Public healthcare facilities in many low and middle-income countries face persistent shortages of essential medicines, despite an increase in public expenditure on healthcare across the globe. A critical but underexplored reason is the design of procurement information systems that govern the flow of medicines and information across the public health supply chain. This chapter argues that the effectiveness of public health expenditure extends beyond procurement budgets. The ability of information systems to integrate data across actors, institutions, and levels of service delivery is essential to ensure that health expenditure is translated into health outcomes for citizens.

Using case studies from India, the chapter identifies two fundamental challenges. The first is a vertical integration problem: procurement systems are typically designed around administrative structures rather than the logic of the healthcare supply chain. As a result, information systems often track medicines only up to warehouses or healthcare facilities, without visibility into actual patient-level consumption. The absence of last-mile traceability weakens demand estimation, forecasting, and procurement planning, resulting in stock-outs and interruptions in treatment. The second is a horizontal integration problem: multiple procurement systems operate in parallel across disease programmes, health schemes, insurance mechanisms, and different levels of government. These systems maintain separate databases, standards, and reporting structures that prevent aggregation of demand and consumption data even when they procure and distribute the same medicines. This fragmentation obscures true treatment costs, reduces economies of scale, and weakens the relationship between public expenditure and health outcomes.

Designing procurement information systems for improved access to public healthcare, Pavithra Manivannan, Chapter in Public Finance in the Digital Era: Emerging Themes 2026, edited by Cathal Long and Ameya Naik, published by ODI Global, April 2026.