The logical underpinnings and benefits of pooled pharmaceutical procurement: A pragmatic role for our public institutions?

Multi-national pharmaceutical companies have long operated across national boundaries, and exercised significant leverage because of the breadth and depth of their market control. The goals of public health can be better served by redressing the imbalance in market leverage between supply and demand. Consolidation of purchasing power across borders, as well as within countries across organizational entities, is one means to addressing this imbalance. In those existing pooled procurement models that consolidate purchasing across national boundaries, benefits have included: 1) reductions in unit purchase prices; 2) improved quality assurance; 3) reduction or elimination of procurement corruption; 4) rationalized choice through better-informed selection and standardization; 5) reduction of operating costs and administrative burden; 6) increased equity between members; 7) augmented practical utility in the role of the host institutions (regional or international) administering the system; and finally, 8) increased access to essential medical products within each participating country. Many barriers to implementation of a multi-country pooled procurement system are eliminated when the mechanism is established within a regional or international institution, especially where participating countries are viewed (and view themselves) as clients/members of the institution, so that they have some sense of ownership over the procurement mechanism. This review article is based on two literature reviews, conducted between 2007 and 2009 (including publications from 1996 through 2009), and interviews with key informants.

► Review of global literature on multi-country pooled procurement of pharmaceuticals. ► Analysis of potential for redressing imbalance in market leverage between global pharmaceutical corporations and consumers. ► Analysis of potential for buyers' cartels (monopsonies) to reduce unit purchase costs, gain economies of scale, improve rational therapeutic choices, and decrease corruption, including counterfeiting.