Drug Procurement, the Global Fund, and Misguided Competition Policies

In an effort to increase competition and decrease price, the Global Fund to Fight AIDS, Tuberculosis and Malaria recently began asking some grant recipients to use international competitive bidding processes for certain drug purchases. Unfortunately, for countries like Kenya, this request has caused more harm than good. After awarding the tender for its annual supply of the anti-malarial artemether-lumefantrine to the lowest bidder, Ajanta Pharma, Kenya experienced wide stock-outs in part due to the company’s inability to supply the order in full and on time. Similar problems could arise in Uganda. Despite Kenya's experience, Uganda has awarded its next tender for artemether-lumefantrine to Ajanta Pharma. Uganda is already facing wide stock-outs and risks exacerbating an already dire situation the longer it takes to fulfill the procurement contract. A tender process based primarily on price cannot account for a company's ability to consistently supply sufficient product in time.

Click here to read the full article as an Adobe Acrobat PDF.

Roger Bate is the Legatum Fellow in Global Prosperity at AEI. Richard Tren is the director of the Washington, D.C.-based lobby group Africa Fighting Malaria. Kimberly Hess is a researcher and editor at Africa Fighting Malaria.

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