Ing Karl Farrugia Chief Executive Officer Five consecutive

Ing Karl Farrugia, Chief Executive Officer

Five consecutive years … 2013 2014 2015 2016 TODAY • CPSU: Strategic mission & Vision statement • Access and equity within transparent measures • Framework agreements • Change in tender / financial conditions • Timely deliveries • Website and Logo Launching • Increasing collaboration: Believing and Achieving together • Changes in ordering patterns • Supplier/Client performance • Improved payment terms • Reduced penalties • New CPSU warehouse • Single bonds • Strengthening our Success • Global shortages • Quality of products • Key Performance Targets • Forecasting model • New website and logo • Time-based agreement • Looking Beyond the Horizon • Migration • New legislation • Innovative procurement models • Direct Entity and Home Care Deliveries • Quality documents • Strategic Innovation • Maintain achievements • Bring along innovation • Sharing ideas • Listening • Reaching targets

Fifth Suppliers’ Conference

Why Strategic Innovation? Superior Stakeholder Value Heightened Competitive Advantage Unique Differentiation Game Changing Strategic Innovation

Innovation Process Understand Implement the Problem LISTEN Design Experiment Get Organised Get Creative

Annual Expenditure Budget on Health Procurement € 300 million National & € 50 million EU funds € 1, 200 of treatment per citizen

Annual Expenditure Budget on Treatment 2017 € 102 M GFL+ € 3 M Oncology 100 million Medical Materials and 50 million Surgical Devices € 40 million € 62 million 250 million Medicinal Products

Increase in Treatment Budget 2011 -2017 € 86 M € 64 M 2011 € 72 M 2012 € 94 M € 97 M € 102 M € 77 M 2013 2014 2015 2016 2017

Annual Statistics 2017 In-Patients Treatment Less than 2 items Out of Stock average Only 3 weeks Nil Out of Stock due to Global Shortages mainly Antibiotics

Annual Statistics 2017 Out-Patients Treatment Less than 1 item Out of Stock on average 13 weeks ZERO Out of Stock

Projects 2017 • Oncology Medicines Euro 3 Million – 7 new treatments! • Type II Diabetes Monitoring Euro 0. 5 Million supply directly to community pharmacy. • Joint Procurement / Innovative Procurement Mechanisms • EU Funding and special projects • Upgrading of Supply Chain and Distribution operations • Enterprise Resource Planning System to patient level: – Barcoding (in progress with GS 1 Standard) – Automation/Distribution System (in progress) – Intelligent Storage modules (pilots projects in action)

The 2 nd Meeting of the Valletta Technical Committee comes to an end - achieving further milestones Agenzia Italiana del Farmaco Roma

CPSU Migration of Offices • CPSU office San Gwann • All Contracts, Invoices and Suppliers visits/queries to be received at San Gwann reception as from 1 st January 2018 • NEW ADDRESS – Central Procurement & Supplies Unit – UB 002 San Gwann Industrial Estate – San Gwann (SGN 3000)

Company Profiling • CPSU-COC Committee came up with the said criteria but working to achieve a marking scheme. • The main areas of consideration are: – – Administrative Quality Time Pricing

Tangible Results thru’ innovative Procurement Annual Achievement v. Negotiated Model v. Total cost avoidance of circa Euro 3 Million v. Price Capping Model v. Total cost avoidance of circa Euro 1 Million v. Package Based Tenders v. Total cost avoidance of circa Euro 2 Million

Strategic Innovation • Full visibility of treatment up to patient level • Requisition Module • Web-based replenishment system • Full electronic prescription with clinical based protocol model • Electronic Invoicing from Supplier to CPSU • Dynamic Purchase Model and E-Library • Package Deals

Thank You “Genius is 1% inspiration, 99% budget allocation. ”