Transcript Medicines Supply Chain - Medicines Transparency Alliance

Analysis of the Pharmaceutical Supply Chain in Jordan
Simon Conesa 1, Prashant Yadav 1, Rania Bader 2 (2009)
1 MIT-Zaragoza
International Logistics Program, Zaragoza Logistics Center, SPAIN, 2 Consultant, MeTA Jordan
Poster prepared by Samia Saad, MeTA Jordan Int. Consultant
This Study was Funded by the World Bank under the MeTA Initiative
5. Key Problems in PUBLIC Sector Supply Chain
1. OBJECTIVE
 To understand the structure of the pharmaceutical supply chain in
Jordan using a rigorous study framework
 To identify bottlenecks in the pharmaceutical supply chain that limit
access to medicines and strategies to alleviate those bottlenecks
 To assist Jordan in the development of policy recommendations to
improve procurement, distribution and pricing of medicines in both the
public and private sectors.
2. BACKGROUND
 Jordan is a small, highly urbanized, low–middle income country with a
population of ~ 6 million (2009)
 Fragmented public health sector: Ministry of Health (MoH), Royal
Medical Services (RMS) each providing a third of healthcare and
two smaller public institutions, Jordan University Hospital and King
Abdullah University Hospital, as well as United Nations Relief Works
Agency (UNRWA)
 Public sector provides 65% of health services
 Healthcare Expenditures: $1.4 billion ; 9.05% of GDP (2007)
 Pharmaceutical Expenditure as % of Total Health Expenditure: 34.0%
(2007)
 High out of pocket Expenditure on Pharmaceuticals (Public
expenditure 33.3%; Private expenditure 66.7%)
 Approximately 80% of the population covered by health
insurance
6. PRIVATE Sector Supply Chain
 Strong local pharmaceutical industry which produces high quality
branded generics, primarily for export to neighbouring countries.

84 medicine agents & ~ 160 subagents & herbal/ food
supplement products' importers.

16 GMP certified local branded generic medicines manufacturers.
70% of production for export to 66 export markets. 48% in volume,
28% in value of medicines consumed locally.

58 Private Hospitals, 1829 registered retail pharmacies (over 1000
in capital) , other drug stores and misc. stores 317
3. METHODOLOGY
 Methodology consisted primarily of qualitative + some quantitative
analysis.
 Study traces flow of essential medicines from manufacturer to patient
in public, private and not-for profit sectors.
 Primary research was conducted using in-person interviews with
various stake-holders in supply chain.
 Template to assess role and responsibilities and extent of markups at
each stage was used wherever possible.

JFDA regulates registration, quality and pricing of medicines

Medicine prices set by JFDA (MSP + mark ups):
 originator price calculated using variety of criteria (arithmatical
formula, median basket, country of origin, price in Saudi market.. etc)
 for generics, price ceiling set at 80% of price of underlying originator
 wholesale mark up 19%; retail mark up 26%
7. Incentive Analysis of Pharmaceutical Supply Chain
Activity
JPD
JFDA
MoH
Decrease Price (retail &
procurement price)
Strong
Medium
Strong
Weak
Weak
Indifferent
Medium
Indifferent
Medium
Weak
Weak
Indifferent
Indifferent Indifferent
Strong
Weak
Weak
??
Indifferent Indifferent
Medium
Strong
Strong
??
Increase Timely
Availability of Stock at
National MoH
Warehouse
 Analysis should be viewed as a preliminary-level study as all
information could not be obtained in the short time frame.
4. Characterising the PUBLIC Sector Supply Chain
Increase Availability at
point of dis pensing in
PUBLIC Sector
Increase Availability at
point of dis pensing in
PRIVATE Sector
Ensure Quality of
Medicines
JFDA is a strong
Regulatory agency,
successfully selffunded through
registration fees.
Efficiency, safety,
and cost benefit
analysis is used to
guide drug
selection.
Stringent
registration
requirements are
followed for all
products.
JFDA develops
standard
treatment
guidelines and
protocols.
Pre-shipment
inspection and QC
is often mentioned
as a procurement
bottleneck.
Inspections (at
least two per year)
are carried out at
manufacturers,
wholesalers and
retail pharmacies.
JFDA is
responsible for
issuing and
updating the RDL,
consistent with
WHO EDL.
JPD is
responsible for
procurement on
behalf of MoH,
RMS, official
Jordanian
Universities
Hospitals, and
The King Hussein
Cancer Center.
Yearly local
tendering with
Jordan-registered
entities is used.
Reference price is
<85% of
registered price.
If there are no
qualified bidders
(e.g. sole
registered drugs
in their therapeutic
category), JPD
request a
quotation or
executes a direct
purchase.
The Supply
Department of the
MoH is primarily
responsible for
Distribution.
Drugs are usually
received in two
batches, one 3
months after the
bid award and the
next 4 months
later.
There are 3
main warehouses
that distribute to
14 Health
Districts, each
holding around a
month’s worth of
supply.
Every quarter
stock levels
(+pipeline
inventory) are
checked against
average
consumption to
consider
reordering.
Dispensing of
pharmaceuticals
is carried out at
most health
facilities with a
modest co-payment
scheme.
There are
frequent stockouts
. for some
drugs, which are
consequentially
purchased at retail
pharmacies.
JFDA promotes
rational drug use
but adherence by
prescribers is low.
Ensure Rational
Drug Use and
adherence to STGs
Retail
Wholesalers Prescribers
Pharmacists
Strong
Strong
Strong
Medium
Medium
Strong
Indifferent
Medium
Strong
Weak
Weak
Indifferent
8. RECOMMENDATIONS FOR INTERVENTION
1. Improving Procurement Efficiency through a Decision
Support Tool
2. Improving Information
Quantification
Availability
for
Forecasting
&
3. Incentives for Adherence to Standard Treatment Guidelines
4. Better Warehouse Layout Planning and Stocking
5. Re-examine the Feasibility of Minor Changes to Pricing
Regulation
For further reading, full supply chain report available from MeTA Jordan
• WHO (2008) Jordan Country profile: World Health Report
• National Health Accounts of 2007 (published July 2009) http://www.who.int/nha/country/jor/jordan_nha_2007.pdf
• Bader, Rania (2007) HAI/WHO Medicine prices, availability, affordability & price components in Jordan.
• Saad, Samia (2007) Medicines Transparency Alliance: Scoping Report For Hashemite Kingdom Of Jordan
• Jordan National MeTA Workplan (February 2009)
http://www.medicinestransparency.org/fileadmin/uploads/Documents/MeTA-Jordan-workplan.pdf