The Economics of Pharmaceutical Policy in Ghana

Pharmaceutical expenditure in Ghana accounts for about one-third of the total recurrent costs of the Ministry of Health, but in isolation this figure is a misleading indicator of economic importance. In the primary care sector up to 75-80 percent of the running cost of a health center may be accounted for by pharmaceuticals, and because the Ghanaian currency is heavily overvalued, even these proportions understate the true value of resources used on important drugs. An apparent lack of central control of drugs expenditure led to a study of the existing allocation procedures and prescribing practices. The results suggest large-scale wastage through overprescribing, often in response to patients' preferences for more costly medication. Approaches to improved planning of drug use, including the setting of expenditure norms based on recommended prescribing routines, are detailed, and it is concluded that the resultant savings could allow a sizable extension of the coverage given to rural populations by the primary health care system.