ABBREVIATIONS WHO UNICEF CMS MSD DMO MOHSW RCHCO PHF FBO NGO TFDA World Health Organisation

United Nations Childrens Fund Central Medical Store Medical Store Departments District Medical Officer Ministry of Health and Social Welfare Reproductive Child Health Coordicator Primary Health Facilities Faith-Base Organization Nongovernmental Organization Tanzania Food and Drug Authority

1.0 INTRODUCTION. 2.0 Pharmaceutical procurement in Tanzania 1.1 Definition Procurement is the process of obtaining/acquiring supplies and services and can achieved through purchase (buy), manufacture in-house (from available materials), receive donation (in kinds), agencies WHO, UNICEF or bilateral aid program also this may occurs in cycles, as long as need persists to consume the supplies and services Pharmaceutical procurement is particularly prone to poor governance, as it entails complex process, which involves several stakeholders including government ministries, manufactures, hospitals, and other distributors. When pharmaceutical procurement and supply chain systems work effectively they offer high levels of quality cost effectiveness, product availability, transparency, accountability and value for money in the use of public funds. 2.0 PHARMACEUTICAL PROCUREMENT IN TANZANIA. Pharmaceutical procurement process in Tanzania may occur at different service level (Central Medical Store, Health faculties, Private pharmacy, distributors etc) so at each level may use different types of procurement depend upon on the policy system exist. All pharmaceutical procurement method at any lever of the health system fall into one of the basic categories: Open tender, restricted tender, competitive negotiation and direct procurement. How ever each of these methods can be used with any of the standard purchasing models annual, scheduled, or perpetual review. 2.1 CENTRAL MEDICAL STORE At the Central Medical Store procurement of essential medicines and all other category of product are procured by the MSD Tender Board. The tender board membership is comprised of people with different qualifications including, Pharmacists, Financial expert, Material Management staff and Logisticians. So this may result into the central buying unit manages the purchase on behalf of

member. Most essential medicines and supplies stocked at MSD are procured by tender through International Competitive Bidding (commonly used), National competitive bidding, Negotiated tender, selective bidding, direct procurement and shopping. So the Central Medical Store has the duties of to procure and distribute to all health facilities in Tanzania. 2.2 PUBLIC HEALTH FACILITIES Those public health facilities draw their requirements from MSD either through their respective funds deposited at a MSD direct by MOHSW or by direct purchase using their own funds from other sources including government basket funds. Those who participate in procurements are Supplier officer, Pharmacist or RCH coordinator, Clinical officer, head of facility depending on the facility in question. 2.3 HOSPITALS: The ordering mechanism for essential drugs is as follows: Hospital and DMOs procure directly from the MSD on a cash and carry basis. This is undertaken by entering a zonal store and procuring items in stock based on their amount on their account or cash on hand. So kits are planned on annual basis together with MOHSW are procured and distributed according to this plan 2.4 HEALH CENTRES AND DISPENSARY Indent and ILS orders are in Principle the same, where Primary Health Facility fill in an individual order (R & R) report and request which have a list of all essential medicines according to health facilities level, (Form 2A, Form 2B and 2C) this is for dispensary, health center and Hospital respectively and send to DMO who channel it to MSD where it is packed individually and shipped to the DMO with PHF name on the box. It is then transported to the PHF by the DMO. This was done on quarterly basis But now MSD try doing a PILOT study of direct delivery services to the Health Facilities

INFORMATION (ORDERS) AND SUPPLIES FLOW DIAGRAM

Role MOH Central: Forecast needs Allocate central funds Supervise

MOH Programme Managers

Flow of supplies Flow of orders

MSD Central/Zonal: Procure Store Distribute

MSD Central and Zonal Stores via MSD or hospital vehicle via MSD vehicle

Hospitals : Serve clients Prepare hospital orders and funding Districts: Review & approve dispensary and health center orders Allocate local funds Deliver to facilities Store supplies in transit Dispensaries & Health Centers: Serve clients Prepare orders Collect local funds

Hospitals (Government/FBO/ NGO) via district vehicle Government Dispensaries and Health Centers

District

via district or NGO vehicle NGO Dispensaries and Health Centers

CLIENTS

2.5 Vertical programme: Procurement of vertical programme drugs is carried out partly by MSD and partly by external procurement agents like Crown Agents and UNICEF that is are procured only under special request by the respective programme. So the MOHSW and programs mobilize enough funds from the government or

development partners or both and deposit the same to MSD which in turn advertise tender, All vertical programme under the MOHSW in Tanzania use MSD for storage and distribution of their Items. The MSD utilizes the same storage and distribution network for vertical programme items as is used for essential drugs that is its IT system, personnel, warehouse, trucks, etc, So it was the duty of programme manager or district coordinator to fill all the order report (R&R) and submit them to MSD for processing. 2.6 Private supplier: Private wholesalers operate under the simple mechanism of procuring items and selling them with mark up covering the cost of the operation as well as profit. The prices of private wholesale are not regulated by the government but the selection of medicines is limited to drugs registered under the TFDA. So some health facilities, procure medicines and supplies from private pharmaceutical wholesalers and private pharmacies. This happen after the items were being out of stock from MSD, so can be procured through quotation basis or vendor systems depend on which system exists at that level. 2.7 Agencies / Donation: Also sometime hospitals, health centers and dispensary may get assistance of pharmaceutical products from the donors or Agencies such as WHO and UNICEF. But this assistance of pharmaceutical products should comply with the list of National Essential Drugs according to the level of services and Standard Treatment Guideline.

3.0 OBJECTIVES OF GOOD PROCUREMENT PRACTICE The following are main objectives in a good procurement practice system: To procure the right drugs in the right quantities at the lowest possible total cost. This may help to reduce the occurrence of drug resistance and the over stock of the products In a decision making process it is required to select reliable suppliers of quality products. Supplier should be flexible and able to provide service and satisfy the need of the customer. Also to ensure timely delivery and notification. Supplier should be able to delivery the service on time and according to the planned schedule and contract made. This may increase the sustainability of pharmaceutical product 3.1 PHARMACEUTICAL PROCUREMENT PRACTICE The following are examples of process should be involved in good procurement practice: Generic name: Always we use generic names (International Non-Proprietary name, INN) for fair competition. So we need to specify Quality Standards, not specific brands, for drugs with bioavailability problems. Since this emphasize the NEED to reduce cost via generic purchase. Examples of generic names: use metronidazole instead of Flagyl, etc. Limited to essential medicines list or formulary list: This can be done by Select Safe, Effective, Cost-effective drugs. Since we cant buy everything in a real situation. Also when required, we should use formal approval procedures for procurement of non-listed medicines. This list

can prepare at International, National, Hospital level depending on the needs, want and demand at that level. Bulk purchases: Concentrate purchases on limited List of items to increase quantities and hence reduce price. In addition the commitment to award a single contract for the entire volume of each item raises the suppliers interest in bidding and provides an incentive for them to offer competitive prices. Formal supplier qualification and monitoring. Use formal supplier qualification based on medicine quality, service reliability, and financial viability. This may help to the service to be standard and smooth oriented with minimal resistance Approve suppliers before tendering (Prequalification) or after (Post qualification) this may be done by using a formal Monitoring System to Ensure continued supplier qualification. Competitive bidding process. Also there is need to use Competitive bidding on all but very small or Emergency purchases to obtain the best prices. In Restrictive tender, only prequalified suppliers should be allowed to compete. In Open tenders, suppliers must be evaluated after submission of bids. Commitment to a sole source: To procure all contracted medicines only from winning suppliers. We are not required to enter into any separate deals with non-contracted suppliers. If you do so it may reach a point they will sell to us at high price or susceptible to influence by special interest.

4.0 EFFICIENT AND TRANSPARENCY PHARMACEUTICAL PROCUREMENT. 4.1 Separation of key function: It may happen in our system whereby all duties of procurement of pharmaceutical material were done by one person or one office. These duties such as product selection, forecasting, product specification, pre-selection of suppliers and adjudication of tenders etc all these were done by one individual person or office. In most of public sector context the reality is that all function of the drug procurement process are entirely in the hand of one office or official. So without appropriate separation of function and authority the procurement process is much more susceptible to influence by special interest. This may result into procurement personnel may be able to bias drug selection, manipulate orders to increase the quantities, prejudice supplier qualification decisions, manipulate the final award tender and slant product specification to limit competition. Separations of key functions contribute to professionalism accountability and efficient procurement system. 4.2 Following written procedures and should be well plan and monitor. Most of our health facilities in public or private sectors their systems at work place not well computerize or organized. This result into a system being not able to retrieve all data at a right time and if we got them will be not completed and not well organized during planning process. So it was advisable to have a procurement and supply management activities that are well planned and performance to be monitored regularly. 4.3 Regular reporting on procurement performance. Health facilities now days they dont have good and sufficient reporting system. Most of the activities done through the basket fund or their own source of fund

not well reported at a right time or not reported completely. The procurement office should be required to report regularly on key procurement performance indicators. The organization should make sure that efficient and reliable information management system should be in place this may help to track the flow of product in the system. 4.4 Annual audit with published results .Finally it is required even once a year the procurement department be audited by internal or external auditor and audit report issued. The aim of auditing was to see if all necessary process/steps were followed and documented accordingly. The auditors were required to issue a detailed Letter of Comment to the management of the organization and to the appropriate public supervisory body.

5.0 Conclusion and recommendation Effective procurement is collaborative process between the procurement office, with requirements for trained staff and appropriate management systems, and technical and policy committees, which make final decisions as to which drugs to buy, in what quantities, and from which suppliers. Also the moves towards reducing donor on direct funding to budget support to the government need to be addressed. Training of in forecasting and quantification for essential drugs, HIV/AIDS related commodities is a priority together with proper inventory management leading to availability and accuracy of raw data.

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6.0 Reference: 1. Class review notes/handouts 2. http://www.who.int/medicines/areas/coordination/tanzania_mapping_suppl y.pdf 3. http://hdptz.esealtd.com/fileadmin/documents/Key_Sector_Documents/Ta nzania_Key_Health_Documents/Tanzania_Drug_tracking_study_final_rep ort.pdf 4. Management Science for health. Managing drug supply; the selection, procurement, distribution and use of Pharmaceuticals. Kumarian Press, 199, Second edition, revised and expanded.

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