sahr2001 - Health Systems Trust

Drug Expenditure Data
A large percentage of recurrent expenditure in the public sector is on
medicines. A significant development in drug management has been the launch
of the Pharmaceutical Management Information System (PharMIS), a data
warehousing project involving the national and provincial departments and
the central procurement committee (COMED).
One of the tools employed by PharMIS is the Pareto or ABC analysis. This is
a priority-setting tool that identifies the major cost-drivers per provincial
depot and nationally. By multiplying volumes and costs per item, the amount
of money expended on a single line item (a medicine in a particular
formulation, strength and pack size) can be determined, and then the relative
proportion that this constitutes of the total medicines expenditure calculated.
The results are then ranked, identifying the items that account for the largest
proportion of the drug budget. Such items can then be targeted for
intervention, if necessary. A selection of data for the period 1 January 2001
to 30 June 2001, provided on 19 November 2001, has been depicted.
Expenditure totals have been annualized, assuming a continued smooth offtake
from the respective depots. It can be seen that only 25 items account for
nearly one quarter (23.43%) of all drug expenditure.
The data must however be interpreted with great care. The system cannot, at
present, combine the contributions of different pack sizes of the same product
(e.g. carbamazepine 200mg tablets packed in 84s and 500s). If such an item
appears more than once in the upper section of the ABC listing, then the
combined value may be even greater, and the item a more important target
for intervention than at first apparent.
The table below shows the proportion of the national expenditure accounted
for by the individual provinces. If it appears that a province does not use a
particular item, this might in fact be because of the vagaries of the supply
system. Where an item appears not to be used at all - such as erythromycin
250mg 500s in many provinces – it might well be because a different pack
size (e.g. patient-ready packs of 20) is procured instead. For example, although
the Western Cape appears to buy no reserpine 28s (item 12), it buys 100% of
the patient-ready prepack that has been allocated a different stock code
number. In addition, in the Western Cape, vaccines and medicines for family
planning are not supplied through the pharmaceutical depot, and therefore
do not appear on the ABC data set. The same applies to large volume bulky
items that are delivered directly to hospitals, such as intravenous fluids, which
are supplied directly to hospitals in KwaZulu-Natal and the Northern
Province. In Gauteng more than 12% of purchases bypass the depot. It should
also be noted that data from the Northern Cape is not yet included, as the
system used there is unable, at present, to communicate with the data
warehousing software.
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