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

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

Strong local pharmaceutical industry which produces high quality branded generics, primarily for export to neighbouring countries.

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.

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

JPD isresponsible for procurement onbehalf of MoH,RMS, officialJordanianUniversitiesHospitals, andThe King HusseinCancer Center.

Yearly localtendering withJordan-registeredentities is used.

Reference price is<85% ofregistered price.

If there are noqualified bidders(e.g. soleregistered drugsin their therapeuticcategory), JPDrequest aquotation orexecutes a directpurchase.

JFDA is a strongRegulatory agency, successfully self-funded throughregistration fees.

Stringentregistrationrequirements arefollowed for allproducts.

Pre-shipmentinspection and QCis often mentionedas a procurementbottleneck.

Inspections (atleast two per year)are carried out atmanufacturers,wholesalers andretail pharmacies.

Efficiency, safety,and cost benefitanalysis is used toguide drugselection.

JFDA developsstandardtreatmentguidelines andprotocols.

JFDA isresponsible forissuing andupdating the RDL,consistent withWHO EDL.

.

The SupplyDepartment of theMoH is primarilyresponsible forDistribution.

Drugs are usuallyreceived in twobatches, one 3months after thebid award and thenext 4 monthslater.

There are 3main warehousesthat distribute to14 HealthDistricts, eachholding around amonth’s worth ofsupply.

Every quarterstock levels(+pipelineinventory) arechecked againstaverageconsumption toconsiderreordering.

Dispensing ofpharmaceuticalsis carried out atmost healthfacilities with amodest co-paymentscheme.

There arefrequent stockoutsfor somedrugs, which areconsequentiallypurchased at retailpharmacies.

JFDA promotesrational drug usebut adherence byprescribers is low.

5. Key Problems in PUBLIC Sector Supply Chain

8. RECOMMENDATIONS FOR INTERVENTION

6. PRIVATE Sector Supply Chain 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%

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

1. Improving Procurement Efficiency through a Decision Support Tool

2. Improving Information Availability for Forecasting & Quantification

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

7. Incentive Analysis of Pharmaceutical Supply Chain

Activity JPD JFD A M oH Ret a il Pharma c is ts

Wh o le sale rs Prescri b ers

Decrease Price (retail & procurement price)

Stro n g M edium Stro n g Weak Weak In d iffer ent

Increase Timely Availability of Stock at National MoH Warehouse

M edium In d iffer ent M edium Weak Weak In d iffer ent

Increase Availability at point of dispensing in PUBLIC Sector

In d iffer ent In d iffer ent Stro n g Weak Weak ??

Increase Availability at point of dispensing in PRIVATE Sector

In d iffer ent In d iffer ent M edium Stro n g Stro n g ??

Ensure Quality of Medicines

Stro n g Stro n g Stro n g M edium M edium Stro n g

Ensure Rational Drug Use and adherence to STGs

In d iffer ent M edium Stro n g Weak Weak In d iffer ent

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