Welcome
to
Procurement & Supply
Management Session
Krishan Batra
UNDP, New York
Learning Objectives:
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UNDP Procurement: An Overview
Sharing UNDP’s Experience
Understanding Supply Chain
Sourcing of Suppliers
Quality Assurance (Right Quality)
Warehousing and distribution
UNDP Procurement:
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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.
Major Challenges:
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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)
ROLE OF PR:
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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
Procurement Agent:
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Procurement Agency is defined as an
organization that is involved in one or
more of the following:
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Pre-qualification, procurement, storage,
distribution etc.
Interested Procurement Agent should
provide detailed info as per
Procurement Agency Information File
(PAIF)
Procurement Agent:
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PAIF should cover:
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General Information
Personnel
Pre-qualification
Purchasing
Storage
Quality Control
Distribution, complaints, Product Recall
Procurement Agent:
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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
Implementer/ Provider:
PR
SUB-RECEPIENT
PROCUREMENT
AGENT
SUPPLIER
Approved PA: LTAs
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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
Supply Mangement:Phases
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Product Planning
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Product Procurement (Perception that this is placing
PO only-an Admin. Function)
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Selection of Products
Forecasting and quantification of need
Identification of Sources
Assurance of Quality
Purchasing
Product Use and Monitoring
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Receipt
Distribution to end users (Logistics)
Rational use and monitoring
Supply Chain:
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Product Selection
Sourcing
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Tendering
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Pre-Qualification
Vendor Evaluation, Reliability, Capacity,
Compliance
Evaluation of Offers
Production:
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GMP audit, Inspection, Sampling, Testing/Analysis
Supply Chain:
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Transport
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Storage
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GMP Audit, Inspection, Sampling, Testing/
Analysis, Warehousing Conditions
Distribution/ Dispensing
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Shipping Documents, Insurance, Shipping Terms,
Inspection, Sampling, Testing
GDP, Counselling, Advising Patients (
Computerised dispensing System etc, Register
M&E
Writing Specifications:
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Functional Specification
Performance Specification
Design Specification
Brand or Trade Name
Samples
Quality Assurance:
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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
Quality Assurance:
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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):
Quality Assurance/ QC:
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Qualification Manufacturer
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Qualification Product
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Check GMP certificate,GMP audit by Pharmacist, Check Mfg.
License
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
TRIPS:
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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.
TRIPS: Developing Countries
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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” )
Procurement Cycle:
REQ
Development of Specifications / TOR
Performance Rating
Sourcing
Payment
Preparation of Solicitation Documents
Contract Management
Bidding
Award Contracts / PO
Evaluation of Offers
Operational Principles:Good Procurement
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Efficient & Transparent Management
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Drug Selection & Quantification
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Limited to Essential Drugs List
Generic description
Financing & Competition
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Separation of key functions
Transparency and written procedures
Good Financial Mgmt.
Competitive Procurement
Supplier Selection & QA
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Formal Supplier qualification
QA programme
Procurement Methods:
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Open Competitive Bidding
Limited Competitive Bidding
Direct Contracting ( Single Source)
Shopping
Factors Affecting the Selection of Methods
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Off Patent or On Patent
Number of approved & eligible sources
Market Situation
Contract Value
Product Procurement:
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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
Non-Health Procurement:
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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
Supplier Selection:
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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
Product Selection: General
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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
Product Selection: HIV/AIDS
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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,
Commodities for HIV/AIDS:
ART
ARV
1, Laboratory Infrastructure
2. Supply Chain Management
3. Client & Community Education. PALLIATIVE
CARE
Anti-infective drugs
TREATMENT
Drugs and supplies to treat
STIs, OIs, TB
DETECTION
Diagnostic Agents and Lab. Supplies
PREVENTION
Condoms, Lubricants, Gloves and so on
HIV/AIDS DRUGS:
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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
HIV/AIDS Commodities:
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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
Laboratory Equipment:
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Microscopes
Automated Analyzers
Precision Pipettes
Centrifuges
Incubators
Refrigerators
Freezers
All equipment require specialized preventive
maintenance and repair
HIV TEST KITS
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ARV Therapy aims at reducing the plasma viral load by
preventing replication.
Antibody Tests such as ELISA , Simple Rapid
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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
HIV TEST KITS
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Ancillary Equipment and Supplies
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Automated Analyzers
Reagents
Centifugers, Refrigerators, Test Tube Racks
Timers, Pipettes, Specimen Tube
Disinfectents
Sharp disposal bins
Waste disposal
Effect of Genetic Competition:
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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)
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89% OF PATIENTS after 32 weeks had almost
undetectable level of virus in their blood.
Mosquito Nets: Specifications
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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
Anti-malarial Medicines:
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Growing resistance of Plasmodium falsipaum
to current monotherapies such as
chloroquine, amodiaquine, sulphaoxinepyrimethamine.
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
Malaria Rapid Diagnostic Test:
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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 13485-2003 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
Product Selection: TB
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TB Drugs
Microscopes, Slides, Reagents, Injection
supplies, X-ray Machines and
Consumables, Lab. Equipments
Non-Health Products such as vehicles,
Office Equipment, PCs etc.
Insecticides:
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Insecticides for Impregnation
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Alphacypermethrin, Cyfluthrin,
Deltamethrin, lambda-cyhalothrin…….
Insecticides for outdoor spraying
Insecticides for indoor spraying
Insecticides for larviciding
Spraying System
Additional Goods & Services
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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
Calculating Procurement Qty
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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
Supply Cycle:
SELECTION
PROCURE
(VALUE FOR MONEY)
(CHOICE)
MANAGEMENT SYSTEM
POLICY & LEGAL FRAMEWORK
USE
(RATIONAL
PRESCRIPTION
PREVENT WASTAGE)
DISTRIBUTE
(EFFECTIVE & EFFICIENT
SYSTEM RIGHT UPTO
POINT OF USE)
Tasks of the Supply Chain
Collect
Consumption
Info.
ESTIMATE NEEDS
REVIEW SELECTION
DETERMINE QTY.
DISTRIBUTION
RECONCILE
NEEDS & FUNDS
INSPECTION
CHOOSE PROC.
METHOD
RECEIPT& QC
CONTRACT
MANAGEMENT
AWARD CONTRACT
SUPPLY
SOURCING
Learning Objectives:
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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
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Note: nearly 80% of the GF money will be spent on
procurement of products