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Usuluteca (A)
Young, David W.
Functional Area(s):
   Financial Accounting
   Health Policy
Difficulty Level: Intermediate
Pages: 5
Teaching Note: Available. 
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First Page and the Assignment Questions:

Dr. Julio Torres, Director of Maternal and Child Services in the Ministry of Health of Usuluteca, a small Central American Republic, knew that this assignment would be one of the most difficult challenges he had faced since assuming his current position almost three years ago. After much discussion with the Minister of Health, it had been decided that Dr. Torres would be responsible for developing a national policy on essential drugs. As a well-respected physician, Dr. Torres was very interested in solving the difficulties within the country regarding the purchase, prescription, and use of drugs, so he viewed the challenge with excitement as well as apprehension.


The concern within the government about the sale and use of drugs was prompted by a growing awareness that those drugs needed to treat the most prevalent diseases, such as measles and malaria, were not reaching the people who were most in need of them. In addition, the government realized that recent efforts to improve the primary health care system, in accordance with the World Health Organization’s (WHO) goal of “health for all by the year 2000”, were limited by problems in drug distribution and sale. The government of Usuluteca wanted to provide free primary health care for all its citizens because it viewed health care as a right of all individuals; however, the substantial cost of delivering services and providing drugs was becoming an ever-increasing burden for the government. Roughly 10 percent of the budget of the Ministry of Health went for purchase of drugs, yet most of these drugs were consumed in the major hospitals and urban areas; only 2 percent of all drugs reached rural health centers. As a result, the majority of Usuluteca’s people had to purchase their own medications, even though the government had promised that health care would be free.

Another problem that required attention was the lack of control or coordination in the country with regard to drug purchase and distribution. Within Usuluteca many private pharmaceutical companies imported or reformulated drugs bought from the large transnational pharmaceutical firms. There was little coordination between these companies and the government, which resulted in either an oversupply or shortage of drugs in many places. The government was also a major importer of drugs from these same companies, though at a reduced price.

The purchase of drugs required a large amount of foreign exchange, which was difficult for the government to raise. As a result, and with the growing demand and need for drugs in Usuluteca, the government’s capability for importing drugs looked weak. Moreover, many government officials, including the Minister of Health, were concerned about the country’s dependency on foreign firms for drug supplies. The minister also recognized the contradiction between government-inspired movements toward self-sufficiency in the rural areas, especially in the case of primary health care, and dependency on external assistance on a national level.

A final concern within the Ministry, and especially of Dr. Torres himself, was the over-use and seemingly irrational prescription of drugs. In urban centers, information about drugs—their benefits and potential side effects—was usually provided by drug company detail men. Physicians claimed this was necessary since they were extremely overworked and did nit have enough time to sort through the vast literature on treatment regimens. In rural areas, by contrast, knowledge . . .


  1. What are the key problems that surround the formulation of a national drug policy in Usuluteca? Please group these problems into some meaningful categories.
  2. Which problems can be more easily resolved in the short run? In the long run? Which cannot be resolved at all?
  3. What are the key features Dr. Torres should include in his recommendations for a national drug policy