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Procurement & Supply Management Session

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1 Procurement & Supply Management Session
Welcome to Procurement & Supply Management Session Krishan Batra UNDP, New York

2 Learning Objectives: UNDP Procurement: An Overview
Sharing UNDP’s Experience Understanding Supply Chain Sourcing of Suppliers Quality Assurance (Right Quality) Warehousing and distribution

3 UNDP Procurement: Procurement in 2004: $1215 million
Global Fund Procurement: $ 150 m UNDP as a PR in 27 country offices:$600M 80% of GF fund is for procuring goods and rest for services Areas covered: GF(HIV/AIDS, Malaria, TB), Good Governance, Poverty Eradication, Environment, Gender etc.

4 Major Challenges: Developing generic specifications
Quality requirements (Right Quality) Supply Sources: Shortlist Ensuring multiple choices Delivery not reliable Stocking (Warehousing) Distribution Network Concept of PR, SR & PA Legal Implication (Generic Drugs)

5 ROLE OF PR: Procure medicine that appear in the treatment guidelines or essential list of WHO PR is responsible & accountable to GF for results Monitor forecast with actual consumption to ensure continuous availability Procurement should adhere to good procurement practices Appropriate product at lowest possible price (Avoid wastage of resources) Tender Documents should list drugs by generic name

6 Procurement Agent: Procurement Agency is defined as an organization that is involved in one or more of the following: Pre-qualification, procurement, storage, distribution etc. Interested Procurement Agent should provide detailed info as per Procurement Agency Information File (PAIF)

7 Procurement Agent: PAIF should cover: General Information Personnel
Pre-qualification Purchasing Storage Quality Control Distribution, complaints, Product Recall

8 Procurement Agent: Procurement Process in accordance with International Practices Concern for Intellectual Property Rights & National Laws Procurement Methods: ICB, NCP, LIB,CP,DP UN Organization, Government Body & International Procurement Agency Payment Terms, Terms & Conditions, QA Methods, Skill Sets, Scope of Insurance and the rate, Shipping and custom clearance, Tracking PO Transfer of risks

9 Implementer/ Provider:

10 Approved PA: LTAs ARVs: UNICEF, IDA Test Kits HIV: UNICEF, WHO, IDA
Test Kits STI: UNICEF, IDA Condoms: UNFPA, Basic Essential Drugs: WHO, IDA, TB drugs: GDF, IDA, IAPSO, WHO, UNICEF Antimalarial Drugs: IDA, UNICEF Lab. Equipment: IAPSO, WHO, UNICEF Vehicles, IT etc.: IAPSO

11 Supply Mangement:Phases
Product Planning Selection of Products Forecasting and quantification of need Product Procurement (Perception that this is placing PO only-an Admin. Function) Identification of Sources Assurance of Quality Purchasing Product Use and Monitoring Receipt Distribution to end users (Logistics) Rational use and monitoring

12 Supply Chain: Product Selection Sourcing Tendering
Pre-Qualification Tendering Vendor Evaluation, Reliability, Capacity, Compliance Evaluation of Offers Production: GMP audit, Inspection, Sampling, Testing/Analysis

13 Supply Chain: Transport Storage Distribution/ Dispensing M&E
Shipping Documents, Insurance, Shipping Terms, Inspection, Sampling, Testing Storage GMP Audit, Inspection, Sampling, Testing/ Analysis, Warehousing Conditions Distribution/ Dispensing GDP, Counselling, Advising Patients ( Computerised dispensing System etc, Register M&E

14 Writing Specifications:
Functional Specification Performance Specification Design Specification Brand or Trade Name Samples

15 Quality Assurance: GDP: It is that part of quality assurance which ensures that quality levels are maintained throughout distribution network Official Inspection & quality control lab.: They verify the compliance of Pharmaceutical product & manufacturing process WHO Certification : Provides independent info ISO Standards: Product Standards European Norms: EN 29000 CEN : Quality Standard (CE Symbol) 5 years Warranty & availability of spare parts Random samples for testing

16 Quality Assurance: Quality is totality of Characteristics of an entity that bear on its ability to satisfy the stated needs. Health care products need special measures Pharmacopoeias: Provide quality specifications for most commonly used pharmaceutical substances, dosage forms, packing materials etc. GMP ( Good Manufacturing Practices): This establish requirements in respect of premises, equipment, personnel, documentation, quality control etc. GDP (Good Distribution Practices):

17 Quality Assurance/ QC:
Qualification Manufacturer Check GMP certificate,GMP audit by Pharmacist, Check Mfg. License Qualification Product Approval Product Specification, Stability Data, Check Packing, labeling ISO 9000 Quality Control (By Independent Contract Lab.): Physical Control of sample per batch, At-random chemical analysis Compliance with international standards

18 TRIPS: Trade related Intellectual Property Rights
When a new medicine is developed, its inventor is given a protection “ Patent” to exclude third parties A patent is a government grant Generics may be produced and sold lawfully Least Developing countries are authorized to forgo the enforcement of patents on pharmaceutical products upto Jan. 2016 Check if there are patent laws that permits patenting, If no, there is no obstacle. If yes, Check if any ARV patented there, if no there is no obstacle. If ARV patented, Option 1-Compliance has been extended. Option 2 Seek reduced pricing from the patent holder or inform them of buying generic drugs.

19 TRIPS: Developing Countries
Is there ia patent law? Are specific ARVs under patent Are there specific options under national law? Compulsory Licensing and Government use. Pay adequate remuneration to patent holder Parallel Importing( National law should allow the use of “ International Exhaustion” )

20 Procurement Cycle: REQ Performance Rating
Development of Specifications / TOR Sourcing Payment Preparation of Solicitation Documents Contract Management Award Contracts / PO Bidding Evaluation of Offers

21 Operational Principles:Good Procurement
Efficient & Transparent Management Separation of key functions Transparency and written procedures Drug Selection & Quantification Limited to Essential Drugs List Generic description Financing & Competition Good Financial Mgmt. Competitive Procurement Supplier Selection & QA Formal Supplier qualification QA programme

22 Procurement Methods: Open Competitive Bidding
Limited Competitive Bidding Direct Contracting ( Single Source) Shopping Factors Affecting the Selection of Methods Off Patent or On Patent Number of approved & eligible sources Market Situation Contract Value

23 Product Procurement: Health & Non- Health Products
Health Products include pharmaceutical products, diagnostics technologies and supplies, bed nets, insecticides, sprays against mosquitoes, and prevention (condoms) or lab. Equipments and supportive products Non-Health covers vehicles, office equipments etc Procurement Process must be Transparent

24 Non-Health Procurement:
Requires less thorough assessment due to lesser potential health impact Plan should address mechanism of procurement, Quality Assurance and distribution Product should conform to ISO/ BS/DIN or National Standards Suppliers who are ISO 9000 certified should be preferred Products conforming to Environmental Standards should be preferred

25 Supplier Selection: Criteria for Pre-Qualification
GMP Audit by a qualified Inspector Product Samples are physically inspected Product Samples are tested in an eligible lab. WHO list of pre-qualified suppliers Stock with Suppliers, Shipping Term (CIF, DDU etc.) References

26 Product Selection: General
Strength: 100mg, 150 mg, 10mg/ml etc Size: 75g, 100ml Dosage Form: Tablet, Capsule, Syrup, Chew, vial Packing Material: Bottle ( Glass, HDPE, PET) Blister (Aluminium or PVC) Pack: 10, 100ml Marking Expiry Date: On receipt, the balance expiry period should be 4/5 of the total expiry period if more than 2 years and ¾ if expiry period is 2 yrs or less

27 Product Selection: HIV/AIDS
Antiretrovirals (ARVs) to reduce MTCT and limit damage to immune system Drugs for Palliative Care ( Relieve pain, physical and mental discomfort) Anti-infective agents to treat or prevent Opportunistic Infections Condoms Lab. Equipment and Supplies Reagents Infrastructure Products: Vehicles, Office Equipment, PCs,

28 Commodities for HIV/AIDS:
1, Laboratory Infrastructure 2. Supply Chain Management 3. Client & Community Education.

29 HIV/AIDS DRUGS: Drugs to prevent Opportunistic Infections
Drugs for palliative and supportive care ARV for mother to child transmission ARV for treatment of clinical AIDS ARV for HIV patients to prevent AIDS. Drugs to treat OI

30 HIV/AIDS Commodities:
Condoms, HIV test Kits Other Diagnostic test kits such as for STI, OI Reagents, Gloves, Laboratory Equipment and supplies Medical Equipment and supplies, such as syringes, needles Disposal Bins

31 Laboratory Equipment:
Microscopes Automated Analyzers Precision Pipettes Centrifuges Incubators Refrigerators Freezers All equipment require specialized preventive maintenance and repair

32 HIV TEST KITS ARV Therapy aims at reducing the plasma viral load by preventing replication. Antibody Tests such as ELISA , Simple Rapid Look for antibodies against HIV, It does not detect virus itself. HIV infects white blood cells known as CD4 Virologic Test ( Rarely used ) Viral Load Assay Test (Number of viral particles) and CD4 (provide an insight to immune system) Evaluated by WHO, 99% Sensitivity and specificity Complicated product to manage, Average shelf life is short (12 months), cold storage Beckman Coulter, Beckton Dickinson, Partec, Dynal Biotech, Guava, Cavidi

33 HIV TEST KITS Ancillary Equipment and Supplies Automated Analyzers
Reagents Centifugers, Refrigerators, Test Tube Racks Timers, Pipettes, Specimen Tube Disinfectents Sharp disposal bins Waste disposal

34 Effect of Genetic Competition:
Sample of ARV triple Combination: Stavudine (d4T)+ Lamivudine(3TC)+ Nevirapine (NVP). Lowest Price per year per patient: Originator $11,000 and generic Cipla, Ranbaxy, Aurobindo, Hetero ( $251-$150) Favored Cocktail for AIDS: Mix of nukes AZT + Lamivudine + Non-nuke Efavirenz ( Three in one pill) 89% OF PATIENTS after 32 weeks had almost undetectable level of virus in their blood.

35 Mosquito Nets: Specifications
Application: For one or two persons or child Material: Cotton, Polyester, Polyethylene, Nylon, Polypropylene ( Life 2-5 years) Size: 1.95mx1.25mx2m , or 1.95mx1.5mx2m Color: Blue or Green Denier: 100 is minimum Mesh Size: 156 holes/sq.inch Weight: 30 gr/sq.m or 40 gr/ sq.m Treatment: Insecticides treatment is more important in Africa than in Asia. Net Attachments: Aluminium Rings

36 Anti-malarial Medicines:
Growing resistance of Plasmodium falsipaum to current monotherapies such as chloroquine, amodiaquine, sulphaoxine-pyrimethamine. Artemether/ lumenfantrine ( Artemisinin based combination therapy), preferably containing artemisnin derivative. Some Countries have adopted ACTs as second line treatment. Amodiaquine + SP is restricted to W.Africa

37 Malaria Rapid Diagnostic Test:
Rapid, accurate and accessible detection of malaria parasites RDT detects specific antigens (proteins) produced by malaria parasites Sensitivity is key but could be affected during storage. QA processes after purchase is very important Shelf life 18 months. GMP and ISO is a standard for medical devices QA to be built into the budget End user training & Supervision Storage and in country shipping Cool Chain for transport and storage Post-purchase Quality Control testing

38 Product Selection: TB TB Drugs
Microscopes, Slides, Reagents, Injection supplies, X-ray Machines and Consumables, Lab. Equipments Non-Health Products such as vehicles, Office Equipment, PCs etc.

39 Insecticides: Insecticides for Impregnation
Alphacypermethrin, Cyfluthrin, Deltamethrin, lambda-cyhalothrin……. Insecticides for outdoor spraying Insecticides for indoor spraying Insecticides for larviciding Spraying System

40 Additional Goods & Services
Storage Place ( Central Warehouse, Regional Warehouse) Distribution Trucks Cold Chain/ Refrigerators Inventory Management System Tracking System Power Generators, PCs, Solar System Logistical Experts, Warehouse Experts Training Services, Operational Manual including Financial System Maintenance of QA/QC, Training Lab. Personnel Monitoring Equipment for side effects, Drug Resistance Consultants to prepare the requirements

41 Calculating Procurement Qty
Average Monthly Use (AM) Procurement Period ( Time between Orders) Lead Time ( Months to receive drugs ) Stock In Inventory Safety Stock = AM*LT Maximum Stock Level: SS+ AM*PP Quantity to Order: Max. Level-stock in Inventory-Stock on order


43 Tasks of the Supply Chain

44 Learning Objectives: UNDP Procurement: An Overview & Challenges
Supplier Selection & Procurement Agent Product Procurement (Health & Non-Health) TRIP & Procurment of Generic ARV Quality Assurance Receipt & Storage (Inventory Management) Distribution Shipping & Insurance Preparing Procurement Plan Note: nearly 80% of the GF money will be spent on procurement of products

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