Why smart government spending matters for the SDG medicines target

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Niranjan Konduri

Niranjan Konduri

Niranjan Konduri is currently a Principal Technical Advisor of the United States Agency for International Development (USAID)-funded Systems for Improved Access to Pharmaceuticals and Services (SIAPS) program implemented by Management Sciences for Health (MSH), whose vision is a world where everyone has the opportunity for a healthy life.
Niranjan Konduri

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The World Health Organization’s first global report on diabetes  highlights the disease’s “alarming surge” with rates that have quadrupled in fewer than three decades. The report reminds us that essential diabetes medicines and health technologies, including lifesaving insulin, are available in only one in three of the world’s poorest countries.

Availability of medicines is certainly an important piece of the complex challenge of ensuring that health systems seamlessly integrate prevention, screening, referral, treatment, and adherence. However, choosing the best way to spend limited public health budgets amid competing priorities is equally important.

Families in low- and middle-income countries can be saddled with out-of-pocket spending on medicines and catastrophic health expenditures. However, on a larger scale, hospitals and even nations can be similarly burdened — and insulin is a major contributor, in part due to its high price. For example, one of Tanzania’s district hospitals could spend half its budget on insulin, leaving the other half to cover medicines for 90 percent of remaining diseases. This presents a tough dilemma: Should the district hospital deny treatment to the majority in order to cover the handful that needs insulin?

Likewise, in Ukraine, an analysis by the U.S. Agency for International Development’s Systems for Improved Access to Pharmaceuticals and Services Program found that insulins and analogues accounted for a whopping 15 percent of the total public spending on all medicines procured for the entire nation. This level of spending was consistent across 2013, 2014, and 2015. The total expenditure of 697 million Ukraine hryvnias ($31.8 million) in 2015 was 55 percent more than in 2013, due in part to the sharp decline in the value of the currency.

By contrast, the comparatively wealthy United Kingdom was concerned that its National Health Service could be bankrupted because spending on diabetes medicines had reached 10 percent of its total pharmaceutical budget. Clearly, other countries in a similar situation such as Venezuela may realize that this is not financially sustainable.

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Timely prevention and efficient use of resources

WHO’s report strongly makes the case for low- and middle-income countries to focus on diabetes prevention, while ensuring access to medicines and health technologies for those in need. By targeting those at high risk with prevention efforts and identifying patients earlier and managing their diabetes better, countries can conserve their limited medicine budgets.

While countries march toward universal health coverage, medicines benefit programs within health insurance schemes must include an appropriate selection of medicines and health technologies. If countries procured cost-effective human insulin instead of the new-generation analogues, projected annual savings would range from $48,000 to $49 million. In South Africa, for example, analogue insulins are not recommended in their national guidelines and not procured for the public sector.

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Health technology assessment for universal health coverage

These scenarios force national authorities to grapple with tough decisions on choosing which medicines and health technologies offer the most in terms of health need, population coverage, and value for money.

According to the WHO, “health technology assessment is a systematic approach to evaluate the properties, effects, and impacts of health technologies or interventions. It can be applied to medical devices, medicines, vaccines, procedures, health services, and public health interventions.”

To support universal health coverage, the WHO issued a resolution on health technology assessment noting the limited capacity in countries to use resources efficiently. Health technology assessment processes are expected to promote fairness, equity, and transparency for decision-making.

For example, the USAID SIAPS program has supported authorities in South Africa through data-driven analysis to limit the use of expensive insulin pens to children and visually impaired patients. Through various institutional and individual capacity building initiatives, we are working with various stakeholders to manage resources efficiently. Our program helped authorities in the Dominican Republic use an evidence-based selection algorithm to free up nearly $62 million for other priority medicines.

Governments should not have to “break the bank” while aspiring to achieve Sustainable Development Goal 3.8 on ensuring access to quality-assured and affordable essential medicines and vaccines for all. As we have seen with diabetes, countries could better use their finite resources on both prevention and the selection of the most appropriate medicines by making health technology assessment a standard way to do business.

This article was originally published on Devex