An Analysis of Pharmaceutical Lending by the World Bank

The World Bank (WB) began to lend for health, nutrition, and population (HNP) in the late 1970s. Today, the Bank has become the single largest external source of HNP financing in low- and middle-income countries. The Bank's activities in the HNP sector are based on the rationale that investments in health, nutrition, and population constitute an investment in human capital that is necessary for enhanced welfare, reduced poverty and sustainable growth. During fiscal years (FY) 1999 to 2002, the World Bank approved 683 lending projects in all sectors, with a total lending amount of US$ 38,306 million (2001 prices). During the same period of time, the World Bank approved 65 HNP lending projects, with a total cumulative value of US$ 3,298 million (2001 prices). The Bank has been financing pharmaceutical activities within the HNP portfolio since 1983. In total, the Bank has provided financing for pharmaceuticals in over 100 HNP projects in all six regions. According to the results of the present research, contracts for the procurement of pharmaceuticals and medical products (PMP) under Bank financed projects from FY 1999 to FY 2002 accounted for almost 36 percent of the procurement of goods in HNP, and for 18 percent of the total HNP procurement activity including goods, civil works, consulting and other services. Despite the increased interest in pharmaceuticals, lending in this area has been conducted without the guidance of an explicit operational policy on pharmaceuticals. While the World Bank has produced a number of policy papers and reports on pharmaceuticals, these are not considered operational policy. In this situation, good practices and implicit policy guide the pharmaceutical activities of the HNP sector and the Bank's pharmaceutical activities.