ghana assessment of medicines procurement and supply...
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REPUBLIC OF GHANA
Ghana
Assessment of Medicines Procurement and Supply Management Systems in the Public Health
Sector
A Country Report 2009
Ministry of Health
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© 2009 Ministry of Health (MoH), Ghana National Drugs Programme (GNDP) Ghana. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronics mechanical, photocopying recording and or otherwise, without prior written permission of the Ministry of Health, Ghana. ISBN: 9988-8283-8-1 For all enquiries write to the publishers The Programme Manager Ghana National Drugs Programme Ministry of Health P.O. Box MB 582 Accra, Ghana, West Africa Tel: +233 (21) 661670/1 Fax: +233 (21) 664309 E-mail: [email protected] Website: www.ghndp.org Material Development Consultant: E.T.A. Abbey, P. O. Box AN 5116, Accra, Ghana, West Africa. Tel. +233 (21) 30421/313843 Printer:
Ministry of Health
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FOREWARD
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TABLE OF CONTENTS ACKNOWLEDGMENTS ................................................................................................. ix EXECUTIVE SUMMARY ................................................................................................ x 1.0 INTRODUCTION ...................................................................................................... 15
1.1 Overview of the health and logistics system ........................................................... 15
1.2 Structure of the Health Care System in Ghana ....................................................... 16
1.3 Management of Health Services ............................................................................. 16
1.4 Number and Distribution of MoH Facilities ........................................................... 17
1.5 Logistics System Overview .................................................................................... 17
1.6 Problem Statement .................................................................................................. 18
2.0 GENERAL OBJECTIVE............................................................................................ 19 2.1 SPECIFIC OBJECTIVES ........................................................................................... 19 3.0 METHOD ................................................................................................................... 19
Sources of Data ............................................................................................................. 20
Region Selection ........................................................................................................... 21
Facility Coverage ......................................................................................................... 22
Medicine Selection ........................................................................................................ 23
Analytical Approach ..................................................................................................... 23
Limitation to the Approach ........................................................................................... 24
4.0 FINDINGS OF THE STUDY ..................................................................................... 24 4.1 ORGANISATION AND MANAGEMENT ........................................................... 24
Governance and organizational model at the surveyed facilities .............................. 24 CMS, RMS and SDP core function matrix ............................................................... 25 Customers of the Medical Stores .............................................................................. 26
4.2 PRODUCT SELECTION ....................................................................................... 26
4.2.1 Availability of essential medicines lists at the survey sites and its adherence during procurement ................................................................................................... 27 4.2.2 Availability of disease-specific STG at study site ........................................... 28
4.3 QUANTIFICATION AND FORECASTING ........................................................ 29
4.3.1 The use of essential logistics data in quantification ......................................... 29 4.4 PROCUREMENT ................................................................................................... 30
4.4.1 Procurement Plans and their development ....................................................... 31 4.4.2 Procurement method employed for contract packages .................................... 32 4.4.3 Procurement frequency .................................................................................... 33 4.4 4 Procurement lead times .................................................................................... 33
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4.4.5 Standard Operating Procedures for procurement ............................................. 34 4.4.6 Tender evaluation by Entity Tender committee and contract award ............... 35 4.4.7 Sources of medicines and medical supplies flowing through the distribution system ....................................................................................................................... 35
4.5 ORDERING ............................................................................................................ 41
4.5.1 Delivery of medicines and health supplies ...................................................... 41 4.5.2 Distances from supply source for medicines and factors that influence transport .................................................................................................................... 42 4.5.3 Monitoring supplier performance .................................................................... 43 4.5.4 Storage capacity at facility warehouse ............................................................. 43
4.6 INVENTORY MANAGEMENT ........................................................................... 44
4.6.1 Designated storage areas at the warehouses .................................................... 45 4.6.3 Stock management techniques ......................................................................... 46 4.6.4 Assessing product availability for the tracer medicines .................................. 47 4.6.5 Assessing stock out duration for the tracer medicines ..................................... 49 4.6.6 Expired products and donations ....................................................................... 51
4.7 DISTRIBUTION ..................................................................................................... 51
4.7.1 Distribution systems used for medicines and medical supplies ....................... 52 4.8 QUALITY ASSURANCE SYSTEM ..................................................................... 53
4.8.1 Registration of product, prequalification of product and pre selection of suppliers .................................................................................................................... 53 4.8.2 Quality analysis of pharmaceuticals ................................................................ 53 4.8.3 Pharmaceutical inspection at the stores from the regulatory authority ............ 55
4.9 RATIONAL USE.................................................................................................... 55
4.9.1 Information sources available at pharmacy or warehouse ............................... 55 4. 10 FINANCING........................................................................................................ 56
4.10.1 Funding sources for procurements ................................................................. 57 4.10.2 Turnover and margins for pharmaceuticals ................................................... 57 4.10.3 Payment terms for clients using facilities ...................................................... 59 4.10.4 Utilization of revenue for operational expenditures ...................................... 60
4.11 INFORMATION MANAGEMENT ..................................................................... 60
4.11.1 Information management infrastructure ........................................................ 60 4.11.2 Data monitored through the supply chain. ..................................................... 61 4.11.3 Availability of DMIS reports at study sites ................................................... 61 4.11.4 Stakeholders who receive logistics reports .................................................... 61 4.11.5 Frequency of submission of reports and timeliness of submissions: ............. 62
4.12 MONITORING AND EVALUATION ................................................................ 62
4.12.1 Supervisory visits carried out by higher levels .............................................. 62 4.13 HUMAN RESOURCES ....................................................................................... 64
4.13.1 Initial and follow up training for staff in procurement and supply chain management .............................................................................................................. 64 4.13.2 Needs assessment of human resource in the supply chain ............................. 65
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5.0 RECOMMENDED OPTIONS AND ASSOCIATED ACTIONS ............................. 66 5.1 Product Selection .................................................................................................... 66
5.2Quantificationa and Forecasting .............................................................................. 66
5.3 Procurement ............................................................................................................ 66
5.4 Distribution ............................................................................................................. 67
5.5 Monitoring and Evaluation ..................................................................................... 68
5.6 Human Resources ................................................................................................... 68
APPENDIX: TABLE OF RECOMMENDATIONS AND ACTIONS TO BE TAKEN ........ 68 Fig. 1. Map of Ghana Fig. 2. Structure of the Pharmaceutical and Health Supplies logistics system (Flow of Supplies) Fig. 3. Average purchase prices of 20 Tracer Medicines by facility type Fig. 4. Mean Purchase price of 20 tracer medicines for CMS and MSH – RPM. Fig. 5. Confidence interval limits for SDP mean purchase prices for 16 medicines Fig. 6. Percentage availability for 20 tracer medicines by facility. Fig 7. Average percentage days out of stock for 20 tracer medicine by facility type Fig 8. Percentage stock out decoration by facility type for 20 tracer medicines. Table 1. Relationships between some indicators and core MoH policy priorities. Table 2. Distribution of facilities visited by type of facility and region Table 3. Regional distributions of survey facilities. Table 4. The governing and organizational model by tiers in the supply chain. Table 5. Core functions performed by tiers in the supply chain Table 6. Customer profile of the CMS and the RMS Table 7. Availability of EML by facility type Table 8. Adherence to EML during procurement by facility type Table 9. Average percentage of STG for disease category by facility type. Table 10. Percentage Usage of logistics data used in quantification by facility type. Table 11. Percentage availability of procurement plans by facility type Table 12. Procurement method employed by facility type. Table 13. Procurement frequency by facility level Table 14: The average periods taken to complete different procurement method in days Table 15: Availability of SOP for Procurement by facility type Table 16: Percentage analysis of tender by technical committee by facility level Table 17: Percentage share of supply source by all SDP Table 18: Percentage difference between mean prices for CMS, RMS and SDP Table 19: Percentage difference between mean prices for CMS and MSH RPM
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Table 20: Confidence Intervals for the SDP purchase prices for medicines Table 21: Transport arrangements linking issuing facility and requesting facility Table 22: Average distance to and from storage/transit by facility type Table 23: Percentage attain in monitoring supplier performance by facility type Table 24: Average storage space by facility type Table 25: Percentage Availability of design areas at CMS, RMS and SDP Table 26: Level of protection at storage sites by facility type Table 27: Percentage level of practice of stock management by facility type Table 28: Average percentage days out of stock of tracer medicines by facility type. Table 29: Percentage level of causes of stock outs by facility type Table 30: Delivery methods employed by facility type Table 31: Requisition methods used by facility type Table 32: Delivery methods employed by facility type Table 33: Products submitted to FDB by CMS in 2006 Table 34: CMS products that failed quality rests carried out at FDB Table 35: Percentage availability of Standard reference books and internet facilities by service provider Table 36: Actual expenditure attributable to funding sources by facility type in 2006 Table 37: Average turnover by facility type between 2004 and 2006 Table 38: Calculated margins from average turnover by facility type Table 39: Stated percentage margins by facility level Table 40: Percentage repayment regimes practice by facility type Table 41: Percentage repayment regimes practice by facility type Table 42: Percentage logistics information monitored by facility type Table 43: Recipients of supply chain reports by facility type Table 44: Percentage training offered by facility type Table 45: Average number of personnel involved in procurement and supply management functions
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ACRONYMS MoH GHS WHO NHIS TCM UNICEF CMS RMS SDP CHAG EML STG MTC SOP ICB MSH-RPM Plus DHA RHA FEFO ACT FDB IEC BNF BP RDF IGF GMP GoG USAID SSDM P and S RSIM PPME DMHO POW DMIS
Ministry of Health Ghana Health Service World Health Organisation National Health Insurance Scheme Technical Cooperation for Essential Drugs and Traditional Medicine United Nations Children’s Fund Central Medical Stores Regional Medical Stores Service Delivery Points Christian Health Association of Ghana Essential Medicines List Standard Treatment Guidelines Medicines and Therapeutics Committee Standard Operating Procedures International Competitive Bidding Management Sciences for Health – Rational Pharmaceutical Management Plus Programme District Health Administration Regional Health Administration First Expiry First Out Artemisinin-based Combination Therapy Food and Drugs Board Information, Education and Communication British National Formulary British Pharmacopoeia Revolving Drug Fund Internally Generated Fund Good Manufacturing Practice Government of Ghana United Stated Development Agency Stores, Supplies and Drug Management Procurement and Supply Research, Statistics Information Management Policy Planning Monitoring and Evaluation District Mutual Health Organisation Programme of Work Drugs Management Information System
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ACKNOWLEDGMENTS The In-depth Assessment for medicines procurement and supply management has been successfully completed with financial support from the Department for International Development and technical support from the World Health Organization. The Ghana National Drugs Programme provided Technical and Logistical support. In addition the contribution of the following people at various stages of the survey is also acknowledged. Mrs. Helen Tata, WHO/HQ EMP, Mr. Abayneh Desta, WHO/AFRO/EDM, Mr Felix Yellu, Chief Pharmacist, Mr. Samuel Boateng, Director Procurement and Supplies. The work of health managers in the CMS, RHA, GHS, MOH, RMS, SDPs who took time to share their ideas, thoughts and data is much appreciated. The support of Mr. Gregory Hess, Magali Babaley, Helen Tata and Carolyn Whitten of WHO/HQ at the stakeholders’ meeting provided a fresh impetus in the final preparation of the report. The support of Mr J. B. Annan, who designed and developed the software tool: WHO Data Collection and Analytical Tool Version 1.0 2007 is well acknowledged. The authors accept responsibilities for any errors, omissions and/or misrepresentations. Field Data Collection Teams: Greater Accra Region: Mr. J. Owusu Agyemang, Mr. George Nana Yaw Yeboah Volta Region: Mr. Divine Azameti, Mr. Hopeson Dzapkasu Upper West Region: Mr. Ralph K. S Hadzi, Mr. D. K. Otuo Serebour Ashanti Region: Mr. J. K. Ansisri-Asafoakoa, Mr. P. K. Britwum Central Region: Mr. Ananga Yamyolia, Mr. Salifu Mohammed Eastern Region: Mr. K. E. Aggrey, Mr. Peter Kyeremateng Data Entry, processing and Analysis: Mr. Peter Ekow Gyimah Report Writing: Mr. Peter Ekow Gyimah Mr. Felix D Yellu Mrs. Edith Andrews-Annan Mrs. Martha Gyansa-Lutterodt Mrs. Augustina Koduah
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EXECUTIVE SUMMARY One major challenge of national medicines policies is the ability to ensure that their implementation plans include the uninterrupted supply of essential medicines that are safe and efficacious, physically and financially accessible and used rationally. Unfortunately, in some countries especially in sub-Saharan Africa, the medicines supply systems are often unreliable and therefore do not guarantee regular supply of these essential medicines. Since medicines and medical supplies in general, form the backbone of all health systems worldwide, there is always the need to ensure their quality and regular availability in the right quantities at affordable prices. Against this backdrop, WHO together with the European Commission supported the Ministries of Health of eleven member countries in the African Region, including Ghana to carry out an in-depth assessment of the medicines supply management system with the aim of identifying gaps that compromise access and efficiency and to develop feasible strategies to address these issues. This assessment was undertaken to determine the current status of medicines supply management system in the public sector in Ghana. The specific objectives were:
o To identify and analyse at each level of the medicines supply management
cycle (selection, procurement, distribution, and use), the actors involved in each category of product and their policy, strategy and tool used for the procurement and supply chain management of each category of product
o To determine the strengths and weaknesses of existing medicines supply
systems and to propose recommendations and strategies on how to improve them.
o To develop a coordinated, coherent and efficient national medicines
supply plan or strategy. A multi-stage sampling procedure was adopted for the selection of the regions, districts and sub-districts covered in the assessment. A combination of both purposive and random sampling methods was also employed in the sample size selection as appropriate. The selection of the six (6) regions in the study was done by stratifying the country’s ten (10) political regions into categories of agro-ecological zone whilst bearing in mind also, the socio-economic profiles of those regions.
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An in-depth assessment of the procurement and supply systems of public health facilities through site visits to several facilities – including national, regional, district and sub-district facilities was undertaken. Four tools developed in collaboration with WHO were used to collect and analyse the information. The main findings include the following
• The presence of the Procurement Law, Act 663 to guide procurement and supplies in the country.
• Well defined distribution network. • Good infrastructure for central level warehousing. • National Essential Medicines List is outdated and Procurement Guidelines have
not been widely disseminated. • Weaknesses in forecasting and quantification due to lack of coordination between
the central and periphery. • Lack of guidelines and rules to facilitate the process of engaging and monitoring
suppliers. • Information for quantification and forecasting is not forthcoming from the facility
level to the central procurement unit for decision making. • Lack of guidelines and rules of engagement for suppliers. • Most facilities have internally developed stock control systems but there is need
for standardization for effective management. • Several of the lower level facilities do not have the optimal storage and handling
equipment and no standardized structural plan have been developed to ensure adequacy of storage conditions.
• The scheduled delivery system that was proposed has not been implemented . • Regular monitoring and supervision of drug supply management activities is not
carried out at all levels. The recommendations and the associated actions are: Product Selection Essential Medicines List should be reviewed regularly. Reward and sanction system to be developed for implementation of the EML. Quantificational and Forecasting Capacity building through training and use of sotfware for forecasting and quantification Strengthen logistics management system for all medicines. Procurement Review procedures and guidelines for procurement and distribution of medicines. Stengthen procurement planning, management and monitoring at each level of the supply chain.
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Distribution Standard structures and systems for storage and distribution at the various levels of the pipeline should be specified. Plan procurement and distribution activities to keep stocks at maximun and minimum levels at all times. Rational Use DTC’s must be made functional in all facilities. Monitoring and Evaluation Review and harmonize existing M & E tools to cover all levels of health care delivery. Human Resources A clear definition for the establishment of procurement and supply management units at all levels of the healthcare system. Procurement and Supply management staff should be well trained to manage the units.
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Fig 1: Map of Ghana
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PREFACE
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1.0 INTRODUCTION The Pharmaceutical procurement system is a major determinant of drug availability and total health costs. Drug purchases represent the single largest health expenditure after personnel costs. An effective procurement process ensures the availability of the right drug in the right quantities at reasonable prices, and at recognized standards of quality. Storage and distribution costs are a significant component of a health budget and transportation costs can represent several times the value of the drugs distributed to remote locations. Designing a system for storing and distributing drugs, medical supplies and equipment is complex and important. The mandate of the directorates responsible for supply is to serve as a vehicle to drive the process by which medicines and health supplies are quantified, procured, delivered and stored before being made available to the client for use. If the public supply chain industry involves all of the above then to be counted as a major player in the industry it has to do this in the most efficient manner and be judged against a set of performance and evaluation criteria that define this. This means that while finance is clearly important in terms of allowing the process to function, it is not the only driving force or criteria for assessment. The increasing challenges in the judicious use of scarce resources make it imperative that the necessary mechanisms are put in place in time to ensure the desired efficiency and quality in health care delivery. It is essential that procurement and distribution activities be performed by trained staff using sound procedures, working in adequate offices with good communications and with access to reliable inventory and consumption information.
1.1 Overview of the health and logistics system There has been considerable improvement in the health status of Ghanaians since the country achieved independence in 1957. The infant mortality rate has decreased from 133/1000 in 1957 to 56/1000 in 1998. Life expectancy has also improved from 45 in 1957 to 57 in 2002. However, relative to other countries especially in East and Southern Africa, health status remains poor. Mortality rates are still high and disease patterns remain challenging. Nutritional problems still persist and the use of health services remains low. Health outcomes demonstrate significant inequalities between different geographical areas of the country and in relation to socio-economic status. The primary concerns in the health sector, according to the Ministry of Health’s Development Framework focus on a number of areas and are incorporated into the MoH’s current Five Year Programme of Work. They include access, quality, efficiency, collaboration and mobilization of resources. More than half of the population must travel significant distances to visit primary health care facilities. The problem is much worse in the northern regions of the country where communities are widely dispersed and transportation infrastructure remains relatively poor. The rapidly growing private sector without adequate collaboration, regulation and control is a major challenge to the health sector. This has led to duplication of efforts in many instances and an inordinate urban/rural distribution of basic services. Indeed, although the private sector sees a significant proportion of patients, their involvement in the planning and decision making process of the ministry is
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very limited. In the same context the utilization of primary services and the acceptance of the essential medicines concept have not been actively promoted. Total expenditure on health in Ghana is about $12 per capita with 50% of this being out-of-pocket payment now gradually being replaced with the national health insurance scheme. The health sector receives between 8% - 10% of total government recurrent budget and about 6% of capital budget. Donor support to the health sector has been increasing rapidly from $4 million in 1990 to $25 million in 1995 and about $27 million in 1998. Tertiary services still take a large proportion of health resources. About 65% of government recurrent budget allocation is salary-related. Most of the resources are controlled at higher level and resources from different sources are not linked; hence accountability becomes diffused. The concepts of performance contracts and service level agreements have been mooted as ways to link goals to performance and to increase accountability within the health system.
1.2 Structure of the Health Care System in Ghana Health services in Ghana are delivered in primary, secondary, and tertiary health institutions. The primary health care system incorporates all institutions (clinics, health centres, and hospitals) and individuals whether private, public or traditional. All districts have also been subdivided into four to six sub-districts, and each sub-district covers a defined geographic area containing 20,000 – 30,000 people. The health centre is responsible for providing clinical, public health, and maternity services to the catchment population using a combination of clinic-based, regular outreach, and mass campaigns in close collaboration with communities, community institutions and leaders, and village-based health workers and health institutions. The district hospital serves as the first referral point in the primary health care system. It provides clinical (outpatient and inpatient) and maternity services and serves as backup for health centres in the district. The regional hospital is the second referral level. It acts as the technical focal point for specialized clinical and diagnostic care in broad specialized areas like medicine, general surgery, pediatrics, and obstetrics and gynecology. The teaching hospitals form the apex of specialized care in the country. They are the leading training and research institutions, and offer undergraduate and postgraduate training for doctors and other health professionals.
1.3 Management of Health Services Health management in Ghana is fairly decentralized. Within the GHS, a nested approach involving District Health Management Teams (DHMTs), Regional Health Management Teams, and headquarters has been put in place. Complementing these arrangements are institutional/health facility management teams. Each of these management levels is a budget and management centre with the responsibility for a defined programme of work supported by a defined operational budget.
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Decentralization of management has been a feature of Ghana’s health sector since the establishment of the DHMTs in 1978, and a key aspect of Ghana’s decentralization has been the establishment of budget management centres that can autonomously set and manage budgets. Although guidelines exist, procurement decisions have been decentralized. As part of the health reform process policy formulation and policy implementation are now performed by distinct bodies. The MoH continues to be responsible for policy design whilst the Ghana Health Service inaugurated in 2003 is now responsible for managing health service delivery. Currently, a sector-wide approach to health delivery exists in Ghana. The principles underlying implementation of the sector-wide approach in Ghana include an agreement between the Government of Ghana and health partners on an agreed and coordinated programme of work, an integrated approach to funding, and common implementation and evaluation arrangements. Under this arrangement, the MoH prepares an annual programme of work, which is funded from Government of Ghana funds, internally generated funds, and pooled donor funds. The MoH and partners meet twice a year to review and agree on sector-wide performance targets.
1.4 Number and Distribution of MoH Facilities Health services in Ghana are provided by both the public and private sectors, including hospitals supported by faith-based organizations. The public sector, which is supported by the government, accounts for over 70 percent of the institutions. The country has 1,887 health facilities, including three teaching hospitals and three psychiatric hospitals. Nine Regional hospitals, 86 district hospitals, 11 polyclinics, and 927 health centres under the Ghana Health Service represent about 55 percent of the total health facilities.
1.5 Logistics System Overview The Ghana public health sector operates a three-tier system for the management of health medicines and health supplies. The Central Medical Stores (CMS), the Regional Medical Stores (RMS) and Service Delivery Points (SDP) together with the transportation network constitute the pipeline for the supply chain. The CMS, a unit of the Procurement and Supply Directorate of the MoH, is responsible for the receipt, storage, and distribution of all commodities procured by the MoH. Lower levels get supplies from the CMS through the “pull” or “demand” system. The MoH currently has in place a number of vertical public sector supply chains based on the type of medicines and health supplies. While integration is currently taking place to look at a more rational way to combine the essential medicines, contraceptives and non-drug consumable supply chains, policy changes necessary to support this have not yet evolved. Currently, drugs are purchased by the Central Medical Stores (CMS) through international competitive bidding (ICB) and from local private suppliers and manufacturers. The RMS and teaching hospitals are expected to procure drugs through the CMS and from the local private sector. All SDP are in turn expected to procure from the RMS in their respective regions. While it is MoH policy that facilities
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procurement through the public system, except in cases of unavailability, studies have shown significant private sector purchases at all levels. Although integration is taking place, there are still a number of district medical stores which procure from both the RMS and the local private sector. The teaching and regional hospitals and the over 900 SDP are supplied by an RMS, DMS and in many instances procure drugs through the local private sector. The transportation system for distribution of essential drugs is currently undergoing policy review within the MoH. Figure 2: Structure of the pharmaceutical and health supplies logistics system (Flow of supplies)
1.6 Problem Statement The major challenge of National Medicines Policy is assuring an interrupted supply of essential medicines that are efficacious and of good quality, physically and financially accessible and used rationally. To attain this objective, Ghana set up national essential medicines supply systems, which consists of a Central Medical Store and distribution facilities from the central to regional, district and facility levels. The public supply chain in Ghana has over the past years gone through transformations with several models suggested, tested and/or tried in order to define best practices and to improve upon the functional relationships with other divisions within the health sector. On the whole there has been uniformity of practice across the country with a few localized systems set up in some settings due to peculiar circumstances. These have been the exception rather than the rule. In the current practice of financing health care delivery through a National Health Insurance scheme (NHIS) the public supply system is evolving (or needs to evolve) to be able to adapt to the new paradigm. The over arching
Ghana Reporting and Distribution System
Port
Donor Manufacturer
CMS PU
SSDM National Programmes
RHA RMS
Private Sector Supplier
THs and Reg Hos
DHMT tTTTS Health Facilities
CBD
CLIENTS
Pipeline
LMIS
Feedback
Pull
Monthly
Pull
Monthly
Monthly
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principle and ideal has been that the public supply chain should be “efficient, customer focused, and financially sustainable. The promulgation of the Public Procurement Act, Act 663 (2003) has impacted the public supply chain in a variety of ways. The liberating force it has unleashed brings with it challenges which when harnessed would improve on procurement and distribution practices. The level playing field, the fairness or non discriminatory practices, the accountability and efficiency gains the process espouses should yield in the end a “value for money” spin off of which an incentive could be the provision of an enabling milieu through which the supply chain can splutter and grow.Unfortunately, there are inadequacies in the supply system leading to low availability and high cost of essential medicines. Against this background and with the aim of improving access to essential medicines WHO, with the financial support of the European Commission, supported the Ministry of Health to assess the medicines supply system and subsequently address the gaps identified for the improvement of the system.
2.0 GENERAL OBJECTIVE The general objective is to carry out an in-depth assessment of all the country's procurement and supply management systems and also the financial flows for essential medicines and medical supplies, and to develop a strategy for strengthening the systems.
2.1 SPECIFIC OBJECTIVES • To identify and analyse at each level of the medicines supply management cycle (selection,
procurement, distribution, and use), the actors involved in each category of product and their policy, strategy and tool used for the procurement and supply chain management of each category of product
• To determine the strengths and weaknesses of existing medicines supply systems and to propose recommendations and strategies on how to improve them.
• To develop a coordinated, coherent and efficient national medicines supply plan or strategy
3.0 METHOD The study identified the relationships that exist in the selection, quantification, procurement, ordering, inventory management, storage and distribution, quality assurance system, use of medicines, financing, information management, monitoring and evaluation and human resource needs within the various tiers of the public supply system and specifically:
1. Compared the current management arrangements in handling pharmaceuticals within the tiers of the system
2. The policy environment in which the supply chain operated. 3. Examined the tools and procedures used in such varied tasks as quantification, contract
management, inventory and information management 4. Ascertained the revenue turnover over a period of time
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5. Assessed the current purchase prices and availability of a basket/tracer pharmaceuticals 6. Compared the prices of the basket of pharmaceuticals with international prices, particularly at
the central level 7. How margins at the RMS compare to the official margins set by MOH for a basket of tracer
medicines 8. Assessed the administrative and physical handling of pharmaceuticals and health supplies 9. Diagnosed the management information systems that drive the supply chain 10. Assessed the human resource gap that needs to be filled 11. The impact of monitoring and evaluation on the performance of the supply chain
12. The resources that exist and the human capital needed to manage the resources
Sources of Data • International Drug Price Indicator Guide from the MSH/WHO 2005 Edition • Purchase records from the CMS, 5 RMS and 18 SDP in the 6 regions of Ghana • Minutes of meetings of procurement committee and standard reference literature including BP
and USP • Interviews of key respondents in the public distribution system
The questionnaires had both qualitative and quantitative sections. The questions in each sub-section of the questionnaires were linked to the thematic areas in the supply chain discussed in section 1 above. This was to ensure that each question had a relevance linked to the current MOH policies and that there was a clear framework in which to analyse the answer matrix. The qualitative questions were also linked to the quantitative data collected from the different sources. The quantitative part covered the following areas:
• Contract awards in 2006 for a select group of 20 tracer pharmaceuticals • The purchase prices to the CMS, RMS and SDP in 2006 for the 20 tracer pharmaceuticals • The percentage availability and stock out days for the 20 tracer pharmaceuticals • Turnover posted over a three year period from 2004 to 2006 • Proportions of incomes used for recurrent expenditures.
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Table 1: Relationships between some indicators and core MoH policy priorities
Region Selection Two main criteria were considered in selecting the study regions.
1. Socio-economic profile and agro-ecological zone 2. The region’s implementation of new policies in the supply chain and its service structure in
terms of health outputs Greater Accra region was included because of its cosmopolitan setting. Eastern region was included because it has made a lot of strides in implementing the designed scheduled delivery programme from the RMS to the SDP Ashanti region was included because it was deemed necessary to capture the same effect we envisaged we would in the Greater Accra Region and the fact that it has partially started the scheduled delivery programme Volta region was included because of its broad geographical characteristics having the advantage of southern, middle and the fringe northern ecological zones Central region was included because of its implementation of the scheduled delivery programme from the RMS to the SDP Upper West region was included because of the fact that it was the only region in the northern ecological zone and because it was the first region to start the scheduled delivery from the RMS to the SDP but somehow has not been able to sustain the programme
Qualitative Question Quantitative indicator Efficiency Equity Sustainability Effectiveness/ Safety
Procurement Comparative prices and indicator price index
• • •
Selection, Quantification and use
Product Information •
Financial Management Accounts • • Ordering Frequency • Inventory Management Availability of stock and
service level • • • •
Distribution Availability and adequacy of transport
•
Quality Assurance Stocks that were certified to have passed analytical test
• •
Human Resource Staffing norm • Monitoring and evaluation
Feedback reports • •
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To complement the Regional Health Administration (RHA), data collected mainly through the RMS, visits were conducted to SDP in the above regions and one private hospital was visited in the Greater Accra.
Facility Coverage A total of 24 facilities were surveyed, 20 from the public sector, 3 from CHAG and 1 from the private sector. Five Regional Medical Stores were visited in the 6 regions. Table 2: Distribution of facilities visited by type of facility and region. Region Total CMS RMS SDP
Public Private CHAG Ashanti 4 1 2 1 Eastern 4 1 2 1 Greater Accra 6 1 1 3 1 Volta 3 3 Central 5 1 3 1 Upper West 2 1 1 TOTAL 24 1 5 14 1 3 Within each region a small non-representative random sample of facilities was used for the survey. A full list of the facilities visited is provided Table 2. The coverage of the CMS, RMS and the SDP meant that these in levels were considered as important components for which information gathered could help chart the course of the supply chain in the public sector. Table 3: Regional distributions of survey facilities
Facility and Level of Care Region CENTRAL MEDICAL STORES Central Medical Stores, Tema
Greater Accra
REGIONAL MEDICAL STORES RMS Ashanti Ashanti RMS Accra Greater Acc RMS Eastern Eastern RMS Central Central RMS Upper West Upper West REGIONAL HOSPITALS Ridge Hospital Greater Accra Koforidua Regional Hospital Eastern Cape Coast Regional Hospital Central Ho Regional Hospital Volta DISTRICT HOSPITALS SDP St Michael Hospital Ashanti Atua Government Hospital Eastern St Martin de Porres Hospital Eastern Kumasi South Hospital Ashanti Dangme East District Hospital Greater Accra Ho Municipal Hospital Volta St Francis Xavier Hospital Central Dunkwa District Hospital Central Tumu District Hospital Upper West
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SUB DISTRICT SDP Agona Health Centre Ashanti Akropong Health Centre Eastern Kpetoe Health Centre Volta Elmina Urban Health Centre Central PRIVATE Iran Clinic Greater Accra
Medicine Selection The underlying reasons for the selection of twenty tracer medicines, irrespective of the dosage form, were to underscore the key and critical medicines that have the greatest public health impact on the population. The range is as follows:
• Antibacterials: Amoxycillin Cap 250mg; Amoxycillin Susp 125mg/5ml (100ml); Cotrimoxazole Susp 200+40mg/5ml (100ml); Metronidazole Tab 200mg
• Antipyretics/Analgesics: Paracetamol Tab 500mg • Antifungals: Clotrimazole cream 1% (20g); Fluconazole Tab 200mg • Anthelminthics: Albendazole Tab 400mg; Albendazole Suspension 20mg/5ml (20ml) • Antihypertensives: Nifedipine Tablet 20mg Retard; Atenolol tab 50mg • Antidiabetics: Glibenclamide Tablet 5mg; Metformin tab 500mg; • Antiulcer: Omeprazole Tablet 20mg; Ranitidine Tab 150mg • Antimalarials: Artesunate + Amodiaquine Tablet 50+153mg • Antiretrovirals: Neverapine Tab 200mg; Lamivudine Tab 150mg; Stavudine Tab 20mg;
Zidovudine Tab 300mg
Analytical Approach The analytical model adopted involved the application of a combination of operational research techniques with a logistics based process mapping analysis. Detailed price comparisons were conducted taking account of differences in the levels of the facilities in the supply chain. At each stage of the supply chain system the price mark-up was determined through actual cost comparisons. After the initial testing of the questionnaires, team members split up and conducted their separate interviews during the months of June and July 2007. Regular contact between the teams ensured that the experience and any data issues encountered by one team were shared with the others. A three day workshop organized by the WHO country office from 21 August 2007 to 23 August 2007 in Accra brought together other African countries that had also collected data for a similar study. The hands-on experience on the WHO Data Collection and Analytical Tool Version 1.0 2007 which is a software specifically developed to facilitate data capture, synthesis and analysis and information bank for the study was thus achieved through this training. Confidence Interval Analysis software version 2.0.0 was used complimentarily to derive the confidence intervals for the mean prices of the tracer medicines.
24
Limitation to the Approach The survey was limited by budget and time constraints. Another limitation to the study was the inability to look at the beneficiaries’ perceptions about the supply chain. No patient and/or client survey to analyse perceptions and preferences were conducted. The absence of a user component of the supply chain ruled out the possibility of determining if decisions on the working of the supply chain were circumscribed within the context of the public sector demands and the policy environment in which the health service operates. Product availability at all levels was computed over a time period rather than specific points in time. Exact comparisons at specific times would have been preferable. Purchase prices at all levels were based on price lists rather than an analysis of actual recorded prices on invoices. Time limitations meant it was also not possible to assess the daily purchase prices or software kept by SDPs and private facilities. Ideally, analysis of samples of individual invoices would have allowed the reconciliation of the prices actually charged in comparison with the purchase price lists. There was no comparison of the proportions of public versus private purchases as well as prices from various vendors. The study did not assess the level of purchases from the private sector to give information about the use and non use of public facility warehouses and therefore no comparison could be made of public sector prices with private sector ones. However, CMS purchase prices were compared with international reference prices where information was available for the pharmaceuticals.
4.0 FINDINGS OF THE STUDY The findings provided here help identify good practices as well as structural problems in the implementation of a sound pharmaceutical sector programme.
4.1 ORGANISATION AND MANAGEMENT CMS, RMS and SDP are mainly public organizations that have imbibed private sector practices. This dual public-private interface has become blurred - at one level they are public-not-for-profit organizations but do apply margins on some selected pharmaceuticals and health supplies that they sell to their clientele. They do declare surplus rather than profits. The margins applied are expected to recover only the cost of the product for replenishment and take care of other costs such as inflation, wastage and some related costs. This income-generating revolving fund ensures an uninterrupted supply of these products. At another level these organizations do also perform public services at no cost in the sense that they do stock public health products that are allocated or issued to lower facilities at zero margin; they are products usually meant for the public good.
Governance and organizational model at the surveyed facilities The surveyed facilities have different governing bodies: the CMS has a mix of responsibilities. First it has responsibilities to an interim management committee and then to the Procurement and Supply Directorate. The RMS has responsibilities to the Regional Health Administration, whilst the Regional
25
Hospitals pharmacies have responsibilities to the Hospital Administration and the Regional Health Directorate. At the district level the District SDP and Sub District SDP report to the District Health Administration. All the facilities surveyed have decentralized organizational structures except for the CMS which is not a BMC but gets its recurrent expenditure budget through the Procurement and Supply Directorate. Table 4: The governing and organizational model by tiers in the supply chain
Levels Number of Facilities
Governing Body Organizational model
Central Medical Stores 1 Interim Management Committee
Centralized and Directorate
Regional Medical Stores 5 Regional Health Administration
Decentralized and Directorate
Regional Hospitals 4 Hospital Administration Decentralized and Directorate District Hospitals SDPs 9 District Hospital
Administration Decentralized and Directorate
Sub District SDPs Private
4
1
District Health Administration -
Decentralized and Directorate -
CMS, RMS and SDP core function matrix The matrix below in Table 4 provides an overview of the core functions of the CMS, RMS and the SDP. All the surveyed facilities perform the following key activities: product selection, quantification of needs, making orders, storage of products, warehousing, stock management as well as distribution (issuing to other stores). Table 5: Core functions performed by tiers in the supply chain
Function CMS RMS SDP Product Selection √ √ √ Quantification of needs √ √ √ Procurement (arranging calls for tenders) √ √ Making Orders √ √ √ Storage √ √ √ Warehousing √ √ √ Stock Management √ √ √ Distribution (Issues to other stores) √ √ √ Distribution (Dispense to in/out-patients) √ Delivery √ √
However, at the CMS level procurement (arranging calls for tenders) is not a core function. There are three units under the Procurement and Supply Directorate of the MoH: the CMS, the Procurement Unit and the Drug Policy Unit. The Procurement Unit coordinates the MoH procurement process and so handles the contract packages and procurement portfolios for the Ministry of Health. CMS prepares procurement plans which are forwarded to the Procurement Unit through the Director of Procurement
26
and Supply. The Procurement Unit then performs all the associated functions concerned with the procurement of needs. Distribution, associated with dispensing occurs at the SDP level. Delivery does not also occur at the SDP level but does occur at the higher levels of the supply chain. Some other additional functions that the surveyed facilities mentioned include the following:
• Logistics management support to peripheral facilities • Providing working experience to pharmacy interns • Providing adherence counseling to clients • Providing health education
Customers of the Medical Stores The surveyed facilities customers can be categorized into 2 groups. They are either internal or external customers. Table 4.4 gives the customer profile of the CMS and the RMS. CMS customers are the RMS and facilities at the tertiary level and other facilities within and outside the public sector health system. The RMSs have customers which include the SDP and others such as the faith based facilities. Note, however, that the CMS and RMS do not have private pharmacies and patients as part of their clientele. The interactions within the tiers lead to the exchange of medicines and health supplies (goods) and/or services, and these transactions have to be properly documented, audited and/or reviewed through a systematic supervisory and monitoring schedule. Table 6: Customer profile of the CMS and the RMS
Customers CMS RMS Health facilities at the central level √ Regional health facilities √ √ District warehouses √ √ District health facilities (District Hospitals) √ √ Health facilities (health Centre, health post) √ √ Private pharmacy Faith based facilities √ √ Non-governmental facilities √ Patients
4.2 PRODUCT SELECTION The selection of products to be used in the public sector health facilities in Ghana is based on the essential medicines list (EML). Each facility is responsible for selecting their medicines based on the prevailing morbidity within the locality where the facility operates. The Essential Medicines List and the complementary Standard Treatment Guidelines (STG) are documents that underpin the choice of medicines to use and how to manage certain diseases of common occurrence in the population. The Ministry of Health has set out an official policy for using the Essential Medicines List to inform procurement of pharmaceuticals at all levels. At the service delivery levels, Medicines and Therapeutics Committees (MTC) decide on the medicines to be used at the various units within the SDP.
27
At the national level an expert committee reviews the best evidence to either include or exclude pharmaceuticals on the essential medicines list. This evidence-based procedure which is adopted in reviewing the medicines list is the bulwark for defining the medicines needed to treat diseases of common occurrence in the population. As a policy thrust it is expected that the choice of medicines be generic rather than branded.
4.2.1 Availability of essential medicines lists at the survey sites and its adherence during procurement A key element of an efficient supply chain is the existence of a national essential medicines list, which contains medicines intended to be used to meet the health needs of the population. If health care is to be provided within budget constraints then a range of pharmaceuticals have to defined and available in the treatment of the common disease that the majority of the population present at health facilities. The analysis indicated that the EML is widely circulated as many survey facilities had copies of it. Table 7: Availability of EML by facility type
Levels Number of Facilities Percentage Availability of EML at Facilities
Central Medical Stores 1 100 Regional Medical Stores 5 80 Regional Hospitals 4 100 District Hospitals SDPs 9 100 Sub District SDPs 4 75 Private 1 100
The assessment revealed that CMS had a 100 percent, RMS demonstrated a return of 80 percent and the private level had a 100 percent. At the SDP regardless of the level of care the overall availability was 94 percent. The dip was found at the sub district SDP. Table 8: Adherence to EML during procurement by facility type
Levels Number of Facilities
Percentage adherence of EML during procurement
Central Medical Stores 1 100 Regional Medical Stores 5 40 Regional Hospitals 4 0 District Hospital SDPs 9 44 Sub District Level SDPs 4 75
Private 1 0 The qualitative evidence revealed that 15.3 percent of SDPs attributed the non-adherence to the EML to the fact that some of the medicines they needed were not available at either the CMS or RMS when they visited these facilities to procure pharmaceuticals. Indeed, 30.7 percent indicated that limiting procurement to the EML was not defined in the pharmacy statute. A high 46 percent of the surveyed facilities at the SDP level thought the EML does not address local needs or demands.
28
Discussion Overall, using the EML as a basis for defining needs when facilities need to procure is not encouraging at the RMS and the SDP levels and may suggest that procurements of non approved medicines could be condoned. The Essential Medicine List as a reference book was expected to be available at all the surveyed facilities. Availability is one thing. Using it as a tool in the selection of medicines is another thing, which has far reaching consequences. The qualitative survey examined the factors that influenced the selection of medicines to be used at each tier of the supply chain. Within the district and between SDPs there are considerable differences. Adherence to EML was much better at the health centre level than at the district hospital level. The RMS and the Regional Hospitals procured medicines outside the EML. The study could not ascertain the proportion of medicines procured outside the list and this, therefore, would require further analysis. When specific data are obtained potential interventions could then be developed. The fact that some SDPs thought there were no statutory provisions to compel them to procure medicines in the EML should trigger concern about refocusing thoughts on the essence and purpose of the EML concept. An indirect reference has been made about the need to review the EML judging from the high proportion of facilities that indicated that the EML does not address local needs. All surveyed facilities that had the EML indicated that the last year of review of the EML was in 2004. A call for a review was, therefore, implicitly indicated.
4.2.2 Availability of disease-specific STG at study site A complementary reference book to the EML, the STG contribute to rational medicines use at all levels of health care delivery within the public and private sectors. At best it serves at the guide that provides information on the main diseases in the population and the standardized approach needed for their treatment. The assessment revealed that 75 percent and 62.5 percent of the Regional Hospitals and District hospitals respectively have STG for the specified disease - HIV/AIDS, malaria, opportunistic infections and TB. At the health centre level there were no STG for handling HIV/AIDS related conditions but there was STG for treatment of malaria and TB. In the private SDP there was an STG for all the disease conditions expect for HIV/AIDS. Table 9: Average Percentage of STG for disease category by facility type
STG Regional Hospital
District Hospital
Health Centre Private SDP
Anti-retroviral therapy in adult 75 56 0 0 Anti-retroviral therapy in children 75 56 0 0 Treatment of malaria 75 56 75 100 Treatment of opportunistic infection 75 67 0 100 Treatment of tuberculosis 75 78 50 100
Discussion In all, majority of the surveyed facilities did indicate the existence of different disease-specific STG with three quarters and a little over half of Regional and District hospitals respectively indicating that they have STG for the specified diseases. Is this an indication that some facilities have developed additional guidelines and protocols for treating specific diseases in addition to the national STG? There
29
were not STG for HIV/AIDs at the health centre level since treatment for such conditions are limited to the higher levels of health care delivery. Some efforts at helping some district hospitals develop STG for the specified diseases would be a positive development to address the other half of the facilities that do not have them. In any case a new STG could address all these concerns and should be done when a new edition of the EML comes out.
4.3 QUANTIFICATION AND FORECASTING In most facility settings of the supply chain in Ghana the traditional consumption based method as opposed to the morbidity based method is used in the estimation of quantities of pharmaceuticals or health supplies needed for a procurement cycle. Most public health programmes in Ghana are established programmes and therefore the need to use the morbidity based method in estimating quantities of pharmaceuticals and health supplies is quite limited. These two methods can, however, be used complementarily when estimations are computed in some programmes such as the ART programme. The three data sets generally recognized and considered essential in quantification based on the consumption method are stock on hand, product consumption and losses and/or adjustments quantities. Personnel involved in quantification normally are officers managing the categories of products vertically in the supply chain.
4.3.1 The use of essential logistics data in quantification It is important that supply chain managers concerned with quantification and forecasting use essential logistics data in deriving quantification and forecasting needs. These key data include consumption data, stock on hand and losses and adjustments. Analysis revealed that two of the three essential logistics data – dispensed to user data and stock on hand-were largely used where applicable. It was the district SDP that demonstrated 89 percent usage of dispensed to user level, stock on hand and stock out duration. There was, however, no utilization of losses and adjustment quantities in quantifying facility needs from the RMS through to the sub-district SDP. Table 10: Percentage usage of logistics data used in quantification by facility type Levels Dispensed to user
data Stock on Hand
Losses / Adjustment
Stock out duration
Central Medical Stores n/a 100 100 100 Regional Medical Stores n/a 40 0 60 Regional Hospitals 100 100 0 100 District Hospital 89 89 0 89 Sub District SDP 100 100 0 75 Private 100 100 0 100
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Discussion The study has revealed that pharmacists at all levels are involved in quantification of essential medicines. Supply officers limit themselves to health supplies quantification and programme managers to all programme needs - HIV/AIDS, TB, antimalarials, medicines for opportunistic infections, pediatric formulations for HIV/AIDS and malaria. Public health personnel are responsible for quantification of contraceptives including condoms whilst laboratory personnel are responsible for laboratory products. In one way or the other, it is remarkable that at least one of the key essential logistics data is used in quantification exercises at all levels. However, at the Central and Regional Medical Stores it is not possible to use dispensed to user data. In reality the Central and Regional Medical Stores use a proxy data, which is the issued data. The assumption made is that whatever is issued out to the lower levels is considered used or “consumed” by clients. It does have certain merits and demerits. On the positive side the data is readily available and sometimes correlates to the dispensed to user quantities. The reality, however, is that it does not reflect actual usage and could be exaggerated. The use of losses and adjustment data was mentioned by CMS. The procurement decisions derived from this is that it enables the supply chain to generate a robust quantification regime that allows for all the transfers, expired products and waste to be factored into the quantification calculations. These can often be overlooked in logistics management unless an allowance factor is included during the quantification exercise. Overestimation or underestimation of needs may occur at the early stages of the implementation of any new programme because consumption data are unavailable; SDP could be either overstocked or under-stocked. Monitoring teams within each district may need to report stock status of medicines to the Medical Superintendent and the Director of Pharmaceutical Services for the respective region so that steps can be taken to move stocks within districts to minimize expiration and ensure accessibility of pharmaceuticals within each locality.
4.4 PROCUREMENT This sub-section is divided into two parts. The first part deals with the administrative elements in the implementation of procurement plans. The second part examines price data. The price data allowed consideration of:
• Comparisons between CMS purchase prices and international reference prices • Differences in prices for medicines purchased at CMS and the RMS to determine how these vary
across the country and whether there is a correlation between relative prices and procurement decisions at different levels
• Variations in average prices for selected medicines at the CMS, RMS and the SDP The policy on the procurement of essential medicines and health supplies in Ghana is based on the principle of decentralization and autonomy of each facility within the procurement and distribution system. Each facility is responsible for making procurement decisions as set out in the MoH Procurement Procedure Manual. Procurement procedures are quite detailed and the manual gives steps on development of contract packages, the formation of committees, setting timelines for bid adverts, opening and evaluation, specification and roles and responsibilities of personnel. The decentralized
31
aspect of the system has both merits and demerits that affect rational procurement decisions which impacts on access and availability of medicines. In general MOH procurement policy states that RMS must source from the CMS first for its requirements and if CMS is unable to meet these needs then with the CMS confirmation that they are indeed out of stock of the requested item, then the RMS can turn to the open market. To do this the RHA and SDP are expected to constitute a procurement committee to make purchases from the private sector. The committee is usually made up of four or five senior members of the RHA and can follow one of two approaches. For consignments worth under $50,000 the RMS can shop locally for supplies comparing prices and quality before deciding on the best offer after the evaluation of bids. For orders larger than $50,000 a formal tender process must be followed with at least three bids being considered by the committee. For lower level facilities a similar approach is meant to be followed i.e. by going to the RMS first and then only when the RMS is unable to supply can the health facility turn to the private sector.
4.4.1 Procurement Plans and their development A vital component of the procurement process is the preparation of procurement plan. Procurement plans give a clearer picture of how procurement could be organized. In general, the plan should include the contract packages, the estimated costs, and the envisaged procurement method to be used for each contract package. Some important additional requirements are the timelines such as the tendering, bid opening and evaluation as well as the expected delivery of the goods. The facility is normally expected to set up a committee to develop the procurement plans and task the procurement office to coordinate the various activities needed to make it functional. The assessment revealed that at each level of the supply chain procurement plans are prepared and that the weakest links are at the district and the sub district SDP which demonstrated 44 percent and no procurement plans respectively whilst for the Central, Private, Regional Hospitals procurement plans were prepared. Table 11: Percentage availability of Procurement Plans by facility Type
Facility Type Number of Facilities Percentage availability of Procurement Plans
Central Medical Stores 1 100 Regional Medical Stores 5 60 Regional Hospitals 4 100 District Level SDPs 9 44 Sub District Level SDPs Private
4 1
0 100
At the SDP where there was evidence of committee participation the members included the Medical Superintendents, Pharmacists, Health Service Administrators, the Hospital Matrons, Laboratory Technologists and Accountants.
32
Discussion Generally, majority of the surveyed facilities did indicate the existence of procurement plans with two fifths of RMS and almost half of district SDP respectively indicating that they at least prepare procurement plans. This is an indication that some facilities may have procurements executed in an uncoordinated manner even though this is only an assumption. Procurement plans are the basis for initiating and implementing the procurement process and also creating the necessary coordinating mechanisms of ensuring the provision of goods and other services the facilities need in a more organized manner. The important process of getting stakeholders to develop their procurement plans in the surveyed facilities was not well established. In a few instances it was the SDP that indicated that there was a committee that facilitated this process. Some efforts at helping some RMS and district SDPs facilities develop procurement plans would greatly improve the processes needed to implement procurement in a more structured manner.
4.4.2 Procurement method employed for contract packages A key component of the procurement plan is the Procurement method. The type of procurement method that is employed for a particular contract package is dependent on many factors including but not exclusively limited to the nature of the goods, services or works desired and the financial threshold or ceiling that would be involved in procuring the package. Whatever method is employed finally impacts on the prices of the goods or services consumers or clients pay for. The Central Medical Stores uses International Competitive Bidding, selective bidding and national competitive bidding in acquiring its pharmaceuticals and medical supplies. The RMS and SDP use national competitive bidding in acquiring goods when they are not available at the CMS. Table 12: Procurement method employed by facility type
Procurement Method CMS RMSs SDPs International Competitive bidding √ Selective bidding √ Negotiated tender National Competitive bidding √ √ √ Direct procurement
Discussion The surveyed facilities all employ approved methods in the procurement of goods. As indicated earlier the Procurement Unit of the MoH coordinates the procurement portfolios of health programmes and that includes CMS requirements and other allied units and/or programmes. The CMS employs a number of methods in acquiring products. The RMS and SDP rely on the National competitive bidding as one of the options for procurement, all of which in the end are directly related to the financial thresholds stipulated for each procurement method. It would be worthwhile to determine the most cost effective method used at the different levels of the supply chain in further surveys.
33
4.4.3 Procurement frequency The number of procurements carried out in the course of a defined procurement period reflects the quality of the procurement plans. It is a measure of how organized the facility handles procurements. There is an indirect relationship with resource mobilization; if resources needed to carry out procurement are easily available the procurement frequency can be stretched but if they are unavailable facilities can make ad-hoc purchases. The assessment has revealed that CMS procures yearly or at least twice in a year. The RMS on average procures four times in a year whilst at the SDP the average procurement frequency was monthly. Some SDPs also indicated that they procure “as and when the need arises”. Table 13: Procurement frequency by facility level
Frequency of Procurement CMS RMSs SDPs Monthly √ Four times a year (Quarterly) √ √ Two times a year √ Yearly √ As and when needed √
Discussion It is difficult to put a ceiling on how many times a facility needs to procure within a given time frame. The assumption is that it reflects on how resources in the health sector need to be utilized. There is a cost in organizing procurements and efficiency gains will most likely appear in the upper levels where it is generally low. The “as and when the need arises” approach may also reflect on an inventory system that forces inventory control officers in the lower facilities to order when stocks reach a minimum level before the end of the review period. The frequent orders that lower level SDPs place might be a reflection of poor inventory management practices and inadequate financial resources for optimum replenishment.
4.4 4 Procurement lead times Timelines are needed for the smooth implementation of procurement plans. One critical timeline is the procurement lead time. Procurement lead time is a function of the type of procurement method used. A long procurement lead time compromises the availability of products, leads to low staff morale and dents confidence in the supply chain and ultimately the health care delivery systems. Analysis showed that on average it take about a year for CMS to receive orders through International Competitive Bidding, whilst in selective bidding it takes about 180 days (6 months). If a national competitive bidding is conducted it takes on average 90 days (3 months) at both the Central Medical Stores and the Regional Medical Stores Table 14: The average periods taken to complete different procurement method in days
Procurement Method CMS RMSs SDPs International Competitive bidding 365 - - Selective bidding 180 - 14 Negotiated tender - - - National Competitive bidding 90 90 - Direct procurement - 14 1
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Discussion It has been suggested and is generally agreed, that at the CMS level the average lead time for ICB should be about 7 months. If it takes CMS a full year on average to receive products then the timelines needed to complete the procurement cycle need to be redefined for ICB. Whether this can be considered a constraint for which CMS can deal directly and address internally or it is an external constraint for which it has no control over, needs to be further analysed. The type of contract awarded to suppliers may determine the procurement lead times as well. The survey has determined that at the SDP level it took on average 14 days to complete a selective bidding procurement process. Another consideration worth pursuing is to institute a rigorous contract regime and match the terms in the contract with supplier performance so that delivery times are adhered to. For now we do have partial explanations for the causes of the long lead times experienced at the CMS. Further studies are needed to elucidate on this matter.
4.4.5 Standard Operating Procedures for procurement Standard Operating Procedures (SOP) should list in detail each and every function associated with the operations of the procurement process. SOPs are developed in close co-operation with the operational staff to ensure their comprehension and comprehensiveness. The SOP must cover all aspects of the system to be applied during the procurement process, such as call of tenders specific for the procurement of medicines and medical supplies. The CMS demonstrated 100 percent existence of an SOP or document for call of tenders specific for the procurement of medicines and medical supplies. The RMS, Regional Hospitals and the District SDP had 60 percent, 33 percent and 25 percent respectively. There was no SOP at the sub district facilities. Table 15: Availability of SOP for procurement by facility type
Levels Number of Facilities Percentage availability of Procurement Manual or SOP
Central Medical Stores 1 100 Regional Medical Stores 5 60 Regional Hospitals 4 25 District SDPs 9 33 Sub District SDPs Private
4 1
0 0
Discussion The decreasing availability of procurement manual or SOP at the RMS level through the sub district SDP may suggest a need to streamline the procurement system in the entire supply chain. Standard Operating Procedures that list in detail each and every function associated with the procurement process are clearly needed. The SOP must cover all aspects of the procurement system to be applied at the health facilities and at the RMS such as the call-for-tenders specific for the procurement of medicines and medical supplies. One can only speculate that at majority of the surveyed
35
facilities probably the process is not well documented and that it would be necessary for steps to be taken to address this.
4.4.6 Tender evaluation by Entity Tender committee and contract award In order to ensure a nondiscriminatory, fair and transparent process in the award of contracts a technical committee is expected to be formed during the evaluation of bids. This exercise should be informed by the tenets put in the bidding documents. There is also the need to ensure that a pact indicating that members of the evaluation team do not have any interest in any of the bidders’ firm is affirmed and available to serve as an evidence of unbiased process and the recommendations of the committee should lead to the award of contracts. Analysis has revealed that at the CMS tenders are technically analyzed by a committee set up at the procurement unit of the MOH. However, 80 percent and 75 percent respectively of RMS and the Regional Hospitals constitute a technical committee and 44 percent of the district hospitals do also constitute a technical committee. There were no such arrangements as constituting a technical committee at the sub district level. Table 16: Percentage analysis of tender by technical committee by facility level
Levels Number of Facilities Analysis of tender by technical committee
Central Medical Stores 1 100 Regional Medical Stores 5 80 Regional Hospitals 4 75 District Level SDPs 9 44 Sub District Level SDPs Private
4 1
0 -
Discussion The non existence of a technical committee at the sub district level is to be expected as they do not normally carry out procurements outside of the RMS. A quarter of the Regional Hospitals and over half of the district hospitals did not put in place technical committees to evaluate bids. The Regional and district hospitals all have to ensure the formation of technical committees to evaluate bids. If this is done the credibility of contracts awarded would be assured and seen as following due process to the letter as there would be transparency and accountability.
4.4.7 Sources of medicines and medical supplies flowing through the distribution system An indirect measure to determine whether procurement entities are procuring rationally is to assess how much they ascribe to procurement policies as spelt out in the MOH Procurement Manual. Currently, medicines are purchased by the CMS through the Procurement Unit which organizes international competitive bidding (ICB) of which winning bidders could be international manufacturers, international suppliers or local companies and through national competitive bidding. The RMS and teaching hospitals are required to procure medicines from the CMS and from the local private sector in cases of unavailability at the CMS. All the regional hospitals and SDPs are in turn expected to procure from the
36
RMS in their respective regions unless there is evidence that what they needed from the CMS was unavailable and so could obtain them elsewhere. The main sources of products at all levels other than the CMS are the local manufacturers and distributors. In addition to the above sources, CMS obtains supplies from both international manufacturers and international distributors. The SDPs surveyed obtain supplies from a variety of sources which are basically private and faith-based establishments. Of the SDPs surveyed 11 percent obtained supplies from faith-based establishments. In addition, 44 percent and 78 percent of SDPs surveyed obtained supplies from private pharmacies and private wholesalers respectively. 72 percent of the surveyed SDP obtain supplies from local manufactures and 61 percent from local distributors. With decentralized management decision making, the actual pattern of procurement reflects separate decisions made by CMS, RMS and SDP managers. Table 5.12 provides the share of supplier base from which SDPs source their products. Table 17: Percentage share of supply source by all SDP
Supplier Category % Responses from SDPs on supply source
Private wholesalers 78 Private pharmacies 44 Faith Based structure 11 Local manufacturers 72 Local distributors 61 International manufacturers 0 International distributors 0
The qualitative survey examined factors influencing local procurement decisions. Respondents at the SDP level identified a number of factors with the following mentioned most often.
• Price of product and Quality of product were mentioned by 44% of facilities surveyed • Performance of supplier, Supplier quotations and stated delivery time were mentioned by 28% • Supplier terms of payment was mentioned by 22% • Impact of bulk procurement was mentioned by 17%. • National preference was mentioned by 11%.
All RMS indicated that they were not obliged to procure exclusively from the public procurement system whilst 84 percent of SDPs said the same. Discussion The highest share of drugs being bought outside of the public sector by the SDP is from the private wholesalers, followed by local manufacturers and local distributors. This suggests that the SDPs visited in the regions are buying from both the public sector as well as the private sector. While they may be following the tenet of the procurement policy none of the facilities visited gave the proportions of purchases they made from either the public or private sector.
37
There is some compelling evidence that pricing and quality of product rank as the most important factors SDPs consider in awarding contracts as these ranked equally with performance of supplier and supplier terms of payment following as close second and third factors they also consider in contract award. As it were, the only information available was an average price analysis for a list of tracer medicines without the one being able to delineate the source of the products as would be presented in later section in this study. To get around this the CMS prices were compared with international reference prices. Average purchase prices at CMS, RMS and SDP Another level of comparison for the public sector distribution system would be to compare prices at the CMS and RMS levels so as to get a sense of the margins at these levels. In this particular case average prices were used. Results and Discussion Figure 3 below is based on average price differentials across regions, and compares prices at different geographic points. It may therefore mask variations in intra-regional prices. This is examined in detail in Table 13 overleaf. This shows the difference between prices for the same product paid by an RMS to a supplier and that probably includes CMS and for a SDP purchase from probably a RMS or a different supplier. A negative difference indicates the RMS average price is less expensive and cheaper than the CMS while a positive difference shows the CMS to be cheaper. In some cases the average prices at the RMS are shown as lower than the CMS prices, as in the case of Paracetamol Tablet 500mg. Figure 3: Average purchase price of 20 tracer medicines by facility type
0.000
0.200
0.400
0.600
0.800
1.000
1.200
1.400
1.600
1.800
Amoxyc
illin C
ap 25
0mg
Amoxyc
illin S
usp 1
25mg/5
ml
Parace
tamol
Table
t 500
mg
Cotrim
oxaz
ole S
us 20
0+40
mg/5ml
Clotrim
azole
Cre
am 1%
(20g
)
Fluco
nazo
le Ta
blet 2
00mg
Albend
azole
Sus
p 20m
g/5ml
Albend
azole
Table
t 400
mg
Metron
idazo
le Ta
blet 2
00mg
Nifedip
ine Ta
blet R
etard
20mg
Atenolo
l Tab
let 50
mg
Metfor
min Ta
blet 5
00mg
Gliben
clamide
Tab
let 5m
g
Omepra
zole
Table
t 20m
g
Ranitid
ine Ta
blet 1
50mg
Artesu
nate/
Amod
Tab 5
0/153
mg
Purc
hase
Pric
e (U
SD)
Avg CMS Avg RMS Avg SDP
38
The analysis indicates that CMS prices were cheaper in all cases except for the Paracetamol Tablet 500mg. The magnitude of the differences is quite huge and range from 15 percent to a high of 346 percent. Given the fact that we were unable to determine the sources of these medicines at the RMS and SDP we can only conclude that on the whole the majority of purchases occur outside the public sector, where margins are set at 10 percent mark up. The study indicates that the price differences are also very wide apart from the RMS to the SDP with a range of 6 percent to over 341 percent.
In the case of the SDP the percentage differences for some of the medicines were so high that we considered them as outliers and so those medicines were not included in the analysis.
Table 18: Percentage difference in prices for CMS, RMS and SDP Products Average
CMS Pur Price
Average RMS Pur Price
Average SDP Pur Price
% Diff (CMS and RMS)
% Diff (RMS and SDP)
Margins at RMS
Amoxycillin Cap 250mg 0.013 0.0152 0.437 15.15 Amoxycillin Susp 125mg/5ml 0.331 0.3931 0.455 18.73 15.80 15.80 Paracetamol Tablet 500mg 0.003 0.0017 0.470 -37.45 Cotrimoxazole Sus 200+40mg/5ml 0.220 0.4260 1.367 93.81 220.93 220.93 Clotrimazole Cream 1% (20g) 0.000 0.5304 1.689 218.33 218.33 Fluconazole Tablet 200mg 0.167 0.7431 1.164 345.78 56.67 56.67 Albendazole Susp 20mg/5ml 0.200 0.2491 0.596 24.56 139.26 139.26 Albendazole Tablet 400mg 0.000 0.1678 0.200 18.94 18.94 Metronidazole Tablet 200mg 0.004 0.0043 0.053 22.54 Nifedipine Tablet Retard 20mg 0.018 0.0558 0.059 204.80 6.25 6.25 Atenolol Tablet 50mg 0.001 0.0142 0.038 167.34 167.34 Metformin Tablet 500mg 0.009 0.0230 0.034 147.31 49.67 49.67 Glibenclamide Tablet 5mg 0.004 0.0083 0.090 108.33 Omeprazole Tablet 20mg 0.000 0.0788 0.119 50.88 50.88 Ranitidine Tablet 150mg 0.000 0.0507 0.224 341.46 341.46 Artesunate/Amod Tab 50/153mg 0.051 0.1226 0.179 140.44 45.95 45.95
CMS prices compared to International Medicines Reference Another price comparison that would help inform policy would be to compare prices offered by the CMS against those offered by international manufacturers or international supplier/wholesalers. Table 18 compares price information from CMS purchase invoices with international information available from the MSH – RPM Plus project on international prices for generic pharmaceuticals. It shows that in all 7 of the products purchased by CMS, where an international reference price was identified, were cheaper than the quoted international reference prices. In some cases, such as Nifedipine, Stavudine and Zidovudine, the differences were smaller. In others, Nevirapine and Artesunate+Amodiaquine the difference in prices were quite substantial. There were 4 medicines for which no data was available at CMS because these were not procured. These were Clotrimazole cream 1% (20g), Albendazole Tab 400mg, Omeprazole Tab 20mg and Ranitidine Tab 150mg.
39
Figure 4: Mean purchase prices of 20 tracer medicines for CMS and MSH-RPM
For the 6 products where MSH – RPM reference prices were lower the differences were wide. The three products where CMS prices were slightly higher were Amoxycillin Capsule 250mg, Fluconazole Tablet 200mg and Atenolol Tablet 50mg. On the other hand for 3 products which were Amoxycillin Susp 125mg/5ml, Cotrimoxazole Susp 240mg/5ml and Albendazole Susp 20mg/5ml the CMS paid substantially more. Table19: Percentage difference between mean purchase prices for CMS and MSH RPM
Medicine CMS Purchase Price
MSH Purchase Price
Price Difference % increase / decrease
Amoxycillin Cap 250mg 0.0132 0.0147 -0.0015 -10.20 Amoxycillin Susp 125mg/5ml (100ml) 0.3311 0.0058 0.3253 5,608.62 Paracetamol Tablet 500mg 0.0027 0.0031 -0.0004 -12.90 Cotrimoxazole Susp 200mg+40mg/5ml 0.2198 0.0037 0.2161 5,840.54 Clotrimazole Cream 1% (20) 0.0000 0.0204 0.00 Fluconazole Tablet 200mg 0.1667 0.1273 0.0394 30.95 Albendazole Susp 20mg/5ml (20ml) 0.2000 0.0150 0.185 1,233.33 Albendazole Tablet 400mg 0.0000 0.0157 0.00 Metronidazole Tablet 200mg 0.0035 0.0034 0.0001 2.94 Nifedipine Tablet Retard 20mg 0.0183 0.0215 -0.0032 -14.88 Atenolol Tablet 50mg 0.0010 0.0088 -0.0078 -88.64 Metformin Tablet 500mg 0.0093 0.0174 -0.0081 -46.55 Glibenclamide Tablet 5mg 0.0040 0.0039 0.0001 2.56 Omeprazole Tablet 20mg 0.0000 0.0594 0.00 Ranitidine Tablet 150mg 0.0000 0.0216 0.00 Artesunate/Amodiaquine Tab 50/153mg 0.0510 0.0885 -0.0375 -42.37 Niverapine Tablet 200mg 0.0866 0.1774 -0.0908 -51.18 Lamivudine Tablet 150mg 0.0844 0.1157 -0.0313 -27.05 Zidovudine Tablet 300mg 0.2260 0.2618 -0.0358 -13.67 Stavudine Tablet 20mg 0.0900 0.1035 -0.0135 -13.04
0.0000
0.0500
0.1000
0.1500
0.2000
0.2500
0.3000
0.3500
Amoxyc
illin C
ap 25
0mg
Amoxyc
illin S
usp 1
25mg/5
ml
Parace
tamol
Table
t 500
mg
Cotrim
oxaz
ole S
us 20
0mg+
40mg/5
ml
Clotrim
azole
Cre
am 1%
(20)
Fluco
nazo
le Ta
blet 2
00mg
Albend
azole
Sus
p 20m
g/5ml
Albend
azole
Table
t 400
mg
Metron
idazo
le Ta
blet 2
00mg
Nifedip
ine Ta
blet R
etard
20mg
Atenolo
l Tab
let 50
mg
Metfor
min Ta
blet 5
00mg
Gliben
clamide
Tab
let 5m
g
Omepra
zole
Table
t 20m
g
Ranitid
ine Ta
blet 1
50mg
Artesu
nate/
Amod
ia Ta
b 50/1
53mg
Nivera
pine T
ablet
200m
g
Lamivu
dine T
ablet
150m
g
Zidov
udine
Table
t 300
mg
Stavud
ine T
ablet
20mg
Med
ian
Purc
hase
Pric
e (U
SD)
CMS Purchase Price MSH Purchase Price
40
Discussion Comparative analysis of prices with international price references gives procurement units leverage in assessing how efficient their procurements have been even though price is not the only criteria to be used in drawing such conclusions. As we have seen from the qualitative interviews, product quality, impact on bulk procurement and national preference are factors linked in the assessment of bids and eventual contract award.
For the products sampled as a whole, after making adjustments for outliers the data analysed suggests the CMS paid on average 21 percent less than the international reference price for the same products (excluding the Amoxycillin Susp 125mg/5ml (100ml), Cotrimoxazole Susp 200mg+40mg/5ml, Albendazole Susp 20mg/5ml (20ml) .
Mean purchase prices at SDP A useful indicator in procurement is to determine how much clients using the health services will be paying for the pharmaceuticals that they use and so measure affordability of medicines indirectly. We have used the mean purchase price data from the sampled SDP to determine the confidence intervals for the SDP mean purchase prices. The SDP mean purchase prices for the tracer pharmaceuticals are presented with the confidence intervals in Table 16. Table 20: Confidence Intervals for the SDP purchase prices for medicines
Medicine SDP Mean Price
Confidence Interval
Amoxycillin Cap 250mg n = 14 0.021 0.018 - 0.025 Amoxycillin Susp 125mg/5ml (100ml) n = 15 0.38 0.299 - 0.416 Paracetamol Tablet 500mg n < 6 0 0 Cotrimoxazole Susp 200mg+40mg/5ml n = 13 0.474 0.394 - 0.553 Clotrimazole Cream 1% (20) n = 11 1.227 0.569 - 1.886 Fluconazole Tablet 200mg n = 7 1.579 1.121 - 2.036 Albendazole Susp 20mg/5ml (20ml) n = 13 0.496 0.312 - 0.681 Albendazole Tablet 400mg n = 14 0.218 0.144 - 0.292 Metronidazole Tablet 200mg n = 11 0.012 0.008 - 0.016 Nifedipine Tablet Retard 20mg n = 13 0.038 0.025 - 0.052 Atenolol Tablet 50mg n = 10 0.032 0.025 - 0.039 Metformin Tablet 500mg n = 11 0.026 0.022 - 0.031 Glibenclamide Tablet 5mg n = 14 0.017 0.008 - 0.026 Omeprazole Tablet 20mg n = 11 0.094 0.062 - 0.126 Ranitidine Tablet 150mg n = 7 0.099 0.067 - 0.130 Artesunate/Amodiaquine Tab 50/153mg n = 12 0.247 -0.006 - 0.504
95% Confidence Interval The wide confidence interval for Clotrimazole Cream and Fluconazole Tablet suggests that the prices at the supply source could be expected to be differently marked. For the other products the nearness of the confidence intervals suggests a relatively closer price regime.
41
Figure 5: Confidence interval limits for SDP mean purchase prices for 16 medicines
Discussion We can predict that the nearness of the confidence interval range for the majority of the medicines is an indication that the purchase prices SDP make can be fairly compared to the mean prices that have been determined.
4.5 ORDERING Ordering is closely linked to procurement and inventory management. It is the interface between procurement and inventory management and there are links. We have already looked at procurement frequency which is similar to and linked to ordering frequency and ordering lead times. We now turn our attention to seminal issues related to supplier performance, availability of transport and the associated problems facing facilities in this regard.
4.5.1 Delivery of medicines and health supplies Useful information in arranging for orders is to determine beforehand whether the supplier is expected to deliver the products or the consignee is to make transport arrangement for the products that have been ordered. This is usually spelt out in the contract. It can also be determined by the procurement incoterm used. The mode of delivery of medicines and health supplies is through a mix service. All the surveyed facilities either receive their products from the supplier or they collect their products themselves.
0
0.5
1
1.5
2
2.5
Amox
ycillin C
ap 25
0mg
Amox
ycillin S
usp 1
25mg/5
ml (100
m
Parace
tamol
Table
t 500
mg
Cotrim
oxaz
ole S
usp
200+
40mg/5
m
Clotrim
azole
Cre
am 1
% (20g
)
Fluco
nazo
le Ta
blet 2
00mg
Albe
ndaz
ole Sus
p 20m
g/5ml (2
0m
Albe
ndaz
ole Ta
blet 4
00mg
Metron
idazo
le Ta
blet 2
00mg
Nifedip
ine T
ablet
Reta
rd 20
mg
Aten
olol T
ablet
50m
g
Metformin
Table
t 500
mg
Gliben
clamide
Tab
let 5
mg
Omeprazo
le Ta
blet 2
0mg
Ranitid
ine Tab
let 15
0mg
Artes
unate
/Amod
iaquin
e Ta
b 50/1
53m
Mea
n Pu
rcha
se P
rice
($)
High Low SDP Mean Price
42
Table 21: Transport arrangements linking Issuing facility and requesting facility Deliveries of orders CMS RMS SDP Delivered by supplier (Issuing facility) √ √ √ Collected by own store (requesting facility) √ √ √
Discussion Currently, lower-level facilities (especially the health centres) rely on the District Health Administrations (DHAs) to provide the transport needs required to cart products to their facilities. The DHAs usually use a four-wheel-drive double cabin pickup truck. Each DHA has at least one double cabin pickup truck. At the regional level, all Regional Health Administrations — which the RMS are linked to administratively — have 7-ton trucks to cart medicines and health supplies from the CMS to the RMS. The CMS is currently working toward providing no-charge transportation to the RMS through a scheduled delivery system using 7-ton trucks. The RMS in turn would focus the use of its trucks to transport medicines and health supplies to the SDP. At present, however, the CMS has five 7-ton trucks and a 35-ton articulated truck, which it uses to transport all medicines and health supplies to the regions. What has been recommended in other studies is the acquisition of 3.5-ton all covered light trucks to the RMS so that they can effectively deliver the needs of the SDP from the RMS. No contract currently exists for transport arrangements between the Regional or District Health Administrations and parastatal or commercial agencies.
4.5.2 Distances from supply source for medicines and factors that influence transport Travel time is an important factor that influences the frequency of orders put in by facilities. Distances from the supply source could also influence the type of vehicle to use at any time and in extreme circumstances the quantities to order. Average distance from the surveyed facilities to key storage/receiving sites is between 4 and 127.3 km on average. Table 22: Average distance to and from storage/transit site by facility type
Respondents at the SDP level identified a number of challenges associated with transport during collection of medicines and medical supplies with the following mentioned most often: -
• Lack of vehicles was mentioned by 61% of facilities surveyed.
Storage/Transit Site CMS RMSs SDPs Central Medical Stores - 127.3 67.4 Regional/District Medical Stores - - 23.6 Airport 30 - - Seaport 4 - -
43
• Poor condition of vehicle was mentioned by 44% • High cost of transport was mentioned by 44% • Long distance to cover was mentioned by 22%. • Poor road network was mentioned by 11%.
The average number of vehicle per facility was found to be one for van, truck, bus, cross country, saloon and pick-up truck. Discussion For all the surveyed facilities it is reasonable to assume that it is possible to get to any storage site within a day or two. This means that transaction times can be reduced and time allotted to other services for their clients.
4.5.3 Monitoring supplier performance A key element in contract management at the facility level is to measure the status of supplies that have been delivered and have information on quantities on order. All deliveries are expected to be carried out within the schedule of deliveries set out in any contract. This ensures that clients would be able to receive their supplies when they need them. This is the long term objective of distribution. All facilities in the CMS and RMS bracket indicated that they monitor supplier performance by a set of criteria to the letter. In the case of the SDP it was revealed that an average of 60 percent monitored supplier performance with varying consideration for respect of agreed delivery time schedule receiving 61 percent attention and to a lesser extent 50 percent receiving quality of service after sales and 56 percent receiving respect of storage conditions. Table 23: Percentages attained in monitoring supplier performance by facility type
Discussion It is important to note that the area receiving the most attention is the product delivered conforming to the order. This means that even in large or small warehouses that may have problems with capacity to stock products adequate arrangements can be made. A topmost priority, however, is whether what they are receiving conforms to the order. Much consideration should also be given to product specification as a monitoring indicator/criterion, where different lines are received by the requesting facilities.
4.5.4 Storage capacity at facility warehouse Storage space can range from a large warehouse as the central warehouse to as small as a cupboard in the remote SDP. No matter how large or small any storage space may be it is important to address the
Monitoring area CMS RMSs SDPs Products delivered conforms to the order 100 100 72 Quality of service after sales 100 100 50 Respect of agreed delivery time schedule 100 100 61 Respect of storage conditions 100 100 56
44
storage conditions necessary to ensure that the same quality and quantity of medicines that were received is the same quality and quantity that was issued to clients with a minimum allowable wastage. CMS has adequate storage space of 50,000 m3 which is big enough to hold all it requires to stock over the required period of time. The SDP has little less than existing rooms for their storage space with an average of just a little over 200 m3. Table 24: Average storage space by facility type
Levels Number of Facilities Average volume of storage space in m3
CMS 1 50,000 RMS 5 2,838.4 SDP 18 223.3
Discussion CMS is the only facility that indicated they had adequate storage space. The difficulty in assessing the adequacy or otherwise of current structures is that it is often subjective and quite difficult to determine what adequate space would be needed by a RMS or SDP. The other difficulty is that to be able to expand on the existing structures requires huge capital investments. It has been included in the report to underscore the need to at least reconstruct the Greater Accra Regional Medical Stores. It was not possible for surveyed facilities to determine the volumes of stocks that they have received for 2006. It would have been a good guide to judge how much space would be needed at the RMS and the SDP but the throughput and output relationships would have to be carefully analysed to be able to draw conclusions on what ideal storage space these facilities would require. It would be necessary to conduct additional surveys to be able to determine the ideal storage space for some facility types.
4.6 INVENTORY MANAGEMENT Inventory control is the basis of coordinating the flow of medicines and medical supplies in the supply chain. An inventory control system informs the manager what to order, when to order, how much to order so that clients can be served at all times. An efficient inventory control system minimizes spoilage and expiry at all levels. Maximum and minimum levels are established at all levels for medicines and other health supplies. The commonly practiced Periodic Ordering, or Forced Ordering inventory control system at the RMS and SDP ensures that at the end of each review period (quarterly for most RMS and monthly for SDP) logistics personnel at those levels review all stock levels and order enough to bring stock levels up to the maximum. Although ensuring uniformity in inventory control may be necessary, each SDP is required to establish local inventory control mechanisms that include a stock status assessment (measured in months’ of stock) and also to establish an emergency order point when an order must be placed for some medicines even if the end of the review period has not been reached.
45
Establishing and maintaining effective inventory records and procedures are the basis of coordinating the flow of medicines in the distribution system and the primary protection against leakage and wastage. Forms are used for requisitioning and issuing medicines and health supplies, for financial accounting, and for preparing the consumption and stock balance reports necessary for procurement.
4.6.1 Designated storage areas at the warehouses Optimal storage areas for specific functions must ideally be designated and constructed in warehouses. Where specific and designated areas exists the flow of goods becomes seamless and this facilitates the identification or location of certain types of products and improves the efficiency of warehouse operations. Much variation exists in design, product handling, and cooling equipment at most of the sites surveyed. CMS has the full storage designated areas except for the area designated for products returned from customers. The RMS and SDP have varying degrees of specific designated areas as indicated in Table 21 Table 25: Percentage Availability of designated areas at CMS, RMS and SDP
Designated areas CMS RMSs SDPs Delivery of products 100 60 44 Expired/damaged products 100 80 61 Main storage 100 100 83 Products requiring cold storage <8oC 100 100 94 Reception of products 100 40 67 Quarantine of products 100 20 22 Storage of dangerous products 100 60 61 Products returned from customers 0 20 33
Discussion Proper organization and maintenance of storage equipment are needed to maintain medicine quality, minimize wastage and damage. To be able to achieve this, facilities have to improvise and create some “fluid location” system. Most facilities may have to be refurbished to accommodate these changes or they could improvise by creating locations that can serve more than one function – fluid locations – to be able to improve on the flow of products and from the warehouses. 4.6.2 Storage conditions at warehouse Gains made by careful selection of products and rational procurements can all be reduced if followed by poor storekeeping practices. In such situations resources are likely to be wasted due to altered quality and spoilage. Medicines have “enemies”: heat, light, moisture and pest. It is also recognized that medicines have to be protected from theft, expiration, physical damage and fire. CMS has the necessary storage conditions as indicated in Table 22. The RMS and the SDP have varying degrees of capacities and resources in handling some of the natural conditions that tend to accelerate the deterioration of medicines.
46
Table 27: Level of protection at storage sites by facility type Storage conditions CMS RMSs SDPs Temperature Protected Not Protected Not Protected Moisture Protected Not Protected Not Protected Humidity Protected Protected Not Protected Pest Not Protected Protected Not Protected Theft Protected Protected Protected Expiration Protected Protected Protected Physical damage Protected Not Protected Not Protected Fire Protected - -
In the area of prevention of physical damage RMS and SDP indicated that they did not have enough handling equipment to ensure that medicines are well protected at the warehouse. Discussion Proper organization and maintenance of storage equipment are needed to maintain medicine quality, minimize wastage, and ensure a regular supply to health facilities. Every facility in the supply chain distribution system is encouraged to use SOP in carrying out their activities. Storage procedures are expected to be followed at all levels. Job aids have been developed and are available in the Standard Operating Procedures manual for the management of health commodities in public health facilities.
4.6.3 Stock management techniques Stock management techniques are a key to ensuring availability of pharmaceuticals and health supplies in the supply chain distribution system. This requires that inventory control officers combine this activity with the check list they would have for monitoring storage conditions. These two activities are not mutually exclusive. FEFO was the most commonly applied technique at all levels of the supply chain. The manual system for entering all transaction records are still practiced at all levels. Defining maximum and minimum levels was not widely practiced at the RMS and SDP levels, as indicated in Table Table 28: Percentage level of practice of stock management by facility type
Stock Management techniques CMS RMSs SDPs Stock cards are available 100 100 94 FEFO 100 100 100 Traceability of batches is assured 0 40 39 Minimum stock levels defined 100 60 56 Maximum stock levels defined 100 60 50 Orders placed when minimum level is reached 0 40 56 Stocks renewed on scheduled dates - - -
Discussion Management of inventory by expiration (that is, first to expire, first out, or FEFO), particularly for medicines, ensures that the medicines near their expiry are issued or dispensed first, thus minimizing wastage that could occur through expiration. At the CMS, RMS, and SDP old stocks that may expire first would practically be arranged in such a way that there are easily seen, thus making them more
47
accessible. In addition to ensuring that products have visible expiration or manufacturing dates, stores personnel are required to check the batch numbers of the products they issue. Only one of the surveyed facilities at the SDP level did indicate that they use this system for tracing batches of medicines issued. We are not very certain if this is done manually or this is a computerized procedure. It is believed that for facilities that do have this in operation they could be tracing batches manually if they did it at all since most of the operations at this level is manually-driven. It does require a certain level of sophistication to be able to issue products with batches stored for traceability purposes. It would be well worth the investment if this were widespread. Implementation of good stock management at facility level varies widely. Most facilities seem to implement a system based on bin cards. What we need to establish is whether the bin cards are fully utilized – whether they are placed near the drugs for easy recording of movements and whether the information on the bin card numbers deviated from physical counts and whether the maximum and minimum stock levels determined have been correctly or incorrectly calculated. Computerization was not mentioned as a strategy for managing stocks but it is known that some levels of computerization exists at the higher levels for inventory control. The maximum and minimum inventory control system would determine and reflect to a large extent the product availability.
4.6.4 Assessing product availability for the tracer medicines Ensuring drug availability is a crucial element of the Ghana National Medicines Policy. Without drugs being available, appropriate treatments cannot be provided leading to a loss of confidence in the health system. Ultimately this will seriously affect the health status of the population. A product was deemed to be available if there was a single unit of issue or dispensed entity of the product in its original container and could be issued or dispensed to a client. Figure 5.4 gives us the direct results of measuring availability of the 20 tracer medicines.
48
Figure 6: Percentage availability for 20 tracer medicines by facility type
There are several ways of assessing availability. Firstly, measuring by facility type and with variable thresholds we will first consider a threshold of 70 percent availability: CMS had 8 medicines, RMS had 15 medicines and SDP had 13 medicines out of the 20. At a threshold of 80 percent availability CMS had 6 medicines RMS had 11 medicines and SDP had 9 medicines. However, at a threshold of 90 percent availability CMS had 4 medicines RMS had 9 medicines and SDP had 3 medicines that make the mark. Secondly, if we are to measure availability by combining all the facilities and assess availability across the entire medicines then we have the following: at a threshold of 70 percent we have 10 medicines, at 80 percent threshold we have 5 medicines and at over 90 percent threshold we have only 2 medicines make the mark. Thirdly, considering the all or none rule, the following products had a full supply status: Amoxycillin Cap 250mg, Paracetamol Tab 500mg, Artesunate + Amodiaquine tab 50 + 153 mg and Niverapine Tab 200mg had full supply status at CMS. On the downside there were no stocks for 6 medicines during the review period at CMS: Amoxycillin Susp 125mg/5ml, Clotrimazole Cream 1%, Albendazole Tab 400mg, Atenolol Tab 50mg, Omeprazole Tab 20mg, and Ranitidine Tab 150mg, . Discussion In order to achieve the objective of making available a continuous supply of essential and affordable medicines of appropriate quality, many factors have to be taken into consideration. The complexity of these various factors can be fully understood if one appreciates that availability is a function of selection, quantification, tendering, procurement, stock management, ordering, storage and storage conditions, distribution, use, quality assurance and availability of funds. From the preceding discussions it is quite clear that a greater number of the surveyed facilities did not practise the inventory management concept of placing an order when the minimum level was reached
0
20
40
60
80
100
120
Amox
ycillin C
ap 25
0mg
Amox
ycillin S
usp 1
25mg/5
m
Parace
tamol
Table
t 500
mg
Cotri S
usp 2
00+4
0mg/5
m
Clotrim
azole
Cream
1% (2
0g
Fluco
nazo
le Ta
blet 2
00mg
Albe
ndaz
ole Sus
p 20m
g/5m
Albe
ndaz
ole Ta
blet 4
00mg
Metron
idazo
le Ta
blet 2
00mg
Nifedip
ine Tab
let R
etard 20
mg
Aten
olol T
ablet
50m
g
Metformin
Table
t 500
mg
Gliben
clamide
Tab
let 5mg
Omeprazo
le Ta
blet 2
0mg
Ranitid
ine Tab
let 15
0mg
Art/A
mod
ia Ta
b 50
/153m
g
Niverapin
e Tab
let 200
mg
Lamivu
dine T
ablet
150m
g
Zidov
udine
Tab
let 30
0mg
Stav
udine
Tab
let 20
mg
CMS RMS SDP
49
except for a few facilities at the SDP. This is the only way facilities can trigger and initiate the necessary activities that would lead to stock replenishment. For the CMS and RMS levels in addition to following basic inventory concepts, better forecasting would obviate the situation where stock out becomes common. However, the procurement method that is normally utilised at those levels can also contribute to low availability. ICB which is the preferred method at the central level takes a long time to go through the procurement cycle. It is also very difficult to set logistics standards at the central level due to the complexity of establishing lead times which are often unpredictable. However, with better planning stock availability should improve at the central level.
4.6.5 Assessing stock out duration for the tracer medicines Stock out duration is a corresponding indicator of stock availability. Used in tandem with the stock availability, the stock out duration allows for a stronger analysis of the stock situation over time. The percentage of time out of stock for a set of tracer medicines gives a measure of the procurement and distribution system’s performance in maintaining a constant supply of medicines. The ideal target for this indicator is 0 percent, or no stock-outs, and the desired change is a decrease from whatever was measured. Analysis revealed that overall, the tracer medicines were out of stock 24.2 percent of the time over the indicated period. This percentage was determined by first calculating the total number of days out of stock for all stocked medicines at each facility. Then the following calculation was applied to determine the average percent time out of stock: Total number of days out of stock for all stocked medicines × 100 × Total number of products stocked 365 The average time out of stock for all facilities was then calculated. Figure 7: Average percentage days out of stock for 20 tracer medicines by facility type
0 10 20 30 40 50 60
Central Medical Stores
Regional Medical Stores
Regional Hospitals
District Level SDPs
Sub District Level SDPs
Private
Average Percentage days out of stock
Average Percentage days out of stock
50
In the sample of facilities assessed, the tracer medicines were out of stock an average of 51.1 percent of the time at the CMS. In the sample of RMS, the tracer medicines were out of stock an average of 54.9 percent of the time, and in the sample of Regional hospitals, the tracer medicines were out of stock an average of 2.6 percent of the time, and in the sample of district hospital and health centers. The tracer medicines were out of stock an average of 3.8 and 8.7 percent respectively within the specified year. Table 29: Average percentage days out of stock of tracer medicines by facility type
Facility type Number of Facilities
Average Percentage days out of stock
Central Medical Stores 1 51.1 Regional Medical Stores 5 54.9 Regional Hospitals 4 2.6 District Level SDPs 9 3.8 Sub District Level SDPs 4 8.7 Private 1 -
Figure 8 Percentage stock 1-1 out duration by facility type for 20 tracer medicines
Discussion The mirror image of product availability is stock out duration. The overall average percent of days out of stock appears high in the Regional Medical Stores, which indicates relatively inaccessibility to medicines for the population at that level. Table 5.24 indicates that the shortest time out of stock was seen at the Regional Hospital level (2.6 percent), and indicates relatively ready access to medicines.
0%
20%
40%
60%
80%
100%
Amox
ycilli
n Cap
250m
g
Amox
ycilli
n Susp
125mg/5
ml (100
ml)
Parac
etamol
Tablet
500m
g
Cotrim
oxazo
le Sus
p 200+
40mg/5
ml (10
0ml)
Clotrimaz
ole C
ream
1% (2
0g)
Flucon
azole
Tab
let 20
0mg
Albend
azole
Sus
p 20m
g/5ml (2
0ml)
Albend
azole
Table
t 400m
g
Metron
idazo
le Tab
let 20
0mg
Nifedip
ine T
ablet R
etard
20mg
Ateno
lol T
ablet
50m
g
Metform
in Tab
let 50
0mg
Gliben
clamide
Tab
let 5
mg
Omepra
zole
Tablet
20mg
Ranitid
ine T
ablet 1
50mg
Artesu
nate/
Amodiaq
uine Ta
blet 5
0/153m
g
Nivera
pine T
ablet 2
00mg
Lamivu
dine T
ablet
150m
g
Zidovu
dine T
ablet 3
00mg
Stavu
dine T
ablet 2
0mg
CMS RMS Reg Hosp Dist Hosp Sub Dist Hosp
51
Measuring stock-out duration is a proxy for determining the service level. And in order to understand why stock outs occurred we elicited the following responses from managers at the surveyed sites. Table 30: Percentage level of causes of stock 1-1 outs by facility type
Causes of stock outs CMS RMSs SDPs Deliveries delay 100 80 33 Deliveries not in conformity with order quantities - 60 39 Transport not available - 60 50 Funds not available - - 33 Maximum/Minimum stock levels not updated - 60 - Errors in forecast 100 40 33 Insufficient staff - - -
Respondents at the RMS and SDP levels identified a number of causes associated with stock 1-1outs of medicines and medical supplies with the following mentioned most often:
• Delay in deliveries was mentioned by CMS and 80 percent of RSM facilities surveyed • Errors in forecasting needs was mentioned by CMS and 44 percent of RMS facilities surveyed • Transport not available, deliveries not in conformity with order quantities and not using max-min
was mentioned by 60 percent at the RMS facilities surveyed
Unavailability of funds was seen less as a cause of stock 1-1 outs and gives indication that financial outlook of facilities has no correlation with out of stock situations
4.6.6 Expired products and donations No report on expiry was mentioned by facilities from the RMS through the sub district SDP surveyed. It was most surprising not to have had any expired products in most of the facilities. CMS indicated that the expired products for 2006 were 0.59 percent of total stock holding. CMS indicated that it received ACT antimalarials donations from Sanofi Aventis and the government of China as well as ARV from the government of Canada during 2006.
4.7 DISTRIBUTION The short term goal of distribution is to ensure that the right quantities of the right products in the right condition are delivered at the right place and time and at the right cost whilst the long term goal is that clients get their needed treatments when they need them. The system design for maintaining a constant supply of pharmaceuticals and other health supplies requires a mix of push and pull requisitioning at all levels of the distribution system. The “push” system is usually adopted by programme managers in the initial phase of new programmes. Programme managers determine quantities to be issued to SDP based on service statistics and programme goals. This level of centralization in the initial phase is necessary because consumption data may be unavailable and also because only a selected number of health facilities may invariably start using the medicines until more facilities are phased into the programme.
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As more data on consumption is generated, changing to a “pull” system becomes necessary, which allows facilities themselves to determine and order the quantities of pharmaceuticals and health supplies they require. There are two interrelated systems we shall be considering. The first is the requisitioning process and the second is the delivery mode.
4.7.1 Distribution systems used for medicines and medical supplies The methods required for requisitioning of pharmaceuticals and medical supplies are often defined within the confines of a supply chain when programmes are developed. The method of requisitioning is spelt out each time products of a particular category are received at the upper levels. A method mix was used comprising purchase orders sent, based on requests and the other method was a distribution schedule upon which the issuing facility were asked to supply, based on allocation. These two methods were found at all levels of the supply chain. Table 31: Requisition methods used by facility type
Requisition method CMS RMS SDP Based on orders received √ √ √ Based on schedule of distribution or allocation √ √
The mode of delivery was achieved in one of two ways: at both the CMS and RMS either the issuing facility delivered to requesting facility or the requesting facility collected consignment with their own means of transport. Table 32: Delivery methods employed by facility type
The CMS and RMS were the facilities where delivery of medicines and medical supplies applied. Discussion Optimizing distribution channels can be achieved by reducing the number of existing distribution levels in the supply chain. The MoH/GHS is working at institutionalizing the delivery of medicines and other health commodities from the upper levels to the lower levels through a scheduled delivery system. This system has started in five regions and at varying stages of implementation. The first three regions to start recently were Central, Eastern, and Western Regions even though Upper West region had started the programme but has since not been able to sustain the practice. It is expected that the remaining five regions will strategise and start the scheduled delivery scheme soon. To effectively realize the full benefits of this system, SDPs send their requisitions before a deadline while they prepare for payment for earlier deliveries. The RMS are required to communicate the deadlines of prescribed activities to all stakeholders, and such information includes, among others,
Delivery method CMS RMS Issuing facility delivers to requesting facility √ √ Requesting facility collects by own means √ √
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submission of orders from all SDPs in their regions, to ensure smooth implementation of the scheduled delivery of medicines and other health supplies. The outcomes of such a good distribution system are that they allow for the following to occur:
maintain a constant supply of medicines - no item out of stock or overstocked keep medicines in good condition - product quality maintained until use minimize medicine losses due to spoilage and expiry - ideally no waste or losses rationalize medicine storage points
4.8 QUALITY ASSURANCE SYSTEM Pre-market registration and pre-distribution quality assessment of all pharmaceuticals and medical supplies is required to ensure quality and consumer satisfaction. To comply with these requirements, Food and Drugs Board (FDB) has established a medicine Quality Assurance laboratory and has been given the authority to control the approval and release of products that meet quality standards after testing. As in many developing countries, the poor quality of pharmaceuticals presents an obstacle to effectively treating diseases. Poor medicine quality also contributes to the growing resistance of some parasites and bacteria. Low bioavailability of the active ingredient in a pharmaceutical will lead to ineffectiveness, which inevitably promotes the development of resistance to the respective medicine. In view of the potential danger that substandard pharmaceuticals are already posing in the fight against diseases, consensus exists among stakeholders that definitive measures should be taken to make medicines safe through strengthening quality control systems at all manufacturing sites and distribution outlets in the country.
4.8.1 Registration of product, prequalification of product and pre selection of suppliers The problems related to quality assurance at national level can be addressed by strengthening activities such as registration, inspection and quality control through MoH/GHS collaboration with the regulatory authority, FDB. Though the FDB is to ensure the quality, safety and efficacy of medicines in both the private and public sectors, the MoH/GHS would provide the necessary facilitative role of making public sector procurement conform to procurement statutes. Discussion The Procurement Units of the MoH/GHS rigorously applies the tenets of public sector procurement in conducting its mandate. All products supplied to the public sector health facilities are registered with the FDB and the products are also pre-qualified. A set of criteria is applied in the selection of prospective suppliers to the health sector and this process is organized and defined within a set period.
4.8.2 Quality analysis of pharmaceuticals One way of checking the quality of medicines after receipt is laboratory testing of samples. Food and Drugs Board has the mandate to ensure that safe, quality and efficacious medicines are used by consumers. Product registration and inspection of manufacturing plants are related activities that FDB undertake prior to the issuance of current Good Manufacturing Practice (GMP) certificates to
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manufacturers. Quality testing of products is routinely carried out using the FDB laboratory and Quality Control outlets in and outside the country. CMS was the only facility that indicated that samples of pharmaceuticals it received were sent to the FDB for quality analysis. All samples submitted were pharmaceutical products. Table 32: Products submitted to FDB by CMS in 2006
Date Of Submission
Product Batch Number
Expiry Date
09-Mar-06 Pyrazinamide Tablet, 500 mg et060184 Jan-08 07-Jun-06 Ferrous Sulphate Tablet, 60 mg (Elemental Iron) mv012 Sep-08 07-Jun-06 Streptomycin Injection, 1 g 2651-01 Apr-08 07-Jun-06 Rifampicin+Isoniazid Tablet, 150 mg+100 mg et060541 Apr-08 10-Aug-06 Fluphenazine Deconoate Injection, 25 mg/ml 60219 May-08 10-Aug-06 Furosemide Injection, 10 mg/ml in 2 ml 060118 Feb-08 10-Aug-06 Gentamicin Injection, 40 mg/ml in 2 ml 060258 Feb-08 10-Aug-06 Benzyl Penicillin Inj, 1 MU 060116 Jan-08 10-Aug-06 Benzathine Benzylpenicillin Injection, 1.2 MU 050610 Jun-08 21-Aug-06 Diclofenac Injection, 25 mg/ml g5011 Oct-08 21-Aug-06 Metronidazole Tablet, 200 mg da6018 Feb-08 21-Aug-06 Ciprofloxacin Tablet, 250 mg g64188 Jan-08 21-Aug-06 Streptomycin Injection, 1 g 2698-01 Apr-08 21-Aug-06 Nifedipine Tablet, 20 mg (Slow release) cq5002 Nov-08 21-Aug-06 Ferrous Sulphate Tablet, 60 mg (Elemental Iron) 112 Jun-08 18-Sep-06 Fluphenazine Deconoate Injection, 25 mg/ml 60068 Aug-08 19-Sep-06 Pyrazinamide Tablet, 500 mg et060874 Jul-08 07-Dec-06 Diclofenac Injection, 25 mg/ml 040901 Sep-08
Of the 19 samples submitted for analysis 3 products failed giving a failure rate of 16.7 percent. Table 33: CMS products that failed quality tests carried out at FDB
Product Quality Test Results Ferrous Sulphate Tablet, 60mg (Elemental Iron) 1 Failed Ferrous Sulphate Tablet, 60mg (Elemental Iron) 2 Failed Rifampicin + Isoniazid Tablet, 150 + 100 mg Failed
The analysis conducted by the FDB revealed that some of the samples CMS submitted were substandard. All three products had dissolution rates less than the expected. Discussion In all, three samples submitted by CMS in 2006 did not comply with the pharmacopeial specifications. Studies conducted by the FDB in 2004 in a quality of antimalarial drug study identified several significant incidents of substandard antimalarial medicines within the Ghana pharmaceutical distribution chain. Medicines collected from the Ghanaian market displayed a high percentage of content failure and poor results on dissolution tests The above report from the 2004 study leaves no doubt about the urgency to be vigilant in applying standards of quality assessments in both the private and public health sectors.
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4.8.3 Pharmaceutical inspection at the stores from the regulatory authority Regulatory bodies such as the FDB are expected to carry out regular inspection of pharmacies and storage facilities to ensure that good storage practices are being followed. These inspections give credibility to the public and consumers that they can trust what they are consuming and also the assurance that the medicines are of the expected standard of quality and safety. Discussion Analysis has revealed that FDB did not carry out any pharmaceutical inspection at any of the surveyed facilities. It is, however, heartening to note that warehouses have recently been informed of plans for warehouse inspections beginning in 2008.
4.9 RATIONAL USE Inappropriate drug use has been identified as an important health and economic problem in developing countries. Inappropriate drug use can undo all the benefits of careful selection, economic procurement and effective distribution. All the resources required to bring the medicine to the counter will be wasted if the process and procedures do not ensure that the right medicines are prescribed and dispensed to the patient in the proper dosage form and in adequate quantities with clear instructions on how to take the medicines. There are common problems encountered in all aspects of the drug use process – some are outside the scope of the current study e.g. problems with diagnosis. However, polypharmacy, overt use of particular forms of medicines and irrational prescribing and dispensing together with problems associated with packaging can all be minimized if the appropriate information and materials are provided. There is, therefore, Information, Education and Communication (IEC) component to this study and this section looks at the information sources that health personnel can turn to and make appropriate decisions. Information source is only one component of the vast subject of rational use and the study focused on the availability of standard reference books, literature and manuals.
4.9.1 Information sources available at pharmacy or warehouse
Standard reference literature as well as internet services provide the tools with which health personnel can use in dealing with rational medicine use problems. As part of their IEC programmes facilities are expected to acquire the standard reference literature or install internet services in their warehouses and/or pharmacies. Analysis has revealed that BNF, EML, Manufacturer’ information, Martindale and STG were not completely available in all facility types visited. Facilities do not have some essential reference books: none of the surveyed facilities had BP and donation guidelines. Internet could be accessed only at CMS.
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Table 34: Percentage availability of standard reference books and internet facilities by service provider Facility type BNF Donation
Guideline EML Intern
et Manufac- turer Info
Martindale STG BP
Central Medical Stores (1) 100 0 100 100 - - 100 - Regional Medical Stores (5) 0 0 40 0 20 20 40 0 Regional Hospitals (4) 25 0 25 - 25 25 25 - District Hospitals SDPs (9) 33 0 33 11 33 11 22 - Sub District SDPs (4) 0 0 25 - 0 0 25 - Private (1)
Discussion In promoting appropriate drug use, IEC has been identified as a major component and the provision and availability of standard reference books and internet should be seen as tools in addressing this issue. In providing these books and internet services health personnel can institute a drug information newsletter or other means of providing regular unbiased information about medicines to other health care providers and to clients. The culture of using these tools and information sources should be encouraged so that prescribing habits and dispensing practices can all lead to improved medication use by patients.
4. 10 FINANCING Health financing has undergone significant changes in the last couple of decades. From a free health care delivery through a user fee system, health financing currently is, to a larger extent, channeled through a health insurance system. The government sets aside between 8 -10 percent of the national budget for the health sector. This has been advocated in various charters of the UN and Ghana has ratified these charters. Development partners have contributed significantly to the health budget and continue to do so. The main costs of managing medicine supply goes beyond the unit costs of the supplies themselves. Other indirect or overhead costs include the salaries, utilities, port charges, transport, warehouse maintenance, equipment and various consumables that we need to be able to operate effectively. To get the most out of the medicines delivered for the quantum of money available, management costs have to be kept appreciably small. These costs can be covered by the system enacted to finance the health services. The Ministry of Health has an official policy for determining the margins to be applied on medicines to address issues of sustainability, equity of access and affordability. At the central, regional and service delivery points, the amount added to the unit cost of medicines which translates into the unit sales is intended to maintain the viability of the facility’s Revolving Drug Fund. The main premise is to allow the facilities to generate sufficient funds to maintain procurement capacity, a hedge against inflation and losses or wastage that might occur. A sound financial management system analysed through the flow of funds within the supply chain as well as the appropriateness of financial management systems influences prospects for long-term financial sustainability.
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4.10.1 Funding sources for procurements A number of funding sources are normally contacted / identified to fund medicines and health supplies expenditures. For every budget that is prepared the funding source has to be identified prior to actual procurement. The contributions from these sources need to be clearly defined in terms of proportions of funding that they may earmark for a particular procurement outlay. Three sources of funding for procurement outlay for 2006 were identified in the survey: Government of Ghana (GoG), facilities’ revolving drug funds (RDF)/ internally generated funds (IGF) and development partners/multi lateral agencies as indicated in Table 32. Table 35: Actual expenditures attributable to funding sources by facility type in 2006
Product Category Source of Funding
CMS Ash RMS Eastern RMS GAR RMS
Essential Medicines RDF 2,458,767.33 2,066,529.06 1,666,667.00 779,032.49 Antimalarials Global Fund 3,545,574.03 - - - Contraceptives USAID 5,600,000.00 - - - HIV/AIDS medicines Global Fund 4,659,717.13 - - - Medical supplies IGF 502,679.45 261,567.46 - - TB medicines Global Fund 355,964.53 - - - Vaccines GoG / Partners 4,199,000.00 - - -
Discussion CMS provided information on all the expenditures for 2006 and identified the source of funding for each product category. However, for the RMS there were gaps in the provision of the information on expenditures for some of the product categories. Information on the RDF and IGF were provided by some of the RMS because actual expenditures were incurred. For the majority of the product categories where information was unavailable RMS do not per se incur these expenditures when they collect them from the CMS. In any case, summing up what was collected would have provided the needed “expenditures incurred” information. Majority of SDP were unable to provide information on expenditures they incurred in 2006 and so we were unable to carry out any analysis on this indicator.
4.10.2 Turnover and margins for pharmaceuticals The turnover or sales is one of the key financial variables needed in calculating financial performance review reports. It is a determinant of surplus and also provides an indirect size of trade carried out and cost recovery for services rendered. In the current national health insurance regime, facility financial turnover would be dependent on reimbursements SDPs will receive from the National Health Insurance Secretariat through the district mutual health organizations (DMHO). Turnover being the sum of credit and cash sales will most likely be affected if re-imbursables are not paid up often but left to accumulate.
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Margins are a component of turnover and it can be derived and compared to what supply chain managers claim they have applied. The assessment has revealed that the average turnover increased consistently over the three year period at every level of the supply chain. Except for an exceptionally high increase in turnover for CMS from 2004 to 2005 as seen in Table 34 we find it nonetheless significant because CMS is an entity in its own right in the analysis we have presented. Table 36: Average turnover by facility type between 2004 and 2006
Levels Number of Facilities
Average Turnover in USD 2004 2005 2006
Central Medical Stores 1 730,176.52 2,434,989.16 2,865,341.05 Regional Medical Stores 3 444,818.94 658,117.09 1,069,154.04 Regional Hospitals 4 324,956.97 414,743.89 504,852.69 District Level SDPs 6 101,696.67 136,013.16 208,314.81 Sub District Level SDPs Private
3 1
7,083.71 85,000.00
8,496.95 102,000.00
18,683.28 116,000.00
What we have derived from the financial turnover information is the percentage increase from subsequent years starting from 2005 (see Table 35). It can be seen that the margins applied are quite different from the stated percentage margin of total sales in Table 36. The range from 17 to 54 percent far exceeds the official allowed margin of 10 for RMS and SDP. Table 37: Calculated margins from average turnover by facility type
Levels Number of Facilities Calculated Margin Percent 2005 2006
Central Medical Stores 1 - 15.02 Regional Medical Stores 3 47.9 38.4 Regional Hospitals 4 27.6 17.8 District SDPs 6 33.7 34.7 Sub District SDPs 3 19.9 54.5
What we can infer from this is that a lot of rounding up probably occurred when medicines were priced for sale to clients. Another reason could be that margins were often arbitrarily increased from the RMS through to the Sub district SDP. Table 38: Stated percentage margins by facility level
Levels Number of Facilities
Percentage Profit Margin of Total Sales 2004 2005 2006
Central Medical Stores 1 15 15 15 Regional Medical Stores 5 10 10 10 Regional Hospitals 4 9.75 8.75 13.73 District SDP 9 12.5 12.25 8.25 Sub district SDP 3 10 10 10
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Discussion Turnover is a very useful variable in measuring indirectly the viability of RDF. There was an increase in absolute terms for financial turnover at all facilities from 2004 to 2006. We cannot as yet determine the proportion that was actual revenue received or credit sales. What we are certain of is that the consistent increase in financial turnover at all levels of the supply chain is a positive sign assuming the yearly increases are not mopped up by inflation and other overhead expenses. We can also draw initial conclusions, however, that the pricing policy or margins were not within the acceptable limits. The challenge of developing a viable and sustainable RDF depends on balancing two contrasting issues; cash flow to ensure the operation of the fund versus keeping the price of drugs within affordable limits. It was apparent that these two issues will need to be given equal attention.
4.10.3 Payment terms for clients using facilities In the light of fierce competition from the private vendors public warehouses do consent and tacitly agree to flexible payment regimes. Except in contracts that have been entered into and for which payment terms will be non negotiable for normal day to day transactions, payment terms agreed upon by service providers and clients are reached by consensus. It is important that such loose agreements are adhered to in order that issuing facilities could make good their debts to other facilities they might have some financial obligations towards. A wide variety of repayment arrangements exist from prepayment options to immediate cash payments. The national insurance scheme, however, is applicable to SDPs and it is significantly implemented at the district and sub district SDPs, which posted 67 and 75 percent respectively. Table 39: Percentage repayment regimes practised by facility type Level No of
Facilities Pre payment
Payment on delivery date
30 days after delivery
Immediate cash payment
National Insurance Scheme
Central Medical Stores 1 - 100 100 100 - Regional Medical Stores 5 20 40 60 20 - Regional Hospitals 4 25 25 50 50 25 District Level SDPs 9 0 44 67 78 67 Sub District SDP 3 25 25 0 50 75 Private 1 - - - - - Discussion It is quite difficult to assess repayment options and prescribe a policy directive. Given the fact that the national health insurance scheme by itself is a “credit” regime and a national mechanism for health care financing. It is hoped that further studies can be carried out to determine how the reimbursements process has influenced health care delivery, in terms of the provision and supply of medicines and medical supplies.
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4.10.4 Utilization of revenue for operational expenditures Revenues generated into RDF are usually meant to provide the funds needed to replenish stocks. However, depending on the policy environment a proportion can be utilized to cover operational expenditures. Analysis has revealed that all the facilities surveyed utilized RDF for a variety of purposes. The percentage usage of the RDF for the procurement of medicines ranged from 75 to 100 percent. A high 80 percent of RMS utilizes the RDF for running cost. Table 40. Percentage of facilities that utilize RDF to cover operational expenditures
Level No of Facilities
Procurement of medicines
Staff salary
Running cost
Equipment Stationery works
Central Medical Stores 1 100 - 100 - Regional Medical Stores 5 100 20 80 20 Regional Hospitals 4 75 25 50 - District SDPs 9 89 22 44 - Sub District SDP 3 75 0 0 - Private 1 - 100 100 -
Discussion Most facilities surveyed utilized the RDF for the procurement of medicines. But for some of the surveyed facilities the occasional use of the RDF for paying staff salary and covering overhead costs needs to be further discussed as to the merits and demerits of such practices. What would be further required is to determine the effect of the usage of the RDF on decapitalization and to work out the proportions that could be considered as tolerable and permissible (assuming the RDF ensure full recovery for the sale of medicines). A major analysis would be to find out the rate of debt recovery over time and factor this in any analysis on this subject.
4.11 INFORMATION MANAGEMENT No supply chain system can be successful without good communication between the stakeholders, users and those who implement the system. To effectively manage, monitor and evaluate any portion of the supply chain requires relevant and timely information. Information flow in the supply chain in Ghana is a two-way process: it is a top-down and bottom-up system. Policies affecting the supply chain are channeled from the MoH/GHS headquarters down to the lower tiers and information on performance is sent up through the various tiers.
4.11.1 Information management infrastructure A current, reliable and comprehensive medicines management information system is an essential element for formulating sound policies ranging from day-to-day management decisions to policy decisions. An information strategy is needed to cover all parts of the medicines supply system. And to be able to do this information sub-systems have to be established each of which provides a piece of the total picture.
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4.11.2 Data monitored through the supply chain. Information which was monitored regularly at the stores includes average monthly consumption, quantities of stock received, expiry, stock on hand, purchase orders and on a few instances, losses and adjustment at the Central Medical Stores. Table 41: Percentage logistics information monitored by facility type Levels AMC Stock
Received Expiry Stock on
Hand Purchase Order
Losses and Adjustments
Central Medical Stores 100 100 100 100 100 100 Regional Medical Stores 80 100 100 100 60 0 Regional Hospitals 100 100 100 100 50 0 District Hospital 77 100 100 88 77 0 Sub District SDP 75 75 75 75 50 0 Private 100 100 100 100 0 0 Discussion Much of the logistics data is already available and collected routinely at SDP as well as service statistics. However, a minimum data set does not appear to have been defined. Careful thought is required to ensure that only the minimum data required is collected. In that way more time can be devoted to ensuring the accuracy and analysis of the data into information. Some data is already collected in the form of health statistics (e.g. morbidity, mortality, attendance). These need to be augmented by the addition of some drug use data (e.g. drug consumption by health facilities, listed by therapeutic group, quantity, overall drug output from RMS, ABC analysis, cost & quantity variation).
4.11.3 Availability of DMIS reports at study sites All the surveyed facilities had reports on medicines management information system at the time of the survey. Discussion The measure of success of a medicines management information system is information utilization. The information system should produce an output that is used by managers in their routine decision-making and problem-solving activities. The information system should support various levels of decision making from the basic health staff through to top-level policy makers.
4.11.4 Stakeholders who receive logistics reports The generated reports were submitted to both internal staff and external stakeholders as indicated in Table 40. They include heads of facilities, personnel at the RHA and DHA, programme managers at GHS headquarters. For CMS stakeholders who were given report are usually either partners, procurement agents and programme managers. Table 43: Recipients of supply chain reports by facility type Facility MOHG
HSCMS
Head of Facility
RHA District Pharmacist
Programme Managers
Stakeholders (e.g. UNICEF)
Central Medical Stores √ √ √ Regional Medical Stores √ √ √
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Regional Hospitals √ √ District Hospital √ √ Sub District SDP √ √ Private Discussions The DMIS reports are widely distributed as indicated in the Table 5.40 above. Information on consumption and stock balances is communicated to the Regional Directorates after submissions are made to the DHA. The Regional reports are also forwarded to the Office of the Chief Pharmacist on a quarterly basis. SDPs give some information on consumption of pharmaceuticals and health supplies on purchase orders to the CMS and RMS but this is not well organized. For purposes of planning, all levels need to share information to ensure efficient and effective logistics management of pharmaceuticals and health supplies.
4.11.5 Frequency of submission of reports and timeliness of submissions: The drug management information system (DMIS) reports generated are submitted to stakeholders either on monthly or quarterly basis. These reports are submitted before agreed deadlines. Discussion The survey has revealed that the information management infrastructure is quite adequate and needs to be sustained. The data gathered would bring together the health status data and the logistics data and allow indicative information to be prepared to facilitate RHA and DHA management without producing ‘data overload’. The information required will facilitate an overview of the operation of the drug programme, the monitoring of the performance of the CMS, RMS, the health facilities, and the impact on the health status of the population. There are clear communication channels as well as reporting norms that have been established and operationally may be considered adequate even though they could be improved.
4.12 MONITORING AND EVALUATION The importance of monitoring and supervision to the success of the public pharmaceutical sector cannot be overemphasized. It is the mechanism by which any deviation from the planned path can be identified and corrected, along with the easy identification and correction of misunderstandings and training needs. There are some prerequisites to a good monitoring system. There have to be clear procedures for the practice being monitored; there must be a good reporting mechanism; there must be a good monitoring tool to assess the practice; and there must be an organization prepared to take concise, corrective action.
4.12.1 Supervisory visits carried out by higher levels Close supervision and monitoring of the operational staff in activities associated with delivery of healthcare is essential if programme objectives are to be achieved. In addition there is a need for a higher level of information exchange between different levels related to the overall performance of the
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healthcare system. A prerequisite for good monitoring is the development of a checklist, a schedule to be followed and feedback to those being supervised. There is a standard practice for facilities at higher levels to presumably carry out monitoring visits to the lower levels and evaluate performance of activities at that level. Ashanti Regional Medical Stores was the only facility that carried out monitoring visits. The activities carried out during monitoring were the following:
review of needs review of ordering process checking the conditions of storage Physical inventory Checking stock cards and reports Monitoring financial data
Discussion Ashanti RMS has a systematic and commendable approach to the overall monitoring in terms of the approach. There was an impressive and busy schedule of visits by RMS staff to health facilities. Fortunately these monitoring visits have been used as a vehicle for assessing medicine management. It is worth noting that this monitoring was used to address programme management issues as well and areas focusing but not probably limited to the evaluation of performance. The impact of monitoring and evaluation has been very limited in all regions, as monitoring and evaluation procedures have not been carried out much more rigorously and possibly utilization of findings has been lacking. The overall lack of monitoring and reporting related to the pharmaceutical programmes in the regions would mean that they may not have been able to evaluate performance, identify problems, take corrective measures or assess impact in any organized way. From the preceding section it was established that the RMS did review logistics data internally but did not organize supervisory visits to the lower facilities other than RMS Ashanti. It is also unfortunate the CMS did not carry out any monitoring activities. It is a note of success to the Ashanti RMS monitoring team that they can approach so well a task often perceived as threatening to the staff being monitored. The challenge now is that the monitoring process should use objective measures and that at all levels these activities would be carried out more regularly. Box 1. An example of best practice in Monitoring and Supervision from the Ashanti Region Ashanti Region was the only region that indicated that they carried out monitoring and supervision in the survey. Even though the frequency was not regular but were carried out randomly we can fairly analyse what they did. During monitoring stores personnel checked and computed the stock out rate from number of stock out days, percentage expiry, analysed reports to ascertain delivery status at the facilities and determined the products that were not in conformity with product specifications.
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By sending stores personnel into the field and analysing logistics data with facility personnel an excellent rapport would have developed and logistics problems would have been addressed before they become insurmountable. Logistics personnel – the supervised and the supervisor would then be prepared to take up challenges in the field and give practical solutions to peculiar problems. There can be no substitute to this activity in imparting skills and learning “new ways of doing things” in the process. We do not as yet have firm outlines on the approach Ashanti Region adopted during monitoring visits we can only hope that this would be reviewed, further analysed and shared with the rest of the regions.
4.13 HUMAN RESOURCES It is recognized that various personnel are involved in handling the myriad activities needed to sustain the public supply chain. Personnel range from professionals to non-professionals who may be either skilled or unskilled. A multi-disciplinary team that is well trained and motivated is a necessary and important resource on whom the success or failure of the supply chain depends. As in so many other developing countries the quality and number of personnel needed to handle the numerous supply chain functions is quite fluid because of the high staff turnover. A needs assessment study is needed from time to time to look at the human resource base in the supply chain so that it becomes a policy issue in the forefront of planners’ and administrators’ agenda. How human resource issues are handled would largely determine the overall performance of the supply chain – in terms of policy on recruitment, training, retraining, deployment to various facilities where their services would be greatly needed and the level of investments that would be infused into the public supply chain.
4.13.1 Initial and follow up training for staff in procurement and supply chain management Orientation of staff when they are engaged in their new roles is important in achieving the right balance between theory and practice. Over time when personnel are settled in their new roles and responsibilities it is important to sustain their enthusiasm in the job with periodic retraining so that the skills, competencies and knowledge that they have gained would increase their productivity. Initial training was offered in full at CMS and Regional hospitals with varying degrees of training at the RMS and District SDPs. Follow up training was hardly conducted at all at the Central and sub district SDP. Table 43: Percentage training offered by facility type
Facility type No of Facilities
Initial training conducted
Follow up training conducted
Central Medical Stores 1 100 - Regional Medical Stores 4 40 40 Regional Hospitals 5 100 50 District SDP 9 55 22 Sub District SDP 4 25 0 Private 1 0 0
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Discussion A well trained corps of professional and non professionals should be the standard-bearer on which the supply chain places its mantle. Without a well trained corps of professionals and non professionals the outputs that we wish to see would be difficult to realize. The technical requirements demanded would be difficult to carry out with untrained staff and the supply chain would be the loser. However, we can only speculate and hope that the few follow up training programmes that were offered at the lower levels to the Regional Hospitals and district SDP are suggestive perhaps of facilitative monitoring and supervision. They could have as well been opportunities to conduct short on-the-job training. Such should be the way to go in offering facilitative monitoring and supervision in the entire public supply chain.
4.13.2 Needs assessment of human resource in the supply chain Assessment of the human resource requirement of all categories at all levels is a necessary requirement to determine how logistics functions can be performed to the highest standards. Norms are needed to be set to facilitate the recruitment and distribution of staff to needy settings. These norms should be reviewed from time to time to take care of a changing supply chain policy and educational reforms alike. The average number of personnel involved in procurement and supply management at the surveyed sites is presented in Table 5.41. Except for the CMS where absolute staff numbers have been obtained most of the RMS and SDP averaged less than one staff per facility type for the key personnel needed in procurement and supply management functions. Table 44: Average number of personnel involved in procurement and supply management functions
Personnel CMS RMS Regional Hospital
District Hospital
Sub District SDP
Pharmacist 3 1 2.73 0.8 0 Medical Officer - 0.6 0.5 0.8 0.3 Medical Assistant - 0 0.25 0.1 0.6 Computer Specialist 1 1 0 0.1 0 Nurse - 0.3 0.5 0.5 1.3 Administrative Officer - 0.3 0.5 0.7 0 Accountant 1 0.3 0.5 0.1 0 Supply Officer 2 - 0.25 0 0 Procurement Officer - 0.3 0.5 0.1 0 Storekeeper - 0.3 0 0.2 0 Pharmacy Technologist - - 0 0.1 0 Dispensing Technician - - 0 0.1 0.3
Discussion The inadequate number of staff involved in making procurement and supply management decisions at all levels of the supply chain is very clear. With less than an average of one person per profession it is likely that all the facilities have few inputs coming from a multi-disciplinary team needed in drawing up and carrying through their procurement and supply management activities. What is needed then is to drum home the needed policies for staffing norms to be established and recruitment to be effected so current personnel are not unnecessarily overburdened and to derive the required balance in carrying out procurement and supply management activities.
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5.0 RECOMMENDED OPTIONS AND ASSOCIATED ACTIONS The following key recommendations have been made based on the analysis as reviewed at a stakeholders meeting. These recommendations were made against the backdrop of realistic changes that could be carried out. For any of the relevant thematic areas we have identified the activities to be completed, the constraints that are likely to affect the change, the units and/or personnel who will be best placed to ensure the implementation of those changes suggested as well as the resources need to implement the activities.
5.1 Product Selection Review procedures and guidelines for procurement and distribution of medicines
• DTC’s must be made functional • Prescribers must be trained in RUM every year with emphasis on newly qualified prescribers • General awareness creation to be carried out • Participatory evaluation and reviewing
Reward and sanction system to be developed for implementation of the EML
• Put in place reward and sanction system for the implementation of the EML
5.2Quantification and Forecasting Capacity building in forecasting and quantification
• Development of guidelines and training manuals on quantification • Conduct training in logistics management at all levels of the supply chain
Quantification should be based on real need to address issue of perennial stock outs • Develop and disseminate policy on needs-based quantification • Collect identifiable core dataset • Top up RDFs for need-based procurement
Strengthen logistics management system for all medicines • Define comprehensive dataset • Design appropriate forms to capture data • Collect identifiable core dataset • Design networking systems
5.3 Procurement Stengthen procurement planning, management and monitoring at each level of the supply chain
• Prepare proposals for training in procurement.
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• Develop training materials • Identify resource persons • Train personnel on the procurement law, Act 663
Capacity building in procurement Review the existing protocol on prequalification
• Constitute a forum of experts to review the document • Encourage stakeholders consultations. • Reports should be disseminated • Adoption of protocol by Minister of Health
Put in place a clear procurement catalogue with regards to product specification
• Constitute a team of experts to develop the document • Launch this national document
Strengthen Logistics System management and Data Management system
• Training • Develop SOPs • Carry out facilitative supervision • Develop simplified formats for facilities to use as template
Strengthen facilitative supervision and monitoring Incentives for use of standards / guidelines
• Constitute a team to review the provisions of the Procurement law • Encourage Suppliers/stakeholder involvement in the process
Review the penalty laws
5.4 Distribution Standard structures and systems for storage at the various levels of the pipeline must be specified
• Launch a designed review of all storage facilities at all levels of the supply chain • Refurbish identifiable structures and facilities.
Plan procurement and distribution activities to keep stocks at maximun and minimum levels at all times
• Purchase adequate shelves, pallets and other handling equipment • Train personnel in the maintenance of equipment
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5.5 Monitoring and Evaluation Review and harmonize existing M & E tools to cover all levels of health care delivery
• Set up a committee to review and harmonize existing M & E tools • Presentation of recommendations to relevant stakeholders • Training the supervisors on revised M & E protocols
5.6 Human Resources A clear definition for the establishment of procurement and supply management units at all levels
• Set up a team to assess human resource needs for the supply chain • Advocate and lobby for the recruitment of needed staff at all levels of the supply chain
APPENDIX: TABLE OF RECOMMENDATIONS AND ACTIONS TO BE TAKEN Key Issue Recommended
Policy Change Activities to be completed
Constraints Responsibility Resource Needed
Product Selection
Concept of Generic Prescribing not respected by prescribers Newly qualified Health workers are not well informed on the role and function of the EML No sanctions applied for non use of the EML
Review procedures and guidelines for procurement and distribution of medicines Reward and sanction system to be developed for implementation of the EML
DTC’s must be made functional Prescribers must be trained in RUM every year with emphasis on newly qualified prescribers General awareness creation to be carried out Participatory evaluation and reviewing Put in place reward and sanction system for the implementation of the EML
Influence from multinational drug companies Lack of private public partnership Loose enforcement of procurement and distribution procedures in the public sector
GNDP, Chief Pharmacist, Prescribers, DTC’s, Heads of Training Institutions, NHIA/Private sector
Funds
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Quantification and Forecasting
Limited forecasting and quantification capacity in the health sector
Capacity building in forecasting and quantification
Development of guidelines and training manuals on quantification Conduct training in logistics management at all levels of the supply chain
Principles may be overridden by lack of resources or limited resources
P and S SSDM HR MoH/GHS
Consultantand experts Examples of places of best practices
Quantification being done on supply or ability to pay basis
Quantification should be based on real need to address issue of perennial stock outs
Develop and disseminate policy on needs-based quantification Collect identifiable core dataset Top up RDFs for need-based procurement
Applying operational standards may be compromised Detractors to recommended policy
P and S, MoH SSDM Chief Pharmacist Programme Managers NHIA
Defined quantification data set unavailable at all levels
Strengthen logistics management system for all medicines
Define comprehensive data set Design appropriate forms to capture data Collect identifiable core dataset Design networking systems
Applying operational standards may be compromised
PU SSDM
Procurement Inadequate interpretation of procurement law in the context of medicines procurement
Stengthen procurement planning, management and monitoring at each level of the supply chain Capacity building in procurement
Prepare proposals for training in procurement Develop training materials Identify resource persons Train personnel on the procurement law, Act 663
Inadequate funds
CEOs of THs; RDHA, Public Procurement Authority, Procurement Officers
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Prequalification procedures too cumbersome
Review the existing protocol on prequalification
Constitute a forum of experts to review the document Encourage stakeholders consultations. Reports should be disseminated Adoption of protocol by Minister of Health
Expensive Time consuming Commitment from FDB Obtaining the regulatory agencies commitment
Food and Drugs Board Director of Procurement and Supply
Services of procurement experts Evaluation process
Lack of national standards on product specification
Put in place a clear procurement catalogue with regards to product specification
Constitute a team of experts to develop the document Launch this national document
Some local manufacturers might not buy the idea Time consuming (lot of time required)
Regional Health Directorates Product users Regulatory agencies
Finance Commit-ment
Inadequate skills at lower levels of health system in implementing procurement procedures
Strengthen Logistics System management and Data Management system Strengthen facilitative supervision and monitoring
Training Develop SOPs Carry out facilitative supervision Develop simplified formats for facilities to use as template
Breaks in Procurement cycle -Logistics cycle Access to Funds
Central: CMS, SSDM, Chief Pharmacist, Human Resource Directorate Regional: RMS Programmes: Programme Managers
Inadequate enforcement of procurement procedures or guidelines
Incentives for use of standards / guidelines Review the penalty laws
Constitute a team to review the provisions of the Procurement law Encourage Suppliers/stakehol-der involvement in the process
Lack of enforcement capacities Lack of commitment
Suppliers Attorney Generals Department Regulatory bodies
Distribution Inappropriate storage conditions
Standard structures and systems for storage at the
Launch a designed review of all storage facilities at all levels of the
Long term project and cannot be realized now
CIMU of the PPME SSDM of MoH
Capital Grants and loans
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various levels of the pipeline must be specified
supply chain Refurbish identifiable structures and facilities
Inadequate storage / handling equipment
Plan procurement and distribution activities to keep stocks at maximun and minimum levels at all times
Purchase adequate shelves, pallets and other handling equipment Train personnel in the maintenance of equipment
Lack of funds and other resources
P&S SSDM RDHS, CEOs
Monitoring and Evaluation
M & E is fragmented and not well coordinated
Review and harmonize existing M & E tools to cover all levels of health care delivery
Set up a committee to review and harmonize existing M & E tools Presentation of recommendations to relevant stakeholders Training the supervisors on revised M & E protocols
Bureaucracy Thin HR
Office of the Chief Pharmacist PPME – MOH / GHS, DDPS, CEOs of THs, Monitoring Teams
Human Resources
Lack of adequate qualified staff/personnel for managing the supply chain
A clear definition for the establishment of procurement and supply management units at all levels
Set up a team to assess human resource needs for the supply chain Advocate and lobby for the recruitment of needed staff at all levels of the supply chain
Delay in obtaining clearance from Ministry of Finance Slow recruitment process Potential effect on wage bill
Human Resource Division – MoH / GHS Procurement and supply directorate