Center for Pharmaceutical Policy, Management, & Service Studies

Drug procurement system research, Prof. Dr. apt. Yusi Anggriani, M. Kes. raises GIZ funding (Deutsche Gesellschaft für Internationale Zusammenarbeit)

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Author : Faradiba

Lecturer at the Faculty of Pharmacy, Pancasila University, Prof. Dr. apt. Yusi Anggriani, M.Kes, Head of Center for Pharmaceutical Policy, Management and Services Studies (CEPHAS), received a grant commissioned by The Social Protection Programme project (GIZ SPP), to support research activities in the field of drug procurement systems, entitled “Medicines : Overlooker bricks in the pillar of social protection in Indonesia”.

Indonesia has implemented the JKN system since 2014 and has experienced a deficit until 2019. However, the sustainability of JKN is far from assured. Medicines procured through the public procurement platform alone totalled EUR 493 million in 2022, and an average of EUR 451 million a year for the period 2017-2022. In addition, medicines also procured from other mecanism which are not recorded. The system led to a dramatic fall in prices for most products. From 2013-2017, prices fell for 86% of medicines on the platform, half of them dropping by more than 50% (Anggriani et al. 2020). However, price-based contracting paid insufficient attention to provider performance for quality and delivery, and the annual/biennial system was slow to adjust to external shocks, especially rising prices for imported ingredients. These factors, and failure to pay for earlier deliveries, sometimes left health facilities with no stock of e-catalog medicines.

From January 2023, the government has radically revised the procurement system, replacing e-catalog with an e-marketplace system. Changes include: 1. Single winner provisions eliminated. 2. Ceiling prices eliminated. 3. Consolidated tendering eliminated. 4. Fixed prices eliminated. 5. Transparency curtailed, buying prices not published. These changes will reduce transparency and economies of scale. They provide a large “natural experiment” which will allow us to generate robust evidence about: (a) changes to price under the new drug procurement system, (b) the availability of medicines in the public system under the new drug procurement system (no hypothesis), (c) the opportunities for inefficiencies and malpractice under the new drug procurement system.

A six-month pilot research, which will run until December 2023, will involve many districts in Jakarta and Sleman, as well as several stakeholders such as BPJS, LKPP, and MOH, hospitals, and the community. We believe this evidence will be useful both in setting the agenda for its continuing support for social protection in Indonesia, and in monitoring the progress of policies designed to improve sustainable social protection related to health and well-being over the next decade.

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