Unilab: 8.25%

4. Euro-Med: 7.78%

Price Discrepancy between the hospitals studied:

1. Average Price Discrepancy: 41% (The highest range being: 124 to 723%)

2. In NCR hospitals: there are 98 drugs with a Price Difference of 20% or more than 20%. They marked an Average Difference of 92% and a Median of 50%. The highest recorded Price Difference is: 631%

3. Across Regions: there are 180 drugs with a Price Difference of 20% and higher. They marked an Average Difference of 155% and a Median of 73%. The highest recorded Price Difference is 1,031%

Price-Factor Analysis showed that even favorable factors such as favorable regional location, mode and date of procurement, quantity and supplier did not necessarily lower the price of drugs.

The computed Opportunity Cost from unmonitored drug prices amounted to P/18.5M, which is a 10% of the hospitals' Total Drug Expenditure.

Average Rate of Distribution of the hospitals' Available Drugs:

1.Charity patients received: 59%;

2. Regular paying patients received: 41%;

3. Average Rate of Distribution is: 85%;

4. Average Refund: The hospitals got an Average Refund for drugs and medicines of 21%;

5. 8% of patients admitted in the hospitals availed of PhilHealth services.

Drugs Data Management concerns:

1. Drug entries in PO's with incomplete specifications or none;

2. Several PO's specifying very small amounts;

3. Use of Brand-Name drugs instead of Generic-Name drugs;

4. Inefficient internal monitoring of stocks; 5. Very limited data computerization.