Drug Procurement and Distribution

Abstract

Drug procurement and distribution system can be referred as a critical connecting process to effectively assure the affordability and patients’ accessibility to essential and quality medicines. There are various existing economic market structures such as monopoly and oligopoly markets. A monopoly implies a single firm that produces or imports the products to the market with no close substitute, while an oligopoly market has a small number of relatively large firms that produce or import similar, but slightly different products. In both cases, there are significant barriers to entry for other enterprises. This situation has resulted in imperfect competition and currently become the challenge to develop the strategic procurement and smart logistic design in order to achieve the affordability and accessibility to essential medicines for the needed patients under the universal healthcare coverage. In Thailand, the emerging or new license medicines may come from the domestic pharmaceutical importers or domestic pharmaceutical manufacturers both in public and private sectors. For domestic manufacturers, most raw materials are imported due to the limited capacity in producing the active pharmaceutical ingredients in the country. After the manufacturing process, the finished products are distributed through distributors and wholesalers to various health facilities in public and private hospitals, clinics, and pharmacies. Besides this, the special management design has come up with the collaboration of the National Health Security Office and the Social Security Office in order to ensure the accessibility to some special access items such as high-cost rare diseases medicines or some orphan drugs like antidotes and antivenom. Moreover, in case of emergencies, the guidelines for managing, procuring and distributing medicines have been established consecutively in order to control the outbreaks that can be prevented by vaccines, toxic leakage, and floods. Currently, the disruptive technology has made a great impact on many businesses especially in the delivery and logistic system, resulting in an emergence of skillful companies providing the services for managing warehouses and delivery system not only for medicines but also other goods. For the government sectors, the Government Pharmaceutical Organization plays an important role in manufacturing and distributing medicines to the public hospitals. The organization also represented as the supply security partner in Universal Health coverage in Thailand by taking the responsibility in procuring and distributing drugs in the special projects under the National Health Security Office and the Social Security Office via the Vendor Managed Inventory (VMI) system.