Strengthening purchasing of medicines

The costs of medicines have increased significantly in recent years. The end of patent terms for various expensive medicines offers opportunities to limit the increase in medicine costs to a certain extent, putting in place strong purchasing organisations. Hospitals do not announce any negotiated discounts on medicines. And yet there are both national and international signals and figures that indicate that Dutch hospitals could purchase medicines for lower prices. This report offers concrete advice on how to do this.

The content of this report is based particularly on interviews. The information from the interviews was enriched and placed in context using desk research. Results from interviews and desk research were refined during an expert meeting. The expensive medicines task force and consulted experts have responded to the draft report.

It seems tempting to rigorously redesign the current model for the purchase of expensive medicines; which are purchased mostly by hospitals. A new model could probably address the challenge of keeping medicines affordable in the Netherlands. This could include purchasing by other parties, such as healthcare insurers or the Ministry of Health, Welfare and Sport. There could also be increases in scale by purchasing expensive medicines at a national or even at European level. During the research we have, however, had to conclude that there is no ‘magic bullet’ - no simple solution for this difficult problem. The solution to the problem assumes incremental innovation and gradual improvement of structures and processes that mainly already exist.

Hospitals can strengthen medicine purchasing by systematically following five steps of an effective purchasing process in their own hospital and/or in the purchasing organisation to which they are affiliated. These steps are: (1) Determine medical policy and volume, (2) Issue purchasing mandate, (3) Negotiate with the manufacturer, (4) Implement purchasing policy and (5) Monitor prescription policy. Interviews demonstrated that, in undertaking these steps, the following three elements were particularly important:

  1. Medical specialists should be involved in formulating the medical policy for purchasing (step 1) in their own hospital. They are after all those who are ‘at the helm’ in implementing the contract agreements.
  2. Those involved in their own hospital may not make other agreements with medicine suppliers once the purchasing mandate has been issued to their own hospital’s purchasing team or the joint purchasing organisation (step 2). The level of compliance with contract agreements is determining for the credibility and thus the purchasing power of the purchasing organisation.
  3. Frequent benchmark information is essential in implementing the purchasing policy (step 5). Feeding back information contributes to raising awareness of prescribers about prescribing behaviour and can be used to convince medical specialists regarding the purchasing policy.

Written by

Saskia van der Erf
Mainly active in International Health Systems, Pharmaceutical care, Emergency care and Mental Healthcare
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Jan-Peter Heida
Mainly active in Healthcare, Strategy consulting, Regulated markets and Competition
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