The National Public Procurement Service (Sercop) has concluded in July the final phase of its inverse medicines tender, procuring 416 medicines and generating savings of USD300 million.
Implications | Sercop analysed during the past six months up to 4,000 proposals for the award of 416 medicines. Santiago Vasquez, Sercop's director, reported that 80% of contracts that were part of the tender were awarded to domestic companies, with estimated savings of USD300 million. |
Outlook | Ecuador's mandatory healthcare plan contains about 800 items, as the tender concluded recently addressed only half of these medicines. The Ecuadorian government has announced that it would launched a second similar tender in August to acquire around 400 more medicines from the mandatory plan. |
In the first half of July, the last phase of the inverse medicines tender (Subasta Corporativa Inversa de Medicamentos) ended. The tender was conducted by the National Public Procurement Service (Sercop), with the assistance of the Ministry of Public Health (MSP), the Ecuadorian Social Security Institute (IESS), the Social Security Institute of the Armed Forces of Ecuador (ISSFA), and the Institute of Social Security the National Police (ISSPOL).
According to the Ecuadorian newspaper El Telegrafo, Sercop analysed up to 4,000 proposals for the award of 416 medicines during the past six months. Sercop director Santiago Vasquez reported that 80% of contracts that were part of the tender were awarded to domestic companies and generated estimated savings of USD300 million.
Among the medicines that had been acquired with a substantial price reduction were metformin (from USD.028 to USD0.009 per unit), zoledronic acid (from USD92.68 to USD3.40), and losartan (from USD0.13 to USD0.005). Vazques explained that from July and for two years, healthcare providers that signed an agreement with Sercop would be able to purchase these 416 medicines at the agreed price set by Sercop in the inverse medicines tender.
Outlook and implications
The participation of domestic companies in the centralised tender is positive news. Last year, the local pharma industry feared that the new medicine procurement process through Sercop would harm its participation (see Ecuador: 29 September 2015: Ecuadorian government states domestic pharma industry will be favoured in USD450-mil. national medicines tender).
Following the Ecuadorian government's reduction of the 2015/16 healthcare budget from USD479 million, which was the initial proposal by the Ministry of Health, to USD234.5 million, the government established that the acquisition of medicines for Ecuador's Social Security Institute (IESS) would be achieved with half of the original budget by using a centralised electronic drug procurement system in order to reduce medicines spending securing more affordable prices (see Ecuador: 2 March 2015: Ecuador's Social Security Institute reduces 2015/16 pharmaceutical budget by USD244.5 mil.).
Centralised procurement of medicines is of great concern to innovative pharmaceutical companies operating in Ecuador, which are acutely aware that market access is likely to become increasingly competitive in terms of price, although for the companies that were successful in winning tenders/contracts, they will have large guaranteed volumes for two years.
Ecuador's mandatory healthcare plan contains about 800 items, as the tender concluded recently addressed only half of these medicines. The Ecuadorian government announced that it would launch a second similar tender in August to acquire around 400 more medicines from the mandatory plan.