The People's Liberation Army (PLA) said that online purchasing had helped the army cut pharmaceutical costs in 2007, when it only spent 79 million yuan (about 11.1 million U.S. dollars) out of a 100 million yuan budget for the 32 most commonly purchased drugs.

The savings were achieved by soliciting large-volume online bids and dispersing purchases across provincial lines, according to Li Jianhua, the director of the health bureau of the PLA's General Logistics Department.

Wholesale prices offered online were 20 percent below the national average, Li said.

The army made a comparative analysis of pharmacy prices in 14 provinces and municipalities to ensure that military units in different locations bought the same product at the same price, Li told Xinhua.

To promote fairness and transparency, the PLA has built up a pharmacy purchasing network that it used to select 2,200 suppliers world-wide for the 17,469 products that were needed, said Li.

The network had proven to be very useful as the entire process, from purchasing through delivery, supervision and management could be handled online, according to Li.

The system also helped the army select the best products at competitive prices and screen out unqualified suppliers. Products were judged by quality, price, credibility of manufacturers and service, said Li, adding that the buying panel consisted of more than 40 army pharmaceutical experts who had the final say. The network is connected to a pharmaceutical supervision database that allowed 660 inferior products to be screened out last year, according to Li.

The army made public such information as manufacturers' qualifications and bid prices, so the buying process became more transparent, Li said.

Delivery had gotten faster as stable suppliers cooperated with local pharmaceutical companies to send medicine to the army, said Li.

Now the army can forecast its needs based on statistics and suppliers are guaranteed prompt payment, said Li.

(Xinhua News Agency, March 12, 2008)