An investigation into the role of contract drug purchasing in hospitals
Whereas health care resources are limited, demands upon them are
insatiable. Drug expenditure has received particular attention
in attempts to regulate increasing costs. For hospitals, contract
purchasing is designed to regulate drug expense.
This thesis examines the contract mechanisms.
Information was collected from pharmacists and supplies officers
in all English health regions and pharmaceutical companies supplying
the bulk of hospital drug requirements.
The main findings of the research are:-
There is a large, unexplainable difference in price charged
to various health regions for an identical drug. Price charged
is independent of all obvious correlates •
.2 Despite the oligopgonistic power of the National Health Service
there is no centralised interchange of price or purchasing
information between health regions.
3 Pharmaceutical suppliers view hospital drug purchasing as
fertile for opportunistic pricing within the context of total
4 There is an ill-defined working relationship between pharmacists
and supplies officers in the implementation of drug contracts,
often amicable locally but tense and competitive nationally.
The overall impression is of a purchasing mechanism which, due to
its political sensitivity, has, by default, become increasingly
outmoded and represents a triumph of public accountability over
individual negotiating skill. The overall regulation of pricing is
in substantive conflict with the hospital contract system. One
encourages UK research, the other not, while the savings in hospital
purchase are redundant in the context of both overall corporate
and Governmental financing.
Cost savings are unknown. Other methods of acquisition such as
prime vendor buying should be considered, as a means of improving
purchase efficiency for both supplier and purchaser.