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The Knowledge Network on Innovation and Access to Medicines is a project of the Global Health Centre at the Graduate Institute, Geneva. The project seeks to maximize the contributions of research and analysis to producing public health needs-driven innovation and globally-equitable access to medicines.

Research Synthesis:

Pooled procurement

 

v1.0 researched and written by Elise Erickson, edited by Suerie Moon, last updated June 2018

Introduction​

 

The literature around pooled procurement is thin*, and there appears to be no recent literature (in the last five years) on the topic.

Search terms

 

Pooled procurement, joint procurement, group procurement, group purchasing, collective bargaining​

Synthesis of the literature​

 

The literature tends to focus on the key features and reported achievements and obstacles of different regional pooled procurement agencies such as the Pan American Health Organization (PAHO) EPI Revolving Fund, and the Gulf Cooperation Council (GCC) Group Purchasing Program, the Eastern Caribbean Drug Service (ECDS), or other institutions such as the Global Drug Facility (GDF). Huff-Rouselle (2012) provides an informative overview of the purpose, benefits, and design aspects of various pooled procurement models (including price reduction, quality assurance, reduction in corruption, standardization, administrative burden, funding, etc.).A WHO meeting report outlined experiences, successes and challenges of several different agencies including GCC, PAHO, GDF, South African Development Community (SADC), etc., and also identified the key components for supporting pooled procurement such as shared political will; it also listed priority areas for collaboration (World Health Organization (WHO) 2007b).

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Many agencies reported lower prices and increased drug quality with pooled procurement, but a study by Waning et al. (2009) found that bulk purchasing did not necessarily reduce antiretroviral prices.

 

While some studies reviewed an agency on its own (Arinaminpathy et al. 2015; Huff-Rousselle and Burnett 1996; Kumaresan et al. 2004; Khoja and Bawazir 2005; Lunte, Cordier-Lassalle, and Keravec 2015), others compared two or more agencies (Huff-Rousselle 2012; DeRoeck et al. 2006). For instance, DeRoeck et al. (2006) concluded that PAHO’s ‘central contracting’ model may be better suited for countries with less contracting and procurement capabilities, whereas GCC’s ‘group contracting’ model may be more suitable for countries with more developed capabilities.

 

Although the focus tends to be on regional agencies, some (although fewer) studies focused on national or sub-national pooled systems such as the pooled procurement system set-up as a result of Delhi’s 1994 Drug Policy in India (Roy Chaudhury et al. 2005); a study comparing pooled procurement models in Bihar and Tamil Nadu, India (Chokshi et al. 2015); Jordan’s public health sector joint procurement of pharmaceuticals (Al-Abbadi et al. 2009); New Zealand’s pooled procurement under the National Hospital Pharmaceutical Strategy (2002-2003) (Tordoff, Norris, and Reith 2005); or Thailand’s provincial collective bargaining system (Songkhla, Wibulpolprasert, and Prakongsai 1998). Examining the theory behind pooled procurement, Barbosa and Fiuza (2012) showed that public bodies in Brazil benefited from lower prices with pooled procurement, and also that the reputation of the actors in the pool mattered—that is, when a buyer in good standing is joined by a buyer with a poor reputation, the prices paid increased as a result of credit risk effects.

Some studies focused solely on vaccine procurement. For instance, Kaddar et al. (2013) examined MIC’s use of UN-pooled procurement systems for vaccines, including a graphical overview (see figure 8 in Kaddar et al. 2013), and a table listing all MIC vaccine procurement methods.

There are also a handful of feasibility studies and situational analyses for pooled procurement in various regions that outline specific considerations for pooled procurement (World Health Organization (WHO) 2007a; Southern African Development Community (SADC) 2012).

Research gaps

 

  • Additional empirical studies on the impact, benefit and transaction cost of pooled procurement on drug prices, including mechanisms at international, regional and national levels, particularly in developing countries

  • Better understanding of the conditions under which pooled procurement is most effective

  • Further research to understand the specific needs of middle-income countries (MICs) in pooled procurement mechanisms

  • Data to compare quality, quantity and prices of drugs supplied inside vs. outside of pooled procurement institutions (e.g. Global Fund and Global Drug Facility - GDF)

* For the purposes of this review, we have established three categories to describe the state of the literature: thin, considerable, and rich. 

-   Thin: There are relatively few papers and/or there are not many recent papers and/or there are clear gaps

-   Considerable: There are several papers and/or there are a handful of recent papers and/or there are some clear gaps

-   Rich: There is a wealth of papers on the topic and/or papers continue to be published that address this issue area and/or there are less obvious gaps

 

Scope: While many of these issues can touch a variety of sectors, this review focuses on medicines. The term medicines is used to cover the category of health technologies, including drugs, biologics (including vaccines), and diagnostic devices.

Disclaimer: The research syntheses aim to provide a concise, comprehensive overview of the current state of research on a specific topic. They seek to cover the main studies in the academic and grey literature, but are not systematic reviews capturing all published studies on a topic. As with any research synthesis, they also reflect the judgments of the researchers. The length and detail vary by topic. Each synthesis will undergo open peer review, and be updated periodically based on feedback received on important missing studies and/or new research. Selected topics focus on national and international-level policies, while recognizing that other determinants of access operate at sub-national level. Work is ongoing on additional topics. We welcome suggestions on the current syntheses and/or on new topics to cover.