Capacity building strategies to improve efficient use of existing resources: The South African experience

The efficient use of existing resources is an essential component of a sustainable and resilient pharmaceutical system. SIAPS-South Africa has used various capacity-building strategies to improve the decision-making process in the selection of cost-effective and affordable medicines for the public sector, and to promote the monitoring and analysis of pharmaceutical expenditure. To that effect, SIAPS-South Africa collaborated with the Department of Health and local universities to build capacity in the implementation of pharmacoeconomics principles and financial management.

This renewed focus on financing, an area long neglected in pharmaceutical services, has drawn attention to the fact that capacity-building in pharmacoeconomic principles and financial management is essential to ensure the sustainability of a health system. To this end, SIAPS is SIAPS is building institutional capacity through the development of national guidelines and standards, and is helping to build individual capacity through in- and pre-service trainings, and providing guidance on using existing resources more efficiently.

Institutional Capacity Building

SIAPS-South Africa collaborated with the National Department of Health (NDoH) to publish guidelines for pharmacoeconomic submissions in the country. SIAPS is now also working with the Essential Drugs Programme (EDP) at the national health office and the Provincial Pharmacy Therapeutics Committees (PPTCs) to institutionalize appropriate pharmacoeconomic principles into the approach used to evaluate value of treatments selected.

The National Health Act 61 of 2003 makes provision for the National Health Council (NHC) to establish a framework for a uniform health system within the country—a process that has highlighted the need to systematically assess the efficiency of pharmaceutical services provision to support patient care.

In October 2013, NDoH Chief Directorate Sector-Wide Procurement embarked on an initiative to establish a set of minimum requirements (standards) against which provincial pharmaceutical services could be routinely monitored using a peer review process. SIAPS collaborated with NDoH to define a set of standards and develop the dashboard. There are a six financial management standards monitored through the national dashboard, including monitoring budget versus expenditure, expenditure on medicines not in the Essential Medicines List and payment of suppliers (within 30 days). As part of their reporting to NDoH, provinces are requested to send annual ABC analyses. SIAPS is working closely with PPTCs to build capacity in conducting ABC analyses and using the information for decision making. One of the interventions developed to control pharmaceutical expenditure was the replacement of two antihypertensive products the provincial formulary with two others from the same therapeutic class, lowering costs from ZAR 100.11 and ZAR 133.23 per person per year to ZAR 31.03 and ZAR 30.42, respectively. The projected savings are ZAR 18 million per 100,000 persons per year.

Individual Capacity Building

A guide to creating a syllabus for pharmacoeconomics
A guide to creating a syllabus for pharmacoeconomics courses

SIAPS technical assistance extended to teaching pharmacoeconomics and financial management concepts, including understanding of the affordability of treatments versus value for money, through pre- and in-service training for undergraduate students enrolled in pharmacy programs at South African universities. This included the development of a training syllabus, training materials for presentation, and practical examples with solutions for in-class training and testing, which are utilized by Sefako Makgatho Health Sciences and University of KwaZulu-Natal. Additionally, the establishment of a standardised pharmacoeconomics curriculum in partnership with the University of KwaZulu-Natal was highlighted at the International Society for Pharmacoeconomics and Outcomes Research (ISPOR) meeting, where important deliberations were made around health technology assessment (HTA) policies for South Africa.

SIAPS Program’s assistance to universities also extends into the postgraduate level. SIAPS collaborated with the University of Western Cape (UWC) to include a pharmacoeconomics principles and value-for-money session in the Winter School Rational Medicines Use course at the university’s School of Public Health, as well as in the online Rational Medicine Use module. Similarly, SIAPS assisted with the development and facilitation of the Winter School Medicines Supply Management course, including sessions on pharmaceutical financial management and monitoring, and analysing pharmaceutical expenditure. The interest in the Winter School courses at UWC, which are supplementary for MPH candidates and open to non-stidents, is encouraging. The courses have attracted individuals from the National Treasury, the public and private sector, including non-pharmacists who have an interest in the stewardship of pharmaceutical resources.


The Pharmaceutical Leadership and Development Program in South Africa incorporates aspects of pharmacoeconomics and financial management into the training. SIAPS has worked with staff from the National Treasury Department to facilitate a module with the intention of strengthening the financial management capacity of pharmacists working in the public sector. The module is meant to ensure better understanding of the legislation and regulations relating to the control of public finance, assets and inventory. Participants gain the skills and are given access to tools to enable them to plan and manage budgets accordingly, as well as to monitor and mitigate for financial risks in their specific circumstances.

To date, two teams of PLDP participants have identified the lack of compliance with aspects of the Public Finance Management Act (PFMA) as a key challenge.  Using the Challenge Model, the teams have develop action plans to address the issue. The desired measurable result for one of the teams was that all invoices received at the medicine depot should be settled within 30 days from receipt of invoice. The team mapped out all financial processes at the medical supply depot to identify the bottleneck. Although they didn’t reach their target of 30 days, they improved the time taken to process payments as shown in their, age analysis.

A second team, from a different province, worked on a similar project aimed at reducing time taken to pay supplier invoices and improve compliance with the PFMA. Their measurable result was to reduce the average number of days the medical depot takes to pay its suppliers—from the point of accepting depot invoiced stock to payment—from 47 days to less than 30 days. The team identified key contributors to the delays and implemented priority actions to address these issues, and are continuing to work to identify opportunities to intervene, improve, and monitor performance.

By Milli Reddy, Senior Technical Advisor, SIAPS-South Africa;  Gail Mkele, Senior Technical Advisor, SIAPS-South Africa; Percival Daames, Senior Technical Advisor, SIAPS-South Africa