May 12, 2016
Anti-corruption summit commitments on procurement will be key for the health sector
Transparency International (TI) welcomes the statements at today’s Anti-Corruption Summit from Argentina, Malta, Mexico and Nigeria to implement open contracting principles in health sectors.
TI is looking forward to working with these countries and others, alongside the UK Government and the Open Contracting Partnership. TI will also be engaging with the UN, building upon our collaboration with the World Health Organisation (WHO).
“Corruption that impacts on people’s access to getting the quality medicines and healthcare they need is one of the most cynical form of corruption,” said Dr Marie-Paule Kieny, WHO Assistant-Director General for Health Systems and Innovation. “We are committed to intensify our work with our Member States and partners in the future – transparency and good governance are the foundation of a functioning health system.”
Open contracting is a key policy to achieving transparent and accountable procurement systems. TI will seek to work with governments, global institutions and expert civil society organisations to improve open contracting with the aim of:
- Developing resources and providing technical assistance for health sector open contracting;
- Developing a common approach/global standard to monitor the performance of both companies and governments;
- Encouraging countries and international institutions to adopt open contracting as a default part of their health sector procurement process.
An estimated USD 5 trillion is spent worldwide every year on providing health commodities and services. But how much of this spend reaches patients?
There are vulnerabilities to corruption right through the value chain of the health sector – including in manufacturing (counterfeit/substandard medicines) distribution (theft and re-sale of medicines), marketing (payments to physicians for prescribing their products) and delivery (e.g. under the table charging of patients for services).
But the most significant vulnerability is in the area of procurement and contracting – in both the public and private sectors. Estimates of health public procurement funds lost to corruption globally range from 10 to 25%.
Strengthened procurement can also deliver very significant value for money gains. For example, from 2011, South Africa has halved prices and saved an estimated US$900m in its tenders for antiretrovirals for HIV/AIDS through reforming the tender process. Key measures included greater transparency of evaluation and allocation methodologies and reference to existing best global prices. South Africa is now the global benchmark for low ARV prices; a benchmark that other countries have been able to leverage for better pricing.