Analysis of medicines expenditures and pharmaceutical inventory control management at Muhimbili National Hospital

Background: Good pharmaceutical management is an important approach to contain the increasing expenditures on medicines in developing countries. ABC and VEN analyses classify items according to their budgetary consumption and importance, respectively. When the two are combined together they increase efficiency in medicines supply chain systems and also diminish costs associated with overheads, wastages and inefficiencies. This study uses ABC and VEN approaches to analyse medicine expenditures and further explores inventory control methods employed and the associated challenges at Muhimbili National Hospital-Tanzania Methods: This was a descriptive hospital based cross-sectional study which was conducted at Muhimbili National Hospital. Data were collected using pre-tested questionnaires and through document reviews. Analysis was performed by using Excel spreadsheet (Microsoft Excel®, Microsoft Corporation) and SPSS version 20 computer software. Results: The annual medicines expenditures was 1.2 billion Tanzanian Shillings (approx 750,000 US $) which is equivalent to 1.3% of the total annual hospital expenditures. About 394 medicines were procured during the financial year, 143 from MSD and 251 from other suppliers. Overall, 46 (12 %) medicine belong to class A and 67 (17 %) to the vital category, based on ABC and VEN classifications. About 270 (approx 70%) medicines were essential and consumed 70% of the budget. Of the 143 medicines procured from the MSD, 8 consumed 50% of the budget; ceftriaxone injection (1 gram) alone contributing 15 % and only 4 of the class A items were Vital. Of the 251 medicines procured from other suppliers; 14 consumed 50% of the budget, and meloxicam and augmentin tablets together contributed 16 %. Only 6 of the class A items could be classified as Vital. There was no special inventory control methods for class A items which are main drivers of medicine expenditures. Even though shortage of human resource is a major challenge for the vii pharmacy department, majority of the existing pharmaceutical personnel do not have sufficient expertise in inventory management. Conclusion: Based on the ABC and VEN analyses, there is inefficiency in allocating the scarce financial resources to medicines at Muhimbili National Hospital. Even for the few class A medicines which consumes nearly three-quarter of the budget, there is no special monitoring mechanisms to ensure rational prescribing and inventory management. In order to allocate scarce resources efficiently and to manage pharmaceutical inventories effectively, priority-setting decisions must employ ABC and VEN classifications