Welcome to Procurement Supply Management Session Krishan Batra

Welcome to Procurement & Supply Management Session Krishan Batra UNDP, New York

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

UNDP Procurement: n n n Procurement in 2004: $1215 million Global Fund Procurement: $ 150 m UNDP as a PR in 27 country offices: $600 M 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: n n n n n 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: n n n 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: n Procurement Agency is defined as an organization that is involved in one or more of the following: n n Pre-qualification, procurement, storage, distribution etc. Interested Procurement Agent should provide detailed info as per Procurement Agency Information File (PAIF)

Procurement Agent: n PAIF should cover: n n n n General Information Personnel Pre-qualification Purchasing Storage Quality Control Distribution, complaints, Product Recall

Procurement Agent: n n n 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-RECEPIENT PROCUREMENT AGENT SUPPLIER

Approved PA: LTAs n n n n n 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 n Product Planning n n n Product Procurement (Perception that this is placing PO only-an Admin. Function) n n Selection of Products Forecasting and quantification of need Identification of Sources Assurance of Quality Purchasing Product Use and Monitoring n n n Receipt Distribution to end users (Logistics) Rational use and monitoring

Supply Chain: n n Product Selection Sourcing n n Tendering n n n Pre-Qualification Vendor Evaluation, Reliability, Capacity, Compliance Evaluation of Offers Production: n GMP audit, Inspection, Sampling, Testing/Analysis

Supply Chain: n Transport n n Storage n n GMP Audit, Inspection, Sampling, Testing/ Analysis, Warehousing Conditions Distribution/ Dispensing n n Shipping Documents, Insurance, Shipping Terms, Inspection, Sampling, Testing GDP, Counselling, Advising Patients ( Computerised dispensing System etc, Register M&E

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

Quality Assurance: n n n n 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: n n n 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: n Qualification Manufacturer n n Qualification Product n n Check GMP certificate, GMP audit by Pharmacist, Check Mfg. License 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: n n n n 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 n n n 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: REQ Development of Specifications / TOR Performance Rating Sourcing Payment Preparation of Solicitation Documents Contract Management Bidding Award Contracts / PO Evaluation of Offers

Operational Principles: Good Procurement n Efficient & Transparent Management n n n Drug Selection & Quantification n Limited to Essential Drugs List Generic description Financing & Competition n Separation of key functions Transparency and written procedures Good Financial Mgmt. Competitive Procurement Supplier Selection & QA n n Formal Supplier qualification QA programme

Procurement Methods: n n n Open Competitive Bidding Limited Competitive Bidding Direct Contracting ( Single Source) Shopping Factors Affecting the Selection of Methods n n Off Patent or On Patent Number of approved & eligible sources Market Situation Contract Value

Product Procurement: n n Health & Non- 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: n n n 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: n n n n 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 n n n n Strength: 100 mg, 150 mg, 10 mg/ml etc Size: 75 g, 100 ml Dosage Form: Tablet, Capsule, Syrup, Chew, vial Packing Material: Bottle ( Glass, HDPE, PET) Blister (Aluminium or PVC) Pack: 10, 100 ml 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 n n n n 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: ART ARV 1, Laboratory Infrastructure 2. Supply Chain Management 3. Client & Community Education. PALLIATIVE CARE Anti-infective drugs TREATMENT Drugs and supplies to treat STIs, OIs, TB DETECTION Diagnostic Agents and Lab. Supplies PREVENTION Condoms, Lubricants, Gloves and so on

HIV/AIDS DRUGS: n n n 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: n n n 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: n n n n Microscopes Automated Analyzers Precision Pipettes Centrifuges Incubators Refrigerators Freezers All equipment require specialized preventive maintenance and repair

HIV TEST KITS n n ARV Therapy aims at reducing the plasma viral load by preventing replication. Antibody Tests such as ELISA , Simple Rapid n n n Look for antibodies against HIV, It does not detect virus itself. HIV infects white blood cells known as CD 4 Virologic Test ( Rarely used ) Viral Load Assay Test (Number of viral particles) and CD 4 (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 n Ancillary Equipment and Supplies n n n n Automated Analyzers Reagents Centifugers, Refrigerators, Test Tube Racks Timers, Pipettes, Specimen Tube Disinfectents Sharp disposal bins Waste disposal

Effect of Genetic Competition: n n n Sample of ARV triple Combination: Stavudine (d 4 T)+ Lamivudine(3 TC)+ 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) n 89% OF PATIENTS after 32 weeks had almost undetectable level of virus in their blood.

Mosquito Nets: Specifications n n n n n Application: For one or two persons or child Material: Cotton, Polyester, Polyethylene, Nylon, Polypropylene ( Life 2 -5 years) Size: 1. 95 mx 1. 25 mx 2 m , or 1. 95 mx 1. 5 mx 2 m 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: n n Growing resistance of Plasmodium falsipaum to current monotherapies such as chloroquine, amodiaquine, sulphaoxinepyrimethamine. 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: n n n 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 n n n 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: n Insecticides for Impregnation n n Alphacypermethrin, Cyfluthrin, Deltamethrin, lambda-cyhalothrin……. Insecticides for outdoor spraying Insecticides for indoor spraying Insecticides for larviciding Spraying System

Additional Goods & Services n n n 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 n n n n 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: SELECTION PROCURE (VALUE FOR MONEY) (CHOICE) MANAGEMENT SYSTEM POLICY & LEGAL FRAMEWORK USE (RATIONAL PRESCRIPTION PREVENT WASTAGE) DISTRIBUTE (EFFECTIVE & EFFICIENT SYSTEM RIGHT UPTO POINT OF USE)

Tasks of the Supply Chain Collect Consumption Info. ESTIMATE NEEDS REVIEW SELECTION DETERMINE QTY. DISTRIBUTION RECONCILE NEEDS & FUNDS INSPECTION CHOOSE PROC. METHOD RECEIPT& QC CONTRACT MANAGEMENT AWARD CONTRACT SUPPLY SOURCING

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