Transcript Pharmaceutical Procurement Demystified

Pharmaceutical Procurement
Demystified
Managing supply chains through the
Public Sector
Sangeeta Raja
ACTafrica
Why care about supply chains?
 Over the last decade – health expenditures
continue to escalate worldwide.
 High-income countries spend 10% of their GDP for
health
 Middle-income countries average 6 percent of their GDP
and
 Low income countries, about 5.3% of GDP (Source: WB 2007)
 Expenditures for medicines and medical consumables
has also increased. (Source: WHO, 2004)
 Despite increased spending – little attention is given to
supply chains. (Source: DELIVER, 2006)
Source: World Bank 2007
The Burning Question for the Bank
Is the Bank investment in HNP significant?
Does it buy enough medicines and health
supplies to make a difference?
Does the Bank’s procurement practices
impact the supply chains
Does the Bank invest in supply chains?
What are the entry points for the Bank?
Supply Chain management in WB
Portfolio
The objective of the ACTafrica review was
to:
establish the level of Bank support in the
procurement of health sector goods and its
impact on supply chains
determine the extent to which the Bank has had
a role in addressing supply chain management
through its various products and instruments
Looking within….
WB financed procurement of medicines and medical equipment FY99-07 (US $billion)
Medical
equipment, $1.3,
45%
Pharmaceuticals,
$1.6, 55%
Source: WB Business Warehouse
Trend by Year
300,000,000
250,000,000
US millions
200,000,000
150,000,000
100,000,000
50,000,000
0
1999
2000
2001
2002
Medical Equipment
2003
2004
2005
2006
Pharmaceuticals
2007
Who is buying what?
Medical Equipment (EMD) versus Pharmaceutical Procurement by Region FY 99 - 07
ECA
MNA
EAP
LAC
AFR
SAR
0%
20%
40%
60%
% of total EMD/PMP procurement
EMD
Source: WB Business Warehouse
PMP
80%
100%
Procurement trends that impact supply
chains
Number of pharmaceutical contracts
Number of medicines contracts by Region FY99-07
500
400
300
200
100
0
ECA
EAP
MNA
SAR
LCR
AFR
Procurement Efficiency
Uganda HIV/AIDS Control Project, number of repetitive procurements
Table 2: Uganda HIV/AIDS Control Project - pharmaceutical contracts categorized by disease
Types of pharmaceuticals procured
Condoms - 10 + 80+ 80 = 170m condoms
(plus 1 sampling & testing consulting svcs contract)
TB drugs, lab TB reagents
ARVs
STI and Opportunistic Infections (OI) drugs
VCT test kits, STD-HIV test kits
Other - accessories & pharma proj consult svcs
TOTAL
Contract
amount
(millions)
Number
of
contracts
Average
contract
amount
% of total PMP
procurements
4,585,528
4
1,146,382
32.4
2,667,557
2,309,766
3,041,979
1,298,116
256,300
14,159,245
8
6
14
4
2
38
333,445
384,961
422,208
324,529
128,150
18.8
16.3
21.5
9.2
1.8
100.0
Procurement lead times
Commodity
Bid Posting to Contract
Award Date
Condoms
7-9 months
Contraceptives,
injectables
7 months
STI drugs
8 months
WB Procurement of key public health
commodities
HIV Test Kits
ARVs
Anti-TB drugs
Malaria commodities
Contraceptives
Vaccines
0
100
200
300
400
500
$US millions
600
700
800
900
Trends in procurement of key public
health commodities FY 99- 07
ARVs
Vaccines
180
140
35
120
30
100
25
$US millions
$US millions
160
80
60
40
20
15
10
20
5
0
0
1999
2000
2001
2002
2003
2004
2005
2006
2007
2003
40
45
35
40
2006
2007
35
$US millions
30
$US millions
2005
Malaria
Contraceptives
25
20
15
30
25
20
15
10
10
5
5
0
1999
2004
0
2000
2001
2002
2003
2004
2005
2006
2007
1999
2000
2001
2002
2003
2004
2005
2006
2007
Are we diagnosing and mitigating the
risks?
33 CPARs conducted from FY99-07 in
Africa
Less than 30% conducted a specific
assessment of health sector
Only two addressed the impact of
procurement processes on healthcare
supply chains
Are we addressing the health sector in
procurement reforms?
Review of Procurement Reform Projects in
top 10 African countries conducting the
most healthcare procurement – 9 out of 10
did not address any specific procurement
reform for the health sector.
(Documentation was not available for the
last one)
However, there is hope...
ANNEX 2: World Bank Strategies Addressing Health Sector Supply Chain Issues
Distribution
(inventory
management, logistics
Procurement
information
management,
transport and
warehousing)
Capacity
Building
(specifically in
supply chain
management,
logistics, and/or
procurement)
Included
in results
framework &/or
implementation
plan?
Year
published
General
Forecasting
Health, Nutrition, and Population Sector
Strategy
1997
#
0
**
0
0
Y
HNP Strategy to Strengthen Health Systems
2007
**
0
**
#
0
double check pub,
not found in online doc
Intensifying Action Against HIV/AIDS in Africa:
Responding to a Development Crisis
2000
*
0
#
*
0
Y
Barely: The Task Force, with the Theme Group, will review and revise existing policies and develop new policies where
needed to protect the blood supply, facilitate condom distribution by subsidizing costs, ensure adequate supply and
accessibility of drugs for STIs and opportunistic infections...
Global HIV/AIDS Program of Action
2005
**
0
**
#
**
Y
Continue to support the global partnership on ARV procurement and logistics management capacity building
The World Bank's Commitment to HIV/AIDS in
Africa: Our Agenda for Action, 2007-2011
2008
**
0
**
#
**
Y
SCM as part of strengthening national systems in health service delivery
Rolling Back Malaria: The World Bank Global
Strategy and Booster Program
2005
*
#
**
*
0
Y
In terms of developing procurement guidelines for malaria commodities
2005
**
**
**
**
0
Y
Progress indicator: Percent of health facilities with no supply interruptions of 1 week or more in nationally recommended
anti-malaria drugs during the last 3 months
2008
**
**
**
0
**
waiting for
revised version
2005
#
0
#
0
#
Y
See p. 46 - In terms of HD operations emphasizing the removal of critical weaknesses in the service delivery chain (e.g.
drug delivery and logistics);
2007
#
0
#
0
#
Y
See p. 32 re: malaria - Focus on financial management, procurement supply chain and M&E
2007
**
#
**
**
*
N/A
Strategy/Supply Chain Issues
Framework for Action: Booster Program for
Malaria Control in Africa
Booster Program for Malaria Control in Africa Phase II Strategy
Meeting the Challenge of Africa's
Development: A World Bank Group Action
Plan (AAP)
Accelerating Development Outcomes in Africa:
Progress and Change in the Africa Action Plan
(AAP)
The Business of Health in Africa: Partnering
with the Private Sector to Improve People’s
Lives, (IFC)
How?
Streamline business processes and procurement procedures to HNP
There is not an implementation plan since this is not a formal strategy - double check 3rd section once you get the
book--The Case for Investing in the Private Health Care Sector in Sub-Saharan Africa
Key:
Strong Inclusion/Discussion: **
Adequate Inclusion/Discussion: *
Minimal Inclusion/Discussion: #
Not Included/Discussed: 0
NOTES:
- Intensifying Action, The Global AIDS Program of Action and the AFA discuss distribution in terms of condoms, and is discussed more so in Intensifying Action.
- The AFA addresses capacity building in supply chain management by emphasizing efforts to improve donor coordination and harmonization of procurement practices.
- The AAP mentions supply chains once in the context of drug delivery and logistics (p.46), and addresses logistics through addressing improvement facilitation (e.g. reducing customs clearance, cross border and transport and handling processes in terms of time and costs (p.78). While the AAP discusses procurement
issues and capacity building in procurement, it is only in broad context and with no specific reference to issues in the health sector.
- The AAP Update mentions supply chains and procurement once in the context of malaria, and logisitcs systems for pharmaceuticals.
- The 2007 HNP Strategy mentioned distribution of both drugs and bednets on pgs. 26 and 53. The 1997 HNP Strategy mentions improving the supply of essential drugs and consumables.
Strategies
Supply Chains, discussed and identified:
HNP Sector Strategy
Global HIV/AIDS Program of Action
The World Bank’s Commitment to HIV/AIDS in
Africa: Our Agenda for Action, 2007 – 2011
Booster Program for malaria Control in Africa –
Phase II strategy