DEVELOPING NATIONAL DRUG POLICY IN ARMENIA

Lack of good governance in the pharmaceutical sector leads to destructive practice [3]. It can be revealed in self-interested manipulation of the drug selection process, corruption in the award of tenders, nepotism in the appointment of key staff, health staff selling drugs on the outside and so forth. In Tanzania the health sector, including pharmaceuticals, was ranked third in the list of sectors with the highest incidence of corruption. Many examples of corruption and lack of ethical practice in the pharmaceutical arena are reported in the press, scientific journals and other sources (see Box 1). They are also highlighted by Transparency International. The results of unethical practices include reduced quality of helth care, shortages of medically needed medicines and medical suppliers, unsafe and poor quality products on the market, financial loses for health systems due to irrational use of medicines through unethical promotion, and the undermining of public trust in science [4]. Corruption is considered to be one of the main reasons of a National Medicines Policy failure.

On the other site, lessons learned from countries experience show that transparency, accountability and acceptance of policy are among the important factors contributing to successful implementation of policy strategies. This has been confirmed in Thailand when the drug procurement system based on collective provincial bargaining by all district hospitals in one province was introduced [1]. In Guatemala the new drug purchasing system was modified to include an open tendering system, with control over those who make the offers, and clear rules to ensure transparency and bring an end to corruption [2].

A stronger ethical dimension in the pharmaceutical sector as a new priority of WHO in the area of National Medicines Policy

Realizing an increasing value of a good governance, the World Health Organization has presented a new priority in the area of National Medicines Policy: “promoting a stronger ethical dimension in the pharmaceutical sector, including the use of anti-corruption measures [4]. Related expected outcomes in countries - “Ethical practices and anti-corruption measures identified and implemented in the pharmaceutical sector using the experience of successful programmes addressing aspects of corruption encountered in the pharmaceutical sector” have been firstly introduced in WHO Medicines Strategy 2004-2007. Progress will be monitored through the outcome indicator - “No of countries with medicines legislation requiring transparency, accountability and code of conduct for regulatory work”.

Armenia has started some important, but very poor prepared reforms in the area of the Health and Pharmaceutical sector, in particular creating new large public medical corporations, increasing public Health and Pharmaceutical expenditures and some others. These strategies have not been enough developed, specifically it has not been defined how to use increased Drug Budgets, how to distribute free for patients medicines to selected vulnerable groups, how to improve procurement in new corporations and so forth. It has led to a unique situation when in the country, where public pharmaceutical expenditures are extremely low, a part of extra money provided from the state budget for purchasing medicines were not spent and returned by ambulances. Another related problem area – absence of developed and approved strategies on implementation of Essential Drugs Concept, which is promoted by WHO as a basis of a National Medicines Policy and has been declared in Armenia. It results to the situation, when selection of medicines at any stage of Drug management (procurement, donation, prescribing, etc.) is based not on approved List of Medicines, but on interests and preferences of person selected. Issues of transparency and accountability are also not covered by legislation and regulation. Even a scandal caused by huge waste of medicines donated due to expiration has not led to making changes in regulation and introducing accountability mechanisms. The results of Study, implemented in 2002 and showed ten-time difference in householders’ drugs expenditures and data reported on medicines sales, also support emerging need in improving governance.
Thus, the hypothesis is that the most urgent policy for the Pharmaceutical sector:
1. Developing and approval of “Programme on Essential Medicines” as a Pharmaceutical policy Implementation plan stating medium-term objectives and strategies.
2. Identifying and promoting transparency and accountability mechanisms in order to support policy implementation.

The aim of this project is to investigate problems caused by the lack of good governance in the pharmaceutical sector of Armenia and other NIS; develop recommendations on promoting transparency and accountability and incorporate measures suggested in a draft of Armenian Pharmaceutical Policy Implementation plan simultaneously developed.

1. To identify specific pharmaceutical sector areas where a lack of good governance can lead to destructive practices including corruption and to analyze the situation in the areas selected in Armenia, Moldova and Kyrgyz.
2. To develop transparency and accountability mechanisms for each specific pharmaceutical sector area where relevant. To develop suggestions on transparency and accountability mechanisms for including in the existing Law “On drugs” and to implement advocacy of these changes.
3. To define a political feasibility of policy recommendations developed using “Political mapping of Health Policy” method (M.Reich, 1994).
4. To organize seminar for exchange of opinions on this issue with inviting all the stakeholders involved in the pharmaceutical sector.
5. To develop and pilot special curricula for post-graduate education of pharmacists and in-service training of public servants in the area of transparency and accountability in the pharmaceutical sector.
6. To organize a network on transparency and accountability in the pharmaceutical sector for NIS including creation a special web site.
7. To develop on the basis of situation analysis a draft of Pharmaceutical Policy Implementation plan (“Programme on Essential Medicines”), covering also transparency and accountability mechanisms suggested for the pharmaceutical sector.
8. To circulate a draft developed among all the pharmaceutical sector stakeholders and to be a coordinator of organizing under supervision of the Ministry of Health a national Conference on discussing a draft of Implementation plan developed.
9. To organize two seminars for medical journalists for presenting a draft of Implementation plan developed and other issues related to Pharmaceutical policy.

Specific pharmaceutical sector areas where a lack of good governance can lead to destructive practices will be selected on the basis of publications review and interviewing key informants (N=10). Then the set of indicators will be developed in order to assess the situation in these areas. It is assumed that the selected areas will include public procurement, donations, distribution of free medicines (state hospitals and ambulances). Indicators will be discussed with the Working group on health issues at the Anti-corruption Strategy Implementing Monitoring Commission, contacts with which are already established. Data will be collected according to the indicators and officials (N=20) involved in the areas selected will be interviewed in Armenia. Data for Moldova and Kyrgyz will be collected by interviewing via E-mail professionals interested in the area of Pharmaceutical policy. Contacts with them have been already established through implementing a joint project at the NGO. Data received will be analyzed and compared.

Transparency and accountability mechanisms for each specific pharmaceutical sector area where relevant, will be developed relaying on review publications in this area including recommendations of WHO, experience of other countries and the results of situation analysis in NIS. Contacts will be established with the Transparency International and the Public Integrity Education Network, a joint initiative of TIRI and the Center for Policy Studies at Central European University for shearing information. Information will be received from the WHO Department of Essential Medicines and Policy about countries experience on legislation requiring accountability and transparency in the pharmaceutical sector. Suggestions on transparency and accountability mechanisms in the pharmaceutical sector for including in the existing Law “On drugs” will be developed based on knowledge gained and data collected. The results of work would be presented at the Congress of the International Pharmaceutical Federation within Sessions of the Administration Section in order to discuss and share opinions with leading professionals in the area of Pharmaceutical service administration. Participation in the Congress would also provide opportunity to meet and discuss project implementation with my IPF Fellow mentor who will do presentation at the Congress.

In order to define a political feasibility of policy recommendations developed “Political mapping of Health Policy” method designed by M.Reich will be used. A special questionnaire will be developed and distributed among the stakeholders involved in the areas selected for introducing transparency and accountability mechanisms. After analyzing questionnaires an appropriate changes will be introduced in recommendations on transparency and accountability mechanisms. An updated version will be distributed among stakeholders involved in the pharmaceutical sector. Policy paper will be prepared and presented to the Ministry of Health.

All recommendations and policy paper will be presented at the meeting organized with inviting interested parties (representatives of Ministries of Health, Economy, Yerevan City Administration, the State Committee on Donations, the state Agency on Procurement, Pharmaceutical Associations, consumer organizations and so forth). There is a previous consent about support of activities aimed to the public pharmaceutical sector functionality improvement from the Ministry of Health. Curricula will be prepared also in Russian in order to be available for all the interested in NIS.

Curricula for post-graduate education of pharmacists and in-service training of civic servants in the area of transparency and accountability in the pharmaceutical sector will be developed on the basis of publications review and results of analyzing the situation in NIS. Contacts will be reestablished with the Transparency International and the Public Integrity Education Network in order to have an opportunity for access to teaching programmes on corruption control. Curricula will be presented for approval by the Education-Methodological Council of the National Institute of Health. A short in-service training will be organized for professionals interested from public sector.

Contacts will be established with professional and/or policy-makers in NIS in order to organize a network on transparency and accountability in the pharmaceutical sector for NIS. A special web site will be created. It will cover the results of policy analysis on this issue, policy recommendations developed, important links, teaching materials and other relevant information. Presentation will be made at the Congress ”Person and Medicines” in Moscow.

From the beginning of carrying out the project, work on drafting “Program on essential drugs” as a National Pharmaceutical Policy Implementation plan, will be started. This “Program on essential drugs” was recommended in the policy paper developed during my IPF project It would cover other specific recommendations from the policy paper and would be based on a draft of National Pharmaceutical Policy document also developed during the period of my IPF project. A draft of “Program on essential drugs” will be a detailed document covering activity, responsibility and time frame for all the pharmaceutical policy components including issues of transparency and accountability. Draft developed will be distributed among all the pharmaceutical sector stakeholders for suggestions. Under supervision of the Ministry of Health and together with DURG, an Armenian think-tank specialized in the area of pharmaceutical policy research and advocacy, a national Conference will be organized in order to discuss the following documents:

After a National Conference all the suggestions will be analyzed and an appropriate changes will be made in the documents discussed. Then the suggestions for a draft of National Drug Policy document and a draft of “Program on essential drugs” developed will be presented to the Ministry of Health for approval.

Two seminars for medical journalists for presentation of a final version of “Program on essential drugs” draft and training them on most important issues related to Pharmaceutical policy will be organized.

How the results of the research and policy recommendations might be utilized in Armenia and other NIS and impact

The results of research being presented to the Ministry of Health, Armenia and on the special web site created for NIS can be used as unique source of information because issues of transparency, accountability, anti-corruption measures in the pharmaceutical sector have never been investigated in Armenia and other NIS. They will be also provided to the WHO what planed work with countries on issues of anti-corruption and ethical practice for 2004-2007. Recommendations on transparency and accountability mechanisms can be used for changing Legislation and regulation documents. “Program on Essential Medicines” can be approved by the Ministry of Health as a five-years Implementation plan. It would provide main policy strategies and framework for activities. Curricula in area of transparency and accountability for professionals working in the pharmaceutical sector will be firstly introduced in the National Institute of Health. Stakeholders involved in seminars and Conference will be aware on pharmaceutical policy issues and this will create an environment where policy-makers are more accountable. Journalists involved in seminars will get knowledge and information they currently do not have.

This project focuses on both the implementation of policy recommendations of and expansion of policy research related to my IPF fellowship project. The activity intended on implementation of my first recommendation – “Approval of a National pharmaceutical policy document”, has been started at the end of my IPF fellowship project, when I have developed and presented to the Ministry of Health such a strategic document. My recommendations have been used for developing Drug policy Chapter of Health policy document developed by the Ministry of Health (Letter of acknowledgement from the Ministry of Health is attached). The other most important recommendation of my IPF project was “Development and approval of a Program on essential drugs aimed at a broad introduction of the essential drugs concept” is one of the central objectives of this Continuing fellowship project. This Program can mainly cover other recommendations as well. This direction has been recommended also by my mentors (“Strongly recommended if focused on national understanding, acceptance and implementation of the national policy”). Other part of this project is expansion covering such extremely important issues as transparency and accountability, as well as involving some other NIS countries.

Relation to work of current IPF fellows as well as the work of the Soros network programs

As this Continuing Fellowship project covers issues of Governance, Transparency, and Accountability, I would be interested to collaborate with: current IPF fellows group “Democratic Governance, Transparency, and Accountability”; CEU/Center for Policy Studies program “Good Governance”, in particular “Public Integrity Education Network” (desirable contacts with this Network is describe in proposal). As project plans developing curricula for post-graduate and in-service training, useful collaboration is expected with current IPF fellows group “Developing Socially Responsible Elites and the Challenges of Higher Education”. Helpful contacts would be established with “Public Health Programs” Initiative at OSI/Soros Foundation Network.

1. Good drugs at low cost: Thailand’s provincial collective bargaining system for drug procurement. Essential Drugs Monitor, 1998, N25&26: 5-7.
2. Improving the supply, quality control and access to essential drugs in Guatemala. Essential Drugs Monitor, 1998, N25&26: 12-13.
3. Management Sciences for Health (1997). Managing Drug Supply: The Selection, Procurement, Distribution and Use of Pharmaceuticals, 2nd edn, Management Sciences for Health in collaboration with the World Health Organization. Kumarian Press, Hartford, CT.
4. WHO Medicines strategy. Countries at the core 2004-2007. WHO, 2004.

Box 1. Examples of corruption and informal payments in the Health and Pharmaceutical sector

In the city of Bangalore, southern India, an independent survey of the quality of maternity health services for the urban poor conducted by the NGO Public Affairs Centre revealed that the poor pay huge amounts of extortionary money in their interactions with the public maternity hospitals. The average patient in a maternity ward run by the city corporation pays 1,089 rupees (approximately US$22) in bribes to receive adequate medical care. A further 61 per cent of the respondents were forced to pay for medicines, though public policy clearly mandates that they be given free of charge.
Source: Press Release: Highlights from the Transparency International
Global Corruption Report 2003

In Tanzania, according to the Warioba Report, the health sectors was ranked third in the list of sectors with the highest incidence of corruption. This is also true to most developing countries and the reasons are clear that health is a service which is in great demand and touches the lives of most people, while on the other hand resources are scarce. Clients pay bribes in almost all the departments of the hospital; the outpatient, laboratory, X-ray, the labour ward and the mortuary are notorious. The pharmacy and the general wards are also not free from corruption. In fact, there is no "corruption free zone" as it is often claimed. And on the other hand, we have those who engage in grand corruption, these involve themselves in corruption because of greed. In the health sector, this involves the payment of big sums of money by rich individuals and institutions to some corrupt government officials in order to win tenders for the supply of pharmaceuticals, medical equipment and supplies. As a result of this unfair competition among bidders, the Government does not get the supplies worth the money it pays. The Government incurs loss through getting fewer supplies, which are more expensive due to over-invoicing, substandard, and having shorter life span or shelf life in case of medicines. This type of corruption, apart from resulting into Government losing a lot of money, delivers a heavy toll at the micro-level due to the effects arising from the shortages it causes at the lower level. Thus macro- level corruption causes corruption at micro-level. And all in all it retards development of a nation, as the government cannot achieve its objectives, increase the debt of the country and makes the country more poorer.
Source: M. J. Mwaffisi. Corruption in the Health Sector. The 9th International Anti-Corruption Conference. The Papers

Informal payments in the health sector in Eastern Europe and Central Asia are emerging as a fundamental aspect of health care financing and a serious impediment to health care reform.
The frequency of informal payments exceeds 60 percent in the CIS countries for which there are data, reaching 91 percent in Armenia, and are reported in all but a handful of Eastern European countries. Inpatient care carries the highest costs, but pharmaceuticals are the most frequently purchased health service that public providers do not finance.
In Armenia tactics such as not divulging the full cost of treatment from the onset, refusing to complete treatment without further payment, and prescribing harmless but nontherapeutic drugs in which physicians have a financial interest have become increasingly common.
Source: Maureen Lewis. Who is Paying for Health Care in Eastern Europe and Central Asia? Human Development Sector, Unit Europe and Central Asia Region, The World Bank