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What is a Revolving Drug Fund

A Revolving Drug Fund (RDF) is a self-sustaining healthcare financing system, in which user fees are collected to cover the cost of healthcare, especially the procurement and supply of pharmaceuticals. They are also known as DRFs or Drug Revolving Funds.

RDFs require a substantial initial investment, typically from central government or from an international donor. The investment is used to procure a seed stock of pharmaceuticals to establish the necessary infrastructure to manage the RDF system. This includes revenue collection systems, as well as revitalizing the supply chain and pharmaceutical procurement process. Revenue collected from the sale of seed stock and from other healthcare services is  used to replenish the pharmaceutical stock. Ideally, this creates a self-sustaining healthcare system which no longer depends on foreign aid.

Why implement a Revolving Drug Fund

Common healthcare financing methods in low- and middle-income countries are insufficient to provide reliable access to healthcare, especially pharmaceuticals. This is predominantly a supply chain issue, so RDFs are commonly implemented as part of a broader initiative to strengthen the health supply chain.

An RDF is designed to increase the availability of medicines at public health facilities while making them more affordable compared to those sold by private pharmacies.

An RDF should be considered where the availability and quality of pharmaceuticals is noticeably substandard due to insufficient finances. However, an RDF adds complexity because revenue must be collected and routed back to pharmaceutical procurement.

Our methodology

Implementing RDFs requires a gradual approach as full scale implementation is rarely feasible from the start. We can conduct a feasibility study, and advise you on establishing, managing, and sustaining your RDF scheme. We will work in collaboration to guide you through the pre-implementation, implementation, and post implementation stages.

You can find more information on the topic in Pam Steele’s book, Revolving Drug Funds in Low- and Middle-Income Countries, available to buy on Amazon.

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