Welcome

to

Procurement & Supply Management Session

Krishan Batra

UNDP, New York

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

UNDP Procurement: Procurement in 2004: $1215 million Global Fund Procurement: $ 150 m UNDP as a PR in 27 country offices:

$600M 80% of GF fund is for procuring goods

and rest for services Areas covered: GF(HIV/AIDS, Malaria,

TB), Good Governance, Poverty Eradication, Environment, Gender etc.

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

ROLE OF PR: Procure medicine that appear in the treatment

guidelines or essential list of WHO PR is responsible & accountable to GF for results Monitor forecast with actual consumption to

ensure continuous availability Procurement should adhere to good

procurement practices Appropriate product at lowest possible price

(Avoid wastage of resources) Tender Documents should list drugs by generic

name

Procurement Agent: Procurement Agency is defined as

an organization that is involved in one or more of the following: Pre-qualification, procurement,

storage, distribution etc. Interested Procurement Agent

should provide detailed info as per Procurement Agency Information File (PAIF)

Procurement Agent: PAIF should cover:

General Information Personnel Pre-qualification Purchasing Storage Quality Control Distribution, complaints, Product

Recall

Procurement Agent: Procurement Process in accordance with

International Practices Concern for Intellectual Property Rights &

National Laws Procurement Methods: ICB, NCP, LIB,CP,DP UN Organization, Government Body &

International Procurement Agency Payment Terms, Terms & Conditions, QA

Methods, Skill Sets, Scope of Insurance and the rate, Shipping and custom clearance, Tracking PO

Transfer of risks

Implementer/ Provider:

PR

SUB-RECEPIENTPROCUREMENT

AGENTSUPPLIER

Approved PA: LTAs ARVs: UNICEF, IDA Test Kits HIV: UNICEF, WHO, IDA Test Kits STI: UNICEF, IDA Condoms: UNFPA, Basic Essential Drugs: WHO, IDA, TB drugs: GDF, IDA, IAPSO, WHO,

UNICEF Antimalarial Drugs: IDA, UNICEF Lab. Equipment: IAPSO, WHO, UNICEF Vehicles, IT etc.: IAPSO

Supply Mangement:Phases Product Planning

Selection of Products Forecasting and quantification of need

Product Procurement (Perception that this is placing PO only-an Admin. Function)

Identification of Sources Assurance of Quality Purchasing

Product Use and Monitoring Receipt Distribution to end users (Logistics) Rational use and monitoring

Supply Chain: Product Selection Sourcing

Pre-Qualification Tendering

Vendor Evaluation, Reliability, Capacity, Compliance

Evaluation of Offers Production:

GMP audit, Inspection, Sampling, Testing/Analysis

Supply Chain: Transport

Shipping Documents, Insurance, Shipping Terms, Inspection, Sampling, Testing

Storage GMP Audit, Inspection, Sampling, Testing/

Analysis, Warehousing Conditions Distribution/ Dispensing

GDP, Counselling, Advising Patients ( Computerised dispensing System etc, Register

M&E

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

Quality Assurance: GDP: It is that part of quality assurance which

ensures that quality levels are maintained throughout distribution network

Official Inspection & quality control lab.: They verify the compliance of Pharmaceutical product & manufacturing process

WHO Certification : Provides independent info ISO Standards: Product Standards European Norms: EN 29000 CEN : Quality Standard (CE Symbol) 5 years Warranty & availability of spare parts Random samples for testing

Quality Assurance: Quality is totality of Characteristics of an entity

that bear on its ability to satisfy the stated needs. Health care products need special measures Pharmacopoeias: Provide quality specifications for

most commonly used pharmaceutical substances, dosage forms, packing materials etc.

GMP ( Good Manufacturing Practices): This establish requirements in respect of premises, equipment, personnel, documentation, quality control etc.

GDP (Good Distribution Practices):

Quality Assurance/ QC: Qualification Manufacturer

Check GMP certificate,GMP audit by Pharmacist, Check Mfg. License

Qualification Product Approval Product Specification, Stability Data, Check

Packing, labeling ISO 9000 Quality Control (By Independent Contract

Lab.): Physical Control of sample per batch, At-random chemical analysis

Compliance with international standards

TRIPS: Trade related Intellectual Property Rights When a new medicine is developed, its inventor is given

a protection “ Patent” to exclude third parties A patent is a government grant Generics may be produced and sold lawfully Least Developing countries are authorized to forgo the

enforcement of patents on pharmaceutical products upto Jan. 2016

Check if there are patent laws that permits patenting, If no, there is no obstacle. If yes, Check if any ARV patented there, if no there is no obstacle.

If ARV patented, Option 1-Compliance has been extended. Option 2 Seek reduced pricing from the patent holder or inform them of buying generic drugs.

TRIPS: Developing Countries Is there ia patent law? Are specific ARVs under patent Are there specific options under national

law? Compulsory Licensing and Government use.

Pay adequate remuneration to patent holder Parallel Importing( National law should allow

the use of “ International Exhaustion” )

Procurement Cycle:

Award Contracts / PO

Contract Management

Performance Rating

REQ

Preparation of Solicitation Documents

Sourcing

Development of Specifications / TOR

Evaluation of Offers

Payment

Bidding

Operational Principles:Good Procurement Efficient & Transparent Management

Separation of key functions Transparency and written procedures

Drug Selection & Quantification Limited to Essential Drugs List Generic description

Financing & Competition Good Financial Mgmt. Competitive Procurement

Supplier Selection & QA Formal Supplier qualification QA programme

Procurement Methods: Open Competitive Bidding Limited Competitive Bidding Direct Contracting ( Single Source) Shopping Factors Affecting the Selection of

Methods Off Patent or On Patent Number of approved & eligible sources Market Situation Contract Value

Product Procurement: Health & Non- Health Products Health Products include pharmaceutical

products, diagnostics technologies and supplies, bed nets, insecticides, sprays against mosquitoes, and prevention (condoms) or lab. Equipments and supportive products

Non-Health covers vehicles, office equipments etc

Procurement Process must be Transparent

Non-Health Procurement: Requires less thorough assessment due to

lesser potential health impact Plan should address mechanism of

procurement, Quality Assurance and distribution

Product should conform to ISO/ BS/DIN or National Standards

Suppliers who are ISO 9000 certified should be preferred

Products conforming to Environmental Standards should be preferred

Supplier Selection: Criteria for Pre-Qualification GMP Audit by a qualified Inspector Product Samples are physically inspected Product Samples are tested in an eligible

lab. WHO list of pre-qualified suppliers Stock with Suppliers, Shipping Term (CIF,

DDU etc.) References

Product Selection: General Strength: 100mg, 150 mg, 10mg/ml etc Size: 75g, 100ml Dosage Form: Tablet, Capsule, Syrup, Chew, vial Packing Material: Bottle ( Glass, HDPE, PET)

Blister (Aluminium or PVC) Pack: 10, 100ml Marking Expiry Date: On receipt, the balance expiry

period should be 4/5 of the total expiry period if more than 2 years and ¾ if expiry period is 2 yrs or less

Product Selection: HIV/AIDS Antiretrovirals (ARVs) to reduce MTCT and limit

damage to immune system Drugs for Palliative Care ( Relieve pain,

physical and mental discomfort) Anti-infective agents to treat or prevent

Opportunistic Infections Condoms Lab. Equipment and Supplies Reagents Infrastructure Products: Vehicles, Office

Equipment, PCs,

Commodities for HIV/AIDS:

ARTARV

PALLIATIVECARE

Anti-infective drugs

TREATMENTDrugs and supplies to treat

STIs, OIs, TB

DETECTIONDiagnostic Agents and Lab. Supplies

PREVENTIONCondoms, Lubricants, Gloves and so on

1, Laboratory Infrastructure2. Supply Chain Management3. Client & Community Education.

HIV/AIDS DRUGS: Drugs to prevent Opportunistic

Infections Drugs for palliative and supportive

care ARV for mother to child transmission ARV for treatment of clinical AIDS ARV for HIV patients to prevent AIDS. Drugs to treat OI

HIV/AIDS Commodities: Condoms, HIV test Kits Other Diagnostic test kits such as

for STI, OI Reagents, Gloves, Laboratory

Equipment and supplies Medical Equipment and supplies,

such as syringes, needles Disposal Bins

Laboratory Equipment: Microscopes Automated Analyzers Precision Pipettes Centrifuges Incubators Refrigerators Freezers All equipment require specialized

preventive maintenance and repair

HIV TEST KITS ARV Therapy aims at reducing the plasma viral load by

preventing replication. Antibody Tests such as ELISA , Simple Rapid

Look for antibodies against HIV, It does not detect virus itself. HIV infects white blood cells known as CD4

Virologic Test ( Rarely used ) Viral Load Assay Test (Number of viral particles) and

CD4 (provide an insight to immune system) Evaluated by WHO, 99% Sensitivity and specificity Complicated product to manage, Average shelf life is

short (12 months), cold storage Beckman Coulter, Beckton Dickinson, Partec, Dynal

Biotech, Guava, Cavidi

HIV TEST KITS Ancillary Equipment and Supplies

Automated Analyzers Reagents Centifugers, Refrigerators, Test Tube

Racks Timers, Pipettes, Specimen Tube Disinfectents Sharp disposal bins Waste disposal

Effect of Genetic Competition: Sample of ARV triple Combination:

Stavudine (d4T)+ Lamivudine(3TC)+ Nevirapine (NVP).

Lowest Price per year per patient: Originator $11,000 and generic Cipla, Ranbaxy, Aurobindo, Hetero ( $251-$150)

Favored Cocktail for AIDS: Mix of nukes AZT + Lamivudine + Non-nuke Efavirenz ( Three in one pill) 89% OF PATIENTS after 32 weeks had almost

undetectable level of virus in their blood.

Mosquito Nets: Specifications Application: For one or two persons or child Material: Cotton, Polyester, Polyethylene,

Nylon, Polypropylene ( Life 2-5 years) Size: 1.95mx1.25mx2m , or 1.95mx1.5mx2m Color: Blue or Green Denier: 100 is minimum Mesh Size: 156 holes/sq.inch Weight: 30 gr/sq.m or 40 gr/ sq.m Treatment: Insecticides treatment is more

important in Africa than in Asia. Net Attachments: Aluminium Rings

Anti-malarial Medicines: Growing resistance of Plasmodium

falsipaum to current monotherapies such as chloroquine, amodiaquine, sulphaoxine-pyrimethamine.

Artemether/ lumenfantrine ( Artemisinin based combination therapy), preferably containing artemisnin derivative.

Some Countries have adopted ACTs as second line treatment.

Amodiaquine + SP is restricted to W.Africa

Malaria Rapid Diagnostic Test: Rapid, accurate and accessible detection of malaria

parasites RDT detects specific antigens (proteins) produced by

malaria parasites Sensitivity is key but could be affected during storage. QA processes after purchase is very important Shelf life 18 months. GMP and ISO 13485-2003 is a standard for medical

devices QA to be built into the budget End user training & Supervision Storage and in country shipping Cool Chain for transport and storage Post-purchase Quality Control testing

Product Selection: TB TB Drugs Microscopes, Slides, Reagents,

Injection supplies, X-ray Machines and Consumables, Lab. Equipments

Non-Health Products such as vehicles, Office Equipment, PCs etc.

Insecticides: Insecticides for Impregnation

Alphacypermethrin, Cyfluthrin, Deltamethrin, lambda-cyhalothrin…….

Insecticides for outdoor spraying Insecticides for indoor spraying Insecticides for larviciding Spraying System

Additional Goods & Services Storage Place ( Central Warehouse, Regional

Warehouse) Distribution Trucks Cold Chain/ Refrigerators Inventory Management System Tracking System Power Generators, PCs, Solar System Logistical Experts, Warehouse Experts Training Services, Operational Manual including

Financial System Maintenance of QA/QC, Training Lab. Personnel Monitoring Equipment for side effects, Drug Resistance Consultants to prepare the requirements

Calculating Procurement Qty Average Monthly Use (AM) Procurement Period ( Time between

Orders) Lead Time ( Months to receive drugs ) Stock In Inventory Safety Stock = AM*LT Maximum Stock Level: SS+ AM*PP Quantity to Order: Max. Level-stock in

Inventory-Stock on order

Supply Cycle:

PROCURE

USE

SELECTION

DISTRIBUTE

(EFFECTIVE & EFFICIENTSYSTEM RIGHT UPTOPOINT OF USE)

(VALUE FOR MONEY)

(CHOICE)

(RATIONALPRESCRIPTIONPREVENT WASTAGE)

MANAGEMENT SYSTEMPOLICY & LEGAL FRAMEWORK

Tasks of the Supply Chain

ESTIMATE NEEDS REVIEW SELECTION DETERMINE QTY.

RECONCILENEEDS & FUNDS

CHOOSE PROC.METHOD

SUPPLY SOURCING

CONTRACT MANAGEMENT

RECEIPT& QC

DISTRIBUTION

INSPECTION

Collect Consumption Info.

AWARD CONTRACT

Learning Objectives: UNDP Procurement: An Overview & Challenges

Supplier Selection & Procurement Agent Product Procurement (Health & Non-Health) TRIP & Procurment of Generic ARV Quality Assurance Receipt & Storage (Inventory Management) Distribution Shipping & Insurance Preparing Procurement Plan

Note: nearly 80% of the GF money will be spent on procurement of products