GLOBAL DRUG FACILITY Improving country access to anti-TB medicines

1. GLOBAL DRUG FACILITY Improving country access to anti-TB medicines Andrea de Lucia, GDF Team Leader 1st line Country Support WHO/UNICEF Technical Briefing Seminar on Essential Medicines Policies 1 October 2011

2. ROLE OF GDF • Established 2001, GDF is an initiative of the Stop TB Partnership hosted by WHO • Public Sector procurement of anti-TB drugs, of the right quality, quantity, and price, and deliver them at the right time to the right people • Originally established to provide in-kind 1st line anti-TB drug grants, since added direct procurement services as countries have other sources of funding available • Provide limited technical assistanceby monitoring drug management in countries utilising GDF’s services and highlight system strengthening requirements.

3. GDF PROCUREMENT FACTS 2010 Global FLD market estimated b/w USD261 – 418 million in 2008* GDF has approximately USD50 million of this market Global SLD market is unknown** GDF has approx USD57 million of this market Source: *TB Alliance (2008) **(2011) • Total value of goods procured: USD112,107,433 • Value of grant expenditure: USD36,792,474 • Value of direct procurement services expenditure: USD75,305,619 • Total cost of procurement agents:USD5,322,781 (GIZ 3.9%, IDA 4.2%) • Estimated FLD patient treatments: 2,293,207 (242,490 paediatrics) • Estimated SLD patient enrolled: 10,742 • Number of countries using GDF’s services: 93 • Stock-outs reported to GDF thru monitoring missions: 12 (10 in Africa region) • Emergency and urgent orders requested: 87 TB Drug Manufacturers Meeting, New Delhi, 29-30 August 2011

4. GDF PROCUREMENT FUNDING TRENDS Ex Works value of orders placed 2007-2010 per funding service TB Drug Manufacturers Meeting, New Delhi, 29-30 August 2011

5. GDF PROCUREMENT CHALLENGES – FLD/SLD SUPPLY • Limited number of API producers. • Stringent prequalification requirement results in a lack of incentives to prequalify products • Insufficient number of quality assured products can result in the interruption of supply of drugs (Streptomycin) • Limited number of TB drug manufacturers also results in a lack of competition (high prices) and overstretches suppliers (late deliveries). TB Drug Manufacturers Meeting, New Delhi, 29-30 August 2011

6. GDF PROCUREMENT CHALLENGES – FLD/SLD DEMAND • Market fragmentation: multiple entities procuring • Poor forecasting of requirements by clients • Insufficient budgetary and procurement planning • Volatile funding commitments from donors and governments cause havoc in planning • Emergency requests with short delivery lead times stress all actors (allow 8 months delivery lead time). TB Drug Manufacturers Meeting, New Delhi, 29-30 August 2011

7. COMMENTSON FLD BIDDING 2011 • Prices have increased significantly since 2009 • GDF observed: • Increased unit prices attributable to API costs, namely R, and fuel costs in India • For products where there was competition, price ranges were generally similar • For those products where there was no competition, price increases appeared unreasonable and unjustifiable – eg paediatrics TB Drug Manufacturers Meeting, New Delhi, 29-30 August 2011

8. PRICING OF HIGH DEMAND FLDS AND PROJECTED DEMAND* *Based on retrospective analysis of demand in 2010 TB Drug Manufacturers Meeting, New Delhi, 29-30 August 2011

9. COMMENTSON SLD BIDDING 2011 • General price containment since 2009 • GDF observed: • Out of 23 products, 12 have only 1 quality assured manufacturer – ie no competition • Excepting capreomycin and moxifloxacin, no significant price differentials since 2009 • Volumes procured to date have not resulted in price reductions • Price reductions are only likely in future if demand is further consolidated • Market sustainability is a concern TB Drug Manufacturers Meeting, New Delhi, 29-30 August 2011

10. PRICING OF HIGH DEMAND SLD’S AND PROJECTED DEMAND* * Based on retrospective analysis of demand in 2010 TB Drug Manufacturers Meeting, New Delhi, 29-30 August 2011

11. GDF'S RESPONSE TO PROCUREMENT CHALLENGES • Manufacturers offering staircase pricing where demand can be consolidated (move towards quarterly ordering and have a dedicated forecasting staff at GDF) • New FLD/SLD LTA's have a heavier liquidated damages clause for suppliers not honouring delivery lead times • Rethinking stockpile options: • warehouses in strategic logistical locations and financing scheme options. • Continue providing adult/paediatric FLD grants as we expect budgetary gaps due to price increases over 2011-2012: countries must plan and identify gaps early to allow for application review and delivery (8 months) • Strengthened GDF technical assistance at regional level beginning 2012: Regional Technical Officers to provide assistance in procurement planning, quantification, monitoring and order placement. TB Drug Manufacturers Meeting, New Delhi, 29-30 August 2011

12. TECHNICAL ASSISTANCE – GDF MONITORING MISSIONS • Monitoring missions conducted in 55 countries in 2010 • Objective • Validate stock levels • Monitor GDF terms & conditions (grant & direct procurement) • Assess overstocking and stock outs • Assist with planning for future requirements • Highlight problems in supply chain • Key Observations • Gaps in PSM staff capacity/training • Lack of Standard Operating Procedures • Poor information management (manual vs computerised) • Inadequate planning of requirements/funding • Reliance on donor funding and associated volatility • Political commitment to change is not always evident TB Drug Manufacturers Meeting, New Delhi, 29-30 August 2011

13. TECHNICAL ASSISTANCE – GDF DRUG QUANTIFICATION TOOL • Developed in partnership with MSH for 1st line drugs • Objective • Quantify countries annual needs for procurement planning and budgeting purposes (GDF 1st line drug prices), using morbidity data • Determine low long quantities of stock on hand will treat estimated patients • Determine trigger dates for reordering • Adjust buffer stock % based on projected demand & available budget • Key Observations • User friendly but staff training is required to utilise and interpret the information for planning purposes • Quantification requires good data – NTP needs a good surveillance system to know: • exact number of patients treated last year • number of patients in each treatment category • existing stock levels of each item TB Drug Manufacturers Meeting, New Delhi, 29-30 August 2011

14. TECHNICAL ASSISTANCE – DRUG MANAGEMENT WORKSHOPS • With our partner MSH, GDF organizes drug management workshops focused on helping countries identify their PSM bottlenecks and develop an Improvement Plan • Curriculum includes: • Selection Rational drug use • Quantification Quality assurance • Procurement Inventory control • Hosting country site visit to relevant sites (Central NTP, Central warehouse, NRA, health centres) • In 2010, regional workshops held in AFRO and EURO; joint consultants training for EMRO/AFRO (Nairobi) • In 2011, global workshop focused on the drug management and 2nd line drugs (Sri Lanka) • In 2012, continued regional workshops with new Regional Technical Officers once recruited. TB Drug Manufacturers Meeting, New Delhi, 29-30 August 2011

15. Main messages • FLD price increases will affect most countries' planned budgets • Start early to identify gaps in drug procurement budgets • Allow sufficient time for securing additional funding (if necessary), order placement, manufacturing lead times, and SEA shipment (most cost-efficient) • Thank you! • Andrea de Lucia • deluciaa@who.int