The study was conducted in the RDT Hospital, Bathalapalli, which is a non-profit, 300-bed, secondary level care facility in a rural area of Anantapur, Andhra Pradesh, India. The hospital belongs to an NGO called Rural Development Trust, and provides free consultation and medicines at reduced costs to people of low socioeconomic status. In 2010, the hospital adopted the policy of limiting the list of available drugs, according to the WHO EML concept [4]. For that, a local formulary was created and all departments of the hospital implemented clinical protocols for the treatment of the most common diseases in the area by using exclusively medicines which were included in the formulary.

For this study, we collected information from the hospital database, of all medicines which were issued in the hospital pharmacy from January 11^th 2011 to January 10^th 2012. During this period of time, the hospital had 325,463 outpatient visits and 20,331 admissions, with an average stay of 4.35 days. We analyzed the total costs and the utilization of the medicines by WHO EML therapeutic groups. A Cost-analysis of the individuals drugs that comprised 50% of the drug expenditure, was also performed. The study was approved by the hospital’s ethical committee.

The total annual medicine expenditure was 25,784,681.42 INR (USD 416,474.17 at the rate of 1 USD = 61.91 INR). Cost-analysis studies by WHO EML therapeutic groups is presented in [Table/Fig-1]. Anti-infective medicines had the highest costs, followed by solutions correcting water, electrolyte and acid-base disturbances; hormones, other endocrine medicines and contraceptives; gastrointestinal medicines; immunologicals; and medicines affecting the blood. Among anti-infective medicines, antiretrovirals and beta-lactam antibiotics had the highest impact on the hospital budget [Table/Fig-2].

Only 21 drugs constituted approximately 50% of the total expenditure [Table/Fig-3]. Lopinavir/ritonavir, amoxicillin/clavulanic acid, atazanavir, insulin, and normal saline accounted for 6.2%, 6%, 4.6%, 4.4%, and 3.9% of the hospital drug budget, respectively. Four drugs, anti-D immunoglobulin, hepatitis B immunoglobulin, natural phospholipids and dalteparin (a low molecular weight heparin), bore a high costs despite the fact that they were rarely used.

To the best of our knowledge, this is one of the first studies to analyzse the costs of the WHO EML in a resource-limited setting. Almost 41% of drug spending is allocated to anti-infective medicines. This finding is in clear contrast to the situation in developed countries, where the therapeutic groups with highest expenditure are cardiovascular, oncological, respiratory and psychiatry medicines [5].

Due to concerns about their costs, antiretrovirals which to treat HIV infection were not included in the WHO EML until 2002 [1]. The results of this study confirmed that antiretrovirals bear the highest costs for the WHO EML. However, HIV is a communicable disease and a major public health problem in low and middle-income countries, and recent studies have demonstrated a reduction in HIV transmission in areas where the roll-out of antiretroviral therapy has been successfully implemented [6,7].

In this study, oral antidiabetic drugs, such as metformin and glibenclamide, were frequently prescribed, but they did not have a big impact on the drug budget due to their low costs. However, insulin had the highest cost among non-anti-infective drugs. Insulin is necessary to treat diabetic patients with a poor metabolic control, chronic renal failure or pancreatic exhaustion [8]. However, the results of this study suggest that many diabetic patients in resource-limited settings might not be able to afford insulin.

We found that two drugs from the WHO EML involved in perinatal care (anti-D immunoglobulin and lung surfactant), were used rarely, but carried a high cost to the hospital. The inclusion of these drugs in the WHO EML was performed, based on evidence obtained from studies done in developed countries [9,10]. However, due to their high costs, it would be desirable to perform cost-effectiveness analysis of these medicines in low or middle income countries, in order to decide whether these medicines are a public health priority or should be reserved for tertiary care centres.

The study has some limitations. Three therapeutic groups from the WHO EML were not included in the analysis (blood products and plasma substitutes; diagnostic agents; and disinfectants and antiseptics) because they were not dispensed through the pharmacy of the hospital and we did not have information about the costs of these products during the study period. In addition, the results of this study cannot be generalized to tertiary care hospitals, where the presence of specialties not present in our hospital, such as Oncology or Psychiatry, may increase the costs of other therapeutic groups.

This is one of the first studies to describe the drug spending in a hospital from a resource-limited setting after adopting the WHO EML. Anti-infective medicines contributed the highest expenditure to the hospital, especially antiretrovirals. Among non-anti-infective medicines, insulin was the drug with the highest cost.