Impact of e-bidding procurement on generic omeprazole injection prices in Thailand

Generics/Research | Posted 20/06/2023 post-comment0 Post your comment

To address Thailand's increasing drug costs, the government implemented e-bidding for drug procurement. In a study by Pentrakan et al., e-bidding reduced omeprazole injection prices by 17.35% per vial and enhanced the procurement process. Nonetheless, maintaining a balance between innovation and involving local suppliers is vital for success [1].

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The financial burden of pharmaceuticals is progressively becoming more significant in numerous countries. This trend is also observed in Thailand, where drug expenses continue to rise steadily.  

The Thai government has made efforts to implement a number of cost-containment policies and revamp drug procurement procedures in order to achieve significant savings. However, the procurement procedures within the pharmaceutical sector are intricate, encompassing diverse structures like monopolies and oligopolies. Under a traditional purchasing system, the procurement price of each product differs based on the purchasing power of healthcare providers. Some trade names of generics have continued selling at high prices. Extensive discussions have taken place regarding inefficiencies and inadequate information, which have led to adverse impacts on the procurement process and price distribution among buyers. Specifically, proton pump inhibitors (PPIs), such as omeprazole injections, have emerged as a significant expenditure share, presenting a wide range of purchase prices for generic drug products. 

Starting from 2018, the government introduced an electronic government procurement system. A method employed to enhance the efficiency of public drug procurement involves the adoption of the electronic bidding (e-bidding) system, which has a central agency handling the procurement activity such as selecting contractors, price negotiation, condition setting, and making a purchasing decision for hospitals or local units who are only required to submit their requests to it.

Consequently, the objective of this study [1] was to determine the effect of the e-bidding system on drug prices. It was assessed retrospectively through a sample of all generic drug products under the same drug category of omeprazole injection in Thailand. The study data employed nationwide pharmaceutical procurement data of Thailand from 2018 to 2019 in both traditional and e-bidding systems. In this study, three types of analyses were conducted, including: (1) descriptive statistics that compared the prices of medicine products among subgroups of relevant factors; (2) price dispersion analysis classified by procurement practices between the e-bidding system and the traditional system; and (3) price reduction analysis using a difference-in-differences estimate of the price for these two groups before and after programme intervention.

The results revealed significant differences in average prices of generic medicines among subgroups of participants, regions of buyers, manufacturer's countries, owners of the facilities and procurement quantities. When comparing the price dispersions between the e-bidding system and the traditional system, the study found that drug purchases made through the e-bidding system exhibited lower price dispersions. 

Importantly, the impact of the e-bidding system on procurement prices was assessed by comparing the differences in outcomes while controlling for potential confounding factors. The result clearly indicates that the adoption of the e-bidding system was strongly associated with a reduction in generic drug prices of omeprazole injection, resulting in a decrease of 17.35% per vial.

By implementing the e-bidding system, Thailand has successfully accomplished its objective of lowering the prices of omeprazole injections. Hospitals now have the means to tackle the issue of generic medicine prices by accessing impartial market information regarding product availability and fair comparative prices, thereby improving the overall process. 

Nevertheless, the study showed that nearly 98% of the total quantity in the e-bidding system originated from Indian pharmaceutical companies, and the average price was also lower compared to equivalent products from other countries. Consequently, it is imperative to take additional measures to mitigate the risk of hindering innovation and restricting supplier involvement, particularly for domestic manufacturers.

Conflict of interest
The authors of the research paper [1] declared that there was no conflict of interest.

Abstracted by Amarawan Pentrakan, Department of Pharmacy Administration, Faculty of Pharmaceutical Sciences, Prince of Songkla University, Hat Yai, Songkla, 90110 Thailand

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1. Pentrakan A, Wang JY, Wong WK. The impact of centralized electronic bidding system on procurement prices for generic medicines: a case study from Thailand. Songklanakarin J Sci Technol. 2023;44(6):1532-38.

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