Policies and institutional arrangements for rationalizing drug selection and consumption patterns in African healthcare systems

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1 Available online at Research in Social and Administrative Pharmacy 5 (2009) Commentary Policies and institutional arrangements for rationalizing drug selection and consumption patterns in African healthcare systems Ebenezer Kwabena Tetteh, B.Pharm., MSc a Office of Health Economics, UK Summary Keeping pharmaceutical expenditures affordable and within national budgets and household incomes (while maintaining or maximizing expected therapeutic effects and health outcomes) requires influencing prices and volumes, the latter being related to rational selection and use of medicines. Additional benefits of rationalizing drug consumption relate to correcting deadweight losses of treatment resistance and failures, iatrogenic illnesses, drug dependence, and negative healthcare-seeking behavior. This article presents a model-mix approach for rationalizing drug consumption in African nations that recognizes the dichotomy between professionally determined and consumer-driven consumption. The model-mix policy relies on financial and nonfinancial interventions, including those aimed at correcting information asymmetries and failures, for modifying volumes of consumption. These interventions will be operated and coordinated by dedicated medicines management agencies in African nations. Ó 2009 Elsevier Inc. All rights reserved. Keywords: Africa; Affordability; Drug selection/consumption; Model mix; Medicines management Introduction It is documented that globally half of drugs are wrongly prescribed, dispensed, and consumed. 1 Two-thirds of antibiotics are sold without written prescriptions as if they are over-the-counter remedies. 2 The cumulative effects of such irrational drug consumption patterns are the deadweight loss associated with antimicrobial resistance, iatrogenic illnesses, drug dependence, or addiction and poor health outcomes. 3 Deadweight loss associated with antimicrobial resistance from irrational medicines use is more worrying when one considers limited private-equity-funded R&D investments in medicines for neglected diseases (African trypanosomiasis, Chagas disease, leishmaniasis, schistosomiasis, so forth) affecting mostly low-income countries. It will be a tragedy if after all the efforts to circumvent the scientific, regulatory, and economic hurdles associated with R&D for neglected diseases, irrational consumption renders new medicines for these diseases ineffective within a short time of availability. a The author is a pharmacist with an MSc in Health Policy, Planning and Financing from the London School of Economics and London School of Hygiene and Tropical Medicine. At the time of writing this article, the author worked at the Centre for Health Technology Evaluation of the National Institute for Health and Clinical Excellence, UK. The opinions expressed are entirely those of the author. No external funding was used in support of the article. address: /09/$ - see front matter Ó 2009 Elsevier Inc. All rights reserved. doi: /j.sapharm

2 E.K. Tetteh/Research in Social and Administrative Pharmacy 5 (2009) Because irrational consumption artificially inflates patients demands for medications, the waste induced by inappropriate use is even more damaging in African countries where drug costs fall mostly on household incomes in the way of outof-pocket cash payments. Because availability of medicines is used as a proxy indicator of quality healthcare, inflated expectations and demands created by inappropriate consumption mean a more negative impact on healthcare-seeking behavior whenever health facilities are plagued by drug stock-outs. 1 Generally, increments or decrements in pharmaceutical expenditures may be decomposed into changes in price, product mix, and actual volumes of drug consumption. As depicted by the price- volume -expenditure function in Fig. 1, planning for affordable expenditures to derive the best possible pharmaceutical benefits and outcomes from available health finances (and foreign exchange reserves) requires equal, if not stronger, focus on policy tools for modifying product mix and actual consumption volumes. Taking into account societal costs, irrational consumption arguably constitutes the largest source of waste in pharmaceutical markets. Granted, drug consumption patterns (based on a supplydemand framework) are of two dimensions: professionally determined consumption and consumer-driven consumption; the latter related to patients tastes/preferences for medicines (not on clinical need). Third-party payment and informational asymmetries and agency relationships in pharmaceutical/healthcare markets mean rationalizing both supply and demand dimensions of consumption relies on optimality of these relationships, which in turn is determined by informational, financial, and/or nonfinancial policies to mitigate agency costs. The focus of this article is on the volume component, that is, interventions for rationalizing drug selection and consumption in African countries. The article evaluates these interventions within the context of proposals made under WHO s Medicines Strategy. 1,2,4 It intends to offer inputs to discussions over which strategies should be adopted by a national program for rationalizing drug consumptions and how such a program should be implemented. Yet the largely normative suggestions made in this article should in no way be regarded as a one-size-fits-all solution to all drug problems Fig. 1. Planning for affordable pharmaceutical expenditures. Volume refers to the combined effects of the mix of products and actual volumes of drug consumption. The starred options refer to different forms of price controls and administered pricing rules.

3 276 E.K. Tetteh/Research in Social and Administrative Pharmacy 5 (2009) faced by African nations. For instance, issues relating to counterfeit drugs and the state of drug supply chains, bribery, and institutionalized corruption in public systems remain out of the scope of this article. The article also abstracts issues relating to infrastructural inadequacies and capacity constraints facing African nations. Capacity constraints are unavoidable whether good or bad policies are considered fit to be implemented, and the only way of avoiding these issues is to do nothing. It is easier to walk through a change process when one has a fair direction of the right options to take; and an incremental implementation strategy with planned capacity building offers a prudent means to deal with capacity constraints. The rest of the article is organized as follows. Second section looks at rationalizing drug selection and professionally determined consumption. Third section looks at rationalizing consumer-driven consumption and Fourth section discusses the policy implications. Rationalizing drug selection and professionally determined consumption Influencing what is prescribed Essential drug lists and formularies Proliferation of medicines on the global market is known to constrict rational drug consumption. The first step is setting administrative restrictions on the mix of pharmaceutical products through appropriate selection of active therapeutic molecules (ATMs) and inclusion of selected ATMs on what would be formally designated as essential drugs lists (EDLs). No health system can afford to supply all medicines available on the global market, and EDLs are, in effect, medical purchasing guidelines specifying which ATMs should be purchased and used.* It is not the intention here to offer detailed descriptions of EDLs that will be found elsewhere 1,2,4-6 but to highlight practical ways of using EDLs to effectively streamline product mix. For African countries, the starting point will be to adopt the model EDL developed by the World Health Organisation (WHO). However, experience to date has shown a wedge between instituting EDLs and prescribers adherence to it. 2 The wedge evolves, in part from the way in which EDLs specify ATMs in international nonproprietary names (INN) and yet, instituted in the absence of active implementation and enforcement efforts, that is, prescribing and clinical auditing structures and operational generic policies (see Fig. 2). Of particular relevance to bridging the wedge between EDLs and clinical practice are formularies, formulary compliance, and generic substitution lists. For administrative simplicity, formularies that envelope generic substitution lists should be adopted. Such formularies restrict physicians/ prescribers choice of actual branded/unbranded products to use to 1 or 2 selections in a given therapeutic class on a list (i.e., a positive formulary). This is to prevent the situation where listing of products in international nonproprietary names creates unmanaged decision space for physicians/ prescribers to choose or write prescriptions with actual trademarked products that may or may not provide value for money. As with EDLs, a starting platform for African countries is to adopt WHO model formulary, which should be customized according to domestic situations. 6 In adopting formularies, possible confrontation with the politics of clinical autonomy of the medical profession can and should be mitigated by prescribing allowance for non-formulary products where clinicians/prescribers are made to justify the clinical need for non-formulary drugs, that is, instituting stringent prior authorization (PA) hurdles expand the clinical space for dealing with atypical patient-specific situations. The effectiveness of PA, however, depends heavily on the time costs and possibly lost income for physicians called to justify their use of non-formulary products. 8 Even then objections that formularies erode physicians clinical freedom are overexaggerated. In the absence of explicit formulary lists, physicians create their own implicit, individualized formulary list of favorite preferred drugs, written down or not, developed with or without a clear clinical rationale and revised in response to nonprice (marketing) competition or by copying the prescribing patterns of their peers. An explicit formulary will ensure consistency in therapeutic choices, and compliance to formularies will ensure evenness in delivery of essential drug benefits. The value of formularies, however, goes beyond * A streamlined product mix will help reduce the number of distribution channels in drug supply chains and introduce administrative efficiencies. It will also help reduce the costs of training health staff compared with having an overwhelming range of products. Further, it could be used to support the growth of domestic industries by restricting prescribing and consumption to local firms products.

4 E.K. Tetteh/Research in Social and Administrative Pharmacy 5 (2009) Fig. 2. Components of a generic competition policy. streamlining product mix/ volume. It is a valuable bargaining leverage for influencing prices. Indeed, WHO 1,2 recommends that national EDLs, defining country-specific therapeutic choices, should be used in influencing drug procurement or reimbursement under health insurance programs. Current evidence suggests that although 70% of WHO member nations adopt the EDL concept, only 30% employ EDLs to influence reimbursements and procurements. 4 In applying formularies to moderate price and volume, African countries need to pay attention to the following (see also WHO 9 ). (1) Therapeutic classification used in WHO EDLs should be maintained with comments and indications of functional equivalence within any pharmacologic class of generic equivalents and/or therapeutic substitutes. The advantage from applying WHO EDL classification systems is the leeway for aggressive substitution that reflects cross price elasticity of medicinal demands within and across molecular classes in any disease category. (2) The number of ATMs in each therapeutic class of WHO EDLs should be expanded to include other unlisted molecular entities to increase the number of substitutable/interchangeable ATMs. This is critical in that selection of ATMs on WHO EDLs is partly based on prices from international sources, not country-specific prices/discounts. Selection, however, of unlisted molecules should be based on clinical preferences and sound clinical judgments of interchangeability across what will be a set of heterogeneous therapeutic effects. (3) Ex post of competitive discriminatory price bidding in procurement contracting, actual products to be purchased, prescribed, and dispensed within any therapeutic class have to be specified on the basis of price discounts. To ensure that therapeutic choices are not severely restricted in return for discounts, a minimum of 2 preferred actual products (which may also be the maximum allowable) should be listed in each therapeutic class, that is, moving away from a winner-takesall strategy to accepting, at least, 2 bid winners. Besides the option of PA, this will expand further the space to deal with variances in clinical effects and patient-specific situations. (4) Listed products should be labeled with priority (VEN (vital, essential, necessary)) procurement codes, and actual prices or daily costs of treatments should not be published. Signs/symbols (or bar charts) indicating relative unit prices or daily treatment costs

5 278 E.K. Tetteh/Research in Social and Administrative Pharmacy 5 (2009) should be used. For instance, indicating cheapest and indicating most expensive z. Once these steps are followed, formularies and formulary compliance will ensure that bid winners gain incremental demand volumes in return for price discounts (see Tetteh 10 ). For ease of reference for health staff, two-part formularies can be created: (1) WHO-style formulary presenting detailed clinical information on ATMs and (2) a complementary formulary list without details of clinical indications, and so on that specifies features (3) and (4) discussed earlier. The complementary formulary list will be revised as frequently as terms of procurement contracting and drug acquisition prices are (re)negotiated, without having to revise the main WHO-style formulary that should revised at least biannually. 1,2,4 Both sets of formularies may be printed in pocketsize, which has been shown to be a successful strategy for informing prescribers of essential drugs approved. 11 In relation to rationalizing volumes, a time-series regression analysis of the impact of positive formulary lists in the United Kingdom reported reductions in rates of prescribing by 300,000 items per month and 260,000 prescription scripts per month. However, these effects are most likely to be due to changes in product mix. One will expect EDLs and/or formularies to have one-off effect: changing primarily what is prescribed but not the how dimensions of prescribing behavior. Before-after studies in Ireland reported, although introduced in 1982, of negative formularies (specifying drugs not to be used) contracted consumption volumes, and prescribing rates returned to pre-intervention levels after 7 years. Delisting negative drugs appears to have been compensated by increases in prescription rates of positive drugs. 12 Restricting market access based on clinical superiority Another way of streamlining the mix of pharmaceutical products is through directly restricting the number of actual trademarked drugs (in a given therapeutic category) gaining marketing authorization/entry based on clinical superiority (defined on some health outcome dimensions). Denmark follows this policy; managing 4,900 branded drugs compared with 10,000 in the United Kingdom and 23,000 in Germany. 12 Albeit restricting market access based on clinical superiority appears as a sound approach, it might not be appropriate in terms of price-discounting competition. So-called me-too or follow-on medicines, even if offering marginal therapeutic benefits (over and above existing drugs), do increase treatment options and the number of competing therapeutic substitutes and ultimately the number of generic equivalents post-patent expiration. The policy of restricting market access based on clinical superiority has been promoted by Tanzania 13 ; however, this needs to be revisited in light of effects on price-discounting competition. Besides, administrative restrictions on product mix would be more effective when applied at the points of prescribing, dispensing, and consumption than at the points of market entry. Influencing how drugs are prescribed Correcting information failures in clinical decisionmaking The simplest, and arguably the crudest, way of influencing how medicines are prescribed and used is setting prescription fill limits that specify the number of pills to be prescribed and prescriptions dispensed in, say, a month or year. 8 It is no more than a halfway-fix to a problem that first requires changing the information base on which drug prescribing decisions are made; that is, overturning a reliance on marketing and promotional materials that create brand loyalty. Intense promotional activities by drug suppliers in Tanzania are reported to have encouraged over-purchasing and over-prescribing of branded expensive drugs, mainly in large urban hospitals, to the deprivation of rural healthcare facilities. 14 Generally, marketers of drug firms (equipped with free drug samples and educational materials) have sought to create brand loyalty among prescribers and patients. Changing the medical information base for prescribing, hence, requires some controls on the various forms of promotion and marketing. It must be noted that advertising and promotion z It may be argued that the use of symbols is imprecise and nearly useless in guiding prescribers to make pricesensitive choices. However, the argument holds only when prescribers are inundated with a wide range of products. To the extent that the formulary design the author is proposing will apply to a minimum (or allowed maximum) of 2 products, symbols should easily inform prescribers to use (more often) the least costly products. Symbols introduce administrative efficiencies in that they circumvent problems of continuous inflation adjustments of listed prices. 9 They also correct diminished price information from using confidential contracts to prevent price spillovers and maintain incentives for noncooperative competitive discriminatory pricing 10.

6 E.K. Tetteh/Research in Social and Administrative Pharmacy 5 (2009) have multidimensional effects. They serve as a source of information on clinical benefits of available therapeutic substitutes/generic equivalents, and yet they create deeply rooted habits that negate price sensitivity and encourage irrational prescribing. The solution is not an outright ban on drug advertising and marketing but answering questions of whether prescribers have access to unbiased comparative clinical evidence on competing therapeutic alternatives or whether they obtain information mostly from narrowly focused, self-serving, incomplete advertising and marketing materials. 8 One solution is creating drug information centers to evaluate the clinical evidence on available products launched on the market x. These centers will develop clinical information dossiers that will be used by healthcare payers, procurement agencies, or service providers (in addition to price information) to determine whether a given product will be preferred on formularies for purchase and use. This effectively breaks the detailing link between physicians and marketers. It is crucial, however, for information provision to be complemented by academic detailing involving face-to-face interactions. This may include day-to-day supervision, auditing, (confidential) peer review, training workshops, and courses. It is reported that academic detailing centered on information provision unaccompanied by face-toface interventions is ineffective in changing drug prescribing behaviors. 1,2,5,8 In general, academic detailing (policy ownership sharing) will be needed to help prescribers understand the rationale behind administrative restrictions on product mix and advertising. Because retail pharmacies tend to be the first point of accessing healthcare in African countries, it is argued here that academic detailing should be skewed on pharmacists and shop attendants. Face-to-face academic detailing may further be strengthened by mandating in-service training and continuing medical education as licensure requirements. However, the fixed costs of mandatory investment in medical expertise and continuing education should not be solely borne by prescribers as this might deter entry into medical professions. Mandatory continuing education as part of licensure and certification requirements should receive public subsidies of some sort. 15, ** Another useful policy is modifying the content of educational curricula for would-be health professionals to include problem-based pharmacotherapy (exemplified with formularylisted ATMs or products) and skills for appraising clinical trial reports, medical bulletins, and products insert package leaflets, and so on. The plan is for would-be health professionals to develop appropriate prescribing/clinical practice styles before they start practicing. yy This may be easier than educating established prescribers who might have developed their own rational or irrational behaviors. Financial incentives It is well-documented health provider behavior does respond to financial and economic incentives; it is neither a myth nor rule-of-thumb. 16 Various financial policies including (1) global budgets set at the institutional level, (2) remuneration (pay) methods operating at prescriber level, and (3) financial penalties and rewards at both prescriber and institutional levels can be used to modify prescribing/consumption patterns and clinical performance. At the institutional level fixed rather than indicative global budgeting, which is summed over all components of clinical activity (pharmacies, hospitals, primary care units, and others), is advocated. A global budget, x This does not require creation of a new institutional agency. To the extent that drug regulatory authorities (DRAs) collect information on safety, efficacy, and quality, they can act as drug information centers. Funding for these expanded functions of DRAs could come from public finances, charging drug registration fees that are proportionate to the true costs of quality assurance regulation or from savings accrued from cost-containing procurements. ** Nevertheless, given that internal and external brain-drain may be induced by health professionals attempts to increase the rate of return on their subsidized investments in medical education, African governments may need to place bonding restrictions to such offerings of public subsidies, be it at undergraduate or postgraduate levels. yy Market-share shifting effects of formulary compliance to incentivize drug suppliers to offer price discounts will be more effective if enforced in influential public health facilities such as teaching hospitals. Because prescribing patterns of private-sector physicians will be partly, or wholly, influenced by teaching hospitals, overall gain in business volumes for a supplier may exceed public purchases.

7 280 E.K. Tetteh/Research in Social and Administrative Pharmacy 5 (2009) in theory, allows efficient combination and substitution of medical inputs and resources zz. When set prospectively, global budgets offer incentives for cost-effective prescribing and service delivery, which, in contrast to prescribing or line-item budgets, provide less room for shifting pharmacy costs elsewhere. Still, risk or costs shifting incentive arises with prospective global budgets because it introduces constraints requiring average revenue to be equal to average costs. Yet beyond some undefined outputs, marginal revenues will be zero, while marginal costs are non-zero, meaning uncompensated services and revenue shortfalls. Retrospective budgets, in contrast, do not offer incentive for risk or costs shifting but create institutional inertia and lock in existing inefficient behavior. Consequently, some flexibility is needed in designing prospective global budgets for healthcare providers to account for costs variations (due to ex ante health status of patients, ex post referrals of cases, and epidemiologic population-level risk of medical illness) that are not under clinical control. This means complementing stop-loss financing (with or without adjustments for health risks) with stop-gain function of prospective global budgets. This delicate balance will be at the discretion of policy makers in African nations. In the same vein, prospective prescriber payment (i.e., capitation or case payments by diagnoses or episodes of illness) is expected to induce cost-effective efforts. Salaries provide no incentive and fee-for-service offers a disincentive. This in no way suggests superiority of any payment system over the other. 17 Different payment systems have their own drawbacks, contain their own perverse incentives, and could be made to work well, taking into account the nature of ownership of health facilities and effectiveness of accreditation and ethical standards and nonfinancial incentives (more on this in the next section). Blended/mixed payment systems have been suggested, that is, a prospective payment bundled with retrospective payment to ensure that overall marginal revenue is positive to mitigate perverse incentives. This, however, demands a balance between potential cost efficiency against transaction costs, in terms of complexity of implementation (including the cost of measures to correct more complex behavioral responses to game the mixed budgeting/payment policy). An alternative is performance-based systems that link budgeting and remunerations to observable and measurable performance outcomes. Increases or cuts in pay, perquisites and allowances, subsidies, bonuses, or stop-loss funding, for instance, may be tied to desired performance. Evidence on performance measures suggest that clinical processes are more sensitive, feasible, easier to collect, understand, and measure, subject to less variations and especially useful where final health outcomes cannot be easily attributed to clinical processes. 18 This maintains separability of ex ante health status, ex post referrals, and epidemiologic risks from clinical responsibility. Indeed, a study of performance-based financing at health-facility level in Rwanda reported that health facilities assigned to pay-for-performance (P4P) budgets increased their clinical activities and cost efficiencies relative to controls. 19 Analysis of a performance-based staff pay in 15 healthcare centers in Kabutare district in Rwanda showed that modifications of fixed annual staff bonuses into performance-based pay yielded an increase in staff productivity in specified clinical activities. 20 One drawback with P4P systems is specialization on specified clinical processes. This worsened in cases where patients healthcare-seeking behavior was unresponsive to specified processes. It can, however, be mitigated by specifying performance over a number of complementary clinical processes (at a given point in time) and/or revising performance objectives over different time periods. In addition, if physicians and/or health facilities face roughly the same case diagnosis mix, relative performance pay/budget scales may be used to create a pseudo-yardstick competition. Together, these measures should help adjust for randomness and uncertainty in agents efforts and check against gaming and ratchet effects associated with multi-period setting of performance targets. 18 Caution must be exercised, however, to avoid a range of outcomes that result in a dramatic increase in auditing and monitoring requirements. In addition, complementarities in financial systems at the institutional and health-staff levels are needed to ensure that incentives for cost efficiency and quality of care are maintained. That is to say, zz If Ro is the prospective budget in a given financial year (short-run period), efficient (substitutive/complementary) use of medical inputs will ensure Ro % P P Q P þ P L Q L þ P M Q M, where P is the price and Q is the quantity, and the subscripts P, L, and M refer to pharmaceuticals, labor, and other medical inputs. The term P P Q P is the same as the price- volume -expenditure relationship in Fig. 1.

8 E.K. Tetteh/Research in Social and Administrative Pharmacy 5 (2009) performance-based global budgets should be matched to performance-based physician pay, taking into account the need to share the efficiency gains from incremental performance and prevent free riding where there are joint production efficiencies from team effort. Yet, no remuneration system will work well if physicians do not receive fair returns for all clinical activities they perform and for investments in medical expertise. 15,17 An equal-compensation principle for multitasking should be a basic feature of pay/budget formulae. Although prospective (P4P) schemes come with increased likelihood of (1) under-treatment (skimming), (2) unbundling/specializations, and (3) shifting of health risks (dumping/creaming), these perverse incentives should not be overemphasized. Quality and quantity distortions of healthcare delivery associated with financial systems may be checked by intrinsic/altruistic motivations or social interactions to foster competition for professional status or peer recognition. 15,18 For this reason, African countries should avoid overreliance on monetary incentives as tools for influencing prescribing behaviors. Nonfinancial incentives Nonfinancial instruments collectively labeled as clinical governance can be used to monitor the potential distortions of quality and quantity of healthcare documented to be associated with economic motivations. Even then, tools for clinical governance can be applied independently for rationalizing drug consumption and present (relative to financial incentives) little conflicts with altruistic motivation. Clinical governance can be considered as a nonfinancial analog to financial rewards to encourage appropriate agents efforts. According to Kuhn, 15 clinical governance can be considered as a framework of formal/informal rules for appropriate clinical behavior under unforeseen medical contingencies. At the institutional level, (1) registries of complaints about health services delivery (2) agreed service-levels arrangements and performance indicators (3) licensure and accreditation, and revalidation of accreditation and licensure provide ways of standardizing the quality and quantity of care. At the prescriber level, clinical governance may involve the use of (1) flow charts and diagnostic cards and (2) prescription and clinical practice guidelines (also called standard treatment guidelines or disease-management references) to specify protocols detailing when, where, and how to use different diagnostic examinations, medicines, or lifestyle modifications for a disease diagnosis. As with financial tools, there must be complementarities between nonfinancial incentives at the institutional and prescriber levels. An oftenadvocated prescriber-level tool is clinical guidelines. These define current best clinical evidence (or opinion) and, similar to EDLs/formularies, reduce variations in clinical behavior that is beyond tailoring treatment to patient-specific situations. However, barriers to prescribers adherence to clinical guidelines need to be addressed. This includes (1) lack of awareness, familiarity, agreement, expertise, or experience (2) low expectancy of beneficial effect of guidelines, and (3) lack of sanctions and auditing to increase the likelihood of detecting deviations from recommended behaviors. 21 For these reasons, prescribers have to be academic-detailed on the contents of clinical guidelines. Analogous to EDLs/formularies, pocket-sized clinical guidelines have been shown to be successful. 12 It might be argued that clinical guidelines should be soft to allow clinicians to be innovative. Based on clinicians skill and expertise, they will try out mix-and-match and watch-wait strategies to accommodate patient-specific situations. Soft clinical guidelines, therefore, are a means of encouraging altruistic motivations and sheer clinical brilliance. 15 In that case, clinical guidelines have to be supported by prescription/clinical supervisions and auditing, (confidential) peer reviews, and feedback (knowledge and experience sharing) within institutional settings. Auditing or peer review may involve profiling prescribing/clinical patterns of physicians using surveys or drug utilization reviews. To encourage adherence, clinical guidelines may be used as the chassis of undergraduate or in-service training. Generally, non-adherence to behavior-change interventions can be mitigated through rigorous preemployment screening/selection and credentialing at point of entry into medical profession or health institutions. Indeed, credentialing and screening (by ensuring that health staff embrace or adhere to behavior-modifying interventions for appropriate care) should minimize (costs of) enforcement and auditing efforts. 17 Experiences from Kaiser Permanente in California, United States, suggest that academic detailing, peer review and feedback, clinicianprofile comparisons (or relative performance scales), and involvement of physicians (i.e., shared policy ownership) achieved over 98% physicians

9 282 E.K. Tetteh/Research in Social and Administrative Pharmacy 5 (2009) compliance with formularies without the need for command-and-control management, financial incentives, or linking pay systems to prescribing behavior. 22 It appears that a coordinated, supportive, trust-and-verify environment for disease management, sharing of clinical knowledge and experience, collective learning, peer recognition, competition for professional status, and intrinsic motivations might be more effective than experimenting with financial incentives. On this basis, some might argue for the self-regulatory variation in prescriber-focused clinical governance, that is, autonomous self-supervised group process designed among prescribers, to identify any behavioral anomalies for correction. The problem with a self-regulatory approach is the scope for prescribers to free ride on group efforts and professional reputation, and the unconstrained space it offers for collusion, political lobbying, and logrolling. Clinical governance is at its best when it incorporates a mix of external and self-regulations. 15 Note that the tools for (nonfinancial) clinical governance may be bundled together (with or without financial incentives) into disease-management programs, under the supervision of drug and therapeutic committees (DnTCs) at health facility-, district-, or regional-levels. Although the creation of DnTCs was advocated by WHO Medicines Strategy, there is currently only sketchy evidence on the existence and effectiveness of DnTCs in low-income nations; only 30-40% of WHO member countries have DnTCs. 1,2,4 DnTCs may be considered as gatekeepers, peer-review organizations, or enforcers of appropriate clinical behaviors. African countries will need to create such professional bodies, if attempts to rationalize drug consumption are regarded as a serious policy concern. DnTCs might also have their funding/ pay structures related to specified performances outcomes. A variant of disease-management programs is community-case management (CCM), where production of health services is taken out of institutions into communities. 1,2 CCM will potentially be of great value in the low-resource settings of African countries, where the spread of primary health facilities is limited. A study of a CCM for malarial episodes in a rural province in Burkina Faso reported that cases of severe malaria were significantly lowered when geographical coverage of CCM was, at least, 50%. 23 Notwithstanding this, CCM should not be considered as a substitute for spreading geographical coverage of (primary) health facilities. Rationalizing consumer-driven consumption Financial and nonfinancial interventions for rationalizing drug consumption described so far have centered on professionally determined consumptions. In the same regard, financial (costsharing) and nonfinancial strategies could be targeted at consumers. The focus here however is on nonfinancial interventions, that is, pharmaceutical counseling and literacy as part of health education and promotion programs. Although medicinal need is an important measure of professionally determined objectives, it is a poor predictor of consumer behavior. 8 Healthcare providers cannot assume all the blame for irrational drug consumption. Gafni et al 24 argue for changing the traditional nature of physician-patient agency from where the agent makes all decisions to one in which the agent transfers information to consumers to modify preferences and/or valuations of treatment benefits. That is, empowering consumers to actively participate in making joint therapeutic choices. The essence of correcting information asymmetries and failures need not be overemphasized. Consumers decision on therapies, independent of physicians influence, is shaped by income, beliefs, social and cultural norms, and perceptions. 25 If a patient has low expectations of drug therapy provided and has to pay for prescribed medicines out of pocket, it is easy to see why treatments may be abandoned completely. Arguably, patients in this case will be making a rational economical choice in abandoning treatment based on perceived therapy costs and benefits. See Lamiraud and Geoffard 26 for a discrete choice experiment to support this premise. On this basis, it is argued here that pharmaceutical counseling and literacy must first acknowledge the influence of cultural norms on patients perceptions of therapy and, therefore, compliance to dosing regimens and protocols. There is sketchy evidence on the influences of cultural norms on medicines use in African nations. However, a study by Etkin et al 27 reports how understanding of disease etiology and drug benefits (indigenization of medicines) in Hausaland in Nigeria had substantial influence on consumption. It appears that medical knowledge is somehow integrated with cultural norms and beliefs to generate appropriate or inappropriate personalized medical conceptions. African countries should consider commissioning operational research on country-specific characteristics that may affect drug use. Research evidence engendered could then be fed into tailored pharmaceutical/health education programs to

10 E.K. Tetteh/Research in Social and Administrative Pharmacy 5 (2009) correct inappropriate indigenization of medical knowledge. Granted, modest approaches like one-to-one counseling and literacy by health professionals to consumers can go a long way to promote patients compliance with dosing and treatment regimes and reduce unnecessary resource use and expenditures. 8 Still, it is necessary to correct information failures on the supply-side, considering that physicians beliefs about drug treatment appear to have spillover effects on patients expectation of medicinal benefits and adherence. 25 Fig. 3 specifies the minimum information-exchange set that health professionals must attempt to offer on each contact with health services to patients, especially at points of dispensing medicines. 28 Because in most cases nurses, pharmacists, and drug dispensers are at the end of treatment pathways, academic detailing these groups of health professionals to educate patients will be more useful than information exchanges between physicians and patients (see the subsection on correcting information failures in clinical decision-making). Loevinsohn 29 reports that successes of health education programs hinge on using few messages repeatedly in practically every patient contact with health services. A counterargument is that it would be self-defeating for medical professionals to transfer information to patients, because this constricts the space and scope for agency shirking (not to mention the time costs involved in information provision). However, this could be circumvented in a clinical environment that encourages intrinsic motivations and in which health professionals receive fair remunerations for multitasking, including revealing their knowledge to consumers. In the constrained environments of African nations with shortage of health staff, insert leaflets in drug product packages might be just enough for educated consumers. For less-educated patients, calendar blister packaging of drug products, especially for treatments with complex dosing regimens, in addition to pictorial package inserts, might be helpful when used by health professionals to educate patients at points of dispensing. 30 Repeated interactions characterized by continuous information exchanges may go a long way in creating balanced relationships between patients and health professionals in African nations. This appears particularly critical for mothers when it comes to pediatric health. Kidane and Morrow 31 reported that counseling mothers in Tigray, Ethiopia, to promptly administer antimalarials to their children at home reduced under-5 mortality by 40% in the intervention villages. Given that medical information asymmetries are compounded by high levels of illiteracy in African countries, mass education campaigns and social marketing (through public media) should be considered. Such informational interventions should be propagated in local languages to ensure responses to these programs are not dominated by educated consumers. 5 Granted, caution must be exercised with a reliance on social marketing, considering a tendency to create brand loyalty. Policy implications Theories of healthcare-provider behavior suggest that economic and non-economic motivations are not mutually exclusive, objective functions are mixed, and outputs of theoretical models change in different environments. This indeed explains the multiplicity of healthcare-provider models and it is a testament to the numerous nuances in real life. 32 Because both financial and nonfinancial behavior-change interventions have their weaknesses, 17 designing appropriate policy responses requires knavish (financial) incentives and Fig. 3. Minimum information exchange set for patients.

11 284 E.K. Tetteh/Research in Social and Administrative Pharmacy 5 (2009) knightly (altruistic) motivations to be complements that are symbiotically aligned in a robust fashion. 33 The difficulty with a model-mix approach is mapping health providers behavior with separate motivations. There is no recipe for the model-mix approach and some optimal fixed recipe may be irrelevant, considering that responses to irrational provider behavior should necessarily vary across country-specific contexts. A review of 30 studies in developing countries on the size of drug utilization improvements with different interventions reported that financial incentives had lower effects than nonfinancial incentives, including CCM, medical training and academic detailing, clinical supervision, and auditing. 1,2 The empirical evidence suggests the model mix may have to be biased in favor of nonfinancial strategies. Still, irrational consumption is not necessarily the outcome of health providers behavior. A model-mix strategy must envelope strategies for modifying consumer-driven consumption. At the moment, the only solution is experimentations and empirical evaluations of behavior-change interventions, in any given context, to identify the most effective policies. One way of institutionalizing the model-mix strategy is creating quasi-independent agencies overseeing DnTCs, drug information centers, and health facilities, and so on, to coordinate day-to-day operation of the model-mix strategies discussed in the previous sections. This is consistent with WHO advocacy for multidisciplinary national agencies (involving civil society) to promote, coordinate, and monitor policies for rationalizing medicine selection and consumption. 2 It also fits with World Bank 11 prescription for assignment of public policy responsibility for medicines management xx to a national authority. These recommendations may not differ from the status quo in African countries, and changes needed may only be strengthening existing public institutions to act as medicines management agencies (MMAs). Depending on country-specific objectives, MMAs may take on additional responsibilities, including consolidating medicinal demand across health facilities for the purpose of procurement and efficient drug supply. This will be akin to responsibilities of hospital and pharmaceutical supplies committees proposed in Tanzania. 13 Although the discussions here are intended primarily for the public sector, the basic principles for rationalizing medicine consumption find their applications in private health sectors. As reported by Maiga et al, 34 interlinkages between the public and private sectors are such that a private sector that fails to rationalize consumptions undermines improvements in public sectors. The private sector will sell inflated demand and expectations of medications as a visual signal of quality healthcare. Regulations in the way of formal or informal legislation and cooperative relationships are essential to discourage negative consumption patterns and coerce private service providers to adopt modelmix strategies. An integrated institutional arrangement should provide greater likelihood of balancing public and private sector consumptions. This follows the concept of co-creation (publicprivate partnerships) to strengthen healthcare systems (see Conway and White 35 ). With respect to evaluating policy outcomes, MMAs that have some formal/informal control over private sectors prescribing patterns will be well positioned to conduct empirical analysis of the effects of interventions over the entire health system. The path ahead is sustained efforts at balancing the various motivations influencing prescriber-determined and consumer-driven consumption in public and private sectors, to the point that drug consumption is appropriate, reasonable, and affordable. An MMA with a degree of autonomy and close links to public, not-for-profit, and private health facilities will offer the best platforms for coordinated multi-sectoral efforts geared toward rational use of medicines. References 1. WHO. Promoting Rational Use of Medicines: Core Components. WHO/EDM/ a. 2. WHO. The World Medicines Situation. WHO/ EDM/PAR/ a. 3. Elbasha EH. Deadweight loss of bacterial resistance due to over-treatment. Health Econ 2003;12: WHO Progress in the rational use of medicines, including better medicines for children. Report by the Secretariat: 120th Session of the Executive Board. Available at: ftp.who.int/gb/ebwha/pdf_files/eb120/ b120_7-en.pdf Accessed September 29, xx The concept of medicines management is by no means clear and may refer to a whole range of tasks associated with choosing, pricing/purchasing, distribution/storage, quality assurance, and use of medicines in ways that maximize the net social welfare benefits from pharmaceutical expenditures. Here, the term refers to implementation of the model-mix policy for modifying volume.

12 E.K. Tetteh/Research in Social and Administrative Pharmacy 5 (2009) Laing RO, Hogerzeil HV, Ross-Degnan D. Ten recommendations to improve drug use in developing countries. Health Policy Plan 2001;16(1): WHO. The Selection of Essential Medicines. WHO/ EDM/ b. 7. US FDA. Approved drug products with therapeutic equivalence evaluations, ob/docs/preface/eclink.htm; Available at: Accessed April 27, Schweitzer SO. Pharmaceutical Economics and Policy. New York: Oxford University Press; WHO. How to develop a national formulary based on the WHO model formulary: a practical guide. WHO/EDM/PAR/2004.8; Tetteh EK. Providing affordable essential medicines to African households: the missing policies and institutions for price containment. Soc Sci Med 2008; 66(3): World Bank. Importance of pharmaceuticals and essential drug programs in Better Health for Africa: experience and lessons learned. Available at, www. worldbank.org; AccessedJune 5, Mossialos E. Regulating expenditures on medicines in European health care systems. In: Saltman RB, Figueras J, Sakellarides C, eds. Critical challenges for health sector reform in Europe. Maidenhead: Open University Press; p WHO. A short manual on Tanzania National Drug policy: the masterplan for the pharmaceutical sector Available at, gsd/cgi-bin/whocountry/library.fcgi; Accessed October 5, Yudkin JS. The economics of pharmaceutical supply in Tanzania. Int J Health Serv 1980;10(3): Kuhn M. Quality in Primary Care: Economic Approaches to Analyzing Quality-Related Physician Behaviour. London: Office of Health Economics; Chaix-Couturier C, Durand-Zaleski I, Jolly D, Durieux P. Effects of financial incentives on medical practice: results from a systematic review of literature and methodological issues. Int J Qual Health care 2000;12(2): Robinson JC. Theory and practice in the design of physician payment incentives. Milbank Q 2001; 79(2): Propper C, Wilson D. The use of performance measures in healthcare systems. In: Jones A, ed. The Elgar companion to health economics. Cheltenham: Edward Elgar; p Soeters R, Musango L, Meessen B. Comparisons of two output-based schemes in Butare and Cyangugu provinces with two control provinces in Rwanda. Global Partnership on Output-Based Aid (GPOBA). Rwanda: World Bank, Ministry of Health; Meessen B, Kashala J-P, Musango L. Output-based payment to boost staff productivity in public health centers: Contracting in Kabutare district, Rwanda. Bulletin of the World Health Organisation 2007;85: Partridge MR. Translating research into practice: how are guidelines implemented? Eur Respir J 2003; 21(Suppl. 39): Levine S, Campen D, Millares M, Barrueta A. Kaiser Permanente s prescription drug benefit. Health Affairs 2000;19(2): Pagnoni F, Convelbo N, Tiendrebeogo J, Cousens S, Esposito F. A community-based programme to provide prompt and adequate treatment of presumptive malaria in children. Trans Royal Soc Trop Med Hyg 1997;91(5): Gafni A, Charles C, Whelan T. The physician-patient encounter: the physician as a perfect agent for the patient versus the informed treatment decision-making model. Soc Sci Med 1998;47(3): Horne R. Patients beliefs about treatment: The hidden determinant of treatment outcome? J Psychosom Res 1999;47(6): Lamiraud K, Geoffard P-V. Therapeutic non-adherence: A rational behaviour revealing patient preferences? Health Econ 2007;16: Etkin N, Ross J, Muazzamu T. The indigenization of pharmaceuticals: therapeutic transitions in rural Hausaland. Soc Sci Med 1990;30(8): Bradley C, Hansen EH, Kooiker S. Patients and Their Medicines. In: Mossialos E, Mrazek M, Walley T, eds. Regulation of pharmaceuticals in Europe: striving for efficiency, equity and quality. Maidenhead: Open University Press; p Loevinsohn BP. Health education interventions in developing countries: a methodological review of published articles. Int J Epidemiol 1990;19(4): Wright JM, Htun Y, Leong MG, Forman P, Ballard RC. Evaluation of the use of calendar blister packaging on patient compliance with STD syndromic treatment regimens. Sex Transm Dis 1999; 26(10): Kidane G, Morrow RH. Teaching mothers to provide home treatment of malaria in Tigray, Ethiopia: a randomized trial. Lancet 2000;356(9229): Pauly MV. Nonprofit firms in medical markets. Am Econ Rev 1987;77(2): Le Grand J. Motivation, agency and public policy: of knights & knaves, pawns & queens. New York: Oxford University Press; Maiga FI, Haddad S, Fournier SP, Gauvin L. Public and private sector responses to essential drugs: a multilevel analysis of drug prescription and selling practices in Mali. Soc Sci Med 2003;57(5): Conway S, White S. Co-creating health systems. Presentation at Re-Action, 16 May Available at, html; Accessed August

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