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Passbooks for Drug Logistics, Andhra Pradesh
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Subject Area="Logistics." Objective="Drug supply"
Details for Reform Option "Passbooks for Drug Logistics, Andhra Pradesh"

Background: Centralised procurement has advantages in terms of price and quality but can result in a mismatch between the facilities' requirements and the actual supplies. Action: The passbook system gives the institution powers to select drugs and set the quantity, within an essential drug list. The imbalance between need and supply is thus redressed. Every facility is issued a passbook valid for the financial year, containing an entry showing about 80% of the facility’s drug budget for that year. The facility level management draws drugs (and other medical supplies) from the district or state medical stores depending on need. The value of the drug drawn is debited to the passbook. The permitted drugs are specified in a rational drug list and only those drugs can be procured. The facilities are allowed to procure drugs and medical supplies locally up to the balance of the drug budget.

Cost Information not available.
Place Andhra Pradesh, since 1998.
Time Frame No information available.

Economical: More flexibility to facilities in type and quantity of drugs procured and consequently less useless inventories and less wastage of date expired drugs. Targeted: Enables better monitoring of the use of drugs and meets the needs of a larger number of clients. Educational: Encourages the use of less expensive generic drugs rather than expensive proprietary formulations. Regulatory: Places a ceiling on the value of drugs used and ensures economy and prioritisation.


Inflexible: The facilities are given a budget based on withdrawals the previous year, so if drugs or supplies are unavailable for a period of time they suffer cuts the following year.The budget can also be inadequate in times of epidemic or special campaigns. Unpopular in some quarters: Possible opposition from procuring organisation who resent loss of power to determine which drugs/ quantities they buy. Increased workload: Additional work involved in calculating and accounting for drugs used.


A flexible and responsive central procurement system. Enforcement of rational use of drugs.

Who needs to be consulted

State government.



Sustainable as a part of the larger drug procurement and logistics system.

Chances of Replication

Replicable if the political will to reform is there.




Submitted By

Indrajit Pal, Former Programme Advisor, European Commission Technical Assistance, New Delhi. July 2002.

Status Active
Reference Files
Govt of AP GO No Ms227 dated 12-05-1993 (PROD No 28).doc
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