Impact of procurement deregulation on the Government Pharmaceutical Organization's products and structure

Abstract

This study attempts to investigate the impact of deregulation of the purchasing procurement in the part of pharmaceutical and medical products on the Government Pharmaceutical Organization (GPO) products and structure with related to the public sector under the Ministry of Public Health. Forecasting method using “opinion survey” conducted by GPO and other institutes was the main concern to evaluate the impact on product sale and earning of GPO as well as GPO structure in response to the product change. It is found that after deregulation the GPO's sales in the public sector under the Ministry of Public Health will decease to at least 43% of the former level in 1997 resulting in a loss of earnings up to 59.53% for the same period. Sales can be increased only if the GPO improves its sales promotion/advertising, customer services and delivery systems to be able to compete with the private sector: GPO must also expand its production and further develop R&D function to produce new drugs using indigenous raw materials available in the country.