1. GLOBAL DRUG FACILITY Improving country access to anti-TB medicines Andrea de Lucia, GDF Team Leader 1 st line Country Support WHO/UNICEF Technical Briefing Seminar on Essential Medicines Policies 1 October 2011

2. 1 20 th Coordinating Board Meeting | Washington DC| 31 March – 1 April 2011 ROLE OF GDF Established 2001, GDF is an initiative of the Stop TB Partnership hosted by WHO Public Sector procurement of anti-TB drugs, of the right quality, quantity, and price, and deliver them at the right time to the right people Originally established to provide in-kind 1 st line anti-TB drug grants, since added direct procurement services as countries have other sources of funding available Provide limited technical assistance by monitoring drug management in countries utilising GDF’s services and highlight system strengthening requirements.

3. 2 20 th Coordinating Board Meeting | Washington DC| 31 March – 1 April 2011 GDF PROCUREMENT FACTS 2010 Total value of goods procured: USD112,107,433 Value of grant expenditure: USD36,792,474 Value of direct procurement services expenditure: USD75,305,619 Total cost of procurement agents: USD5,322,781 (GIZ 3.9%, IDA 4.2%) Estimated FLD patient treatments: 2,293,207 (242,490 paediatrics) Estimated SLD patient enrolled: 10,742 Number of countries using GDF’s services: 93 Stock-outs reported to GDF thru monitoring missions: 12 (10 in Africa region) Emergency and urgent orders requested: 87 TB Drug Manufacturers Meeting, New Delhi, 29-30 August 2011 Global FLD market estimated b/w USD261 – 418 million in 2008* GDF has approximately USD50 million of this market Global SLD market is unknown** GDF has approx USD57 million of this market Source: *TB Alliance (2008) **(2011)

4. 3 20 th Coordinating Board Meeting | Washington DC| 31 March – 1 April 2011 GDF PROCUREMENT FUNDING TRENDS TB Drug Manufacturers Meeting, New Delhi, 29-30 August 2011 Ex Works value of orders placed 2007-2010 per funding service

5. 4 20 th Coordinating Board Meeting | Washington DC| 31 March – 1 April 2011 GDF PROCUREMENT CHALLENGES – FLD/SLD SUPPLY Limited number of API producers. Stringent prequalification requirement results in a lack of incentives to prequalify products Insufficient number of quality assured products can result in the interruption of supply of drugs (Streptomycin) Limited number of TB drug manufacturers also results in a lack of competition (high prices) and overstretches suppliers (late deliveries). TB Drug Manufacturers Meeting, New Delhi, 29-30 August 2011

6. 5 20 th Coordinating Board Meeting | Washington DC| 31 March – 1 April 2011 GDF PROCUREMENT CHALLENGES – FLD/SLD DEMAND Market fragmentation: multiple entities procuring Poor forecasting of requirements by clients Insufficient budgetary and procurement planning Volatile funding commitments from donors and governments cause havoc in planning Emergency requests with short delivery lead times stress all actors (allow 8 months delivery lead time). TB Drug Manufacturers Meeting, New Delhi, 29-30 August 2011

7. 6 20 th Coordinating Board Meeting | Washington DC| 31 March – 1 April 2011 COMMENTS ON FLD BIDDING 2011 Prices have increased significantly since 2009 GDF observed: Increased unit prices attributable to API costs, namely R, and fuel costs in India For products where there was competition, price ranges were generally similar For those products where there was no competition, price increases appeared unreasonable and unjustifiable – eg paediatrics TB Drug Manufacturers Meeting, New Delhi, 29-30 August 2011

8. 7 20 th Coordinating Board Meeting | Washington DC| 31 March – 1 April 2011 PRICING OF HIGH DEMAND FLDS AND PROJECTED DEMAND* TB Drug Manufacturers Meeting, New Delhi, 29-30 August 2011 * Based on retrospective analysis of demand in 2010

9. 8 20 th Coordinating Board Meeting | Washington DC| 31 March – 1 April 2011 COMMENTS ON SLD BIDDING 2011 General price containment since 2009 GDF observed: Out of 23 products, 12 have only 1 quality assured manufacturer – ie no competition Excepting capreomycin and moxifloxacin, no significant price differentials since 2009 Volumes procured to date have not resulted in price reductions Price reductions are only likely in future if demand is further consolidated Market sustainability is a concern TB Drug Manufacturers Meeting, New Delhi, 29-30 August 2011

10. 9 20 th Coordinating Board Meeting | Washington DC| 31 March – 1 April 2011 PRICING OF HIGH DEMAND SLD’S AND PROJECTED DEMAND* TB Drug Manufacturers Meeting, New Delhi, 29-30 August 2011 * Based on retrospective analysis of demand in 2010

11. 10 20 th Coordinating Board Meeting | Washington DC| 31 March – 1 April 2011 GDF'S RESPONSE TO PROCUREMENT CHALLENGES Manufacturers offering staircase pricing where demand can be consolidated (move towards quarterly ordering and have a dedicated forecasting staff at GDF) New FLD/SLD LTA's have a heavier liquidated damages clause for suppliers not honouring delivery lead times Rethinking stockpile options: –warehouses in strategic logistical locations and financing scheme options. Continue providing adult/paediatric FLD grants as we expect budgetary gaps due to price increases over 2011-2012: countries must plan and identify gaps early to allow for application review and delivery (8 months) Strengthened GDF technical assistance at regional level beginning 2012: Regional Technical Officers to provide assistance in procurement planning, quantification, monitoring and order placement. TB Drug Manufacturers Meeting, New Delhi, 29-30 August 2011

12. 11 20 th Coordinating Board Meeting | Washington DC| 31 March – 1 April 2011 TECHNICAL ASSISTANCE – GDF MONITORING MISSIONS Monitoring missions conducted in 55 countries in 2010 Objective Validate stock levels Monitor GDF terms & conditions (grant & direct procurement) Assess overstocking and stock outs Assist with planning for future requirements Highlight problems in supply chain Key Observations Gaps in PSM staff capacity/training Lack of Standard Operating Procedures Poor information management (manual vs computerised) Inadequate planning of requirements/funding Reliance on donor funding and associated volatility Political commitment to change is not always evident TB Drug Manufacturers Meeting, New Delhi, 29-30 August 2011

13. 12 20 th Coordinating Board Meeting | Washington DC| 31 March – 1 April 2011 TECHNICAL ASSISTANCE – GDF DRUG QUANTIFICATION TOOL Developed in partnership with MSH for 1 st line drugs Objective Quantify countries annual needs for procurement planning and budgeting purposes (GDF 1 st line drug prices), using morbidity data Determine low long quantities of stock on hand will treat estimated patients Determine trigger dates for reordering Adjust buffer stock % based on projected demand & available budget Key Observations User friendly but staff training is required to utilise and interpret the information for planning purposes Quantification requires good data – NTP needs a good surveillance system to know: –exact number of patients treated last year –number of patients in each treatment category –existing stock levels of each item TB Drug Manufacturers Meeting, New Delhi, 29-30 August 2011

14. 13 20 th Coordinating Board Meeting | Washington DC| 31 March – 1 April 2011 TECHNICAL ASSISTANCE – DRUG MANAGEMENT WORKSHOPS TB Drug Manufacturers Meeting, New Delhi, 29-30 August 2011 With our partner MSH, GDF organizes drug management workshops focused on helping countries identify their PSM bottlenecks and develop an Improvement Plan Curriculum includes: SelectionRational drug use QuantificationQuality assurance ProcurementInventory control Hosting country site visit to relevant sites (Central NTP, Central warehouse, NRA, health centres) In 2010, regional workshops held in AFRO and EURO; joint consultants training for EMRO/AFRO (Nairobi) In 2011, global workshop focused on the drug management and 2 nd line drugs (Sri Lanka) In 2012, continued regional workshops with new Regional Technical Officers once recruited.

15. 14 20 th Coordinating Board Meeting | Washington DC| 31 March – 1 April 2011 Main messages 1.FLD price increases will affect most countries' planned budgets 2.Start early to identify gaps in drug procurement budgets 3.Allow sufficient time for securing additional funding (if necessary), order placement, manufacturing lead times, and SEA shipment (most cost- efficient) Thank you! Andrea de Lucia deluciaa@who.int