Acquiring vital medications is an overwhelming challenge in many low and medium income countries. Essential treatments are often not available or affordable in these nations, even decades after commercialization.
The potential buyers of these countries face a patent tangle, where a single medication can be covered by hundreds of them. This makes it difficult and more expensive from the legal point of view, to obtain license rights for its manufacture.
These buyers must also deal with a complex supply chain and, often, fragile. Many large pharmaceuticals have few incentives to sell their products in non -profitable markets. Quality control represents another layer of difficulty, due to the proliferation of low quality and counterfeit medicines in many of these countries.
Organizations such as the Medication Patent Fund, backed by the United Nations, have effectively contributed to increase the availability of generic versions of patented drugs. However, problems go beyond patents or manufacturing: the way in which medications are also acquired is also a key factor.
Buyers in low and medium income countries are usually ministries of health or community organizations with limited budgets, which must negotiate with suppliers that often have considerable market power and greater experience.
We are economists and study how to improve access to medicines worldwide. Our research revealed that, although the grouping of orders for essential medicines can contribute to reducing costs and guaranteeing a constant supply for these countries, it also presents disadvantages that require flexibility and early planning to be adequately addressed.
Understanding these compensations can help countries better prepare for future health emergencies and for the treatment of chronic diseases.
Joint acquisition reduces medications costs
A strategy that low -income countries are adopting more and more frequently to improve access to treatment is joint purchase. In this scheme, several buyers coordinate their acquisitions in order to strengthen their collective bargaining power and reduce the prices of essential medicines. For example, joint purchase can help buyers to meet the minimum lot size requirements imposed by some suppliers, requirements that countries that buy individually may not reach.
Countries usually resort to four models for the joint acquisition of medicines:
- A method, called decentralized acquisition, implies that buyers directly acquire manufacturers.
- Another method, called international joint purchases, implies resorting to international institutions such as the Joint Purchasing Mechanism of the World Fund or the United Nations.
- Countries can also acquire recipe medications through their own central medical stores, which are government or semi -autonomous organisms that acquire, store and distribute medications on behalf of national health systems. This method is called centralized national acquisition.
- Finally, countries can also resort to non -profit organizations, foundations, non -governmental organizations and private wholesale.
We wanted to understand how different acquisition methods affect the cost and delivery time of HIV/AIDS medicines, malaria and tuberculosis, since these three infectious diseases are responsible for a large proportion of deaths and cases worldwide. Therefore, we analyze more than 39,000 drug purchase transactions in 106 countries between 2007 and 2017, financed by the World Fund, the largest multilateral financier of programs against HIV/AIDS globally.
We discovered that joint purchase through international institutions reduced prices between 13% and 20% compared to direct purchase from medication manufacturers. The smallest buyers and those who acquired medications produced by a small number of manufacturers were the ones who obtained the greatest savings. In contrast, the joint purchase nationwide offered less consistent savings, since larger buyers managed to negotiate more advantageous prices.
The World Fund and the United Nations were especially effective in reducing the prices of older medications without patent.
Compensation in Commonquisite Acquisitions
Savings in costs derived from the joint acquisition of drugs can have their counterparts.
While the World Fund reduced unexpected delays in deliveries by 28%, it demanded that buyers make their orders far in advance. This translates into a delivery period provided between the order and the longest delivery: an average of 114 days more than that of direct purchases. Instead, the national joint purchase shortened delivery deadlines for more than a month.
Our results suggest a central tension: joint acquisition improves prices and reliability, but can reduce flexibility. Organizations that facilitate joint acquisition tend to prioritize medications that can be acquired in large quantities, which limits the availability of other types of drugs. In addition, longer delivery deadlines may not be suitable for emergency situations.
With the spread of COVID-19, several armed conflicts of great magnitude and tariff wars, governments have become increasingly aware of the fragility of the global supply chain. Some countries, such as Kenya, have sought to reduce their dependence on international consultation since 2005, investing in national purchases.
However, the transition to national self -sufficiency is a slow and difficult process due to the challenges in large -scale quality guarantee and manufacturing. It could also weaken the international joint production systems, which depend on a wide participation to negotiate better conditions with suppliers.
Interestingly, we find little evidence that the international joint acquisition influences the emergency plan prices of the president of the United States for AIDS relief, an important buyer of HIV treatments for developing countries. Elicerly eligible products do not seem to benefit more than the international joint acquisition than not eligible.
However, national acquisition institutions managed to obtain lower prices for eligible products to Pepfar. This suggests that the presence of an important donor as Pepfar can reduce costs, especially when countries manage acquisitions internally.
USAID cuts and global access to medications
While international organizations such as Patent Pool Medicines and the World Fund can address previous barriers, such as patents and acquisitions in the World Medication Supply Chain, other institutions are essential to ensure that medications really reach patients.
The United States Agency for International Development (USAID) has played a fundamental role in the provision of HIV treatment abroad through Pepfar.
The Trump administration decision, in February 2025, to cut more than 90% of USAID foreign aid contracts accounted for a reduction of 60,000 million US dollars in world assistance worldwide. It is estimated that hundreds of thousands of deaths are already taking place, and it is likely that millions more die.
*Lucy Xiaolu Wang She is an attached teacher of the Department of Economy of Umass Resources; Amherst Nahim Bin Zahur She is an attached teacher at Queen’s University, Ontario.
This article was originally published in The Conversation
Follow us on Google News to always keep you informed
