These transcripts approximately cover the plenary sessions devoted to discussing individual country cases, political commitment, and county comparisons against the Vietnam case. Due to poor recording quality and in the interest of clarity and space, they have been heavily edited. They are meant to give the reader an idea of the nature of the discussions−the topics touched on, the issues that arose, and the kinds of conclusions reached. They are not meant to be an accurate recounting of what was said by the participants.

Moderator:

I just wanted to sort of summarize. I think it's an interesting transition from an old paradigm to a new paradigm: the old paradigm seems to be characterized by the perception that health care is competition between the private and public sectors; the old paradigm is characterized by government control through the Ministry of Health of the production of health care services; the old paradigm is characterized by free services and free drugs, that services are provided primarily by the government with the private sector being a small component, and there are task-oriented vertical programs that get the job done. The new paradigm, however, might need to be considered, and I think we are going through a transition in a way. 　One of the elements of the new paradigm is an integrated system development approach in which the vertical programs are seen as activities that can be carried out to achieve certain specific tasks but do not become an end in themselves. It is not the only way; it is one tool that is available to the system to be able to achieve what it wants to achieve. Services are provided through a public and private mix so that there doesn't have to be and either/or situation. In juan's point of view, it's a win-win situation rather than a win-lose situation that cost recovery is not just primarily for the purpose of cost recovery, as Rudy pointed out in the morning, but has other functions that go beyond cost recovery, functions that look at accountability, promoting community co-management, promoting ownership, promoting community oversight in getting involved in supervision and monitoring. Thus the role of government should shift away from the production of health to actual regulation, monitoring, technical support, guidelines, and criteria setting. The aim is to establish an alliance of all health practitioners, whether they are orthodox, non-orthodox, traditional, non-traditional, or whatever, and to start promoting an alliance. 　It's important to start looking at a much more integrated approach rather than saying either-or (is the government or the private sector in control?), to look at the various facets of this diamond and see how can we start integrating and working together. What are some of the linkages that need to be established between governments, between sectors within goverment, between the donors, between the technical people and the specialists that ar involved?

Chairman:

I want to draw your attention to what are the final objectives of this meeting. One is availability of affordable, essential drugs to the people. Second, appropriate use; that means the safe and effective use of drugs. To achieve this goal, what king of system can be developed, what is suitable and appropriate?

Chairman:	Our main subject this afternoon is the discussion of political commitment and legislation. For example this morning I asked my colleague from Myanmar what kind of political commitment they have. In 1998, regarding this essential drugs project, how much essential drugs does the country need? Of the country's needs, how much is the government planning to provide or cover? And the other parts will be covered by whom? How are the drugs to be delivered to the people? In what way? What is the 1998 plan? From a practical viewpoint even as a simple public health officer, this is one form political commitment.
Moderator:	I think this is a relatively open-ended session. The purpose of this session is to promote dialogue, to raise issues. What I will do basically is to identify areas in which we can start looking at the issues from the point of view of political commitment and legislation. 　On area as far as political commitment is concerned, as far as policy development is concerned, is the whole issue of cost recovery. There are a number of countries where cost recovery is still in the pilot stage where it's only allowed in certain areas, but generally not welcome. User charges are permitted but they are not officially recognized. Therefore, different countries are at different levels. For example, even in Vietnam, the decision to officially have cost recovery only in the RDF areas is something that was recently signed by one of the senior functionaries in the government. It was done in August, even though in principle user charges had been operational. 　The other area would be retention of locally generated revenues and the use of guidelines. What are the policies? What kind of understanding? Where in the government? Through the Ministry of Health or outside? The whole issue of decentralization, internally from the point of view of the Ministry of Health and externally from the point of view of treasury and civil service control? National drug policies and essential drug lists? What are the drug laws, and to what extent are these laws being implemented, like the Drug Administration of Vietnam or the FDA in Myanmar? What is going on? Where are we, with regard to prescription practices and requirements for prescriptions? Looking at the whole concept of gener()ic drugs and automatic substitution, is there a policy in the government? Has the government of the Ministry of Health considered this? Who is giving the authorization? 　Then the development of the pharmaceutical sector. From a point of view of production: GNP status, local versus import; regulation and control; capacity for regulation and control. From a point of view of registration of drugs: importation of drugs, quality assurance of raw material importation or production as the case may be. 　The final one is the whole funding issue given current foreign exchange fluctuations, an issue that Myanmar highlighted but I am sure is reflected in countries like Mongolia because they are also having a problem with inflation. [...] Even Vietnam is being affected.
Myanmar:	Regarding cost recovery, we have already discussed it this morning a little bit. Because of inflation, the money was devalued to some extent. So, we cannot say the actual recovered money meets the previous value. We can show you a calculation. 　Firstly, we distributed drugs. We calculated the price of the drugs at ＄1 equal to 100 kyats. But for the local level, we reduce the price because this is a little bit higher than the current market price. So the price is reduced, say, by about 10%, so the local price is 90% of the original price. And then, after we recover, we give some exemptions. Actually it's about 15%. So the recovered money is reduced. We give 10% of the recovered money for incentives and management of the RDF, again reducing the recovered money to some extent. And then, currency devaluation reduces the amount recovered again. In short, the recovered money after one year is 15% of the price. At the same time, the price of the drugs imported from other countries has also increased as an external factor. Another external factor is devaluation. So we can say what is left over is less than 15% of the price. The cost recovery is very much reduced by the time we get the money.
Moderator:	What is the government's stand with regard to cost recovery? For example, in Myanmar, am I correct in my understanding that cost recovery at this moment is only applicable in those townships which are operating the CHMF or the MDP, but in other townships it's not? So you actually have a double system. If that is correct, what's the government's policy in the short and long term, and what proposals are you as program managers making with regard to standardizing policy? I think that's the question. That question is addressed to all the countries. What is the overall government policy? Also, if you need to explain the data you already presented, that's fine, but I hope that you can focus on political aspects of policy development.
Myanmar:	I would say the replenishment of drugs is done about two or four times per year. Otherwise, after one year, if the replenishment is down, it would be very difficult to combat this problem. Shortening the replenishment cycles is one of the policies. Then the Central Medical Store Department distributes drugs all over the country. For 340 townships all over the country, distribution is through the CMSD. 　In our country, we have eighty-eight items of essential drugs on the national essential drugs list. Out of the eighty-eight items, seventy-two are tax-exempted by our government. This is one demonsration of political commitment from the government. We had to review and revise [the national essential drugs list], since we started our national essential drugs list in 1979. Last year, we reviewed and revised, and publishing is on the way.
Moderator:	So has the government committed itself to a generalized national policy regarding cost recovery in all the townships, or is it only limited to your project areas?
Myanmar:	Not only in our project areas but also the whole country. My colleagues have explained that it is the Central Medical Store that supplies drugs to the RDFs. Twenty-seven items of Myanmar pharmaceutical factory products are distributed to the whole country. They have made the cost recovery scheme, but not based on essential drugs.
Chairman:	Just one clarification. The Central Medical Store is buying drugs from 700 factories. This is not enough. From outside the country, what is acceptable quality and what is the cheapest agency? Is UNIPAC the most appropriate and cheapest source of acceptable quality of drugs?
Myanmar:	On one the slides, we showed that the Ministry of Health issued one directive−in every hospital we have to set up a billboard which you can see at rural health centers and the township hospitals−saying that this hospital or health center provides free medical care to the poor. Those who can afford, they purchase in community cost sharing. This is written at every hospital. Very recently we have distributed this directive as one of our political commitments.
Myanmar:	SIDA wanted to supply drugs for one of our provinces. First, SIDA wanted to supply drugs, but after discussions they agreed to supply money. With this money we can buy products three times more than if we import drugs from abroad. If we develop domestic industries we can supply a lot more, [and more nationally than if we use UNIPAC suppliers]
Moderator:	With regard to Myanmar, with regard to retention of local revenue, if the funds from the revolving drug funds are funds that are generated by fees or user charges, how are these controlled? What is the government's policy? Are these controlled by the government? Does a certain proportion have to revert back to the treasury, or is 100% left in the hands of the health facility and the RDF or PHC committee? What is the government's policy with regard to the retention and use of locally generated revenues as far as Myanmar is concerned?
Myanmar:	Regarding retention of local revenues, 100% is owned by the local community. But only the replenishment system, they have to send 90% of the recovered money to the Central Medical Store, but they own the money. The Central Medical Store calls the tenders from the firms for that particular township by using their own money. That means that all the recovered money is owned by that locality.
Moderator:	So the recovered money belongs to the community, but the actual decision as to how it is used is with the central level because they decide what the procurement is based on the order that it received?
Myanmar:	The procurement is based on the requirements of each township. No central control.
Moderator:	I understand that the procurement is done at the request [...]. The ordering or requisition is made by the township. But the actual decisions with regard to the centralized procurement are done at the central level. The money is just sent to the bank, but it is kept in their name. So they don't really get into decisions about where to buy, how much to buy, what proportion to buy, from whom. All those decisions are made at the central level, even though the money belongs to the township.
Myanmar:	Because at the local level they need to know where to buy registered drugs, because we have a lot of unregistered drugs. But very recently, the FDA has been working very hard with support from other ministries. That means the enforcement of drug laws is being implemented now. Drug dealers are now not marketing unregistered drugs. This is a great change, very recently.
Moderator:	In what direction does the government want to go? It sort of takes us into decentralization. Are you planning to decentralize and move out the procurement and the control of the procurement down to the township level with the strengthening of the FDA, and make drugs available directly for its management at the local level? Or is this not planned?
Myanmar:	Yes, we are planning, we are considering for this. If we can buy, we can purchase locally, we would decentralize for that procurement. Because at the moment, the drugs at the local level, most of them are not registered, so that is why we need a little bit centralization.
Moderator:	So it sort of takes us into decentralization. How far is the decentralization? What's the government approach policy towards decentralization? To what extent is decentralization?
Myanmar:	This is only for the procurement.
Moderator:	So personnel controls are still at the central level. Financial and treasury dicisions are made-budgeting, even though there is some sort of feedback, but the final budget approval and the actual allocation and everything are done at the central level?
Myanmar:	I'm sorry I didn't get your question.
Moderator:	My point is that in decentralization you're referring only to the procurement. What about the decentralization within the Ministry of Health that deals with decision making with regard to budgeting, personnel transfers, everything. Does it have to go back to Yangon?
Myanmar:	That's correct.
Myanmar UNICEF Rep:	I really don't know what you are leading to and what you want the colleagues from Myanmar to say.
Moderator:	The purpose of this session is to use this opportunity to look at the findings that we have from Vietnam since yesterday and today, and to look at where each country is as far as it's concerned, what needs to be done. So in the evening today, when you are looking at your country proposal development, you have a picture that if Vietnam has moved to this−from the study we found that these are the critical elements that move us along−where are we, according to those critical elements? And we thought that the political component, looking at cost recovery, these were the areas in which you might want to take stock and then decide what needs to be done. Myanmar may have already reached that point and have already a clear picture of what needs to be done, but it is an opportunity to exchange, to see what the other countries can relate to....
UNICEF Mongolia:	Ten percent of all the drugs are produced in the country, but the country has only small-scale factories, and 90% are usually imported from abroad. [...] Usually, again, we get the drugs at provincial level with about 10%-15% discount. [...] So at present, Mongolemimpex is the main supplier and procurement agency for the drugs and they're importing all the drugs from abroad. [...]
Chairman:	Let me make a suggestion. Yesterday and today there were presentations of the progress of each country, and particularly yesterday's was Vietnam. So we see there is progress. What then is the main contributing factor? We had some analysis on this. For example, in the case of Myanmar, at present your source of drugs is both local and from the outside. In case of outside, you use UNIPAC. Oh, in the first stage. Okay. Then my questin is, is there another option other than UNIPAC? Is there any other better source for importing drugs for the public purpose of essential drugs? Is there any other private agency also to import essential drugs? 　Let's say in case the country uses UNIPAC, theoretically, when an imported drug reaches the commune health center, will the price go up or be maintained? Theoretically, you can calculate it in the situation of each country, right? So in this way, if you draw your picture−theoretical aspect, practical aspect−then how do you solve the gap? You see my point? Then the discussion will become more fruitful. We are not accusing any country's operation, but because already we have examples from Vietnam. Okay? So using the experience of Vietnam, you just calculate how much drugs you need and from where you import, at what prices. Then you have to but some margins or markups as it goes to the outlets. How much does it become in your country?
Myanmar:	For the replenishment of required drugs, now we are negotiating with the private sector, because some of UNIPAC's prices are a little bit higher than the drugs imported by the private sector. But we procure only FDA-registered drugs. But some other countries like India or Bangladesh, some of the essential drugs there are cheaper than at UNIPAC.
Chairman:	After importation, if you go to the community health center, how much will the price have increased? And is this price acceptable to the people or not?
Myanmar:	There's a 10% profit margin for the community.
Chairman:	So this is theoretically very good. Practically also?
Myanmar:	In our last procurement in our essential drug project we procured through the Central Medical Store from the outside private market.
Chairman:	From the experience of other countries, it is clear that the Central Medical Store is much too bureaucratic. There is much more room for improvement. But still, in your country is using the Central Medical Store as the main body more appropriate, or is there any other room for improvement?
Myanmar:	At the present moment the CMSD is most appropriate, because of the technical know-how and other things.
Chairman:	So you can prepare next year's plan. What is the main obstacle to implement this planning?
Myanmar:	I think the main obstacle for the continuation of this project is the local production of essential drugs. If the essential drugs are available at the local level, I think we can implement fully decentralization of the project.
Chairman:	Local production, yes, it's much better, but even at the present status of local supply capacity, you can also respond to the national needs, right? Then what is really the main obstacle to implementing this system using imported drugs? What kind of obstacle? I think you can do it.
Myanmar:	Like in other developing countries, we need foreign exchange for the import of essential drugs.
Chairman:	In theory, if you have some initial capital for importation, then from this other things this will come, right?
Myanmar UNICEF Rep:	I think that the issue of replenishment is a major issue, as I mention repeatedly. It is crucial that this issue be solved in the country. For that, high-level political decisions should be made. There are at least two schemes in order to procure drugs in the country. 　One is local production by the Myanmar pharmaceutical industry sufficient to complete the essential drug list in the national program. So then you open the possibility of importation. I think that that's where the decision should be made. What are they going to import? We are not advocating importation through UNIPAC; that's just one alternative. If there are similarly quality drugs available in the local market or in neighboring countries, I think that the country should make the decision. But that is solely the decision of the country. But in doing so, you have to consider the availability of hard currency, inflation, price fluctuations, and [...]. It's a complicated issue but−I will repeat again−these should be and has been brought to the attention of the authorities [...]. Still, I would say that we need to work harder to bring these to an open layer of decision makers. Unfortunately, sometimes the decisions in our country have to go up to the cabinet or even to the Health and Nutrition National Committee's chairman or secretary. So things are not easy in Myanmar. In order to answer your questions, we have to build a broader framework in order to understand where the actual constraints and difficulties are. This goes for any project in Myanmar.
Chairman:	In the past four years, Myanmar has the experience of starting this project. Already we have basic experience. We know the difficulty, but if we just let it stop us, then nothing will happen. A neighboring country−your brother country here−started in the same period, but fortunately they were able to make big progress. This is a very difficult country, too. That's the reason this time I draw your attention to theoretical aspects−not purely theoretical aspects but backed up by the experience of your country. As Dr. Aguilar mentioned, now you need some pushing power or force to the political level. How to organize this power? How to formulate this power to push the government? This is the next subject. One of my purposes here is to consider how to support your country to organize this power.
Mongolia:	I just want to exchange ideas regarding the essential drug policy in Mongolia. 　We have had our essential drug policies since 1993. As to these policies, we have registered over 1,200 items for the country. Of that, 250 items are essential drugs. We have some differences in the levels [...]. The Ministry of Health established this kind of category. At the provincial level we have 200 items, and at the sum level they have 130 items. We have also bag level; bag means [close] administrative rule. At the bag level, we have already established thirty-seven essential drugs, because we have feldshers. Feldsher means trained, needed professionals. That's why we could establish the thirty-seven items and the essential drug policy. We also every two years revise the list of the essential drugs, because sometimes there comes from outside some new drugs. The drug policy in my country is very different. We had before many discussions at several levels: the central level, the aimag level, and the bag level. [...] In near future the Mongolian government doesn't want to establish national pharmaceutical factories, because pharmaceutical factories are very difficult to establish; we don't have enough money. [...] Also, the number of consumers is not so much. That's why we decided that what is important at present is to establish pharmacies. 　The main importance is Mongolemimpex. Mr. Byambaa is responsible for all imported medicine from other countries. And still we have a centralized drug distribution system. Mongolemimpex has responsibility for distributing all drugs, including imported and domestic products [...] still now. But the price is the same at the central level, the sum level and the bag level. But there are some private agencies and private small companies that are already importing some drugs from other countries. That's why they are pulling up prices, because they need the transportation fees and something like it. This is now still our policy in the Mongolian case.
Laos:	In Laos's case, we established our national drug policy in 1993, but we had great support from SIDA. After that, we had a review of our national drug list that's called the National Essential Drugs List. Our national drugs list has only 261 items, but we divide it among four categories: for the central level, the provincial level, the district level, and the community base level. But for the community base level, we promote the non-use of injections, only outside or external use drugs only. 　In the last two months we had the national congress for the health sectors. Our policy, we base on the promotion of rational use of drugs. We have a root project that is supported by SIDA also. We promote,too,the the provision of essential drugs−that's about 20 items−to the community base level. And after that, we have cost recovery regulations that were established by our prime minister's office. All people in Laos have to pay for their own health services. In staff offices, officers also have to pay, but we can claim from the Ministry of Welfare. 　In the supply system, we have to improve our local production. We have two small factories. One is supported by the Japanese government, and one [...]. But we produce about 300 items of essential drugs. In the national law, the budget law says that we have to purchase drugs from our local factories. But for items that we cannot produce, we have to buy from the suppliers/importers with whom we have already negotiated, that we have selected already [...]. 　In Laos's case, the distribution is like that. When we buy drugs from factories, we make a contract. After that, the factory distributes directly to the province, district, or to the community base. As for private companies also, when we have a contract, the private company should distribute the drugs directly to the facility; we don't need to make these transportation ourselves.
Regional UN Rep:	Just a question for our colleagues from Mongolia. In terms of the decentralization of financial management and revenue retention, the way I understood it, the revenue from direct [...] is totally decentralized and sent up to Mongolemimpex to [...]. But that's in practice half [their take from drugs], the other half is covered by national health insurance, for which the money has to be paid from the central level directly into Mongolemimpex. So the question I have to Mongolia is how is the situation evolving now? 　Still we have a very interesting situation. The mechanism put in place to ensure equity and the mechanism that is increasingly being suggested and supported by the government [...], namely national health insurance, has in practice as one of the side effects, the risk of stock-outs because the health insurance does not succeed in generating enough revenue to pay Mongolemimpex, so in practice Mongolemimpex has a problem. Now linked to that has been a very positive [development]. Since the beginning of this year, Mongolemimpex is autonomous, which means that its money is maintained and used for drugs instead of going into the general gevernment revenue. That's the positive part of that. But the side effect of that is, because they are autonomous they have to pay for all the drugs that they are procuring; if the health insurance is not paid what they're supposed to be paid, there is problem despite the fact that the system [fully follows government principle]. 　So I am asking a question partly to Mongolia now. I am not in fact asking you to solve it because it's virtually an unsolvable situation, so I'd like to [throw it open] to the table here.[...]
Mongolia:	That is a very good question, because we have a national drug insurance system and we have a centralized system within the drug system, but decentralization in the financial aspects in my country, they are [...], because one of the government's responsibility is to buy drugs at the central level and they have also some [...] from the central government. For example, at the sum level health center, which is made up of maybe six up to eighteen bags and also outpatient services, all expenditure at sum health centers is from two sources: one is national health insurance−approximately 70% or 80% is from health insurance funds, and 20% to 25% from local government budget annual expenditure. But sometimes we have some problems because the health center doesn't have money from insurance, and the local government always has trouble with money.
Moderator:	Mongolia is a very interesting situation. When health insurance was developed, its primary focus was to provide coverage and [...] and all the premiums were paid by the government. The premiums are very small but the primary purpose was to be able to channel the funds. When the revolving drug fund came up and cost was being recovered at the local level, some people who were covered were entitled to receive money through insurance. So the actual cost of the drugs was not obtained from the patients themselves but was taken from the health insurance. The health insurance and capitalization and the way the insurance was set up−was one of the reasons why ADB came in to actually study the insurance system and look at whether it should be based on an endowment system or should it be based on a flexible premium system. 　The bottleneck was the liquidity of the insurance to have cash available. This impacted on Mongolemimpex. Many of the donations were made by different foundations−Kfw was involved to a certain extent and Nippon Foundation was involved. Many of the imports that were made were then used by Mongolemimpex at the national level to be able to [...] the revolving drug funds. But the [...] insurance was limited to 70% or less. A funding gap therefore occurred that eventually impacted on Mongolmimpex's ability to [...]. It's cash flow [...] situation that is very difficult to get out of. Still, you move away from the idea of the government taking full responsibility, whether it's directly funding the services or whether it is indirectly funding the services of national health insurance. 　I mean, that's the critical issue that ADB wanted to address, that they came to look at the health sector reform, and that is why we had the meeting before to be able to look at the overall impact of health insurance. Amongst the countries here, it is only Mongolia that has national health insurance. There are health insurances in other countries; Vietnam has one but Vietnam health insurance exists only in certain provinces and it is private. There is a national insurance for government staff.
Regional UN Rep:	Mongolia is extra complicated because the health insurance is centralized. Had the health insurance been decentralized, then the periphery working on the cash-and-carry-basis...I mean, they get the drugs for all they've put in. Then there's no big problem. The key element here is to decentralize...
Moderator:	They are sort of sandwiched bedween the Ministry of Health and [...] insurance agency and Mongolemimpex. You have the health insurance funding under the Ministry of Health, but still the government has to fund the premiums which provide the capital for the health insurance. [...]. And then the other thing was that the insurance had a very direct effect on the hospitals as all the costs in the hospitals were covered. So the hospitals realized that the longer they kept the patients, the more they would get from health insurance. We couldn't do the same thing at the sum or bag levels. And so you had over-utilization with long periods of hospitalization and this raised the cost of insurance. This factor was also identified at last year's May conference when we were discussing this as a proportion of cost recovery[...]. 　So I think these are issues of indirect health finance and cost recovery that we need to look at in relation to direct user fee component.
Myanmar UNICEF Rep:	What I have here with me are the minutes of a meeting that we attended with Dr. Narula, the deputy minister of health and the director general and a number of high level [people] at the Ministry of Health in Yangon. And five major issues were raised during this meeting. And if I read them quickly, you will see where Myanmar stands on some of the issues that have been raised in Yangon. 　First, is the government's clear commitment to community cost sharing. And what is says in the minutes is: ゛After three years of experimentation, community cost sharing is now practiced in nearly one half of the country. It is time for the government to finish experimentation and to make CCS as the principle in public health care services on a nationwide scale. In full commitment is recognition for the Nippon Foundation future support. 　Second, setting up an effective essential drugs replenishment system. Myanmar can now provide fifty-one essential drug items produced locally. Experiences in Laos and Myanmar show that using the private sector and shifting govenment's role from execution to control and regulation can to this private-public mix approach. 　Third, institutionalization of decentralized drug supplies and management. Decentralization of health care management is the unavoidable destination of our countries. The process, however, takes time. Introduction of the CCS is the first step; and the more revenue the community raises, the more autonomy it will have. Decentralization of the present drug supply and management system will be the second stepm to make the system responsible for communities' initiative needs. Supervisory and monitoring roles are also needed to be decentralized. 　Fourth, review of national drug policies. The present government policies, regulation and practices which either discourage import of essential drugs or make the rational use of limited current resources in procurement of drug should be reviewed and consolidated. 　[...]″
Myanmar UNICEP Rep:	[...] five points. In the very first comment he made, he insisted that in practice this is no longer an experiment, the principle is adopted at the national level. It will be gradually scaled up nationwide. So I think that the government is clearly committed to many of these issues that still need confirmation at the policy-making level. That is one of the issues I've been raising since my very first intervention, and I thing that that clearly summarizes what is the status of Myanmar's essential drugs policies regarding implementation, not only of [policy] but of general essential drugs activities in the country.
Cambodia:	I would like to do a brief comment on the pharmaceutical situation in Cambodia. 　Firstly, on political commitment. The national drug policies and financial chapter are already approved by the government, and for the financial chapters it's not only approved by the government but is also mentioned in the Constitution and approved by the parliament that user fees are allowed. As for the government input for the budget, in 1996 we had only around $10 million; the government input was $8 million, so that was about 80%. And for 1997, the budget is also $10 million, but government input is about $8.2 million. The remaining budget is covered by donors. 　Now in most of the facilities, user fees are collected, but we don't use that yet for buying drugs, because the medical stores still provide almost enough drugs to all facilities. The government allows those facilities to use [the fees] for running costs and for supplementing salaries which are now very low. Another problem is that normally all income from all ministries should be transferred to the Ministry of Finance, at least 10%. But the Ministry of Health, they take only 1%, [which demonstrates] a good political view and good political commitment from the government. Also, drugs imported for both sectors, public and private, are tax-exempt. 　Secondly, about procurement and drug quality. One hundred percent of drugs are imported in Cambodia. We have some pharmaceutical plants, but they produce only for the private market and not for the public sectors. Before privatization they were facing some problems. This is an answer to Professor Umenai's question this morning. Before, we were facing a lot of problems. When we ran an open tender, it was difficult for us as a government facility to refuse some companies. Fifty-seven companies participated in the first tender, which was very difficult. But now, as procurement is privatized, indirectly we can tell the private company to select the company we want. The private company doesn't decide itself but there should be approval from the Ministry of Health which company they will select. Now only three, four companies, famous companies−I don't want to mention their names− but only famous international companies are allowed. But this is only possible through a private company, because private company has the possibility to refuse. We cannot. We cannot refuse. This is one advantage for us. The only disadvantage of private procurement is that for each item the price is a little high. We are trying to find a solution for that. 　As for supply, it's still centralized at the Central Medical Store. We have twenty-two provinces, but only sixteen can be reached by road, the others by plane or boat. For the sixteen provinces, normally we make appointments for every district facility to come to the province, and the truck from Central Medical Store transports drugs to the provinces which themselves distribute to the districts. No drugs are stored at the province level except for provincial hospitals. 　The essential drugs list. We have three kinds of essential drugs lists. The firsth one is for health facilities, what we call the Minimum Packet Activity, the MPA list, with forty-six items. The second list is CPA, the Complementary Packet Activity with 115 items, which is meant for referral hospitals without surgery or special activities. The third list with 146 items, we call the CPA Plus Special. This is meant for referral hospitals with some special activities, for example [those that are strong socially] or those that conduct some special activity like psychiatry or something else.

Moderator:	It's been a very interesting overview. I just want to take a quick opportunity to sort of summarize looking at these points. 　With regard to cost recovery, looking at Vietnam, then it's full cost recovery with exemptions. But this is an official principle; even the government has agreed on the RDF. With Myanmar, it is cost recovery and there are exemptions. Again, as Rudy pointed out in the morning, these are partial−they are not 100% full cost. With regard to drugs, yes, it is full cost recovery because you're trying to get the cost for the drug. In Mongolia, for example, they have insurance play a very significant role. So there are differences compared to other countries. As far as Laos is concerned, there is full cost recovery with regard to drugs, and there are exemptions and supplements from the Ministry of Social Welfare, and a similar situation in Cambodia. 　In reference to retention and use of locally generated reveneus, Vietnam is yes. Myanmar is yes, but there is control of procurement which is still at the central level. With regard to Mongolia, yes, there is local retention to some extent but there is also control at the central level that they have insurance and facilities. With regard to Laos, yes, there is local retention [of the kind we are familiar with], and with Cambodia it's yes and sort of yes-and-no but going more toward yes. 　With regard to decentralization, Vietnam, as far as drug procurement, ordering, [...], purchasing, it's very decentralized. With Myanmar, at the moment procurement and distribution are still centrally controlled. With regard to Mongolia, it is still centrally controlled; even though Mongolemimpex has become autonomous, still it is centralized through the various branches at the aimag and at the sum levels. With regard to Laos, it is quite decentralized to the point that even the private sector is responding to the lead set by the government factories. And with Cambodia, the procurement is still very centralized; even though there is a private procurement system, it's still done through the centralized system. 　With regard to national drug policy and the essential drug list, all the countries have national drug policies. They have reviewed them. They have essential drugs list by level. All of them have done that one. 　With regard to genetic drugs and substitution, there are emphases on genetic drugs because of the EDL. But genetic drugs being proposed and pushed, at this point in time, is not very strong as far as Vietnam is concerned because of the burgeoning private sector and brand names. The same thing with regard to Myanmar, it is similar. There is not an automatic policy with regard to substitutions. Drugs are not available; people can't substitute. 　Regarding the development with pharmaceutical sector, Vietnam is very autonomous, and as far as production is concerned, the government is taking more responsibility for regulation and controls. With regard to Myanmar, there is limited local productions; there's import, but most of it is still controlled by the government, so the government is still into production as well as a little bit of deregulation control. With regard to Mongolia, the government, even though Mongolemimpex has become autonomous, the control is still with the Ministry of Health, so therefore it is still centrally controlled. With regard to Laos, the policies are quite clear. The pharmaceutical factories are quite autonomous. They can carry out functions on their own. So they are following very much the Vietnam model and moving in that direction and also meeting the demands in reducing import needs. And as far as Cambodia is concerned, as you said rightly, there's still 100% dependence on importing though there is a private sector. 　With regard to foreign exchange, Vietnam, because it had a relatively stable local exchange that has been long-term, they've not had so much of a problem with forex; the private market is very large. With Myanmar, there's a problem with forex because of inflation and the devaluation of the currency. The same situation exists in Mongolia, because I hear that tugrik is going down, down; that's having a great impact on Mongolemimpex. With regard to Laos, forex is not so much of a problem because the factories themselves are functioning and they are albe to function on their own and sustain themselves. In the last four years, as far as these factories are concerned from the data that I have access to, they have shown an almost fourfold increase in total income and turnover. And with Cambodia, still the issue of forex is a problem but mostly in importation.... 　That's just based on what has been said so far, based on making notes. It's an overview or sort of comparison.
Myanmar:	Just to add one thing on behalf of Myanmar regarding inflation and foreign exchange. If you look among our countries, Myanmar suffers also in the sense of or because we don't have any funding from any sources−no ADB, no World Bank, now no investment is coming, nothing. ARI and CDD drugs are dependent on Nippon Foundation. When the country is growing, also, the hardest spot is health, nutrition, and social welfare, that portion. And then the country is not quite stable because inflation is going very high. At the same time, we don't have any cushions. So that also contributes a lot.
UNICEF Cambodia:	Just to add one comment. Just for interest, I think in the near future in Cambodia we are planning to hold a procurement strategy workshop. And if we do that with the ministry, maybe it would be nice to invite some of the other countries around, at least to come in as observers, to go through the options that countries have for approaching procurement, And I think there aren't too many options. 　But clearly, as Dr. Sokhan has said, Cambodia realized that there were constraints with government procurement, just the administrative hassle, as well as some technical needs. And a private agency has been appointed, but working under the strict guidelines of the Ministry of Health. So it's possible for the ministry to monitor the procurement agency very well, and certainly improve efficiency. There's no longer a problem with spending the drug budget. There was a problem up until last year, in fact two years ago, where only 7% of the drug budget was spent because it wasn't possible for the ministry to run the tenders on time. I think whether the ministry runs the complete procurement process itself or decides to use an agency, the pros and cons, that's really the bottom line to decide in each country's situation. 　We heard that Cambodia has a factory, but it's not producing for the public sector. I think the problem with public sector production is often that the costs are hidden and the price quoted by the factory is never actually a true reflection of the production price. And I'm interested to hear of Vietnam's experience with its 125 production facilities. But again, it comes back to the difficulty that governments have in taking political decisions, to actually streamline and make radical changes. That's a key issue. 　On the issue of CMS, I think in all of these countries central medical stores are needed. I think there's a lot of development aid coming in, which doesn't go through private suppliers directly to health facilities. So I think Laos, Cambodia, Myanmar, in the future, all of these countries have significant external aid in the form of essential drugs and supplies that need to be handled by the ministries of health. So a basic functioning medical store and distribution system is needed. 　Again, the strategy in Cambodia was to support the public sector system, but only to the extent that it can meet the needs of today−and perhaps the next four or five years. It was to follow private sector development, and as opportunities arise, begin to bypass the CMS, to make demands on private suppliers to deliver directly to provinces. Then, I think all of that will become possible. 　So I think in most of these countries the strategy needs to be some limited support to develop a public supply system, even if it's for TB drugs, vaccines, things which come through donor funded sources. But then, on the national budget, you consider how best to make the private market work on your behalf. Instead of asking a private company to deliver to a CMS, ask them to deliver to the province. Then your role becomes much more monitoring and following quality. 　I think these are some very, very difficult issues, but I know that twenty years from now, the pharmaceutical sectors will look very different in each of these countries. It's going to happen. It's just the case of whether it happens by default or whether the Ministry of Health, the government, actually plans what it wants to see happen. I think there will be rapid developments.
Moderator:	On E-mail or Internet on the E-Drug mailing list [...], there was a posting that said that some smaller countries in the Caribbean [...]. Because they have such small [drug] volumes, the ministries of health got together and pooled their orders together. They were able to negotiate very good volume discounts and good services and procurement. [...] it has been going on for about four to five years covering a number of these Caribbean[...] countries. 　But this is the sort of thing that, if a donor is interested in looking at it and there is an overall currency fluctuation, it clearly can be done and the countries may consider ordering collectively as with the Caribbean countries [like this]. I don't know how practical it is, but if you call these countries small and the distances here are very large; government [...] but there's a possibility.
Vietnam:	In fact we have 131 state [and private] companies. [...] We have approximately US$360 million a year. That means on average, [per capita of drugs] in 1996 is $5 US; in the 1980s it was only US$0.5 in 1991. [...]
Myanmar UNICEF Rep:	The Vietnam experience really is teaching us that these processes are long processes that cannot be accomplished in a short period of time. The timeline analysis that was presented yesterday clearly showed that at first the rocket was flying at a low altitude. It was just in 1994 when we had the boosters of the Nippon Foundation cooperation [that the project just skyrocketed]. And I think that this was also the case in Peru. If you'll remember, our experience there is that these are processes that are built up block by block and suddenly you have the opportunities and you just go to the skies and circle in a very stable and stationary orbit. I think that this is a very important lesson, because sometimes we get frustrated and we just want to speed up and get results, and these things just have to be done well, but little by little. And I think that, again, the Vietnam experience is showing that very theory. 　For that reason I consider that the message of yesterday of the graduation maybe is coming at a very interesting time and we might have some time for discussion on this message we received yesterday from the Nippon Foundation. This is the right time−we are not trying to wear out our reserved rockets−[to look at] what the future presents to us. 　And finally, if I can just give−I cannot give advice−just some comments that the forthcoming Francophone Summit will open for Vietnam a very interesting possibility to raise this issue of essential drugs. Through the [...]−in this case, the Francophone community−maybe you can have some possible answers from the heads of state at the highest level porssible. I'm sure that the business community also will be very much attentive to go along with Vietnam in order to make essential drugs procurement, replenishment, and production a very successful joint venture here in the country.
Regional UN Rep:	Just a few additional observations sort from what I heard from the different countries. 　First point concerning drug prices, that's quite clear comparing countries around the table here, that drug prices do not only depend on the cost at the source but depend very much on what's between the source and [the community, namely the procurement unit and the distribution system.] I think that Cambodia explained how they are looking for ways to reduce those costs at the moment. [...] between the procurement and what I've seen of the drugs there. They have drugs on the shelves in the central store, generic drugs procured from the cheapest sources. Yet, the prices will be [multiplied] as they're going out, are relatively high compared to other countries. Mongolia, on the other hand, [...] showed that they are pretty much around the UNIPAC prices, and [those UNIPAC prices are the] benchmark for Vietnam I understood as well. 　And second point [...] is in fact that affordability of the most essential drugs for the users depends on not only on the cost of the drug [...] but also to a very large extent on the five goals of the financial management system[...] and I think we can compared some of the countries. In fact that in some of the countries still, there is no link between the quantity of drugs received by the peripheral health center and their revenue. The revenue gives a major incentive to prescribers because with all the prescribing there is a lot of revenue being generated. If that revenue is used as bonuses for the staff, the staff gets more money if they prescribe more drugs. Their costs don't go up because they don't pay for the drugs to the central level. If I were a staff, I would provide very satisfactory prescriptions to the user. 　And lastly, so far in the discussion I was expecting to hear more about advanced systems of differential pricing. [...].
Moderator:	[...] We asked the question: what happens if you have an excess? What happen if the neighboring commune has an excess? Are there any exchanges? And we found that doesn't tend to happen at all. At the same time, when we asked the questions of what proportion of people would pay and if there was any sort of means testing [...]. None of these happened, because the capital stock was quite small, the seed stock too was quite small. 　One ministry official pointed out something very interesting. The district health officer said they noticed that more patients had started coming to the district hospital as compared to a year ago. And a year ago, a large number of private practices had opened. People went there and they were given brand name drugs but they were also given credit. And people could not afford to pay. And a lot of these private pharmacies and private practitioners realized they didn't have the money; they found that there was not enough money[...], and they sort of closed their shops [...]. In the meantime, the hospitals started having more and more drugs because of revolving drug funds, because they were assisting the communes in buying, and so they have now a much higher utilization rate, with people come to the district health hospital. Now that is just in one district, but it could be happening in some of the other relatively poorer districts, though not the richer ones.
Moderator:	With the setting up of revolving drug funds, one of the things that happened is that the government recognized that the public health component would be [rejected]. Since the districts were not necessarily supervised, since most of the resources for the administration of the commune health centers came from the people of the commune, they realized the importance of giving salaries to the health workers so there could be certain amount of control over the [...]. Initially, they tried that at the district level, but the districts did not have the resources−some did, but some did not. Very recently, however, the salary component at the commune level is now becoming the direct responsibility of the provincial governments [...]. It is a very interesting thing that in the financing system in Vietnam, you have the funds from the Ministry of Finance going to all different levels directly to the programs and services that are being provided. But you also have the people's committees, the political committees of the districts that get their budgets from the MOF that are [also part of the] services sector. So you have a dual financing system. The commune health center seemed to be left out of this central feedback, whether it came through the people's committee to the Ministry of Health. Accountability at that level was not required but with the setting up of the revolving drug funds, this became a major issue and when we started looking at irrational drug use, and then it became clear that we had to do something to llok at the public health aspects of the health care services. 　So you're right that in a way revolving drug funds, even though it started off as a business, became an entry point into looking at the whole issue of service provision at the commune level and the role that traditionally the pharmacists have to play with regard to provision, guiding, criteria setting, etc. And I think that's the issue that has begun to emerge, even though our analyses wanted to look primarily at how the revolving drug fund [...].
MSH:	Well, I think I want to touch on the point about differential pricing. There was some evidence that some communes were [insufficient] about which have subsidized price discount of the products. So it was occurring. We were unable to document this systematically, but it did seem to be occurring[...]. And that's the public health solution.
Chairman:	Now, okay, one country is already in orbit, but other countries now trying to reach it. What does this orbit imply in relation to bublic health and also [sustainability]? Public health really means impact on health and also the system management. It's very important. But more important is now all over the world we are now exploring what is the appropriate management of the service system or the political system, economic system. In the world, we are looking for new ways suitable for the survival of human beings. So in this connection, the point you mentioned is very important. [...]. So in this connection, UNICEF is a really important organization worldwide to take leadership to sell this program to other countries.