Sustainable pharmaceutical procurement: Environmental tendering criteria for better or worse?

The purpose of this study is to advance knowledge of the effects of using environmental criteria in the tendering and procurement of pharmaceuticals. In cooperation with the Norwegian Hospital Procurement Trust, we conducted a longitudinal case study of how environmental criteria in the tendering of generic antibiotics were implemented. This case is one of the first attempts to use environmental criteria in generic pharmaceuticals procurement. Qualitative and quantitative data were collected based on interviews, workshops, meetings and secondary sources, followed by iterative analysis, including a case narrative and causal loop diagramming. We found that rewarding environmental criteria fulfilment at the expense of price seems to have multiple effects. Firstly, higher prices increase public spending in the short-term but also help maintain the supply base, which can reduce shortages. Secondly, this increased focus gives more transparency into supplier risks. It is this latter unexpected effect of introducing environmental tendering criteria that makes the case and our analysis particularly interesting. Additionally, in the long term, interviewees expect that increased focus on environmental criteria for specific antibiotics will have the intended effect of reducing transmission of resistant bacteria through improving suppliers’ production processes. Our findings also suggest that increased focus on environmental criteria does not necessarily increase shortages of narrow-spectrum antibiotics, which could unintendedly increase transmission of resistant bacteria. Data from our case study suggest that these two effects are likely to have a positive influence on public health, thereby potentially reducing future healthcare costs. • In-depth study of one of the first attempts to use environmental criteria in tendering and procurement of pharmaceuticals. • Shows the evolution of tendering criteria and its direct and indirect consequences over time. • Demonstrates the balancing act between environment, pharmaceutical price levels and risk of shortages. • Develop a systems view to explain how transparency increases with environmental criteria which could lead to less shortages.