Choice of Currency, Foreign Exchange and Terms of Payment

The OECS/PPS solicits bids in U.S. dollars to provide one standard monetary unit for easy price comparison.  The Eastern Caribbean (E.C) dollar is pegged to the U.S. dollar at a rate of 2.7 and has remained stable at this rate for the last 25 years.  The use of the U.S. dollar prices through the OECS/PPS procurement system allow OECS countries to forecast drug costs in the E.C dollar without concern about fluctuations between international currency, or between the E.C dollar and the U.S. dollar.    The stability of the Eastern Caribbean Dollar and the availability of the U.S. dollar are both advantages that many developing countries, including some Caribbean countries, do not have. 

One of the most critical elements of OECS/PPS’ initial success in reducing the cost of pharmaceuticals was the ability to pay suppliers promptly in foreign exchange within 60 days of receipt of goods at country-level.  In recent years, however, the reputation for prompt payment which OECS/PPS initially established has become tarnished because of slow reimbursement of the country drug accounts by some member countries which are experiencing economic difficulties.  Suppliers responded to tardy payments by withholding shipments to both defaulting non-defaulting countries.