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

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

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

3. 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.

4. 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)

5. 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

6. 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)

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

8. 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

9. Implementer/ Provider:

10. 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

11. 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

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

13. 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

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

15. 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

16. 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):

17. 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

18. 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.

19. 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” )

20. Procurement Cycle: REQ Development of Specifications / TOR Performance Rating Sourcing Payment Preparation of Solicitation Documents Contract Management Award Contracts / PO Bidding Evaluation of Offers

21. 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

22. 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

23. 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

24. 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

25. 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

26. 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

27. 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,

28. Commodities for HIV/AIDS: 1, Laboratory Infrastructure 2. Supply Chain Management 3. Client & Community Education.

29. 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

30. 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

31. Laboratory Equipment: • Microscopes • Automated Analyzers • Precision Pipettes • Centrifuges • Incubators • Refrigerators • Freezers • All equipment require specialized preventive maintenance and repair

32. 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

33. 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

34. 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.

35. 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

36. 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

37. 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

38. 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.

39. Insecticides: • Insecticides for Impregnation • Alphacypermethrin, Cyfluthrin, Deltamethrin, lambda-cyhalothrin……. • Insecticides for outdoor spraying • Insecticides for indoor spraying • Insecticides for larviciding • Spraying System

40. 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

41. 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

42. Supply Cycle: (VALUE FOR MONEY) (CHOICE) MANAGEMENT SYSTEM POLICY & LEGAL FRAMEWORK (RATIONAL PRESCRIPTION PREVENT WASTAGE) (EFFECTIVE & EFFICIENT SYSTEM RIGHT UPTO POINT OF USE)

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

44. 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