Tendering for pharmaceuticals as a reimbursement tool in the Cyprus Public Health Sector

•We assess impact on tendering on pharmaceutical expenses.•We assess both inpatient and outpatient sector prices.•Tendering is a potent procurement approach.•It is a multifactorial process with many possible interactions and complications.•Proper planning is essential.

BackgroundCyprus has been procuring medicines for the public sector through tendering and is one of a few EU member states with this policy both in outpatient and inpatient health sector.ObjectivesThe aim of this paper is the assessment of financial benefit from tendering and evaluation of its operational framework.Data and methodsWe compare value (weighted price) reduction, from a public payer׳s perspective, by using tendering prices compared with official pharmacy procurement prices, for the same volume of products (strength and package). Moreover, we assess mean price reduction of official pharmacy procurement prices as an effect of tendering, for the same sample. We perform the same analysis for the total sample and for 3 overlapping subcategories: branded, generics and Top twenty products in value. Products were selected based on clinical importance, volume and value. Sample includes 176 products, corresponding to 49.3 million euro cost and relevant data were extracted from Public Pharmaceutical sales of 2011 and the official 2011 pricelist of Ministry of Health.Results60.6% value reduction and 39.39% mean price reduction have been achieved with tendering system. Generics demonstrated the greatest reduction both in value (94.8%) and in mean price (62.97%). Branded products reached 33.4% value and 25.99% mean price reduction, while top twenty products achieved 29% value and 23% mean price reduction.ConclusionTendering is emerging as a sustainable and potent solution to a fast expanding pharmaceutical sector and it is a context sensitive cost containment approach. It must be implemented within a transparent, strict and specific framework.