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The Process of Procuring Medicines: Challenges and Opportunities 1.

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Presentation on theme: "The Process of Procuring Medicines: Challenges and Opportunities 1."— Presentation transcript:

1 The Process of Procuring Medicines: Challenges and Opportunities 1

2 Introduction Logistics Cycle Common challenges General challenges with PSM Opportunities 2

3 Our Community

4 4 Introduction Essential Medicines has become a universal concept and successful "brand-name", associated with principles of equity, pro-poor policies, common sense and good governance. Essential medicines are those drugs that satisfy the priority health care needs of the population. Are intended to be available within the context of functioning health systems at all times, in adequate amounts, in the appropriate dosage forms, with assured quality and at a price the individual and the community can afford. Procurement is a repeated, continuous, cyclical process that target to address and meet the 6 customer rights (the rights products, in the right quantities, in the right condition delivered to the right place and the right time for the right cost.

5 5 Logistics Cycle

6 6 Product Selection National Formulary - Essential Drugs List of Zimbabwe (EDLIZ) World Health Organisation (WHO) Model List Selection of products for procurement is not always based on appropriate methods in particular at facility level. Consequently, there are poor linkages between national medicines lists, medicines actually purchased and supplied, and those prescribed to the patients. This is quite evident with the majority of church related hospitals’ donated medicines. Delayed adaptation of WHO recommended regimes

7 7 Quantification and Procurement The goal of the quantification and procurement exercise is to estimate and supply the quantities of each product that a program will dispense to users for a specific period of time in the future. Quantification helps to mobilize and allocate financial resources to procure products; it is often an advocacy tool for supply chain improvements. Forecasting is different from routine ordering, which is a short-term response to an inventory position. Forecasting is different—it projects longer-term trends in the use of products. Forecasting must also consider the logistics system. Does the system have the necessary transportation, storage, handling, and personnel to manage the forecasted products?

8 8 Poor assumptions need for evidence based assumptions Lack of cooperation from procuring partners in providing requested information and forming forecasting and quantification teams Lack and/or poor Data Quality 1.Logistics data 2.Service statistic 3.Demographic data 4.Morbidity data 5.Distribution system capacity Local Procurement Authorisation Preparation of tender documents and Solicitation of Bids 1.Request for Quotation (RFQ) 2.Invitation to Bid (ITB) 3.Request for Proposal (RFP) 4.Competitive negotiated procedure, in which the successful bidder is the "most economically advantageous tender." This does not necessarily translate as being the cheapest bidder.

9 9 Bidders failing to meet technical and financial specifications e.g. product specs incl formulation, pack size, quality, wrong samples, registration and/or pre-qualification, suppliers’ capacity to deliver – lead time) (bid, performance bonds, audited accounts etc). Bid documents not submitted as per tender requirements Supplier Evaluation, inspections and Vendor Master Management Fewer suppliers meeting the technical specifications against global product demand – lead times (especially with cold chain and newer antiretrovirals) Trade compliance i.e. what documents must travel with the shipment from the supplier. Customs Clearance – Import permits, Duty Free Certificates, storage charges Expiring grants and individual donor reporting requirements versus suppliers’ capacity to deliver

10 10 Legal challenges to procurement system or process A challenge to a procurement process may be brought by an economic operator who suffers, or risks suffering, damage or loss as a consequence of a breach of the procurement rules by the contracting authority. Conceivably, this means that both unsuccessful tenderers, and potential tenderers (who would have liked the opportunity to bid for the contract, but who did not), may have an opportunity to challenge the procurement process Contracting authorities are not free to choose the selected bidder on the basis of any criteria that they may wish. The practical effect of this is that a contracting authority runs the risk of receiving a challenge to its process if, in choosing its "most advantageous tender," it relies on factors and criteria that it did not disclose to all bidders at the outset. The use of non-objective, discriminatory criteria may also expose a contracting authority to the risk of a challenge.

11 11 Inventory Management Clearance, storage charges Inadequate and poor storage capacity both at Central and facility levels Shortage of motor vehicles for distribution Many distribution systems for pharmaceuticals, vaccines and nutrition commodities



14 14 Serving Customers Rational Medicines use – standard treatment guidelines Dispensing protocols Good Dispensing Practice Adverse Drug Reaction Reporting and Pharmacovigilance

15 15 General Challenges in supply management Funding – under resourced and overstretched both financially and with regard to staff The large number of different partners with their own medicine supply strategy has led to a lack of coordination of supply systems, resulting in duplication, inefficiency and increased workload, especially at the facility level. The selective approach for priority diseases has neglected other important conditions (e.g. chronic diseases, common diseases in children) Donors’ preference for quick solutions and for disease oriented approach to programme delivery (many separate medicine procurement mechanisms, vertical medicine distribution systems and disease focused pharmacovigilance systems) flows.

16 16 Investment in the health care sector has remained low, with decreases in national government budget for pharmacy services and and a decrease in external resource. Little attention has been given to long term supply strategies, such as the market impact of government interventions and how to develop appropriate social insurance systems. Donors have generally focused on public sector supply for specific diseases, with limited consideration of the role of the private sector The infrastructure and human resources to support medicines supply systems have generally been neglected. Weak routine information systems and a lack of information for planning makes monitoring of performance and evaluation of efficiency challenging.

17 17 External supply system assessments are often simply descriptive without linkages between strategic national medicine policies, previous recommendations and trends over time; compounded by a lack of follow up and political commitment to implement recommendations Many supply management tools are available but very few are evaluated for usefulness and impact. The optimal interaction needed between drug regulatory authorities and medicines procurement systems to ensure quality of medicines throughout the supply chain is not well defined. This gap in normative guidance leads to duplication of human resources, and a lack of coherence between quality assurance activities, and of systematic enforcement and sanctions.

18 18 Opportunities Medicine policies Zimbabwe National Medicines Policy available There is need to include the private and civic sector in various policies and strategies formulation Access Several global and regional price information services and evidence are available. Standard indicators for assessing availability, price and affordability are available. Global standards for essential medicines in emergencies and donations widely respected and used. Medicines pricing surveys have now generated demand for policy procedures on how to reduce prices, promote affordability and how to ensure universal affordability

19 19 Quality, norms and standards Global assignment of INN (generic) Standard procedures for WHO quality norms and standards, with focus on new essential medicines International Pharmacopoeia has become the primary global reference for the quality of new essential medicines; continuously updated and published in hard copy, CD and on-line WHO/UN prequalification Global pharmacovigilance network, with targeted projects for new essential medicines

20 20 Selection and Rational use WHO Model List of Essential Medicines, updated every 2 years since 1977, has become a global model process and model product; first Model List of Essential Medicines for Children (2007) Global database and strong evidence for interventions to promote rational prescribing. Promote the setting up of Hospital Medicine and Therapeutic Committees

21 21 Renewed global donor interests in strengthening health systems (including Supply chain management and Logistics) based on Primary Health Care as the basic approach to universal health access and increasing demand for evidence based policy advice. Vertical programmes also need horizontal health systems for issues which are common to all disease programs (e.g. selection of essential medicines, registration, quantification, quality assurance, supply and rational use) Collaborative procurement with other agencies and/or neighboring countries to enjoy economies of scale.

22 22 Health Facilities pooled procurement through NatPharm Although training has been supported extensively, coherent and sustainable development of human resources to ensure appropriate medicines management has not taken place. Be proactive in indirectly capacitating local industry through multi year (rather than 2 year) forecasting in order for them to plan and mobilise investments for research and development and manufacture



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