Quantification of

medicines needs

Dr. Thida Hla Deputy Director (Medical Care)

Department of HealthProject Manager

Myanmar Essential Medicines Project

Why we need to quantify the medicines need?

• Armament in health services

• Available of good quality, safe and less expensive medicines all the time

• Part of a sequence of inter- dependent steps in the medicines supply management system

Effective Medicines Supply Management

• Main components areSelectionQuantificationProcurement DistributionUse

Quantification• Imbalance in quantification could lead to – High inventory– Stock outs

• Stock outs lead to – Local purchases– Poor image of the facility

Methods of quantification

1. The patient morbidity-standard treatment method(morbidity method)

2. The adjusted consumption method (consumption method)

Comparisons of Two MethodsMethod Advantages DisadvantagesConsu- mption

-Morbidity data not required

-Requires less detailed calculations

-Difficult to review prescribing habits

-Difficult to get consumption data for new facilities

Comparisons of Two Methods

Method Advantages DisadvantagesConsu- mption

-Good for hospitals (because Treatment is more complex)

-Does not encourage good morbidity recording

Comparisons of Two Methods(cont’d)

Method Advantages Disadvantages

Consu- mption

-Reliable if consumption is well recorded and stable

-Unreliable if there have been long stock-outs

Comparisons of Two Methods

Method Advantages Disadvantages

Morbi-dity

-Consumption data not required

-Good for new services

-More detailed calculation required

-Morbidity/STG required

Comparisons of Two Methods

Method Advantages Disadvantages

Morbi-dity

-Based on rational prescribing

-Motivate morbidity recording

-Results may differ from actual supply

-Estimate only the quantities needed to dispense to patients

Critical issues in Quantification

• Preparing an action plan for quantification

• Using centralized or decentralized quantification

• Using normal or computerized methods for quantification

• Estimating the time required

• Developing the medicines list (Selection)

• Filling the supply pipeline• Considering the impact of lead time• Adjusting for losses due to wastage and theft and for programme growth

• Cross checking estimates produced by quantification

• Estimating total procurement cost• Adjusting and reconciling final quantities

• Use the final estimates to order drugs from suppliers and to issue them to health facilities

• Evaluate the effectiveness of the quantification and require estimates in successive periods

• Were all aspects evaluated?• Have causes of the main problem been identified?

• Have appropriate solutions been found to the problem?

• Are the estimates sufficiently accurate?

The patient morbidity – Standard treatment

method• This method starts from two sets of data:The number of episodes of each health problem treated by the type or types of facilities

Standard treatment schedules agreed for each health problem

Quantity of drug specified for a standard course of treatment

No. of treatment episodes of the health problem

Total quantity of a drug required for a given health problem

X =

This calculation is repeated for each health problem and its corresponding

drugs

Ideal inventory modelQ+S

I

Ssafetystock

Averageinventory

Q Working stock

Order placed

Drugs received

Order placed

Drugs received

Lead time

Lead time

Time in months

Stock on hand

The stock in hand consists of two components, the working stock and the safety stock

• Working stock varies from zero to the order quantity (Q) and represents the stock which is used to satisfy demand between deliveries

• Safety stock (S) exists to protect against stockouts, which would otherwise occur when deliveries are delayed, or when demand is unexpectedly high

• Calculate the quantity of each drug required in the next procurement period

• Adjust for expected changes in consumption pattern

• Adjust for losses• Compile decentralized quantifications (if applicable)

• Estimate costs for each drug and total costs

• Compare total costs with budget and make adjustments

Calculate the consumption of each drug

Opening Stock

Drugs Received

Closing stockConsumption += -

Adjust for avoidable wastage and losses

• Drugs destroyed by damp, time expired, batch seized for poor quality, unaccounted

• Should not exceed 5-10% in a well run pharmacy or store

Avoidable wastage-

Recorded consumption=

Consumption adjusted for avoidable wastage

Estimating the safety stock• Safety stock is the quantity of stock used on average during the average lead time from the current supplier.

For calculation:SS = LT X CA

Where SS=Safety stock

LT=Lead TimeCA=Average Consumption

VEN analysis forBudget constraint

V- Vital (Fixed item & amt) E- Essential (Fixed item) N- Non-Essential

Discussion Points

- Source of Morbidity data (HMIS, DUNS, OPD register, Morbidity report)

- Standard Treatment Guidelines (MEDP Guidelines, Treatment guidelines from vertical projects)