REPUBLIC OF GHANA
Ghana
Assessment of Medicines Procurement and
Supply Management Systems in the Public Health
Sector
A Country Report 2009
Ministry of Health
i
© 2009 Ministry of Health (MoH), Ghana National Drugs Programme (GNDP) Ghana.
All rights reserved. No part of this publication may be reproduced, stored in a retrieval
system or transmitted in any form or by any means, electronics mechanical, photocopying
recording and or otherwise, without prior written permission of the Ministry of Health,
Ghana.
ISBN: 9988-8283-8-1
For all enquiries write to the publishers
The Programme Manager
Ghana National Drugs Programme
Ministry of Health
P.O. Box MB 582
Accra, Ghana, West Africa
Tel: +233 (21) 661670/1
Fax: +233 (21) 664309
E-mail: ghndp@ghmail.com
Website: www.ghndp.org
Material Development Consultant: E.T.A. Abbey, P. O. Box AN 5116, Accra, Ghana,
West Africa. Tel. +233 (21) 30421/313843
Printer:
Ministry of Health
ii
FOREWARD
iii
TABLE OF CONTENTS
ACKNOWLEDGMENTS ................................................................................................. ix EXECUTIVE SUMMARY ................................................................................................ x 1.0 INTRODUCTION ...................................................................................................... 15 1.1 Overview of the health and logistics system........................................................... 15 1.2 Structure of the Health Care System in Ghana ....................................................... 16 1.3 Management of Health Services ............................................................................. 16 1.4 Number and Distribution of MoH Facilities ........................................................... 17 1.5 Logistics System Overview .................................................................................... 17 1.6 Problem Statement .................................................................................................. 18 2.0 GENERAL OBJECTIVE............................................................................................ 19 2.1 SPECIFIC OBJECTIVES ........................................................................................... 19 3.0 METHOD ................................................................................................................... 19 Sources of Data ............................................................................................................. 20 Region Selection ........................................................................................................... 21 Facility Coverage ......................................................................................................... 22 Medicine Selection........................................................................................................ 23 Analytical Approach ..................................................................................................... 23 Limitation to the Approach ........................................................................................... 24 4.0 FINDINGS OF THE STUDY..................................................................................... 24 4.1 ORGANISATION AND MANAGEMENT ........................................................... 24 Governance and organizational model at the surveyed facilities.............................. 24 CMS, RMS and SDP core function matrix ............................................................... 25 Customers of the Medical Stores .............................................................................. 26 4.2 PRODUCT SELECTION ....................................................................................... 26 4.2.1 Availability of essential medicines lists at the survey sites and its adherence
during procurement ................................................................................................... 27 4.2.2 Availability of disease-specific STG at study site ........................................... 28 4.3 QUANTIFICATION AND FORECASTING ........................................................ 29 4.3.1 The use of essential logistics data in quantification......................................... 29 4.4 PROCUREMENT ................................................................................................... 30 4.4.1 Procurement Plans and their development ....................................................... 31 4.4.2 Procurement method employed for contract packages .................................... 32 4.4.3 Procurement frequency .................................................................................... 33 4.4 4 Procurement lead times .................................................................................... 33 iv
4.4.5 Standard Operating Procedures for procurement ............................................. 34 4.4.6 Tender evaluation by Entity Tender committee and contract award ............... 35 4.4.7 Sources of medicines and medical supplies flowing through the distribution
system ....................................................................................................................... 35 4.5 ORDERING ............................................................................................................ 41 4.5.1 Delivery of medicines and health supplies ...................................................... 41 4.5.2 Distances from supply source for medicines and factors that influence
transport .................................................................................................................... 42 4.5.3 Monitoring supplier performance .................................................................... 43 4.5.4 Storage capacity at facility warehouse ............................................................. 43 4.6 INVENTORY MANAGEMENT ........................................................................... 44 4.6.1 Designated storage areas at the warehouses .................................................... 45 4.6.3 Stock management techniques ......................................................................... 46 4.6.4 Assessing product availability for the tracer medicines .................................. 47 4.6.5 Assessing stock out duration for the tracer medicines ..................................... 49 4.6.6 Expired products and donations ....................................................................... 51 4.7 DISTRIBUTION..................................................................................................... 51 4.7.1 Distribution systems used for medicines and medical supplies ....................... 52 4.8 QUALITY ASSURANCE SYSTEM ..................................................................... 53 4.8.1 Registration of product, prequalification of product and pre selection of
suppliers .................................................................................................................... 53 4.8.2 Quality analysis of pharmaceuticals ................................................................ 53 4.8.3 Pharmaceutical inspection at the stores from the regulatory authority ............ 55 4.9 RATIONAL USE.................................................................................................... 55 4.9.1 Information sources available at pharmacy or warehouse ............................... 55 4. 10 FINANCING........................................................................................................ 56 4.10.1 Funding sources for procurements ................................................................. 57 4.10.2 Turnover and margins for pharmaceuticals ................................................... 57 4.10.3 Payment terms for clients using facilities ...................................................... 59 4.10.4 Utilization of revenue for operational expenditures ...................................... 60 4.11 INFORMATION MANAGEMENT..................................................................... 60 4.11.1 Information management infrastructure ........................................................ 60 4.11.2 Data monitored through the supply chain. ..................................................... 61 4.11.3 Availability of DMIS reports at study sites ................................................... 61 4.11.4 Stakeholders who receive logistics reports .................................................... 61 4.11.5 Frequency of submission of reports and timeliness of submissions: ............. 62 4.12 MONITORING AND EVALUATION ................................................................ 62 4.12.1 Supervisory visits carried out by higher levels .............................................. 62 4.13 HUMAN RESOURCES ....................................................................................... 64 4.13.1 Initial and follow up training for staff in procurement and supply chain
management .............................................................................................................. 64 4.13.2 Needs assessment of human resource in the supply chain ............................. 65 v
5.0 RECOMMENDED OPTIONS AND ASSOCIATED ACTIONS ............................. 66 5.1 Product Selection .................................................................................................... 66 5.2Quantificationa and Forecasting .............................................................................. 66 5.3 Procurement ............................................................................................................ 66 5.4 Distribution ............................................................................................................. 67 5.5 Monitoring and Evaluation ..................................................................................... 68 5.6 Human Resources ................................................................................................... 68 APPENDIX: TABLE OF RECOMMENDATIONS AND ACTIONS TO BE TAKEN........ 68 Fig. 1. Map of Ghana
Fig. 2. Structure of the Pharmaceutical and Health Supplies logistics system (Flow of
Supplies)
Fig. 3. Average purchase prices of 20 Tracer Medicines by facility type
Fig. 4. Mean Purchase price of 20 tracer medicines for CMS and MSH – RPM.
Fig. 5. Confidence interval limits for SDP mean purchase prices for 16 medicines
Fig. 6. Percentage availability for 20 tracer medicines by facility.
Fig 7. Average percentage days out of stock for 20 tracer medicine by facility type
Fig 8. Percentage stock out decoration by facility type for 20 tracer medicines.
Table 1.
Table 2.
Table 3.
Table 4.
Table 5.
Table 6.
Table 7.
Table 8.
Table 9.
Table 10.
Table 11.
Table 12.
Table 13.
Table 14:
Table 15:
Table 16:
Table 17:
Table 18:
Table 19:
Relationships between some indicators and core MoH policy priorities.
Distribution of facilities visited by type of facility and region
Regional distributions of survey facilities.
The governing and organizational model by tiers in the supply chain.
Core functions performed by tiers in the supply chain
Customer profile of the CMS and the RMS
Availability of EML by facility type
Adherence to EML during procurement by facility type
Average percentage of STG for disease category by facility type.
Percentage Usage of logistics data used in quantification by facility type.
Percentage availability of procurement plans by facility type
Procurement method employed by facility type.
Procurement frequency by facility level
The average periods taken to complete different procurement method in
days
Availability of SOP for Procurement by facility type
Percentage analysis of tender by technical committee by facility level
Percentage share of supply source by all SDP
Percentage difference between mean prices for CMS, RMS and SDP
Percentage difference between mean prices for CMS and MSH RPM
vi
Table 20:
Table 21:
Table 22:
Table 23:
Table 24:
Table 25:
Table 26:
Table 27:
Table 28:
Table 29:
Table 30:
Table 31:
Table 32:
Table 33:
Table 34:
Table 35:
Table 36:
Table 37:
Table 38:
Table 39:
Table 40:
Table 41:
Table 42:
Table 43:
Table 44:
Table 45:
Confidence Intervals for the SDP purchase prices for medicines
Transport arrangements linking issuing facility and requesting facility
Average distance to and from storage/transit by facility type
Percentage attain in monitoring supplier performance by facility type
Average storage space by facility type
Percentage Availability of design areas at CMS, RMS and SDP
Level of protection at storage sites by facility type
Percentage level of practice of stock management by facility type
Average percentage days out of stock of tracer medicines by facility type.
Percentage level of causes of stock outs by facility type
Delivery methods employed by facility type
Requisition methods used by facility type
Delivery methods employed by facility type
Products submitted to FDB by CMS in 2006
CMS products that failed quality rests carried out at FDB
Percentage availability of Standard reference books and internet facilities
by service provider
Actual expenditure attributable to funding sources by facility type in 2006
Average turnover by facility type between 2004 and 2006
Calculated margins from average turnover by facility type
Stated percentage margins by facility level
Percentage repayment regimes practice by facility type
Percentage repayment regimes practice by facility type
Percentage logistics information monitored by facility type
Recipients of supply chain reports by facility type
Percentage training offered by facility type
Average number of personnel involved in procurement and supply
management functions
vii
ACRONYMS
MoH
GHS
WHO
NHIS
TCM
UNICEF
CMS
RMS
SDP
CHAG
EML
STG
MTC
SOP
ICB
MSH-RPM Plus
DHA
RHA
FEFO
ACT
FDB
IEC
BNF
BP
RDF
IGF
GMP
GoG
USAID
SSDM
P and S
RSIM
PPME
DMHO
POW
DMIS
Ministry of Health
Ghana Health Service
World Health Organisation
National Health Insurance Scheme
Technical Cooperation for Essential Drugs and Traditional Medicine
United Nations Children’s Fund
Central Medical Stores
Regional Medical Stores
Service Delivery Points
Christian Health Association of Ghana
Essential Medicines List
Standard Treatment Guidelines
Medicines and Therapeutics Committee
Standard Operating Procedures
International Competitive Bidding
Management Sciences for Health – Rational Pharmaceutical
Management Plus Programme
District Health Administration
Regional Health Administration
First Expiry First Out
Artemisinin-based Combination Therapy
Food and Drugs Board
Information, Education and Communication
British National Formulary
British Pharmacopoeia
Revolving Drug Fund
Internally Generated Fund
Good Manufacturing Practice
Government of Ghana
United Stated Development Agency
Stores, Supplies and Drug Management
Procurement and Supply
Research, Statistics Information Management
Policy Planning Monitoring and Evaluation
District Mutual Health Organisation
Programme of Work
Drugs Management Information System
viii
ACKNOWLEDGMENTS
The In-depth Assessment for medicines procurement and supply management has been
successfully completed with financial support from the Department for International
Development and technical support from the World Health Organization.
The Ghana National Drugs Programme provided Technical and Logistical support. In
addition the contribution of the following people at various stages of the survey is also
acknowledged.
Mrs. Helen Tata, WHO/HQ EMP, Mr. Abayneh Desta, WHO/AFRO/EDM, Mr Felix
Yellu, Chief Pharmacist, Mr. Samuel Boateng, Director Procurement and Supplies. The
work of health managers in the CMS, RHA, GHS, MOH, RMS, SDPs who took time to
share their ideas, thoughts and data is much appreciated.
The support of Mr. Gregory Hess, Magali Babaley, Helen Tata and Carolyn Whitten of
WHO/HQ at the stakeholders’ meeting provided a fresh impetus in the final preparation
of the report.
The support of Mr J. B. Annan, who designed and developed the software tool: WHO
Data Collection and Analytical Tool Version 1.0 2007 is well acknowledged.
The authors accept responsibilities for any errors, omissions and/or misrepresentations.
Field Data Collection Teams:
Greater Accra Region: Mr. J. Owusu Agyemang, Mr. George Nana Yaw Yeboah
Volta Region: Mr. Divine Azameti, Mr. Hopeson Dzapkasu
Upper West Region: Mr. Ralph K. S Hadzi, Mr. D. K. Otuo Serebour
Ashanti Region: Mr. J. K. Ansisri-Asafoakoa, Mr. P. K. Britwum
Central Region: Mr. Ananga Yamyolia, Mr. Salifu Mohammed
Eastern Region: Mr. K. E. Aggrey, Mr. Peter Kyeremateng
Data Entry, processing and Analysis:
Mr. Peter Ekow Gyimah
Report Writing:
Mr. Peter Ekow Gyimah
Mr. Felix D Yellu
Mrs. Edith Andrews-Annan
Mrs. Martha Gyansa-Lutterodt
Mrs. Augustina Koduah
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EXECUTIVE SUMMARY
One major challenge of national medicines policies is the ability to ensure that their
implementation plans include the uninterrupted supply of essential medicines that are
safe and efficacious, physically and financially accessible and used rationally.
Unfortunately, in some countries especially in sub-Saharan Africa, the medicines supply
systems are often unreliable and therefore do not guarantee regular supply of these
essential medicines.
Since medicines and medical supplies in general, form the backbone of all health systems
worldwide, there is always the need to ensure their quality and regular availability in the
right quantities at affordable prices.
Against this backdrop, WHO together with the European Commission supported the
Ministries of Health of eleven member countries in the African Region, including Ghana
to carry out an in-depth assessment of the medicines supply management system with the
aim of identifying gaps that compromise access and efficiency and to develop feasible
strategies to address these issues.
This assessment was undertaken to determine the current status of medicines supply
management system in the public sector in Ghana.
The specific objectives were:
o To identify and analyse at each level of the medicines supply management
cycle (selection, procurement, distribution, and use), the actors involved in
each category of product and their policy, strategy and tool used for the
procurement and supply chain management of each category of product
o To determine the strengths and weaknesses of existing medicines supply
systems and to propose recommendations and strategies on how to
improve them.
o To develop a coordinated, coherent and efficient national medicines
supply plan or strategy.
A multi-stage sampling procedure was adopted for the selection of the regions, districts
and sub-districts covered in the assessment.
A combination of both purposive and random sampling methods was also employed in
the sample size selection as appropriate. The selection of the six (6) regions in the study
was done by stratifying the country’s ten (10) political regions into categories of agroecological zone whilst bearing in mind also, the socio-economic profiles of those regions.
x
An in-depth assessment of the procurement and supply systems of public health facilities
through site visits to several facilities – including national, regional, district and subdistrict facilities was undertaken. Four tools developed in collaboration with WHO were
used to collect and analyse the information.
The main findings include the following
• The presence of the Procurement Law, Act 663 to guide procurement and supplies
in the country.
• Well defined distribution network.
• Good infrastructure for central level warehousing.
• National Essential Medicines List is outdated and Procurement Guidelines have
not been widely disseminated.
• Weaknesses in forecasting and quantification due to lack of coordination between
the central and periphery.
• Lack of guidelines and rules to facilitate the process of engaging and monitoring
suppliers.
• Information for quantification and forecasting is not forthcoming from the facility
level to the central procurement unit for decision making.
• Lack of guidelines and rules of engagement for suppliers.
• Most facilities have internally developed stock control systems but there is need
for standardization for effective management.
• Several of the lower level facilities do not have the optimal storage and handling
equipment and no standardized structural plan have been developed to ensure
adequacy of storage conditions.
• The scheduled delivery system that was proposed has not been implemented .
• Regular monitoring and supervision of drug supply management activities is not
carried out at all levels.
The recommendations and the associated actions are:
Product Selection
Essential Medicines List should be reviewed regularly.
Reward and sanction system to be developed for implementation of the EML.
Quantificational and Forecasting
Capacity building through training and use of sotfware for forecasting and quantification
Strengthen logistics management system for all medicines.
Procurement
Review procedures and guidelines for procurement and distribution of medicines.
Stengthen procurement planning, management and monitoring at each level of the supply
chain.
xi
Distribution
Standard structures and systems for storage and distribution at the various levels of the
pipeline should be specified.
Plan procurement and distribution activities to keep stocks at maximun and minimum
levels at all times.
Rational Use
DTC’s must be made functional in all facilities.
Monitoring and Evaluation
Review and harmonize existing M & E tools to cover all levels of health care delivery.
Human Resources
A clear definition for the establishment of procurement and supply management units at
all levels of the healthcare system. Procurement and Supply management staff should be
well trained to manage the units.
xii
Fig 1: Map of Ghana
.
xiii
PREFACE
xiv
1.0 INTRODUCTION
The Pharmaceutical procurement system is a major determinant of drug availability and total health
costs. Drug purchases represent the single largest health expenditure after personnel costs. An effective
procurement process ensures the availability of the right drug in the right quantities at reasonable prices,
and at recognized standards of quality. Storage and distribution costs are a significant component of a
health budget and transportation costs can represent several times the value of the drugs distributed to
remote locations. Designing a system for storing and distributing drugs, medical supplies and equipment
is complex and important.
The mandate of the directorates responsible for supply is to serve as a vehicle to drive the process by
which medicines and health supplies are quantified, procured, delivered and stored before being made
available to the client for use. If the public supply chain industry involves all of the above then to be
counted as a major player in the industry it has to do this in the most efficient manner and be judged
against a set of performance and evaluation criteria that define this. This means that while finance is
clearly important in terms of allowing the process to function, it is not the only driving force or criteria
for assessment.
The increasing challenges in the judicious use of scarce resources make it imperative that the necessary
mechanisms are put in place in time to ensure the desired efficiency and quality in health care delivery.
It is essential that procurement and distribution activities be performed by trained staff using sound
procedures, working in adequate offices with good communications and with access to reliable
inventory and consumption information.
1.1 Overview of the health and logistics system
There has been considerable improvement in the health status of Ghanaians since the country achieved
independence in 1957. The infant mortality rate has decreased from 133/1000 in 1957 to 56/1000 in
1998. Life expectancy has also improved from 45 in 1957 to 57 in 2002. However, relative to other
countries especially in East and Southern Africa, health status remains poor. Mortality rates are still high
and disease patterns remain challenging. Nutritional problems still persist and the use of health services
remains low. Health outcomes demonstrate significant inequalities between different geographical areas
of the country and in relation to socio-economic status.
The primary concerns in the health sector, according to the Ministry of Health’s Development
Framework focus on a number of areas and are incorporated into the MoH’s current Five Year
Programme of Work. They include access, quality, efficiency, collaboration and mobilization of
resources. More than half of the population must travel significant distances to visit primary health care
facilities. The problem is much worse in the northern regions of the country where communities are
widely dispersed and transportation infrastructure remains relatively poor.
The rapidly growing private sector without adequate collaboration, regulation and control is a major
challenge to the health sector. This has led to duplication of efforts in many instances and an inordinate
urban/rural distribution of basic services. Indeed, although the private sector sees a significant
proportion of patients, their involvement in the planning and decision making process of the ministry is
15
very limited. In the same context the utilization of primary services and the acceptance of the essential
medicines concept have not been actively promoted.
Total expenditure on health in Ghana is about $12 per capita with 50% of this being out-of-pocket
payment now gradually being replaced with the national health insurance scheme. The health sector
receives between 8% - 10% of total government recurrent budget and about 6% of capital budget. Donor
support to the health sector has been increasing rapidly from $4 million in 1990 to $25 million in 1995
and about $27 million in 1998. Tertiary services still take a large proportion of health resources. About
65% of government recurrent budget allocation is salary-related. Most of the resources are controlled at
higher level and resources from different sources are not linked; hence accountability becomes diffused.
The concepts of performance contracts and service level agreements have been mooted as ways to link
goals to performance and to increase accountability within the health system.
1.2 Structure of the Health Care System in Ghana
Health services in Ghana are delivered in primary, secondary, and tertiary health institutions. The
primary health care system incorporates all institutions (clinics, health centres, and hospitals) and
individuals whether private, public or traditional.
All districts have also been subdivided into four to six sub-districts, and each sub-district covers a
defined geographic area containing 20,000 – 30,000 people. The health centre is responsible for
providing clinical, public health, and maternity services to the catchment population using a
combination of clinic-based, regular outreach, and mass campaigns in close collaboration with
communities, community institutions and leaders, and village-based health workers and health
institutions.
The district hospital serves as the first referral point in the primary health care system. It provides
clinical (outpatient and inpatient) and maternity services and serves as backup for health centres in the
district.
The regional hospital is the second referral level. It acts as the technical focal point for specialized
clinical and diagnostic care in broad specialized areas like medicine, general surgery, pediatrics, and
obstetrics and gynecology.
The teaching hospitals form the apex of specialized care in the country. They are the leading training
and research institutions, and offer undergraduate and postgraduate training for doctors and other health
professionals.
1.3 Management of Health Services
Health management in Ghana is fairly decentralized. Within the GHS, a nested approach involving
District Health Management Teams (DHMTs), Regional Health Management Teams, and headquarters
has been put in place. Complementing these arrangements are institutional/health facility management
teams. Each of these management levels is a budget and management centre with the responsibility for a
defined programme of work supported by a defined operational budget.
16
Decentralization of management has been a feature of Ghana’s health sector since the establishment of
the DHMTs in 1978, and a key aspect of Ghana’s decentralization has been the establishment of budget
management centres that can autonomously set and manage budgets. Although guidelines exist,
procurement decisions have been decentralized.
As part of the health reform process policy formulation and policy implementation are now performed
by distinct bodies. The MoH continues to be responsible for policy design whilst the Ghana Health
Service inaugurated in 2003 is now responsible for managing health service delivery.
Currently, a sector-wide approach to health delivery exists in Ghana. The principles underlying
implementation of the sector-wide approach in Ghana include an agreement between the Government of
Ghana and health partners on an agreed and coordinated programme of work, an integrated approach to
funding, and common implementation and evaluation arrangements.
Under this arrangement, the MoH prepares an annual programme of work, which is funded from
Government of Ghana funds, internally generated funds, and pooled donor funds. The MoH and partners
meet twice a year to review and agree on sector-wide performance targets.
1.4 Number and Distribution of MoH Facilities
Health services in Ghana are provided by both the public and private sectors, including hospitals
supported by faith-based organizations. The public sector, which is supported by the government,
accounts for over 70 percent of the institutions.
The country has 1,887 health facilities, including three teaching hospitals and three psychiatric hospitals.
Nine Regional hospitals, 86 district hospitals, 11 polyclinics, and 927 health centres under the Ghana
Health Service represent about 55 percent of the total health facilities.
1.5 Logistics System Overview
The Ghana public health sector operates a three-tier system for the management of health medicines and
health supplies. The Central Medical Stores (CMS), the Regional Medical Stores (RMS) and Service
Delivery Points (SDP) together with the transportation network constitute the pipeline for the supply
chain. The CMS, a unit of the Procurement and Supply Directorate of the MoH, is responsible for the
receipt, storage, and distribution of all commodities procured by the MoH. Lower levels get supplies
from the CMS through the “pull” or “demand” system.
The MoH currently has in place a number of vertical public sector supply chains based on the type of
medicines and health supplies. While integration is currently taking place to look at a more rational way
to combine the essential medicines, contraceptives and non-drug consumable supply chains, policy
changes necessary to support this have not yet evolved.
Currently, drugs are purchased by the Central Medical Stores (CMS) through international competitive
bidding (ICB) and from local private suppliers and manufacturers. The RMS and teaching hospitals are
expected to procure drugs through the CMS and from the local private sector. All SDP are in turn
expected to procure from the RMS in their respective regions. While it is MoH policy that facilities
17
procurement through the public system, except in cases of unavailability, studies have shown significant
private sector purchases at all levels.
Although integration is taking place, there are still a number of district medical stores which procure
from both the RMS and the local private sector. The teaching and regional hospitals and the over 900
SDP are supplied by an RMS, DMS and in many instances procure drugs through the local private
sector. The transportation system for distribution of essential drugs is currently undergoing policy
review within the MoH.
Figure 2: Structure of the pharmaceutical and health supplies logistics system (Flow of supplies)
Ghana Reporting and Distribution System
Manufacturer
National
Programmes
Donor
Port
SSDM
Private
Sector
Supplier
CMS
PU
Pull
Monthly
RHA
RMS
DHMT
tTTTS
Pipeline
LMIS
Monthly
Monthly
Pull
THs and
Reg Hos
Health Facilities
CBD
Feedback
CLIENTS
1.6 Problem Statement
The major challenge of National Medicines Policy is assuring an interrupted supply of essential
medicines that are efficacious and of good quality, physically and financially accessible and used
rationally. To attain this objective, Ghana set up national essential medicines supply systems, which
consists of a Central Medical Store and distribution facilities from the central to regional, district and
facility levels.
The public supply chain in Ghana has over the past years gone through transformations with several
models suggested, tested and/or tried in order to define best practices and to improve upon the
functional relationships with other divisions within the health sector. On the whole there has been
uniformity of practice across the country with a few localized systems set up in some settings due to
peculiar circumstances. These have been the exception rather than the rule. In the current practice of
financing health care delivery through a National Health Insurance scheme (NHIS) the public supply
system is evolving (or needs to evolve) to be able to adapt to the new paradigm. The over arching
18
principle and ideal has been that the public supply chain should be “efficient, customer focused, and
financially sustainable.
The promulgation of the Public Procurement Act, Act 663 (2003) has impacted the public supply chain
in a variety of ways. The liberating force it has unleashed brings with it challenges which when
harnessed would improve on procurement and distribution practices. The level playing field, the fairness
or non discriminatory practices, the accountability and efficiency gains the process espouses should
yield in the end a “value for money” spin off of which an incentive could be the provision of an enabling
milieu through which the supply chain can splutter and grow.Unfortunately, there are inadequacies in
the supply system leading to low availability and high cost of essential medicines.
Against this background and with the aim of improving access to essential medicines WHO, with the
financial support of the European Commission, supported the Ministry of Health to assess the medicines
supply system and subsequently address the gaps identified for the improvement of the system.
2.0 GENERAL OBJECTIVE
The general objective is to carry out an in-depth assessment of all the country's procurement and supply
management systems and also the financial flows for essential medicines and medical supplies, and to
develop a strategy for strengthening the systems.
2.1 SPECIFIC OBJECTIVES
• To identify and analyse at each level of the medicines supply management cycle (selection,
procurement, distribution, and use), the actors involved in each category of product and their
policy, strategy and tool used for the procurement and supply chain management of each
category of product
• To determine the strengths and weaknesses of existing medicines supply systems and to propose
recommendations and strategies on how to improve them.
• To develop a coordinated, coherent and efficient national medicines supply plan or strategy
3.0 METHOD
The study identified the relationships that exist in the selection, quantification, procurement, ordering,
inventory management, storage and distribution, quality assurance system, use of medicines, financing,
information management, monitoring and evaluation and human resource needs within the various tiers
of the public supply system and specifically:
1. Compared the current management arrangements in handling pharmaceuticals within the tiers of
the system
2. The policy environment in which the supply chain operated.
3. Examined the tools and procedures used in such varied tasks as quantification, contract
management, inventory and information management
4. Ascertained the revenue turnover over a period of time
19
5. Assessed the current purchase prices and availability of a basket/tracer pharmaceuticals
6. Compared the prices of the basket of pharmaceuticals with international prices, particularly at
the central level
7. How margins at the RMS compare to the official margins set by MOH for a basket of tracer
medicines
8. Assessed the administrative and physical handling of pharmaceuticals and health supplies
9. Diagnosed the management information systems that drive the supply chain
10. Assessed the human resource gap that needs to be filled
11. The impact of monitoring and evaluation on the performance of the supply chain
12. The resources that exist and the human capital needed to manage the resources
Sources of Data
• International Drug Price Indicator Guide from the MSH/WHO 2005 Edition
• Purchase records from the CMS, 5 RMS and 18 SDP in the 6 regions of Ghana
• Minutes of meetings of procurement committee and standard reference literature including BP
and USP
• Interviews of key respondents in the public distribution system
The questionnaires had both qualitative and quantitative sections. The questions in each sub-section of
the questionnaires were linked to the thematic areas in the supply chain discussed in section 1 above.
This was to ensure that each question had a relevance linked to the current MOH policies and that there
was a clear framework in which to analyse the answer matrix. The qualitative questions were also linked
to the quantitative data collected from the different sources.
The quantitative part covered the following areas:
• Contract awards in 2006 for a select group of 20 tracer pharmaceuticals
• The purchase prices to the CMS, RMS and SDP in 2006 for the 20 tracer pharmaceuticals
• The percentage availability and stock out days for the 20 tracer pharmaceuticals
• Turnover posted over a three year period from 2004 to 2006
• Proportions of incomes used for recurrent expenditures.
20
Table 1: Relationships between some indicators and core MoH policy priorities
Qualitative Question
Quantitative indicator
Efficiency
Procurement
Comparative prices and
indicator price index
Product Information
•
Accounts
Frequency
Availability of stock and
service level
Availability and adequacy
of transport
Stocks that were certified
to have passed analytical
test
Staffing norm
Feedback reports
•
Selection,
Quantification and use
Financial Management
Ordering
Inventory Management
Distribution
Quality Assurance
Human Resource
Monitoring and
evaluation
Equity
Sustainability
Effectiveness/
Safety
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Region Selection
Two main criteria were considered in selecting the study regions.
1. Socio-economic profile and agro-ecological zone
2. The region’s implementation of new policies in the supply chain and its service structure in
terms of health outputs
Greater Accra region was included because of its cosmopolitan setting.
Eastern region was included because it has made a lot of strides in implementing the designed
scheduled delivery programme from the RMS to the SDP
Ashanti region was included because it was deemed necessary to capture the same effect we envisaged
we would in the Greater Accra Region and the fact that it has partially started the scheduled delivery
programme
Volta region was included because of its broad geographical characteristics having the advantage of
southern, middle and the fringe northern ecological zones
Central region was included because of its implementation of the scheduled delivery programme from
the RMS to the SDP
Upper West region was included because of the fact that it was the only region in the northern
ecological zone and because it was the first region to start the scheduled delivery from the RMS to the
SDP but somehow has not been able to sustain the programme
21
To complement the Regional Health Administration (RHA), data collected mainly through the RMS,
visits were conducted to SDP in the above regions and one private hospital was visited in the Greater
Accra.
Facility Coverage
A total of 24 facilities were surveyed, 20 from the public sector, 3 from CHAG and 1 from the private
sector. Five Regional Medical Stores were visited in the 6 regions.
Table 2: Distribution of facilities visited by type of facility and region.
Region
Ashanti
Eastern
Greater Accra
Volta
Central
Upper West
TOTAL
Total
4
4
6
3
5
2
24
CMS
RMS
1
1
1
1
1
1
1
5
Public
2
2
3
3
3
1
14
SDP
Private
CHAG
1
1
1
1
1
3
Within each region a small non-representative random sample of facilities was used for the survey. A
full list of the facilities visited is provided Table 2.
The coverage of the CMS, RMS and the SDP meant that these in levels were considered as important
components for which information gathered could help chart the course of the supply chain in the public
sector.
Table 3: Regional distributions of survey facilities
Facility and Level of Care
CENTRAL MEDICAL STORES
Central Medical Stores, Tema
REGIONAL MEDICAL STORES
RMS Ashanti
RMS Accra
RMS Eastern
RMS Central
RMS Upper West
REGIONAL HOSPITALS
Ridge Hospital
Koforidua Regional Hospital
Cape Coast Regional Hospital
Ho Regional Hospital
DISTRICT HOSPITALS SDP
St Michael Hospital
Atua Government Hospital
St Martin de Porres Hospital
Kumasi South Hospital
Dangme East District Hospital
Ho Municipal Hospital
St Francis Xavier Hospital
Dunkwa District Hospital
Tumu District Hospital
Region
Greater Accra
Ashanti
Greater Acc
Eastern
Central
Upper West
Greater Accra
Eastern
Central
Volta
Ashanti
Eastern
Eastern
Ashanti
Greater Accra
Volta
Central
Central
Upper West
22
SUB DISTRICT SDP
Agona Health Centre
Akropong Health Centre
Kpetoe Health Centre
Elmina Urban Health Centre
PRIVATE
Iran Clinic
Ashanti
Eastern
Volta
Central
Greater Accra
Medicine Selection
The underlying reasons for the selection of twenty tracer medicines, irrespective of the dosage form,
were to underscore the key and critical medicines that have the greatest public health impact on the
population. The range is as follows:
• Antibacterials: Amoxycillin Cap 250mg; Amoxycillin Susp 125mg/5ml (100ml); Cotrimoxazole
Susp 200+40mg/5ml (100ml); Metronidazole Tab 200mg
• Antipyretics/Analgesics: Paracetamol Tab 500mg
• Antifungals: Clotrimazole cream 1% (20g); Fluconazole Tab 200mg
• Anthelminthics: Albendazole Tab 400mg; Albendazole Suspension 20mg/5ml (20ml)
• Antihypertensives: Nifedipine Tablet 20mg Retard; Atenolol tab 50mg
• Antidiabetics: Glibenclamide Tablet 5mg; Metformin tab 500mg;
• Antiulcer: Omeprazole Tablet 20mg; Ranitidine Tab 150mg
• Antimalarials: Artesunate + Amodiaquine Tablet 50+153mg
• Antiretrovirals: Neverapine Tab 200mg; Lamivudine Tab 150mg; Stavudine Tab 20mg;
Zidovudine Tab 300mg
Analytical Approach
The analytical model adopted involved the application of a combination of operational research
techniques with a logistics based process mapping analysis. Detailed price comparisons were conducted
taking account of differences in the levels of the facilities in the supply chain. At each stage of the
supply chain system the price mark-up was determined through actual cost comparisons.
After the initial testing of the questionnaires, team members split up and conducted their separate
interviews during the months of June and July 2007. Regular contact between the teams ensured that the
experience and any data issues encountered by one team were shared with the others.
A three day workshop organized by the WHO country office from 21 August 2007 to 23 August 2007 in
Accra brought together other African countries that had also collected data for a similar study. The
hands-on experience on the WHO Data Collection and Analytical Tool Version 1.0 2007 which is a
software specifically developed to facilitate data capture, synthesis and analysis and information bank
for the study was thus achieved through this training.
Confidence Interval Analysis software version 2.0.0 was used complimentarily to derive the confidence
intervals for the mean prices of the tracer medicines.
23
Limitation to the Approach
The survey was limited by budget and time constraints. Another limitation to the study was the inability
to look at the beneficiaries’ perceptions about the supply chain. No patient and/or client survey to
analyse perceptions and preferences were conducted. The absence of a user component of the supply
chain ruled out the possibility of determining if decisions on the working of the supply chain were
circumscribed within the context of the public sector demands and the policy environment in which the
health service operates.
Product availability at all levels was computed over a time period rather than specific points in
time. Exact comparisons at specific times would have been preferable.
Purchase prices at all levels were based on price lists rather than an analysis of actual recorded
prices on invoices. Time limitations meant it was also not possible to assess the daily purchase prices or
software kept by SDPs and private facilities. Ideally, analysis of samples of individual invoices would
have allowed the reconciliation of the prices actually charged in comparison with the purchase price
lists.
There was no comparison of the proportions of public versus private purchases as well as prices
from various vendors. The study did not assess the level of purchases from the private sector to give
information about the use and non use of public facility warehouses and therefore no comparison could
be made of public sector prices with private sector ones. However, CMS purchase prices were
compared with international reference prices where information was available for the pharmaceuticals.
4.0 FINDINGS OF THE STUDY
The findings provided here help identify good practices as well as structural problems in the
implementation of a sound pharmaceutical sector programme.
4.1 ORGANISATION AND MANAGEMENT
CMS, RMS and SDP are mainly public organizations that have imbibed private sector practices. This
dual public-private interface has become blurred - at one level they are public-not-for-profit
organizations but do apply margins on some selected pharmaceuticals and health supplies that they sell
to their clientele. They do declare surplus rather than profits. The margins applied are expected to
recover only the cost of the product for replenishment and take care of other costs such as inflation,
wastage and some related costs. This income-generating revolving fund ensures an uninterrupted supply
of these products. At another level these organizations do also perform public services at no cost in the
sense that they do stock public health products that are allocated or issued to lower facilities at zero
margin; they are products usually meant for the public good.
Governance and organizational model at the surveyed facilities
The surveyed facilities have different governing bodies: the CMS has a mix of responsibilities. First it
has responsibilities to an interim management committee and then to the Procurement and Supply
Directorate. The RMS has responsibilities to the Regional Health Administration, whilst the Regional
24
Hospitals pharmacies have responsibilities to the Hospital Administration and the Regional Health
Directorate. At the district level the District SDP and Sub District SDP report to the District Health
Administration.
All the facilities surveyed have decentralized organizational structures except for the CMS which is not
a BMC but gets its recurrent expenditure budget through the Procurement and Supply Directorate.
Table 4: The governing and organizational model by tiers in the supply chain
Levels
Central Medical Stores
Number of
Facilities
1
Regional Medical Stores
5
Regional Hospitals
District Hospitals SDPs
4
9
Sub District SDPs
4
Private
1
Governing Body
Organizational model
Interim Management
Committee
Regional Health
Administration
Hospital Administration
District Hospital
Administration
District Health
Administration
-
Centralized and Directorate
Decentralized and Directorate
Decentralized and Directorate
Decentralized and Directorate
Decentralized and Directorate
-
CMS, RMS and SDP core function matrix
The matrix below in Table 4 provides an overview of the core functions of the CMS, RMS and the SDP.
All the surveyed facilities perform the following key activities: product selection, quantification of
needs, making orders, storage of products, warehousing, stock management as well as distribution
(issuing to other stores).
Table 5: Core functions performed by tiers in the supply chain
Function
Product Selection
Quantification of needs
Procurement (arranging calls for tenders)
Making Orders
Storage
Warehousing
Stock Management
Distribution (Issues to other stores)
Distribution (Dispense to in/out-patients)
Delivery
CMS
√
√
√
√
√
RMS
√
√
√
√
√
√
√
√
√
√
√
√
SDP
√
√
√
√
√
√
√
√
√
However, at the CMS level procurement (arranging calls for tenders) is not a core function. There are
three units under the Procurement and Supply Directorate of the MoH: the CMS, the Procurement Unit
and the Drug Policy Unit. The Procurement Unit coordinates the MoH procurement process and so
handles the contract packages and procurement portfolios for the Ministry of Health. CMS prepares
procurement plans which are forwarded to the Procurement Unit through the Director of Procurement
25
and Supply. The Procurement Unit then performs all the associated functions concerned with the
procurement of needs.
Distribution, associated with dispensing occurs at the SDP level. Delivery does not also occur at the
SDP level but does occur at the higher levels of the supply chain.
Some other additional functions that the surveyed facilities mentioned include the following:
• Logistics management support to peripheral facilities
• Providing working experience to pharmacy interns
• Providing adherence counseling to clients
• Providing health education
Customers of the Medical Stores
The surveyed facilities customers can be categorized into 2 groups. They are either internal or external
customers. Table 4.4 gives the customer profile of the CMS and the RMS. CMS customers are the RMS
and facilities at the tertiary level and other facilities within and outside the public sector health system.
The RMSs have customers which include the SDP and others such as the faith based facilities. Note,
however, that the CMS and RMS do not have private pharmacies and patients as part of their clientele.
The interactions within the tiers lead to the exchange of medicines and health supplies (goods) and/or
services, and these transactions have to be properly documented, audited and/or reviewed through a
systematic supervisory and monitoring schedule.
Table 6: Customer profile of the CMS and the RMS
Customers
Health facilities at the central level
Regional health facilities
District warehouses
District health facilities (District Hospitals)
Health facilities (health Centre, health post)
Private pharmacy
Faith based facilities
Non-governmental facilities
Patients
CMS
RMS
√
√
√
√
√
√
√
√
√
√
√
√
4.2 PRODUCT SELECTION
The selection of products to be used in the public sector health facilities in Ghana is based on the
essential medicines list (EML). Each facility is responsible for selecting their medicines based on the
prevailing morbidity within the locality where the facility operates. The Essential Medicines List and the
complementary Standard Treatment Guidelines (STG) are documents that underpin the choice of
medicines to use and how to manage certain diseases of common occurrence in the population.
The Ministry of Health has set out an official policy for using the Essential Medicines List to inform
procurement of pharmaceuticals at all levels. At the service delivery levels, Medicines and Therapeutics
Committees (MTC) decide on the medicines to be used at the various units within the SDP.
26
At the national level an expert committee reviews the best evidence to either include or exclude
pharmaceuticals on the essential medicines list. This evidence-based procedure which is adopted in
reviewing the medicines list is the bulwark for defining the medicines needed to treat diseases of
common occurrence in the population. As a policy thrust it is expected that the choice of medicines be
generic rather than branded.
4.2.1 Availability of essential medicines lists at the survey sites and its adherence during
procurement
A key element of an efficient supply chain is the existence of a national essential medicines list, which
contains medicines intended to be used to meet the health needs of the population. If health care is to be
provided within budget constraints then a range of pharmaceuticals have to defined and available in the
treatment of the common disease that the majority of the population present at health facilities. The
analysis indicated that the EML is widely circulated as many survey facilities had copies of it.
Table 7: Availability of EML by facility type
Levels
Number of Facilities
Central Medical Stores
Regional Medical Stores
Regional Hospitals
District Hospitals SDPs
Sub District SDPs
Private
Percentage Availability of EML at Facilities
1
5
4
9
4
1
100
80
100
100
75
100
The assessment revealed that CMS had a 100 percent, RMS demonstrated a return of 80 percent and the
private level had a 100 percent. At the SDP regardless of the level of care the overall availability was 94
percent. The dip was found at the sub district SDP.
Table 8: Adherence to EML during procurement by facility type
Levels
Number of
Facilities
Percentage adherence of
EML during procurement
Central Medical Stores
Regional Medical Stores
Regional Hospitals
District Hospital SDPs
Sub District Level SDPs
1
5
4
9
4
100
40
0
44
75
Private
1
0
The qualitative evidence revealed that 15.3 percent of SDPs attributed the non-adherence to the EML to
the fact that some of the medicines they needed were not available at either the CMS or RMS when they
visited these facilities to procure pharmaceuticals. Indeed, 30.7 percent indicated that limiting
procurement to the EML was not defined in the pharmacy statute. A high 46 percent of the surveyed
facilities at the SDP level thought the EML does not address local needs or demands.
27
Discussion
Overall, using the EML as a basis for defining needs when facilities need to procure is not encouraging
at the RMS and the SDP levels and may suggest that procurements of non approved medicines could be
condoned. The Essential Medicine List as a reference book was expected to be available at all the
surveyed facilities. Availability is one thing. Using it as a tool in the selection of medicines is another
thing, which has far reaching consequences. The qualitative survey examined the factors that influenced
the selection of medicines to be used at each tier of the supply chain. Within the district and between
SDPs there are considerable differences. Adherence to EML was much better at the health centre level
than at the district hospital level. The RMS and the Regional Hospitals procured medicines outside the
EML. The study could not ascertain the proportion of medicines procured outside the list and this,
therefore, would require further analysis. When specific data are obtained potential interventions could
then be developed.
The fact that some SDPs thought there were no statutory provisions to compel them to procure
medicines in the EML should trigger concern about refocusing thoughts on the essence and purpose of
the EML concept. An indirect reference has been made about the need to review the EML judging from
the high proportion of facilities that indicated that the EML does not address local needs. All surveyed
facilities that had the EML indicated that the last year of review of the EML was in 2004. A call for a
review was, therefore, implicitly indicated.
4.2.2 Availability of disease-specific STG at study site
A complementary reference book to the EML, the STG contribute to rational medicines use at all levels
of health care delivery within the public and private sectors. At best it serves at the guide that provides
information on the main diseases in the population and the standardized approach needed for their
treatment.
The assessment revealed that 75 percent and 62.5 percent of the Regional Hospitals and District
hospitals respectively have STG for the specified disease - HIV/AIDS, malaria, opportunistic infections
and TB. At the health centre level there were no STG for handling HIV/AIDS related conditions but
there was STG for treatment of malaria and TB. In the private SDP there was an STG for all the disease
conditions expect for HIV/AIDS.
Table 9: Average Percentage of STG for disease category by facility type
STG
Anti-retroviral therapy in adult
Anti-retroviral therapy in children
Treatment of malaria
Treatment of opportunistic infection
Treatment of tuberculosis
Regional
Hospital
75
75
75
75
75
District
Hospital
56
56
56
67
78
Health Centre
0
0
75
0
50
Private
SDP
0
0
100
100
100
Discussion
In all, majority of the surveyed facilities did indicate the existence of different disease-specific STG
with three quarters and a little over half of Regional and District hospitals respectively indicating that
they have STG for the specified diseases. Is this an indication that some facilities have developed
additional guidelines and protocols for treating specific diseases in addition to the national STG? There
28
were not STG for HIV/AIDs at the health centre level since treatment for such conditions are limited to
the higher levels of health care delivery.
Some efforts at helping some district hospitals develop STG for the specified diseases would be a
positive development to address the other half of the facilities that do not have them. In any case a new
STG could address all these concerns and should be done when a new edition of the EML comes out.
4.3 QUANTIFICATION AND FORECASTING
In most facility settings of the supply chain in Ghana the traditional consumption based method as
opposed to the morbidity based method is used in the estimation of quantities of pharmaceuticals or
health supplies needed for a procurement cycle. Most public health programmes in Ghana are
established programmes and therefore the need to use the morbidity based method in estimating
quantities of pharmaceuticals and health supplies is quite limited. These two methods can, however, be
used complementarily when estimations are computed in some programmes such as the ART
programme.
The three data sets generally recognized and considered essential in quantification based on the
consumption method are stock on hand, product consumption and losses and/or adjustments quantities.
Personnel involved in quantification normally are officers managing the categories of products vertically
in the supply chain.
4.3.1 The use of essential logistics data in quantification
It is important that supply chain managers concerned with quantification and forecasting use essential
logistics data in deriving quantification and forecasting needs. These key data include consumption data,
stock on hand and losses and adjustments.
Analysis revealed that two of the three essential logistics data – dispensed to user data and stock on
hand-were largely used where applicable. It was the district SDP that demonstrated 89 percent usage of
dispensed to user level, stock on hand and stock out duration. There was, however, no utilization of
losses and adjustment quantities in quantifying facility needs from the RMS through to the sub-district
SDP.
Table 10: Percentage usage of logistics data used in quantification by facility type
Levels
Central Medical Stores
Regional Medical Stores
Regional Hospitals
District Hospital
Sub District SDP
Private
Dispensed to user
data
n/a
n/a
100
89
100
100
Stock on
Hand
100
40
100
89
100
100
Losses /
Adjustment
100
0
0
0
0
0
Stock out
duration
100
60
100
89
75
100
29
Discussion
The study has revealed that pharmacists at all levels are involved in quantification of essential
medicines. Supply officers limit themselves to health supplies quantification and programme managers
to all programme needs - HIV/AIDS, TB, antimalarials, medicines for opportunistic infections, pediatric
formulations for HIV/AIDS and malaria. Public health personnel are responsible for quantification of
contraceptives including condoms whilst laboratory personnel are responsible for laboratory products.
In one way or the other, it is remarkable that at least one of the key essential logistics data is used in
quantification exercises at all levels. However, at the Central and Regional Medical Stores it is not
possible to use dispensed to user data. In reality the Central and Regional Medical Stores use a proxy
data, which is the issued data. The assumption made is that whatever is issued out to the lower levels is
considered used or “consumed” by clients. It does have certain merits and demerits. On the positive side
the data is readily available and sometimes correlates to the dispensed to user quantities. The reality,
however, is that it does not reflect actual usage and could be exaggerated.
The use of losses and adjustment data was mentioned by CMS. The procurement decisions derived from
this is that it enables the supply chain to generate a robust quantification regime that allows for all the
transfers, expired products and waste to be factored into the quantification calculations. These can often
be overlooked in logistics management unless an allowance factor is included during the quantification
exercise.
Overestimation or underestimation of needs may occur at the early stages of the implementation of any
new programme because consumption data are unavailable; SDP could be either overstocked or understocked. Monitoring teams within each district may need to report stock status of medicines to the
Medical Superintendent and the Director of Pharmaceutical Services for the respective region so that
steps can be taken to move stocks within districts to minimize expiration and ensure accessibility of
pharmaceuticals within each locality.
4.4 PROCUREMENT
This sub-section is divided into two parts. The first part deals with the administrative elements in the
implementation of procurement plans. The second part examines price data. The price data allowed
consideration of:
• Comparisons between CMS purchase prices and international reference prices
• Differences in prices for medicines purchased at CMS and the RMS to determine how these vary
across the country and whether there is a correlation between relative prices and procurement
decisions at different levels
• Variations in average prices for selected medicines at the CMS, RMS and the SDP
The policy on the procurement of essential medicines and health supplies in Ghana is based on the
principle of decentralization and autonomy of each facility within the procurement and distribution
system. Each facility is responsible for making procurement decisions as set out in the MoH
Procurement Procedure Manual. Procurement procedures are quite detailed and the manual gives steps
on development of contract packages, the formation of committees, setting timelines for bid adverts,
opening and evaluation, specification and roles and responsibilities of personnel. The decentralized
30
aspect of the system has both merits and demerits that affect rational procurement decisions which
impacts on access and availability of medicines.
In general MOH procurement policy states that RMS must source from the CMS first for its
requirements and if CMS is unable to meet these needs then with the CMS confirmation that they are
indeed out of stock of the requested item, then the RMS can turn to the open market. To do this the
RHA and SDP are expected to constitute a procurement committee to make purchases from the private
sector.
The committee is usually made up of four or five senior members of the RHA and can follow one of two
approaches. For consignments worth under $50,000 the RMS can shop locally for supplies comparing
prices and quality before deciding on the best offer after the evaluation of bids. For orders larger than
$50,000 a formal tender process must be followed with at least three bids being considered by the
committee. For lower level facilities a similar approach is meant to be followed i.e. by going to the RMS
first and then only when the RMS is unable to supply can the health facility turn to the private sector.
4.4.1 Procurement Plans and their development
A vital component of the procurement process is the preparation of procurement plan. Procurement
plans give a clearer picture of how procurement could be organized. In general, the plan should include
the contract packages, the estimated costs, and the envisaged procurement method to be used for each
contract package. Some important additional requirements are the timelines such as the tendering, bid
opening and evaluation as well as the expected delivery of the goods.
The facility is normally expected to set up a committee to develop the procurement plans and task the
procurement office to coordinate the various activities needed to make it functional.
The assessment revealed that at each level of the supply chain procurement plans are prepared and that
the weakest links are at the district and the sub district SDP which demonstrated 44 percent and no
procurement plans respectively whilst for the Central, Private, Regional Hospitals procurement plans
were prepared.
Table 11: Percentage availability of Procurement Plans by facility Type
Facility Type
Central Medical Stores
Regional Medical Stores
Regional Hospitals
District Level SDPs
Sub
District
Level
Private
Number of Facilities
SDPs
1
5
4
9
4
1
Percentage availability of
Procurement Plans
100
60
100
44
0
100
At the SDP where there was evidence of committee participation the members included the Medical
Superintendents, Pharmacists, Health Service Administrators, the Hospital Matrons, Laboratory
Technologists and Accountants.
31
Discussion
Generally, majority of the surveyed facilities did indicate the existence of procurement plans with two
fifths of RMS and almost half of district SDP respectively indicating that they at least prepare
procurement plans. This is an indication that some facilities may have procurements executed in an
uncoordinated manner even though this is only an assumption. Procurement plans are the basis for
initiating and implementing the procurement process and also creating the necessary coordinating
mechanisms of ensuring the provision of goods and other services the facilities need in a more organized
manner.
The important process of getting stakeholders to develop their procurement plans in the surveyed
facilities was not well established. In a few instances it was the SDP that indicated that there was a
committee that facilitated this process.
Some efforts at helping some RMS and district SDPs facilities develop procurement plans would greatly
improve the processes needed to implement procurement in a more structured manner.
4.4.2 Procurement method employed for contract packages
A key component of the procurement plan is the Procurement method. The type of procurement method
that is employed for a particular contract package is dependent on many factors including but not
exclusively limited to the nature of the goods, services or works desired and the financial threshold or
ceiling that would be involved in procuring the package. Whatever method is employed finally impacts
on the prices of the goods or services consumers or clients pay for.
The Central Medical Stores uses International Competitive Bidding, selective bidding and national
competitive bidding in acquiring its pharmaceuticals and medical supplies. The RMS and SDP use
national competitive bidding in acquiring goods when they are not available at the CMS.
Table 12: Procurement method employed by facility type
Procurement Method
International Competitive bidding
Selective bidding
Negotiated tender
National Competitive bidding
Direct procurement
CMS
√
√
√
RMSs
√
SDPs
√
Discussion
The surveyed facilities all employ approved methods in the procurement of goods. As indicated earlier
the Procurement Unit of the MoH coordinates the procurement portfolios of health programmes and that
includes CMS requirements and other allied units and/or programmes.
The CMS employs a number of methods in acquiring products. The RMS and SDP rely on the National
competitive bidding as one of the options for procurement, all of which in the end are directly related to
the financial thresholds stipulated for each procurement method.
It would be worthwhile to determine the most cost effective method used at the different levels of the
supply chain in further surveys.
32
4.4.3 Procurement frequency
The number of procurements carried out in the course of a defined procurement period reflects the
quality of the procurement plans. It is a measure of how organized the facility handles procurements.
There is an indirect relationship with resource mobilization; if resources needed to carry out
procurement are easily available the procurement frequency can be stretched but if they are unavailable
facilities can make ad-hoc purchases.
The assessment has revealed that CMS procures yearly or at least twice in a year. The RMS on average
procures four times in a year whilst at the SDP the average procurement frequency was monthly. Some
SDPs also indicated that they procure “as and when the need arises”.
Table 13: Procurement frequency by facility level
Frequency of Procurement
Monthly
Four times a year (Quarterly)
Two times a year
Yearly
As and when needed
CMS
RMSs
√
SDPs
√
√
√
√
√
Discussion
It is difficult to put a ceiling on how many times a facility needs to procure within a given time frame.
The assumption is that it reflects on how resources in the health sector need to be utilized. There is a
cost in organizing procurements and efficiency gains will most likely appear in the upper levels where it
is generally low.
The “as and when the need arises” approach may also reflect on an inventory system that forces
inventory control officers in the lower facilities to order when stocks reach a minimum level before the
end of the review period. The frequent orders that lower level SDPs place might be a reflection of poor
inventory management practices and inadequate financial resources for optimum replenishment.
4.4 4 Procurement lead times
Timelines are needed for the smooth implementation of procurement plans. One critical timeline is the
procurement lead time. Procurement lead time is a function of the type of procurement method used. A
long procurement lead time compromises the availability of products, leads to low staff morale and
dents confidence in the supply chain and ultimately the health care delivery systems.
Analysis showed that on average it take about a year for CMS to receive orders through International
Competitive Bidding, whilst in selective bidding it takes about 180 days (6 months). If a national
competitive bidding is conducted it takes on average 90 days (3 months) at both the Central Medical
Stores and the Regional Medical Stores
Table 14: The average periods taken to complete different procurement method in days
Procurement Method
International Competitive bidding
Selective bidding
Negotiated tender
National Competitive bidding
Direct procurement
CMS
365
180
90
-
RMSs
90
14
SDPs
14
1
33
Discussion
It has been suggested and is generally agreed, that at the CMS level the average lead time for ICB
should be about 7 months. If it takes CMS a full year on average to receive products then the timelines
needed to complete the procurement cycle need to be redefined for ICB. Whether this can be considered
a constraint for which CMS can deal directly and address internally or it is an external constraint for
which it has no control over, needs to be further analysed.
The type of contract awarded to suppliers may determine the procurement lead times as well. The
survey has determined that at the SDP level it took on average 14 days to complete a selective bidding
procurement process.
Another consideration worth pursuing is to institute a rigorous contract regime and match the terms in
the contract with supplier performance so that delivery times are adhered to. For now we do have partial
explanations for the causes of the long lead times experienced at the CMS. Further studies are needed to
elucidate on this matter.
4.4.5 Standard Operating Procedures for procurement
Standard Operating Procedures (SOP) should list in detail each and every function associated with the
operations of the procurement process. SOPs are developed in close co-operation with the operational
staff to ensure their comprehension and comprehensiveness. The SOP must cover all aspects of the
system to be applied during the procurement process, such as call of tenders specific for the
procurement of medicines and medical supplies.
The CMS demonstrated 100 percent existence of an SOP or document for call of tenders specific for the
procurement of medicines and medical supplies. The RMS, Regional Hospitals and the District SDP had
60 percent, 33 percent and 25 percent respectively. There was no SOP at the sub district facilities.
Table 15: Availability of SOP for procurement by facility type
Levels
Central Medical Stores
Regional Medical Stores
Regional Hospitals
District SDPs
Sub District SDPs
Private
Number of Facilities
1
5
4
9
4
1
Percentage availability of
Procurement Manual or SOP
100
60
25
33
0
0
Discussion
The decreasing availability of procurement manual or SOP at the RMS level through the sub district
SDP may suggest a need to streamline the procurement system in the entire supply chain.
Standard Operating Procedures that list in detail each and every function associated with the
procurement process are clearly needed. The SOP must cover all aspects of the procurement system to
be applied at the health facilities and at the RMS such as the call-for-tenders specific for the
procurement of medicines and medical supplies. One can only speculate that at majority of the surveyed
34
facilities probably the process is not well documented and that it would be necessary for steps to be taken to
address this.
4.4.6 Tender evaluation by Entity Tender committee and contract award
In order to ensure a nondiscriminatory, fair and transparent process in the award of contracts a technical
committee is expected to be formed during the evaluation of bids. This exercise should be informed by
the tenets put in the bidding documents. There is also the need to ensure that a pact indicating that
members of the evaluation team do not have any interest in any of the bidders’ firm is affirmed and
available to serve as an evidence of unbiased process and the recommendations of the committee should
lead to the award of contracts.
Analysis has revealed that at the CMS tenders are technically analyzed by a committee set up at the
procurement unit of the MOH. However, 80 percent and 75 percent respectively of RMS and the
Regional Hospitals constitute a technical committee and 44 percent of the district hospitals do also
constitute a technical committee. There were no such arrangements as constituting a technical
committee at the sub district level.
Table 16: Percentage analysis of tender by technical committee by facility level
Levels
Central Medical Stores
Regional Medical Stores
Regional Hospitals
District Level SDPs
Sub District Level SDPs
Private
Number of Facilities
1
5
4
9
4
1
Analysis of tender by
technical committee
100
80
75
44
0
-
Discussion
The non existence of a technical committee at the sub district level is to be expected as they do not
normally carry out procurements outside of the RMS. A quarter of the Regional Hospitals and over half
of the district hospitals did not put in place technical committees to evaluate bids.
The Regional and district hospitals all have to ensure the formation of technical committees to evaluate
bids. If this is done the credibility of contracts awarded would be assured and seen as following due
process to the letter as there would be transparency and accountability.
4.4.7 Sources of medicines and medical supplies flowing through the distribution system
An indirect measure to determine whether procurement entities are procuring rationally is to assess how
much they ascribe to procurement policies as spelt out in the MOH Procurement Manual. Currently,
medicines are purchased by the CMS through the Procurement Unit which organizes international
competitive bidding (ICB) of which winning bidders could be international manufacturers, international
suppliers or local companies and through national competitive bidding. The RMS and teaching hospitals
are required to procure medicines from the CMS and from the local private sector in cases of
unavailability at the CMS. All the regional hospitals and SDPs are in turn expected to procure from the
35
RMS in their respective regions unless there is evidence that what they needed from the CMS was
unavailable and so could obtain them elsewhere.
The main sources of products at all levels other than the CMS are the local manufacturers and
distributors. In addition to the above sources, CMS obtains supplies from both international
manufacturers and international distributors.
The SDPs surveyed obtain supplies from a variety of sources which are basically private and faith-based
establishments. Of the SDPs surveyed 11 percent obtained supplies from faith-based establishments. In
addition, 44 percent and 78 percent of SDPs surveyed obtained supplies from private pharmacies and
private wholesalers respectively. 72 percent of the surveyed SDP obtain supplies from local
manufactures and 61 percent from local distributors.
With decentralized management decision making, the actual pattern of procurement reflects separate
decisions made by CMS, RMS and SDP managers. Table 5.12 provides the share of supplier base from
which SDPs source their products.
Table 17: Percentage share of supply source by all SDP
Supplier Category
Private wholesalers
Private pharmacies
Faith Based structure
Local manufacturers
Local distributors
International manufacturers
International distributors
% Responses from SDPs on
supply source
78
44
11
72
61
0
0
The qualitative survey examined factors influencing local procurement decisions. Respondents at the
SDP level identified a number of factors with the following mentioned most often.
•
•
•
•
•
Price of product and Quality of product were mentioned by 44% of facilities surveyed
Performance of supplier, Supplier quotations and stated delivery time were mentioned by 28%
Supplier terms of payment was mentioned by 22%
Impact of bulk procurement was mentioned by 17%.
National preference was mentioned by 11%.
All RMS indicated that they were not obliged to procure exclusively from the public procurement
system whilst 84 percent of SDPs said the same.
Discussion
The highest share of drugs being bought outside of the public sector by the SDP is from the private
wholesalers, followed by local manufacturers and local distributors. This suggests that the SDPs visited
in the regions are buying from both the public sector as well as the private sector. While they may be
following the tenet of the procurement policy none of the facilities visited gave the proportions of
purchases they made from either the public or private sector.
36
There is some compelling evidence that pricing and quality of product rank as the most important
factors SDPs consider in awarding contracts as these ranked equally with performance of supplier and
supplier terms of payment following as close second and third factors they also consider in contract
award. As it were, the only information available was an average price analysis for a list of tracer
medicines without the one being able to delineate the source of the products as would be presented in
later section in this study. To get around this the CMS prices were compared with international
reference prices.
Average purchase prices at CMS, RMS and SDP
Another level of comparison for the public sector distribution system would be to compare prices at the
CMS and RMS levels so as to get a sense of the margins at these levels. In this particular case average
prices were used.
Results and Discussion
Figure 3 below is based on average price differentials across regions, and compares prices at different
geographic points. It may therefore mask variations in intra-regional prices.
This is examined in detail in Table 13 overleaf. This shows the difference between prices for the same
product paid by an RMS to a supplier and that probably includes CMS and for a SDP purchase from
probably a RMS or a different supplier. A negative difference indicates the RMS average price is less
expensive and cheaper than the CMS while a positive difference shows the CMS to be cheaper. In some
cases the average prices at the RMS are shown as lower than the CMS prices, as in the case of
Paracetamol Tablet 500mg.
Figure 3: Average purchase price of 20 tracer medicines by facility type
1.800
Purchase Price (USD)
1.600
1.400
1.200
1.000
0.800
0.600
0.400
0.200
A
m
A
ox
m
yc
ox
ill
yc
in
ill
C
in
P
Su ap
C
a
25
ot
r
sp
rim ace
12 0m
t
ox
am
5m g
az
ol
g/
ol
5m
Ta
e
C
b
Su
l
le
lo
s
t
tri
50
20
m
0m
az
0+
ol
40
g
e
Fl
m
C
uc
g/
re
5m
on
am
az
A
l
lb
1
ol
%
en
e
(2
da
Ta
0g
zo
bl
)
et
le
A
20
lb
S
us
en
0m
p
da
g
M
20
z
et
ol
m
e
ro
g
Ta
ni
/5
N
da
m
bl
ife
l
z
e
ol
di
t4
pi
e
00
ne
Ta
m
bl
Ta
g
et
bl
2
et
00
R
m
A
et
te
g
ar
no
d
lo
M
20
lT
et
m
fo
ab
g
r
m
le
G
in
t5
lib
T
0m
en
ab
cl
g
le
am
t
O
50
id
m
0m
e
ep
Ta
ra
g
bl
zo
et
R
l
A
e
a
5m
rte
Ta
su nitid
g
bl
et
na
in
e
2
te
0m
Ta
/A
m
bl
g
e
od
t1
Ta
50
b
50 mg
/1
53
m
g
0.000
Avg CMS
Avg RMS
Avg SDP
37
The analysis indicates that CMS prices were cheaper in all cases except for the Paracetamol Tablet
500mg. The magnitude of the differences is quite huge and range from 15 percent to a high of 346
percent. Given the fact that we were unable to determine the sources of these medicines at the RMS and
SDP we can only conclude that on the whole the majority of purchases occur outside the public sector,
where margins are set at 10 percent mark up. The study indicates that the price differences are also very
wide apart from the RMS to the SDP with a range of 6 percent to over 341 percent.
In the case of the SDP the percentage differences for some of the medicines were so high that we
considered them as outliers and so those medicines were not included in the analysis.
Table 18: Percentage difference in prices for CMS, RMS and SDP
Products
Amoxycillin Cap 250mg
Amoxycillin Susp 125mg/5ml
Paracetamol Tablet 500mg
Cotrimoxazole Sus 200+40mg/5ml
Clotrimazole Cream 1% (20g)
Fluconazole Tablet 200mg
Albendazole Susp 20mg/5ml
Albendazole Tablet 400mg
Metronidazole Tablet 200mg
Nifedipine Tablet Retard 20mg
Atenolol Tablet 50mg
Metformin Tablet 500mg
Glibenclamide Tablet 5mg
Omeprazole Tablet 20mg
Ranitidine Tablet 150mg
Artesunate/Amod Tab 50/153mg
Average
CMS
Pur
Price
0.013
0.331
0.003
0.220
0.000
0.167
0.200
0.000
0.004
0.018
0.001
0.009
0.004
0.000
0.000
0.051
Average
RMS
Pur
Price
0.0152
0.3931
0.0017
0.4260
0.5304
0.7431
0.2491
0.1678
0.0043
0.0558
0.0142
0.0230
0.0083
0.0788
0.0507
0.1226
Average
SDP Pur
Price
% Diff
(CMS and
RMS)
0.437
0.455
0.470
1.367
1.689
1.164
0.596
0.200
0.053
0.059
0.038
0.034
0.090
0.119
0.224
0.179
15.15
18.73
-37.45
93.81
345.78
24.56
22.54
204.80
147.31
108.33
140.44
% Diff
(RMS
and SDP)
Margins at
RMS
15.80
15.80
220.93
218.33
56.67
139.26
18.94
220.93
218.33
56.67
139.26
18.94
6.25
167.34
49.67
6.25
167.34
49.67
50.88
341.46
45.95
50.88
341.46
45.95
CMS prices compared to International Medicines Reference
Another price comparison that would help inform policy would be to compare prices offered by the
CMS against those offered by international manufacturers or international supplier/wholesalers.
Table 18 compares price information from CMS purchase invoices with international information
available from the MSH – RPM Plus project on international prices for generic pharmaceuticals. It
shows that in all 7 of the products purchased by CMS, where an international reference price was
identified, were cheaper than the quoted international reference prices. In some cases, such as
Nifedipine, Stavudine and Zidovudine, the differences were smaller. In others, Nevirapine and
Artesunate+Amodiaquine the difference in prices were quite substantial.
There were 4 medicines for which no data was available at CMS because these were not procured.
These were Clotrimazole cream 1% (20g), Albendazole Tab 400mg, Omeprazole Tab 20mg and
Ranitidine Tab 150mg.
38
Figure 4: Mean purchase prices of 20 tracer medicines for CMS and MSH-RPM
Median Purchase Price (USD)
0.3500
0.3000
0.2500
0.2000
0.1500
0.1000
0.0500
A Am
m
ox ox
C
ot
yc yc
rim
il il
ox Pa lin lin
az rac Su Ca
s p
ol et
e am p 1 25
Su
2 0
C
s ol T 5m mg
lo
20 a
g
tri
0m ble /5m
m
g+ t 5 l
Fl azo
u
l
40 00
A co e C
m mg
lb na
g/
en z rea
5m
o
da le m
l
1
z
Ta
A
o
%
lb
le
bl
(
e
2
S
et
M nd
0)
e
2
a us
N tron zo p 2 00m
ife
le
0
di ida Ta mg g
pi zo
b
ne le le /5m
Ta Ta t 40 l
bl ble 0m
et
A
t
te
R 20 g
M no
et
et
a 0m
l
g
G for ol T rd
20
lib m
en in abl
m
e
O cla Ta t 5 g
m
m ble 0m
A
e
i
de t 5 g
rte
p
su R raz
T 0
na an ole ab 0m
le g
i
te tid
/A in Tab t 5
m
m e
g
od T let
ab 2 0
N
i
a
iv
l
m
T e
e
La rap ab t 15 g
50 0
m in
iv e
/1 mg
5
Zi udi Tab
do ne le 3m
g
vu
Ta t 2
di
00
b
S
ta ne let mg
vu Ta 15
di
ne ble 0m
t
g
Ta 30
0m
bl
et
g
20
m
g
0.0000
CMS Purchase Price
MSH Purchase Price
For the 6 products where MSH – RPM reference prices were lower the differences were wide. The three
products where CMS prices were slightly higher were Amoxycillin Capsule 250mg, Fluconazole Tablet
200mg and Atenolol Tablet 50mg. On the other hand for 3 products which were Amoxycillin Susp
125mg/5ml, Cotrimoxazole Susp 240mg/5ml and Albendazole Susp 20mg/5ml the CMS paid
substantially more.
Table19: Percentage difference between mean purchase prices for CMS and MSH RPM
Medicine
Amoxycillin Cap 250mg
Amoxycillin Susp 125mg/5ml (100ml)
Paracetamol Tablet 500mg
Cotrimoxazole Susp 200mg+40mg/5ml
Clotrimazole Cream 1% (20)
Fluconazole Tablet 200mg
Albendazole Susp 20mg/5ml (20ml)
Albendazole Tablet 400mg
Metronidazole Tablet 200mg
Nifedipine Tablet Retard 20mg
Atenolol Tablet 50mg
Metformin Tablet 500mg
Glibenclamide Tablet 5mg
Omeprazole Tablet 20mg
Ranitidine Tablet 150mg
Artesunate/Amodiaquine Tab 50/153mg
Niverapine Tablet 200mg
Lamivudine Tablet 150mg
Zidovudine Tablet 300mg
Stavudine Tablet 20mg
CMS
Purchase
Price
0.0132
0.3311
0.0027
0.2198
0.0000
0.1667
0.2000
0.0000
0.0035
0.0183
0.0010
0.0093
0.0040
0.0000
0.0000
0.0510
0.0866
0.0844
0.2260
0.0900
MSH
Purchase
Price
0.0147
0.0058
0.0031
0.0037
0.0204
0.1273
0.0150
0.0157
0.0034
0.0215
0.0088
0.0174
0.0039
0.0594
0.0216
0.0885
0.1774
0.1157
0.2618
0.1035
Price Difference
% increase /
decrease
-0.0015
0.3253
-0.0004
0.2161
-10.20
5,608.62
-12.90
5,840.54
0.00
30.95
1,233.33
0.00
2.94
-14.88
-88.64
-46.55
2.56
0.00
0.00
-42.37
-51.18
-27.05
-13.67
-13.04
0.0394
0.185
0.0001
-0.0032
-0.0078
-0.0081
0.0001
-0.0375
-0.0908
-0.0313
-0.0358
-0.0135
39
Discussion
Comparative analysis of prices with international price references gives procurement units leverage in
assessing how efficient their procurements have been even though price is not the only criteria to be
used in drawing such conclusions. As we have seen from the qualitative interviews, product quality,
impact on bulk procurement and national preference are factors linked in the assessment of bids and
eventual contract award.
For the products sampled as a whole, after making adjustments for outliers the data analysed suggests
the CMS paid on average 21 percent less than the international reference price for the same products
(excluding the Amoxycillin Susp 125mg/5ml (100ml), Cotrimoxazole Susp 200mg+40mg/5ml,
Albendazole Susp 20mg/5ml (20ml) .
Mean purchase prices at SDP
A useful indicator in procurement is to determine how much clients using the health services will be
paying for the pharmaceuticals that they use and so measure affordability of medicines indirectly. We
have used the mean purchase price data from the sampled SDP to determine the confidence intervals for
the SDP mean purchase prices.
The SDP mean purchase prices for the tracer pharmaceuticals are presented with the confidence
intervals in Table 16.
Table 20: Confidence Intervals for the SDP purchase prices for medicines
Medicine
Amoxycillin Cap 250mg
Amoxycillin Susp 125mg/5ml (100ml)
Paracetamol Tablet 500mg
Cotrimoxazole Susp 200mg+40mg/5ml
Clotrimazole Cream 1% (20)
Fluconazole Tablet 200mg
Albendazole Susp 20mg/5ml (20ml)
Albendazole Tablet 400mg
Metronidazole Tablet 200mg
Nifedipine Tablet Retard 20mg
Atenolol Tablet 50mg
Metformin Tablet 500mg
Glibenclamide Tablet 5mg
Omeprazole Tablet 20mg
Ranitidine Tablet 150mg
Artesunate/Amodiaquine Tab 50/153mg
n = 14
n = 15
n<6
n = 13
n = 11
n=7
n = 13
n = 14
n = 11
n = 13
n = 10
n = 11
n = 14
n = 11
n=7
n = 12
SDP Mean
Price
0.021
0.38
0
0.474
1.227
1.579
0.496
0.218
0.012
0.038
0.032
0.026
0.017
0.094
0.099
0.247
Confidence
Interval
0.018 - 0.025
0.299 - 0.416
0
0.394 - 0.553
0.569 - 1.886
1.121 - 2.036
0.312 - 0.681
0.144 - 0.292
0.008 - 0.016
0.025 - 0.052
0.025 - 0.039
0.022 - 0.031
0.008 - 0.026
0.062 - 0.126
0.067 - 0.130
-0.006 - 0.504
95% Confidence Interval
The wide confidence interval for Clotrimazole Cream and Fluconazole Tablet suggests that the prices at
the supply source could be expected to be differently marked. For the other products the nearness of the
confidence intervals suggests a relatively closer price regime.
40
Figure 5: Confidence interval limits for SDP mean purchase prices for 16 medicines
2.5
Mean Purchase Price ($)
2
1.5
1
0.5
A
m
ox
yc
i
A
m
ox
lli
n
S yci
us lli
n
p
12 Ca
p
5
P
m
2
C
a
g/ 50
ot
5m m
rim rac
e
l( g
o
xa tam
1
00
zo
ol
m
le
T
ab
S
C
us
l
e
lo
t
p
tri
20 50
m
0+ 0m
az
g
4
ol
0m
e
C
A
F
g/
re
lb
lu
5m
en
am
c
da ona
1
zo
zo
%
le
le
(2
T
0g
S
ab
us
)
le
p
t
2
0m 20
A
lb
0
g/
en
m
5
g
da
m
l(
zo
M
20
et
l
e
ro
m
Ta
ni
bl
da
N
e
ife
zo
t4
di
le
0
pi
0m
T
ne
ab
g
T
le
ab
t2
le
0
tR
0m
et
g
A
ar
te
d
no
20
l
ol
M
m
et
T
g
ab
fo
rm
le
t
in
G
50
lib
T
m
ab
en
g
le
cl
t5
am
O
00
id
m
m
e
A
ep
g
T
rt
ab
ra
es
z
l
un
et
ol
e
at R
5m
T
e/ an
ab
g
A
m itid
le
od in
t2
ia e T
0m
qu a
g
in ble
e
Ta t 1
b 50m
50
/1 g
53
m
0
High
Low
SDP Mean Price
Discussion
We can predict that the nearness of the confidence interval range for the majority of the medicines is an
indication that the purchase prices SDP make can be fairly compared to the mean prices that have been
determined.
4.5 ORDERING
Ordering is closely linked to procurement and inventory management. It is the interface between
procurement and inventory management and there are links. We have already looked at procurement
frequency which is similar to and linked to ordering frequency and ordering lead times. We now turn
our attention to seminal issues related to supplier performance, availability of transport and the
associated problems facing facilities in this regard.
4.5.1 Delivery of medicines and health supplies
Useful information in arranging for orders is to determine beforehand whether the supplier is expected
to deliver the products or the consignee is to make transport arrangement for the products that have been
ordered. This is usually spelt out in the contract. It can also be determined by the procurement incoterm
used.
The mode of delivery of medicines and health supplies is through a mix service. All the surveyed
facilities either receive their products from the supplier or they collect their products themselves.
41
Table 21: Transport arrangements linking Issuing facility and requesting facility
Deliveries of orders
Delivered by supplier (Issuing facility)
Collected by own store (requesting facility)
CMS
√
√
RMS
√
√
SDP
√
√
Discussion
Currently, lower-level facilities (especially the health centres) rely on the District Health
Administrations (DHAs) to provide the transport needs required to cart products to their facilities. The
DHAs usually use a four-wheel-drive double cabin pickup truck. Each DHA has at least one double
cabin pickup truck. At the regional level, all Regional Health Administrations — which the RMS are
linked to administratively — have 7-ton trucks to cart medicines and health supplies from the CMS to
the RMS.
The CMS is currently working toward providing no-charge transportation to the RMS through a
scheduled delivery system using 7-ton trucks. The RMS in turn would focus the use of its trucks to
transport medicines and health supplies to the SDP.
At present, however, the CMS has five 7-ton trucks and a 35-ton articulated truck, which it uses to
transport all medicines and health supplies to the regions. What has been recommended in other studies
is the acquisition of 3.5-ton all covered light trucks to the RMS so that they can effectively deliver the
needs of the SDP from the RMS.
No contract currently exists for transport arrangements between the Regional or District Health
Administrations and parastatal or commercial agencies.
4.5.2 Distances from supply source for medicines and factors that influence transport
Travel time is an important factor that influences the frequency of orders put in by facilities. Distances
from the supply source could also influence the type of vehicle to use at any time and in extreme
circumstances the quantities to order.
Average distance from the surveyed facilities to key storage/receiving sites is between 4 and 127.3 km
on average.
Table 22: Average distance to and from storage/transit site by facility type
Storage/Transit Site
Central Medical Stores
Regional/District Medical Stores
Airport
Seaport
CMS
30
4
RMSs
127.3
-
SDPs
67.4
23.6
-
Respondents at the SDP level identified a number of challenges associated with transport during
collection of medicines and medical supplies with the following mentioned most often: • Lack of vehicles was mentioned by 61% of facilities surveyed.
42
• Poor condition of vehicle was mentioned by 44%
• High cost of transport was mentioned by 44%
• Long distance to cover was mentioned by 22%.
• Poor road network was mentioned by 11%.
The average number of vehicle per facility was found to be one for van, truck, bus, cross country, saloon
and pick-up truck.
Discussion
For all the surveyed facilities it is reasonable to assume that it is possible to get to any storage site within
a day or two. This means that transaction times can be reduced and time allotted to other services for
their clients.
4.5.3 Monitoring supplier performance
A key element in contract management at the facility level is to measure the status of supplies that have
been delivered and have information on quantities on order. All deliveries are expected to be carried out
within the schedule of deliveries set out in any contract. This ensures that clients would be able to
receive their supplies when they need them. This is the long term objective of distribution.
All facilities in the CMS and RMS bracket indicated that they monitor supplier performance by a set of
criteria to the letter. In the case of the SDP it was revealed that an average of 60 percent monitored
supplier performance with varying consideration for respect of agreed delivery time schedule receiving
61 percent attention and to a lesser extent 50 percent receiving quality of service after sales and 56
percent receiving respect of storage conditions.
Table 23: Percentages attained in monitoring supplier performance by facility type
Monitoring area
Products delivered conforms to the order
Quality of service after sales
Respect of agreed delivery time schedule
Respect of storage conditions
CMS
100
100
100
100
RMSs
100
100
100
100
SDPs
72
50
61
56
Discussion
It is important to note that the area receiving the most attention is the product delivered conforming to
the order. This means that even in large or small warehouses that may have problems with capacity to
stock products adequate arrangements can be made. A topmost priority, however, is whether what they
are receiving conforms to the order.
Much consideration should also be given to product specification as a monitoring indicator/criterion,
where different lines are received by the requesting facilities.
4.5.4 Storage capacity at facility warehouse
Storage space can range from a large warehouse as the central warehouse to as small as a cupboard in
the remote SDP. No matter how large or small any storage space may be it is important to address the
43
storage conditions necessary to ensure that the same quality and quantity of medicines that were
received is the same quality and quantity that was issued to clients with a minimum allowable wastage.
CMS has adequate storage space of 50,000 m3 which is big enough to hold all it requires to stock over
the required period of time. The SDP has little less than existing rooms for their storage space with an
average of just a little over 200 m3.
Table 24: Average storage space by facility type
Levels
CMS
RMS
SDP
Number of Facilities
1
5
18
Average volume of
storage space in m3
50,000
2,838.4
223.3
Discussion
CMS is the only facility that indicated they had adequate storage space. The difficulty in assessing the
adequacy or otherwise of current structures is that it is often subjective and quite difficult to determine
what adequate space would be needed by a RMS or SDP.
The other difficulty is that to be able to expand on the existing structures requires huge capital
investments. It has been included in the report to underscore the need to at least reconstruct the Greater
Accra Regional Medical Stores.
It was not possible for surveyed facilities to determine the volumes of stocks that they have received for
2006. It would have been a good guide to judge how much space would be needed at the RMS and the
SDP but the throughput and output relationships would have to be carefully analysed to be able to draw
conclusions on what ideal storage space these facilities would require. It would be necessary to conduct
additional surveys to be able to determine the ideal storage space for some facility types.
4.6 INVENTORY MANAGEMENT
Inventory control is the basis of coordinating the flow of medicines and medical supplies in the supply
chain. An inventory control system informs the manager what to order, when to order, how much to
order so that clients can be served at all times.
An efficient inventory control system minimizes spoilage and expiry at all levels. Maximum and
minimum levels are established at all levels for medicines and other health supplies. The commonly
practiced Periodic Ordering, or Forced Ordering inventory control system at the RMS and SDP ensures
that at the end of each review period (quarterly for most RMS and monthly for SDP) logistics personnel
at those levels review all stock levels and order enough to bring stock levels up to the maximum.
Although ensuring uniformity in inventory control may be necessary, each SDP is required to establish
local inventory control mechanisms that include a stock status assessment (measured in months’ of
stock) and also to establish an emergency order point when an order must be placed for some medicines
even if the end of the review period has not been reached.
44
Establishing and maintaining effective inventory records and procedures are the basis of coordinating
the flow of medicines in the distribution system and the primary protection against leakage and wastage.
Forms are used for requisitioning and issuing medicines and health supplies, for financial accounting,
and for preparing the consumption and stock balance reports necessary for procurement.
4.6.1 Designated storage areas at the warehouses
Optimal storage areas for specific functions must ideally be designated and constructed in warehouses.
Where specific and designated areas exists the flow of goods becomes seamless and this facilitates the
identification or location of certain types of products and improves the efficiency of warehouse
operations.
Much variation exists in design, product handling, and cooling equipment at most of the sites surveyed.
CMS has the full storage designated areas except for the area designated for products returned from
customers. The RMS and SDP have varying degrees of specific designated areas as indicated in Table
21
Table 25: Percentage Availability of designated areas at CMS, RMS and SDP
Designated areas
Delivery of products
Expired/damaged products
Main storage
Products requiring cold storage <8oC
Reception of products
Quarantine of products
Storage of dangerous products
Products returned from customers
CMS
100
100
100
100
100
100
100
0
RMSs
60
80
100
100
40
20
60
20
SDPs
44
61
83
94
67
22
61
33
Discussion
Proper organization and maintenance of storage equipment are needed to maintain medicine quality,
minimize wastage and damage. To be able to achieve this, facilities have to improvise and create some
“fluid location” system. Most facilities may have to be refurbished to accommodate these changes or
they could improvise by creating locations that can serve more than one function – fluid locations – to
be able to improve on the flow of products and from the warehouses.
4.6.2 Storage conditions at warehouse
Gains made by careful selection of products and rational procurements can all be reduced if followed by
poor storekeeping practices. In such situations resources are likely to be wasted due to altered quality
and spoilage. Medicines have “enemies”: heat, light, moisture and pest. It is also recognized that
medicines have to be protected from theft, expiration, physical damage and fire.
CMS has the necessary storage conditions as indicated in Table 22. The RMS and the SDP have varying
degrees of capacities and resources in handling some of the natural conditions that tend to accelerate the
deterioration of medicines.
45
Table 27: Level of protection at storage sites by facility type
Storage conditions
Temperature
Moisture
Humidity
Pest
Theft
Expiration
Physical damage
Fire
CMS
Protected
Protected
Protected
Not Protected
Protected
Protected
Protected
Protected
RMSs
Not Protected
Not Protected
Protected
Protected
Protected
Protected
Not Protected
-
SDPs
Not Protected
Not Protected
Not Protected
Not Protected
Protected
Protected
Not Protected
-
In the area of prevention of physical damage RMS and SDP indicated that they did not have enough
handling equipment to ensure that medicines are well protected at the warehouse.
Discussion
Proper organization and maintenance of storage equipment are needed to maintain medicine quality,
minimize wastage, and ensure a regular supply to health facilities.
Every facility in the supply chain distribution system is encouraged to use SOP in carrying out their
activities. Storage procedures are expected to be followed at all levels. Job aids have been developed
and are available in the Standard Operating Procedures manual for the management of health
commodities in public health facilities.
4.6.3 Stock management techniques
Stock management techniques are a key to ensuring availability of pharmaceuticals and health supplies
in the supply chain distribution system. This requires that inventory control officers combine this
activity with the check list they would have for monitoring storage conditions. These two activities are
not mutually exclusive.
FEFO was the most commonly applied technique at all levels of the supply chain.
The manual system for entering all transaction records are still practiced at all levels. Defining
maximum and minimum levels was not widely practiced at the RMS and SDP levels, as indicated in
Table
Table 28: Percentage level of practice of stock management by facility type
Stock Management techniques
Stock cards are available
FEFO
Traceability of batches is assured
Minimum stock levels defined
Maximum stock levels defined
Orders placed when minimum level is reached
Stocks renewed on scheduled dates
CMS
100
100
0
100
100
0
-
RMSs
100
100
40
60
60
40
-
SDPs
94
100
39
56
50
56
-
Discussion
Management of inventory by expiration (that is, first to expire, first out, or FEFO), particularly for
medicines, ensures that the medicines near their expiry are issued or dispensed first, thus minimizing
wastage that could occur through expiration. At the CMS, RMS, and SDP old stocks that may expire
first would practically be arranged in such a way that there are easily seen, thus making them more
46
accessible. In addition to ensuring that products have visible expiration or manufacturing dates, stores
personnel are required to check the batch numbers of the products they issue.
Only one of the surveyed facilities at the SDP level did indicate that they use this system for tracing
batches of medicines issued. We are not very certain if this is done manually or this is a computerized
procedure. It is believed that for facilities that do have this in operation they could be tracing batches
manually if they did it at all since most of the operations at this level is manually-driven.
It does require a certain level of sophistication to be able to issue products with batches stored for
traceability purposes. It would be well worth the investment if this were widespread.
Implementation of good stock management at facility level varies widely. Most facilities seem to
implement a system based on bin cards. What we need to establish is whether the bin cards are fully
utilized – whether they are placed near the drugs for easy recording of movements and whether the
information on the bin card numbers deviated from physical counts and whether the maximum and
minimum stock levels determined have been correctly or incorrectly calculated. Computerization was
not mentioned as a strategy for managing stocks but it is known that some levels of computerization
exists at the higher levels for inventory control.
The maximum and minimum inventory control system would determine and reflect to a large extent the
product availability.
4.6.4 Assessing product availability for the tracer medicines
Ensuring drug availability is a crucial element of the Ghana National Medicines Policy. Without drugs
being available, appropriate treatments cannot be provided leading to a loss of confidence in the health
system. Ultimately this will seriously affect the health status of the population.
A product was deemed to be available if there was a single unit of issue or dispensed entity of the
product in its original container and could be issued or dispensed to a client. Figure 5.4 gives us the
direct results of measuring availability of the 20 tracer medicines.
47
Figure 6: Percentage availability for 20 tracer medicines by facility type
120
100
80
60
40
20
A
m
A
ox
m
yc
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ill
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00
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ol
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rm
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en
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50
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id
ep
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e
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ra
g
ab
zo
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e
t
an
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5
iti
m
ab
di
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le
rt
ne
t2
/A
Ta
0m
m
od
bl
g
e
ia
t1
N
Ta
iv
50
er
b
m
ap
50
g
in
La
/1
e
53
m
T
iv
m
a
u
bl
g
di
et
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ne
2
id
0
ov
T
0m
ab
ud
g
le
in
t1
e
S
50
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ta
ab
m
vu
le
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di
t3
ne
00
T
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ab
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t2
0m
g
0
CMS
RMS
SDP
There are several ways of assessing availability. Firstly, measuring by facility type and with variable
thresholds we will first consider a threshold of 70 percent availability: CMS had 8 medicines, RMS had
15 medicines and SDP had 13 medicines out of the 20. At a threshold of 80 percent availability CMS
had 6 medicines RMS had 11 medicines and SDP had 9 medicines. However, at a threshold of 90
percent availability CMS had 4 medicines RMS had 9 medicines and SDP had 3 medicines that make
the mark.
Secondly, if we are to measure availability by combining all the facilities and assess availability across
the entire medicines then we have the following: at a threshold of 70 percent we have 10 medicines, at
80 percent threshold we have 5 medicines and at over 90 percent threshold we have only 2 medicines
make the mark.
Thirdly, considering the all or none rule, the following products had a full supply status: Amoxycillin
Cap 250mg, Paracetamol Tab 500mg, Artesunate + Amodiaquine tab 50 + 153 mg and Niverapine Tab
200mg had full supply status at CMS. On the downside there were no stocks for 6 medicines during the
review period at CMS: Amoxycillin Susp 125mg/5ml, Clotrimazole Cream 1%, Albendazole Tab
400mg, Atenolol Tab 50mg, Omeprazole Tab 20mg, and Ranitidine Tab 150mg, .
Discussion
In order to achieve the objective of making available a continuous supply of essential and affordable
medicines of appropriate quality, many factors have to be taken into consideration. The complexity of
these various factors can be fully understood if one appreciates that availability is a function of
selection, quantification, tendering, procurement, stock management, ordering, storage and storage
conditions, distribution, use, quality assurance and availability of funds.
From the preceding discussions it is quite clear that a greater number of the surveyed facilities did not
practise the inventory management concept of placing an order when the minimum level was reached
48
except for a few facilities at the SDP. This is the only way facilities can trigger and initiate the necessary
activities that would lead to stock replenishment.
For the CMS and RMS levels in addition to following basic inventory concepts, better forecasting would
obviate the situation where stock out becomes common. However, the procurement method that is
normally utilised at those levels can also contribute to low availability. ICB which is the preferred
method at the central level takes a long time to go through the procurement cycle.
It is also very difficult to set logistics standards at the central level due to the complexity of establishing
lead times which are often unpredictable. However, with better planning stock availability should
improve at the central level.
4.6.5 Assessing stock out duration for the tracer medicines
Stock out duration is a corresponding indicator of stock availability. Used in tandem with the stock
availability, the stock out duration allows for a stronger analysis of the stock situation over time. The
percentage of time out of stock for a set of tracer medicines gives a measure of the procurement and
distribution system’s performance in maintaining a constant supply of medicines. The ideal target for
this indicator is 0 percent, or no stock-outs, and the desired change is a decrease from whatever was
measured.
Analysis revealed that overall, the tracer medicines were out of stock 24.2 percent of the time over the
indicated period. This percentage was determined by first calculating the total number of days out of
stock for all stocked medicines at each facility. Then the following calculation was applied to determine
the average percent time out of stock:
Total number of days out of stock for all stocked medicines × 100 × Total number of products
stocked
365
The average time out of stock for all facilities was then calculated.
Figure 7: Average percentage days out of stock for 20 tracer medicines by facility type
Average Percentage days out of stock
Private
Sub District Level SDPs
District Level SDPs
Regional Hospitals
Regional Medical Stores
Central Medical Stores
0
10
20
30
40
50
60
Average Percentage days out of stock
49
In the sample of facilities assessed, the tracer medicines were out of stock an average of
51.1 percent of the time at the CMS. In the sample of RMS, the tracer medicines were out of stock an
average of 54.9 percent of the time, and in the sample of Regional hospitals, the tracer medicines were
out of stock an average of 2.6 percent of the time, and in the sample of district hospital and health
centers. The tracer medicines were out of stock an average of 3.8 and 8.7 percent respectively within
the specified year.
Table 29: Average percentage days out of stock of tracer medicines by facility type
Facility type
Number
Facilities
Central Medical Stores
Regional Medical Stores
Regional Hospitals
District Level SDPs
Sub District Level SDPs
Private
of
Average Percentage days out of stock
1
5
4
9
4
1
51.1
54.9
2.6
3.8
8.7
-
Figure 8 Percentage stock 1-1 out duration by facility type for 20 tracer medicines
100%
80%
60%
40%
20%
Am
ox
yc A
illi m
C
n ox
ot
Su yc
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sp illi n
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12 C
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5 m ap
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5m 0m
us eta
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20 ol
10
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e
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(2
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0
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M
a
5m m
et
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ife
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m
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pi
ne le T t 40
ab
0m
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le
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t2 g
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R
et
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d
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fo
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m
r
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lib
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ab 50m
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cl
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te
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t5 g
su
id
ep
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na
e
ra
Ta 0m
te
zo
g
/A R
bl
le
et
m an
od iti
Ta
5m
d
ia
bl
g
qu i ne
e
in Ta t 2
0m
e
b
Ta le
N
g
iv
bl t 1
er
et 50
ap
50 m
La
i
/1 g
m ne
53
iv
Ta
m
ud
b
g
le
Zi
in
t
do
e
Ta 20
vu
0
b
m
di
le
g
ne
t
St
Ta 150
av
bl
ud
m
et
g
in
30
e
Ta
0m
bl
g
et
20
m
g
0%
CMS
RMS
Reg Hosp
Dist Hosp
Sub Dist Hosp
Discussion
The mirror image of product availability is stock out duration. The overall average percent of days out
of stock appears high in the Regional Medical Stores, which indicates relatively inaccessibility to
medicines for the population at that level. Table 5.24 indicates that the shortest time out of stock was
seen at the Regional Hospital level (2.6 percent), and indicates relatively ready access to medicines.
50
Measuring stock-out duration is a proxy for determining the service level. And in order to understand
why stock outs occurred we elicited the following responses from managers at the surveyed sites.
Table 30: Percentage level of causes of stock 1-1 outs by facility type
Causes of stock outs
Deliveries delay
Deliveries not in conformity with order quantities
Transport not available
Funds not available
Maximum/Minimum stock levels not updated
Errors in forecast
Insufficient staff
CMS
100
100
-
RMSs
80
60
60
60
40
-
SDPs
33
39
50
33
33
-
Respondents at the RMS and SDP levels identified a number of causes associated with stock 1-1outs of
medicines and medical supplies with the following mentioned most often:
•
•
•
Delay in deliveries was mentioned by CMS and 80 percent of RSM facilities surveyed
Errors in forecasting needs was mentioned by CMS and 44 percent of RMS facilities surveyed
Transport not available, deliveries not in conformity with order quantities and not using max-min
was mentioned by 60 percent at the RMS facilities surveyed
Unavailability of funds was seen less as a cause of stock 1-1 outs and gives indication that financial
outlook of facilities has no correlation with out of stock situations
4.6.6 Expired products and donations
No report on expiry was mentioned by facilities from the RMS through the sub district SDP surveyed. It
was most surprising not to have had any expired products in most of the facilities. CMS indicated that
the expired products for 2006 were 0.59 percent of total stock holding.
CMS indicated that it received ACT antimalarials donations from Sanofi Aventis and the government of
China as well as ARV from the government of Canada during 2006.
4.7 DISTRIBUTION
The short term goal of distribution is to ensure that the right quantities of the right products in the right
condition are delivered at the right place and time and at the right cost whilst the long term goal is that
clients get their needed treatments when they need them.
The system design for maintaining a constant supply of pharmaceuticals and other health supplies
requires a mix of push and pull requisitioning at all levels of the distribution system. The “push” system
is usually adopted by programme managers in the initial phase of new programmes. Programme
managers determine quantities to be issued to SDP based on service statistics and programme goals.
This level of centralization in the initial phase is necessary because consumption data may be
unavailable and also because only a selected number of health facilities may invariably start using the
medicines until more facilities are phased into the programme.
51
As more data on consumption is generated, changing to a “pull” system becomes necessary, which
allows facilities themselves to determine and order the quantities of pharmaceuticals and health supplies
they require.
There are two interrelated systems we shall be considering. The first is the requisitioning process and
the second is the delivery mode.
4.7.1 Distribution systems used for medicines and medical supplies
The methods required for requisitioning of pharmaceuticals and medical supplies are often defined
within the confines of a supply chain when programmes are developed. The method of requisitioning is
spelt out each time products of a particular category are received at the upper levels.
A method mix was used comprising purchase orders sent, based on requests and the other method was a
distribution schedule upon which the issuing facility were asked to supply, based on allocation. These
two methods were found at all levels of the supply chain.
Table 31: Requisition methods used by facility type
Requisition method
Based on orders received
Based on schedule of distribution or allocation
CMS
√
√
RMS
√
√
SDP
√
The mode of delivery was achieved in one of two ways: at both the CMS and RMS either the issuing
facility delivered to requesting facility or the requesting facility collected consignment with their own
means of transport.
Table 32: Delivery methods employed by facility type
Delivery method
Issuing facility delivers to requesting facility
Requesting facility collects by own means
CMS
√
√
RMS
√
√
The CMS and RMS were the facilities where delivery of medicines and medical supplies applied.
Discussion
Optimizing distribution channels can be achieved by reducing the number of existing distribution levels
in the supply chain. The MoH/GHS is working at institutionalizing the delivery of medicines and other
health commodities from the upper levels to the lower levels through a scheduled delivery system. This
system has started in five regions and at varying stages of implementation. The first three regions to start
recently were Central, Eastern, and Western Regions even though Upper West region had started the
programme but has since not been able to sustain the practice. It is expected that the remaining five
regions will strategise and start the scheduled delivery scheme soon.
To effectively realize the full benefits of this system, SDPs send their requisitions before a deadline
while they prepare for payment for earlier deliveries. The RMS are required to communicate the
deadlines of prescribed activities to all stakeholders, and such information includes, among others,
52
submission of orders from all SDPs in their regions, to ensure smooth implementation of the scheduled
delivery of medicines and other health supplies.
The outcomes of such a good distribution system are that they allow for the following to occur:
„ maintain a constant supply of medicines - no item out of stock or overstocked
„ keep medicines in good condition - product quality maintained until use
„ minimize medicine losses due to spoilage and expiry - ideally no waste or losses
„ rationalize medicine storage points
4.8 QUALITY ASSURANCE SYSTEM
Pre-market registration and pre-distribution quality assessment of all pharmaceuticals and medical
supplies is required to ensure quality and consumer satisfaction. To comply with these requirements,
Food and Drugs Board (FDB) has established a medicine Quality Assurance laboratory and has been
given the authority to control the approval and release of products that meet quality standards after
testing.
As in many developing countries, the poor quality of pharmaceuticals presents an obstacle to effectively
treating diseases. Poor medicine quality also contributes to the growing resistance of some parasites and
bacteria. Low bioavailability of the active ingredient in a pharmaceutical will lead to ineffectiveness,
which inevitably promotes the development of resistance to the respective medicine.
In view of the potential danger that substandard pharmaceuticals are already posing in the fight against
diseases, consensus exists among stakeholders that definitive measures should be taken to make
medicines safe through strengthening quality control systems at all manufacturing sites and distribution
outlets in the country.
4.8.1 Registration of product, prequalification of product and pre selection of suppliers
The problems related to quality assurance at national level can be addressed by strengthening activities
such as registration, inspection and quality control through MoH/GHS collaboration with the regulatory
authority, FDB. Though the FDB is to ensure the quality, safety and efficacy of medicines in both the
private and public sectors, the MoH/GHS would provide the necessary facilitative role of making public
sector procurement conform to procurement statutes.
Discussion
The Procurement Units of the MoH/GHS rigorously applies the tenets of public sector procurement in
conducting its mandate. All products supplied to the public sector health facilities are registered with the
FDB and the products are also pre-qualified. A set of criteria is applied in the selection of prospective
suppliers to the health sector and this process is organized and defined within a set period.
4.8.2 Quality analysis of pharmaceuticals
One way of checking the quality of medicines after receipt is laboratory testing of samples. Food and
Drugs Board has the mandate to ensure that safe, quality and efficacious medicines are used by
consumers. Product registration and inspection of manufacturing plants are related activities that FDB
undertake prior to the issuance of current Good Manufacturing Practice (GMP) certificates to
53
manufacturers. Quality testing of products is routinely carried out using the FDB laboratory and Quality
Control outlets in and outside the country.
CMS was the only facility that indicated that samples of pharmaceuticals it received were sent to the
FDB for quality analysis. All samples submitted were pharmaceutical products.
Table 32: Products submitted to FDB by CMS in 2006
Date
Submission
09-Mar-06
07-Jun-06
07-Jun-06
07-Jun-06
10-Aug-06
10-Aug-06
10-Aug-06
10-Aug-06
10-Aug-06
21-Aug-06
21-Aug-06
21-Aug-06
21-Aug-06
21-Aug-06
21-Aug-06
18-Sep-06
19-Sep-06
07-Dec-06
Of
Product
Pyrazinamide Tablet, 500 mg
Ferrous Sulphate Tablet, 60 mg (Elemental Iron)
Streptomycin Injection, 1 g
Rifampicin+Isoniazid Tablet, 150 mg+100 mg
Fluphenazine Deconoate Injection, 25 mg/ml
Furosemide Injection, 10 mg/ml in 2 ml
Gentamicin Injection, 40 mg/ml in 2 ml
Benzyl Penicillin Inj, 1 MU
Benzathine Benzylpenicillin Injection, 1.2 MU
Diclofenac Injection, 25 mg/ml
Metronidazole Tablet, 200 mg
Ciprofloxacin Tablet, 250 mg
Streptomycin Injection, 1 g
Nifedipine Tablet, 20 mg (Slow release)
Ferrous Sulphate Tablet, 60 mg (Elemental Iron)
Fluphenazine Deconoate Injection, 25 mg/ml
Pyrazinamide Tablet, 500 mg
Diclofenac Injection, 25 mg/ml
Batch
Number
et060184
mv012
2651-01
et060541
60219
060118
060258
060116
050610
g5011
da6018
g64188
2698-01
cq5002
112
60068
et060874
040901
Expiry Date
Jan-08
Sep-08
Apr-08
Apr-08
May-08
Feb-08
Feb-08
Jan-08
Jun-08
Oct-08
Feb-08
Jan-08
Apr-08
Nov-08
Jun-08
Aug-08
Jul-08
Sep-08
Of the 19 samples submitted for analysis 3 products failed giving a failure rate of 16.7 percent.
Table 33: CMS products that failed quality tests carried out at FDB
Product
Ferrous Sulphate Tablet, 60mg (Elemental Iron) 1
Ferrous Sulphate Tablet, 60mg (Elemental Iron) 2
Rifampicin + Isoniazid Tablet, 150 + 100 mg
Quality Test Results
Failed
Failed
Failed
The analysis conducted by the FDB revealed that some of the samples CMS submitted were
substandard. All three products had dissolution rates less than the expected.
Discussion
In all, three samples submitted by CMS in 2006 did not comply with the pharmacopeial specifications.
Studies conducted by the FDB in 2004 in a quality of antimalarial drug study identified several
significant incidents of substandard antimalarial medicines within the Ghana pharmaceutical distribution
chain. Medicines collected from the Ghanaian market displayed a high percentage of content failure and
poor results on dissolution tests
The above report from the 2004 study leaves no doubt about the urgency to be vigilant in applying
standards of quality assessments in both the private and public health sectors.
54
4.8.3 Pharmaceutical inspection at the stores from the regulatory authority
Regulatory bodies such as the FDB are expected to carry out regular inspection of pharmacies and
storage facilities to ensure that good storage practices are being followed.
These inspections give credibility to the public and consumers that they can trust what they are
consuming and also the assurance that the medicines are of the expected standard of quality and safety.
Discussion
Analysis has revealed that FDB did not carry out any pharmaceutical inspection at any of the surveyed
facilities. It is, however, heartening to note that warehouses have recently been informed of plans for
warehouse inspections beginning in 2008.
4.9 RATIONAL USE
Inappropriate drug use has been identified as an important health and economic problem in developing
countries. Inappropriate drug use can undo all the benefits of careful selection, economic procurement
and effective distribution. All the resources required to bring the medicine to the counter will be wasted
if the process and procedures do not ensure that the right medicines are prescribed and dispensed to the
patient in the proper dosage form and in adequate quantities with clear instructions on how to take the
medicines.
There are common problems encountered in all aspects of the drug use process – some are outside the
scope of the current study e.g. problems with diagnosis. However, polypharmacy, overt use of particular
forms of medicines and irrational prescribing and dispensing together with problems associated with
packaging can all be minimized if the appropriate information and materials are provided.
There is, therefore, Information, Education and Communication (IEC) component to this study and this
section looks at the information sources that health personnel can turn to and make appropriate
decisions. Information source is only one component of the vast subject of rational use and the study
focused on the availability of standard reference books, literature and manuals.
4.9.1 Information sources available at pharmacy or warehouse
Standard reference literature as well as internet services provide the tools with which health personnel
can use in dealing with rational medicine use problems. As part of their IEC programmes facilities are
expected to acquire the standard reference literature or install internet services in their warehouses
and/or pharmacies.
Analysis has revealed that BNF, EML, Manufacturer’ information, Martindale and STG were not
completely available in all facility types visited.
Facilities do not have some essential reference books: none of the surveyed facilities had BP and
donation guidelines. Internet could be accessed only at CMS.
55
Table 34: Percentage availability of standard reference books and internet facilities by service provider
Facility type
BNF
Central Medical Stores (1)
Regional Medical Stores (5)
Regional Hospitals (4)
District Hospitals SDPs (9)
Sub District SDPs (4)
Private (1)
100
0
25
33
0
Donation
Guideline
0
0
0
0
0
EML
100
40
25
33
25
Intern
et
100
0
11
-
Manufacturer Info
20
25
33
0
Martindale
STG
BP
20
25
11
0
100
40
25
22
25
0
-
Discussion
In promoting appropriate drug use, IEC has been identified as a major component and the provision and
availability of standard reference books and internet should be seen as tools in addressing this issue.
In providing these books and internet services health personnel can institute a drug information
newsletter or other means of providing regular unbiased information about medicines to other health
care providers and to clients. The culture of using these tools and information sources should be
encouraged so that prescribing habits and dispensing practices can all lead to improved medication use
by patients.
4. 10 FINANCING
Health financing has undergone significant changes in the last couple of decades. From a free health
care delivery through a user fee system, health financing currently is, to a larger extent, channeled
through a health insurance system. The government sets aside between 8 -10 percent of the national
budget for the health sector. This has been advocated in various charters of the UN and Ghana has
ratified these charters. Development partners have contributed significantly to the health budget and
continue to do so.
The main costs of managing medicine supply goes beyond the unit costs of the supplies themselves.
Other indirect or overhead costs include the salaries, utilities, port charges, transport, warehouse
maintenance, equipment and various consumables that we need to be able to operate effectively. To get
the most out of the medicines delivered for the quantum of money available, management costs have to
be kept appreciably small. These costs can be covered by the system enacted to finance the health
services.
The Ministry of Health has an official policy for determining the margins to be applied on medicines to
address issues of sustainability, equity of access and affordability. At the central, regional and service
delivery points, the amount added to the unit cost of medicines which translates into the unit sales is
intended to maintain the viability of the facility’s Revolving Drug Fund. The main premise is to allow
the facilities to generate sufficient funds to maintain procurement capacity, a hedge against inflation and
losses or wastage that might occur.
A sound financial management system analysed through the flow of funds within the supply chain as
well as the appropriateness of financial management systems influences prospects for long-term
financial sustainability.
56
4.10.1 Funding sources for procurements
A number of funding sources are normally contacted / identified to fund medicines and health supplies
expenditures. For every budget that is prepared the funding source has to be identified prior to actual
procurement. The contributions from these sources need to be clearly defined in terms of proportions of
funding that they may earmark for a particular procurement outlay.
Three sources of funding for procurement outlay for 2006 were identified in the survey: Government of
Ghana (GoG), facilities’ revolving drug funds (RDF)/ internally generated funds (IGF) and development
partners/multi lateral agencies as indicated in Table 32.
Table 35: Actual expenditures attributable to funding sources by facility type in 2006
Product Category
Essential Medicines
Antimalarials
Contraceptives
HIV/AIDS medicines
Medical supplies
TB medicines
Vaccines
Source
of
Funding
RDF
Global Fund
USAID
Global Fund
IGF
Global Fund
GoG / Partners
CMS
Ash RMS
Eastern RMS
GAR RMS
2,458,767.33
3,545,574.03
5,600,000.00
4,659,717.13
502,679.45
355,964.53
4,199,000.00
2,066,529.06
261,567.46
-
1,666,667.00
-
779,032.49
-
Discussion
CMS provided information on all the expenditures for 2006 and identified the source of funding for each
product category. However, for the RMS there were gaps in the provision of the information on
expenditures for some of the product categories. Information on the RDF and IGF were provided by
some of the RMS because actual expenditures were incurred.
For the majority of the product categories where information was unavailable RMS do not per se incur
these expenditures when they collect them from the CMS. In any case, summing up what was collected
would have provided the needed “expenditures incurred” information.
Majority of SDP were unable to provide information on expenditures they incurred in 2006 and so we
were unable to carry out any analysis on this indicator.
4.10.2 Turnover and margins for pharmaceuticals
The turnover or sales is one of the key financial variables needed in calculating financial performance
review reports. It is a determinant of surplus and also provides an indirect size of trade carried out and
cost recovery for services rendered. In the current national health insurance regime, facility financial
turnover would be dependent on reimbursements SDPs will receive from the National Health Insurance
Secretariat through the district mutual health organizations (DMHO). Turnover being the sum of credit
and cash sales will most likely be affected if re-imbursables are not paid up often but left to accumulate.
57
Margins are a component of turnover and it can be derived and compared to what supply chain
managers claim they have applied.
The assessment has revealed that the average turnover increased consistently over the three year period
at every level of the supply chain. Except for an exceptionally high increase in turnover for CMS from
2004 to 2005 as seen in Table 34 we find it nonetheless significant because CMS is an entity in its own
right in the analysis we have presented.
Table 36: Average turnover by facility type between 2004 and 2006
Levels
Central Medical Stores
Regional Medical Stores
Regional Hospitals
District Level SDPs
Sub District Level
Private
SDPs
Number of
Facilities
1
3
4
6
3
1
Average Turnover in USD
2004
2005
730,176.52
2,434,989.16
444,818.94
658,117.09
324,956.97
414,743.89
101,696.67
136,013.16
7,083.71
8,496.95
85,000.00
102,000.00
2006
2,865,341.05
1,069,154.04
504,852.69
208,314.81
18,683.28
116,000.00
What we have derived from the financial turnover information is the percentage increase from
subsequent years starting from 2005 (see Table 35). It can be seen that the margins applied are quite
different from the stated percentage margin of total sales in Table 36. The range from 17 to 54 percent
far exceeds the official allowed margin of 10 for RMS and SDP.
Table 37: Calculated margins from average turnover by facility type
Levels
Central Medical Stores
Regional Medical Stores
Regional Hospitals
District SDPs
Sub District SDPs
Number of Facilities
1
3
4
6
3
Calculated Margin
2005
47.9
27.6
33.7
19.9
Percent
2006
15.02
38.4
17.8
34.7
54.5
What we can infer from this is that a lot of rounding up probably occurred when medicines were priced
for sale to clients. Another reason could be that margins were often arbitrarily increased from the RMS
through to the Sub district SDP.
Table 38: Stated percentage margins by facility level
Levels
Central Medical Stores
Regional Medical Stores
Regional Hospitals
District SDP
Sub district SDP
Number of
Facilities
1
5
4
9
3
Percentage Profit Margin of Total Sales
2004
2005
2006
15
15
15
10
10
10
9.75
8.75
13.73
12.5
12.25
8.25
10
10
10
58
Discussion
Turnover is a very useful variable in measuring indirectly the viability of RDF. There was an increase in
absolute terms for financial turnover at all facilities from 2004 to 2006. We cannot as yet determine the
proportion that was actual revenue received or credit sales.
What we are certain of is that the consistent increase in financial turnover at all levels of the supply
chain is a positive sign assuming the yearly increases are not mopped up by inflation and other overhead
expenses. We can also draw initial conclusions, however, that the pricing policy or margins were not
within the acceptable limits.
The challenge of developing a viable and sustainable RDF depends on balancing two contrasting issues;
cash flow to ensure the operation of the fund versus keeping the price of drugs within affordable limits.
It was apparent that these two issues will need to be given equal attention.
4.10.3 Payment terms for clients using facilities
In the light of fierce competition from the private vendors public warehouses do consent and tacitly
agree to flexible payment regimes. Except in contracts that have been entered into and for which
payment terms will be non negotiable for normal day to day transactions, payment terms agreed upon by
service providers and clients are reached by consensus. It is important that such loose agreements are
adhered to in order that issuing facilities could make good their debts to other facilities they might have
some financial obligations towards.
A wide variety of repayment arrangements exist from prepayment options to immediate cash payments.
The national insurance scheme, however, is applicable to SDPs and it is significantly implemented at the
district and sub district SDPs, which posted 67 and 75 percent respectively.
Table 39: Percentage repayment regimes practised by facility type
Level
No
of
Facilities
Pre
payment
Central Medical Stores
Regional Medical Stores
Regional Hospitals
District Level SDPs
Sub District SDP
Private
1
5
4
9
3
1
20
25
0
25
-
Payment on
delivery
date
100
40
25
44
25
-
30 days
after
delivery
100
60
50
67
0
-
Immediate
cash
payment
100
20
50
78
50
-
National
Insurance
Scheme
25
67
75
-
Discussion
It is quite difficult to assess repayment options and prescribe a policy directive. Given the fact that the
national health insurance scheme by itself is a “credit” regime and a national mechanism for health care
financing. It is hoped that further studies can be carried out to determine how the reimbursements
process has influenced health care delivery, in terms of the provision and supply of medicines and
medical supplies.
59
4.10.4 Utilization of revenue for operational expenditures
Revenues generated into RDF are usually meant to provide the funds needed to replenish stocks.
However, depending on the policy environment a proportion can be utilized to cover operational
expenditures.
Analysis has revealed that all the facilities surveyed utilized RDF for a variety of purposes. The
percentage usage of the RDF for the procurement of medicines ranged from 75 to 100 percent. A high
80 percent of RMS utilizes the RDF for running cost.
Table 40. Percentage of facilities that utilize RDF to cover operational expenditures
Level
Central Medical Stores
Regional Medical Stores
Regional Hospitals
District SDPs
Sub District SDP
Private
No
of
Facilities
Procurement of
medicines
1
5
4
9
3
1
100
100
75
89
75
-
Staff
salary
20
25
22
0
100
Running
cost
100
80
50
44
0
100
Equipment
Stationery
works
20
-
Discussion
Most facilities surveyed utilized the RDF for the procurement of medicines. But for some of the
surveyed facilities the occasional use of the RDF for paying staff salary and covering overhead costs
needs to be further discussed as to the merits and demerits of such practices.
What would be further required is to determine the effect of the usage of the RDF on decapitalization
and to work out the proportions that could be considered as tolerable and permissible (assuming the
RDF ensure full recovery for the sale of medicines). A major analysis would be to find out the rate of
debt recovery over time and factor this in any analysis on this subject.
4.11 INFORMATION MANAGEMENT
No supply chain system can be successful without good communication between the stakeholders, users
and those who implement the system. To effectively manage, monitor and evaluate any portion of the
supply chain requires relevant and timely information. Information flow in the supply chain in Ghana is
a two-way process: it is a top-down and bottom-up system. Policies affecting the supply chain are
channeled from the MoH/GHS headquarters down to the lower tiers and information on performance is
sent up through the various tiers.
4.11.1 Information management infrastructure
A current, reliable and comprehensive medicines management information system is an essential
element for formulating sound policies ranging from day-to-day management decisions to policy
decisions. An information strategy is needed to cover all parts of the medicines supply system. And to
be able to do this information sub-systems have to be established each of which provides a piece of the
total picture.
60
4.11.2 Data monitored through the supply chain.
Information which was monitored regularly at the stores includes average monthly consumption,
quantities of stock received, expiry, stock on hand, purchase orders and on a few instances, losses and
adjustment at the Central Medical Stores.
Table 41: Percentage logistics information monitored by facility type
Levels
Central Medical Stores
Regional Medical Stores
Regional Hospitals
District Hospital
Sub District SDP
Private
AMC
100
80
100
77
75
100
Stock
Received
100
100
100
100
75
100
Expiry
100
100
100
100
75
100
Stock on
Hand
100
100
100
88
75
100
Purchase
Order
100
60
50
77
50
0
Losses
and
Adjustments
100
0
0
0
0
0
Discussion
Much of the logistics data is already available and collected routinely at SDP as well as service
statistics. However, a minimum data set does not appear to have been defined. Careful thought is
required to ensure that only the minimum data required is collected. In that way more time can be
devoted to ensuring the accuracy and analysis of the data into information.
Some data is already collected in the form of health statistics (e.g. morbidity, mortality, attendance).
These need to be augmented by the addition of some drug use data (e.g. drug consumption by health
facilities, listed by therapeutic group, quantity, overall drug output from RMS, ABC analysis, cost &
quantity variation).
4.11.3 Availability of DMIS reports at study sites
All the surveyed facilities had reports on medicines management information system at the time of the
survey.
Discussion
The measure of success of a medicines management information system is information utilization. The
information system should produce an output that is used by managers in their routine decision-making
and problem-solving activities. The information system should support various levels of decision
making from the basic health staff through to top-level policy makers.
4.11.4 Stakeholders who receive logistics reports
The generated reports were submitted to both internal staff and external stakeholders as indicated in
Table 40. They include heads of facilities, personnel at the RHA and DHA, programme managers at
GHS headquarters. For CMS stakeholders who were given report are usually either partners,
procurement agents and programme managers.
Table 43: Recipients of supply chain reports by facility type
Facility
Central Medical Stores
Regional Medical Stores
MOHG
HSCM
S
√
√
Head of
Facility
RHA
District
Pharmaci
st
Programme
Managers
√
√
Stakeholders (e.g.
UNICEF)
√
√
61
Regional Hospitals
District Hospital
Sub District SDP
Private
√
√
√
√
√
√
Discussions
The DMIS reports are widely distributed as indicated in the Table 5.40 above. Information on
consumption and stock balances is communicated to the Regional Directorates after submissions are
made to the DHA. The Regional reports are also forwarded to the Office of the Chief Pharmacist on a
quarterly basis.
SDPs give some information on consumption of pharmaceuticals and health supplies on purchase orders
to the CMS and RMS but this is not well organized. For purposes of planning, all levels need to share
information to ensure efficient and effective logistics management of pharmaceuticals and health
supplies.
4.11.5 Frequency of submission of reports and timeliness of submissions:
The drug management information system (DMIS) reports generated are submitted to stakeholders
either on monthly or quarterly basis. These reports are submitted before agreed deadlines.
Discussion
The survey has revealed that the information management infrastructure is quite adequate and needs to
be sustained.
The data gathered would bring together the health status data and the logistics data and allow indicative
information to be prepared to facilitate RHA and DHA management without producing ‘data overload’.
The information required will facilitate an overview of the operation of the drug programme, the
monitoring of the performance of the CMS, RMS, the health facilities, and the impact on the health
status of the population.
There are clear communication channels as well as reporting norms that have been established and
operationally may be considered adequate even though they could be improved.
4.12 MONITORING AND EVALUATION
The importance of monitoring and supervision to the success of the public pharmaceutical sector cannot
be overemphasized. It is the mechanism by which any deviation from the planned path can be identified
and corrected, along with the easy identification and correction of misunderstandings and training needs.
There are some prerequisites to a good monitoring system. There have to be clear procedures for the
practice being monitored; there must be a good reporting mechanism; there must be a good monitoring
tool to assess the practice; and there must be an organization prepared to take concise, corrective action.
4.12.1 Supervisory visits carried out by higher levels
Close supervision and monitoring of the operational staff in activities associated with delivery of
healthcare is essential if programme objectives are to be achieved. In addition there is a need for a
higher level of information exchange between different levels related to the overall performance of the
62
healthcare system. A prerequisite for good monitoring is the development of a checklist, a schedule to
be followed and feedback to those being supervised. There is a standard practice for facilities at higher
levels to presumably carry out monitoring visits to the lower levels and evaluate performance of
activities at that level.
Ashanti Regional Medical Stores was the only facility that carried out monitoring visits. The activities
carried out during monitoring were the following:
„ review of needs
„ review of ordering process
„ checking the conditions of storage
„ Physical inventory
„ Checking stock cards and reports
„ Monitoring financial data
Discussion
Ashanti RMS has a systematic and commendable approach to the overall monitoring in terms of the
approach. There was an impressive and busy schedule of visits by RMS staff to health facilities.
Fortunately these monitoring visits have been used as a vehicle for assessing medicine management. It
is worth noting that this monitoring was used to address programme management issues as well and
areas focusing but not probably limited to the evaluation of performance.
The impact of monitoring and evaluation has been very limited in all regions, as monitoring and
evaluation procedures have not been carried out much more rigorously and possibly utilization of
findings has been lacking. The overall lack of monitoring and reporting related to the pharmaceutical
programmes in the regions would mean that they may not have been able to evaluate performance,
identify problems, take corrective measures or assess impact in any organized way.
From the preceding section it was established that the RMS did review logistics data internally but did
not organize supervisory visits to the lower facilities other than RMS Ashanti. It is also unfortunate the
CMS did not carry out any monitoring activities. It is a note of success to the Ashanti RMS monitoring
team that they can approach so well a task often perceived as threatening to the staff being monitored.
The challenge now is that the monitoring process should use objective measures and that at all levels
these activities would be carried out more regularly.
Box 1. An example of best practice in Monitoring and Supervision from the Ashanti Region
Ashanti Region was the only region that indicated that they carried out monitoring and
supervision in the survey. Even though the frequency was not regular but were carried out
randomly we can fairly analyse what they did. During monitoring stores personnel checked and
computed the stock out rate from number of stock out days, percentage expiry, analysed reports to
ascertain delivery status at the facilities and determined the products that were not in conformity
with product specifications.
63
By sending stores personnel into the field and analysing logistics data with facility personnel an
excellent rapport would have developed and logistics problems would have been addressed before
they become insurmountable. Logistics personnel – the supervised and the supervisor would then
be prepared to take up challenges in the field and give practical solutions to peculiar problems.
There can be no substitute to this activity in imparting skills and learning “new ways of doing
things” in the process.
We do not as yet have firm outlines on the approach Ashanti Region adopted during monitoring
visits we can only hope that this would be reviewed, further analysed and shared with the rest of
the regions.
4.13 HUMAN RESOURCES
It is recognized that various personnel are involved in handling the myriad activities needed to sustain
the public supply chain. Personnel range from professionals to non-professionals who may be either
skilled or unskilled. A multi-disciplinary team that is well trained and motivated is a necessary and
important resource on whom the success or failure of the supply chain depends.
As in so many other developing countries the quality and number of personnel needed to handle the
numerous supply chain functions is quite fluid because of the high staff turnover. A needs assessment
study is needed from time to time to look at the human resource base in the supply chain so that it
becomes a policy issue in the forefront of planners’ and administrators’ agenda. How human resource
issues are handled would largely determine the overall performance of the supply chain – in terms of
policy on recruitment, training, retraining, deployment to various facilities where their services would be
greatly needed and the level of investments that would be infused into the public supply chain.
4.13.1 Initial and follow up training for staff in procurement and supply chain management
Orientation of staff when they are engaged in their new roles is important in achieving the right balance
between theory and practice. Over time when personnel are settled in their new roles and responsibilities
it is important to sustain their enthusiasm in the job with periodic retraining so that the skills,
competencies and knowledge that they have gained would increase their productivity.
Initial training was offered in full at CMS and Regional hospitals with varying degrees of training at the
RMS and District SDPs. Follow up training was hardly conducted at all at the Central and sub district
SDP.
Table 43: Percentage training offered by facility type
Facility type
Central Medical Stores
Regional Medical Stores
Regional Hospitals
District SDP
Sub District SDP
Private
No of
Facilities
1
4
5
9
4
1
Initial training
conducted
100
40
100
55
25
0
Follow up training
conducted
40
50
22
0
0
64
Discussion
A well trained corps of professional and non professionals should be the standard-bearer on which the
supply chain places its mantle. Without a well trained corps of professionals and non professionals the
outputs that we wish to see would be difficult to realize. The technical requirements demanded would be
difficult to carry out with untrained staff and the supply chain would be the loser.
However, we can only speculate and hope that the few follow up training programmes that were offered
at the lower levels to the Regional Hospitals and district SDP are suggestive perhaps of facilitative
monitoring and supervision. They could have as well been opportunities to conduct short on-the-job
training. Such should be the way to go in offering facilitative monitoring and supervision in the entire
public supply chain.
4.13.2 Needs assessment of human resource in the supply chain
Assessment of the human resource requirement of all categories at all levels is a necessary requirement
to determine how logistics functions can be performed to the highest standards.
Norms are needed to be set to facilitate the recruitment and distribution of staff to needy settings. These
norms should be reviewed from time to time to take care of a changing supply chain policy and
educational reforms alike.
The average number of personnel involved in procurement and supply management at the surveyed sites
is presented in Table 5.41. Except for the CMS where absolute staff numbers have been obtained most
of the RMS and SDP averaged less than one staff per facility type for the key personnel needed in
procurement and supply management functions.
Table 44: Average number of personnel involved in procurement and supply management functions
Personnel
Pharmacist
Medical Officer
Medical Assistant
Computer Specialist
Nurse
Administrative Officer
Accountant
Supply Officer
Procurement Officer
Storekeeper
Pharmacy Technologist
Dispensing Technician
CMS
RMS
3
1
1
2
-
1
0.6
0
1
0.3
0.3
0.3
0.3
0.3
-
Regional
Hospital
2.73
0.5
0.25
0
0.5
0.5
0.5
0.25
0.5
0
0
0
District
Hospital
0.8
0.8
0.1
0.1
0.5
0.7
0.1
0
0.1
0.2
0.1
0.1
Sub
SDP
District
0
0.3
0.6
0
1.3
0
0
0
0
0
0
0.3
Discussion
The inadequate number of staff involved in making procurement and supply management decisions at
all levels of the supply chain is very clear. With less than an average of one person per profession it is
likely that all the facilities have few inputs coming from a multi-disciplinary team needed in drawing up
and carrying through their procurement and supply management activities.
What is needed then is to drum home the needed policies for staffing norms to be established and
recruitment to be effected so current personnel are not unnecessarily overburdened and to derive the
required balance in carrying out procurement and supply management activities.
65
5.0 RECOMMENDED OPTIONS AND ASSOCIATED ACTIONS
The following key recommendations have been made based on the analysis as reviewed at a
stakeholders meeting. These recommendations were made against the backdrop of realistic changes that
could be carried out. For any of the relevant thematic areas we have identified the activities to be
completed, the constraints that are likely to affect the change, the units and/or personnel who will be
best placed to ensure the implementation of those changes suggested as well as the resources need to
implement the activities.
5.1 Product Selection
Review procedures and guidelines for procurement and distribution of medicines
• DTC’s must be made functional
• Prescribers must be trained in RUM every year with emphasis on newly qualified prescribers
• General awareness creation to be carried out
• Participatory evaluation and reviewing
Reward and sanction system to be developed for implementation of the EML
• Put in place reward and sanction system for the implementation of the EML
5.2Quantification and Forecasting
Capacity building in forecasting and quantification
• Development of guidelines and training manuals on quantification
• Conduct training in logistics management at all levels of the supply chain
Quantification should be based on real need to address issue of perennial stock outs
• Develop and disseminate policy on needs-based quantification
• Collect identifiable core dataset
• Top up RDFs for need-based procurement
Strengthen logistics management system for all medicines
• Define comprehensive dataset
• Design appropriate forms to capture data
• Collect identifiable core dataset
• Design networking systems
5.3 Procurement
Stengthen procurement planning, management and monitoring at each level of the supply chain
• Prepare proposals for training in procurement.
66
•
•
•
Develop training materials
Identify resource persons
Train personnel on the procurement law, Act 663
Capacity building in procurement
Review the existing protocol on prequalification
• Constitute a forum of experts to review the document
• Encourage stakeholders consultations.
• Reports should be disseminated
• Adoption of protocol by Minister of Health
Put in place a clear procurement catalogue with regards to product specification
• Constitute a team of experts to develop the document
• Launch this national document
Strengthen Logistics System management and Data Management system
• Training
• Develop SOPs
• Carry out facilitative supervision
• Develop simplified formats for facilities to use as template
Strengthen facilitative supervision and monitoring
Incentives for use of standards / guidelines
• Constitute a team to review the provisions of the Procurement law
• Encourage Suppliers/stakeholder involvement in the process
Review the penalty laws
5.4 Distribution
Standard structures and systems for storage at the various levels of the pipeline must be specified
• Launch a designed review of all storage facilities at all levels of the supply chain
• Refurbish identifiable structures and facilities.
Plan procurement and distribution activities to keep stocks at maximun and minimum levels at all times
• Purchase adequate shelves, pallets and other handling equipment
• Train personnel in the maintenance of equipment
67
5.5 Monitoring and Evaluation
Review and harmonize existing M & E tools to cover all levels of health care delivery
• Set up a committee to review and harmonize existing M & E tools
• Presentation of recommendations to relevant stakeholders
• Training the supervisors on revised M & E protocols
5.6 Human Resources
A clear definition for the establishment of procurement and supply management units at all levels
• Set up a team to assess human resource needs for the supply chain
• Advocate and lobby for the recruitment of needed staff at all levels of the supply chain
APPENDIX: TABLE OF RECOMMENDATIONS AND ACTIONS TO BE TAKEN
Key Issue
Recommended
Policy Change
Activities to be Constraints
completed
Responsibility
Resource
Needed
Review
procedures and
guidelines for
procurement and
distribution of
medicines
Reward and
sanction system
to be developed
for
implementation
of the EML
DTC’s must be
made functional
Prescribers must
be trained in RUM
every year with
emphasis on newly
qualified
prescribers
General awareness
creation to be
carried out
Participatory
evaluation and
reviewing
Put in place
reward and
sanction system
for the
implementation of
the EML
GNDP, Chief
Pharmacist,
Prescribers,
DTC’s, Heads
of Training
Institutions,
NHIA/Private
sector
Funds
Product
Selection
Concept of
Generic
Prescribing not
respected by
prescribers
Newly qualified
Health workers
are not well
informed on the
role and function
of the EML
No sanctions
applied for non
use of the EML
Influence
from
multinational
drug
companies
Lack of
private public
partnership
Loose
enforcement
of
procurement
and
distribution
procedures in
the public
sector
68
Quantification
and Forecasting
Limited
forecasting and
quantification
capacity in the
health sector
Capacity building
in forecasting and
quantification
Development of
guidelines and
training manuals
on quantification
Conduct training
in logistics
management at all
levels of the
supply chain
Principles
may be
overridden by
lack of
resources or
limited
resources
P and S
SSDM
HR MoH/GHS
Quantification
being done on
supply or ability
to pay basis
Quantification
should be based
on real need to
address issue of
perennial stock
outs
Develop and
disseminate policy
on needs-based
quantification
Collect identifiable
core dataset
Top up RDFs for
need-based
procurement
Applying
operational
standards may
be
compromised
Detractors to
recommended
policy
P and S, MoH
SSDM
Chief
Pharmacist
Programme
Managers
NHIA
Defined
quantification
data set
unavailable at all
levels
Strengthen
logistics
management
system for all
medicines
Define
comprehensive
data set
Design appropriate
forms to capture
data
Collect identifiable
core dataset
Design networking
systems
Applying
PU
operational
SSDM
standards may
be
compromised
Stengthen
procurement
planning,
management and
monitoring at
each level of the
supply chain
Capacity building
in procurement
Prepare proposals
for training in
procurement
Develop training
materials
Identify resource
persons
Train personnel on
the procurement
law, Act 663
Inadequate
funds
Consultanta
nd experts
Examples of
places of
best
practices
Procurement
Inadequate
interpretation of
procurement law
in the context of
medicines
procurement
CEOs of THs;
RDHA, Public
Procurement
Authority,
Procurement
Officers
69
Prequalification
procedures too
cumbersome
Review the
existing protocol
on
prequalification
Constitute a forum
of experts to
review the
document
Encourage
stakeholders
consultations.
Reports should be
disseminated
Adoption of
protocol by
Minister of Health
Expensive
Time
consuming
Commitment
from FDB
Obtaining the
regulatory
agencies
commitment
Food and Drugs
Board
Director of
Procurement
and Supply
Services of
procurement
experts
Evaluation
process
Lack of national
standards on
product
specification
Put in place a
clear procurement
catalogue with
regards to product
specification
Constitute a team
of experts to
develop the
document
Launch this
national document
Some local
manufacturers
might not buy
the idea
Time
consuming
(lot of time
required)
Regional
Health
Directorates
Product users
Regulatory
agencies
Finance
Commitment
Inadequate skills
at lower levels of
health system in
implementing
procurement
procedures
Strengthen
Logistics System
management and
Data
Management
system
Strengthen
facilitative
supervision and
monitoring
Training
Develop SOPs
Carry out
facilitative
supervision
Develop simplified
formats for
facilities to use as
template
Breaks in
Procurement
cycle Logistics
cycle
Access to
Funds
Central: CMS,
SSDM, Chief
Pharmacist,
Human
Resource
Directorate
Regional: RMS
Programmes:
Programme
Managers
Inadequate
enforcement of
procurement
procedures or
guidelines
Incentives for use
of standards /
guidelines
Review the
penalty laws
Constitute a team
to review the
provisions of the
Procurement law
Encourage
Suppliers/stakeholder involvement in
the process
Lack of
enforcement
capacities
Lack of
commitment
Suppliers
Attorney
Generals
Department
Regulatory
bodies
Standard
structures and
systems for
storage at the
Launch a designed
review of all
storage facilities at
all levels of the
Long term
project and
cannot be
realized now
CIMU of the
PPME
SSDM of MoH
Distribution
Inappropriate
storage
conditions
Capital
Grants and
loans
70
Inadequate
storage /
handling
equipment
various levels of
the pipeline must
be specified
supply chain
Refurbish
identifiable
structures and
facilities
Plan procurement
and distribution
activities to keep
stocks at
maximun and
minimum levels
at all times
Purchase adequate
shelves, pallets
and other handling
equipment
Train personnel in
the maintenance of
equipment
Review and
harmonize
existing M & E
tools to cover all
levels of health
care delivery
Set up a committee Bureaucracy
to review and
Thin HR
harmonize existing
M & E tools
Presentation of
recommendations
to relevant
stakeholders
Training the
supervisors on
revised M & E
protocols
Office of the
Chief
Pharmacist
PPME – MOH
/ GHS, DDPS,
CEOs of THs,
Monitoring
Teams
A clear definition
for the
establishment of
procurement and
supply
management units
at all levels
Set up a team to
assess human
resource needs for
the supply chain
Advocate and
lobby for the
recruitment of
needed staff at all
levels of the
supply chain
Human
Resource
Division –
MoH / GHS
Procurement
and supply
directorate
Lack of funds
and other
resources
P&S
SSDM
RDHS, CEOs
Monitoring and
Evaluation
M & E is
fragmented and
not well
coordinated
Human
Resources
Lack of adequate
qualified
staff/personnel
for managing the
supply chain
Delay in
obtaining
clearance
from Ministry
of Finance
Slow
recruitment
process
Potential
effect on
wage bill
71