Revolving drug funds: conducting business in the public sector.

Pharmaceuticals are essential for preventive and therapeutic health services. Unfortunately, significant demand, limited funds and high prices contribute to frequent shortages of drugs in many public health programs. One method for financing pharmaceutical supplies has been the establishment of revolving drug funds (RDFs) in which, after an initial capital investment, drug supplies are replenished with monies collected from the sale of drugs. All too often however, the funds actually recovered are insufficient to replenish supplies and the fund is soon depleted. In this paper we consider the potential benefits and common pitfalls of revolving drug funds and then focus on the central role of financial planning in establishing drug sales programs. Experiences from a variety of countries suggest several causes for the failure of some RDFs, including: under-estimation of capitalization costs, prices set below true replacement cost, frequent failure to collect payment, delays in cash flow which make funds unavailable for replenishment of drug stocks, rapid program expansion for which additional capital funds are not available, losses due to theft and deterioration of drugs, unanticipated price increases due to inflation or changes in parity rates and foreign exchange purchase restrictions. Common to many of these problems is the lack of a businesslike orientation to RDFs and, in particular, lack of careful financial planning and management. Financial planning for an RDF includes four analytical tasks: assessment of the potential market, estimation of the costs of an RDF, establishment of the cost-recovery objectives, definition of the role of subsidies and surcharges.(ABSTRACT TRUNCATED AT 250 WORDS)

The village health worker program in Afghanistan.

PIP: The questions of policy and operation encountered during a program for training and placing health workers in villages in Afghanistan are discussed. In the spring of 1976, the Ministry of Public Health and the United States Agency for International Development (USAID) decided to support several experiments in creating an alternative health delivery system. The 1st group of 11 village health workers (VHWs) completed training in May 1977. A total of 137 WHWs were trained. The new pro-Soviet government that took power in Kabul in April 1978 decided to eliminate the VHW program for political rather than technical reasons. Although the program's termination prevented the results of this effort from being observed for very long, many of the issues that arose and their solutions are of interest. It was generally agreed that VHWs would be selected by their villages, but there were several options as to guidelines for selection. The Ministry provided the guidelines for qualification but accepted the final selection decision of the villagers, even if some of the guidelines were violated. A major area of disagreement was the potential effect of a decision to allow VHWs to dispense drugs. The VHW did not receive a salary from the Afghan government but was permitted to sell prepackaged drugs at a small profit. The VHWs were very eager to learn. The VHW curriculum initially emphasized the training of VHWs to perform those skills listed in the manuals. Practical work was given the highest priority.^ieng