Chapter one - Introduction

Saron A (B.pharm, Msc)

Outline
• Introduction to National Drug policy

• Development and implementation of national drug policy

• Objectives and key strategies of NDP

• Concept of essential medicine

• Formulary process

• Pharmaceutical sector transformation plan of Ethiopia

Brain storming question

•What do you understand from
the phrase Supply chain
managment ?
 The National Drug Policy

• The National Drug Policy of the Transitional Government of

Ethiopia, established in 1993, addresses critical challenges in
the health and pharmaceutical sectors.

(http://www.efda.gov.et/wp-content/uploads/2019/01/National-drug-Policy-of-
EthiopiaTGE-1993-.pdf)
 cont
• During this period, the majority of Ethiopians still relied on
traditional medicines, and there was limited research on their
safety. Additionally, drug supply faced challenges, both in local
production and importation.

•The policy aims to enhance drug services, ensure efficient

resource allocation, and improve drug safety and efficacy.
 •The policy sought to create a system that matched the
country’s needs and capabilities while ensuring the
availability of essential drugs .
Development and implementation of national
drug policy

• The development and implementation of a national drug policy

involve a complex process with several key steps:

Formulation of Policy:
• The policy development process results in the formulation of the
national drug policy.

• Stakeholders collaborate to define objectives, principles, and

strategies.

con’t
Implementation Strategies:

•After policy formulation, are

implemented by various parties.
•These actions aim such as
equitable drug access, quality, and rational use.
Monitoring and Evaluation:

• Continuous monitoring ensures policy effectiveness.

• Regular evaluation assesses progress, identifies challenges, and

informs adjustments .

Legislation and Regulations:

• Legislation plays a crucial role in drug policy.

• Developing and enforcing are
essential components.

Objectives and key strategies of NDP

OBJECTIVES OF THE POLICY (6)

1. To meet the country’s demand for and to

its supply, distribution and use.

2. To create conducive situations to make the

 with the people’s purchasing power.
cont
3. To ensure the

4. To develop a and gradual

supply to the export market.

5. To expand the training of manpower and drugs research and

development.
6. To devise ways and means for the utilization of traditional drugs in
the regular health services after ensuring their safety and efficacy.
 Strategies of NDP (13)
1. Selection of Drugs
1.1 Based on the country’s health problems, trained
manpower, financial resources and infrastructure, a
National
Drug List will be formulated with full consideration of
• A National Drugs Advisory Committee composed of highly
skilled professionals in medicine and pharmacy shall be
established.
• The Committee shall select the drugs to be used in the
country; prepare lists of drugs of different categories,
formularies and pharmacopoeia; evaluate and decide upon
drugs useful for specific diseases which are not included in the
National Drug List and perform activities in related fields.
2. Drug Supply
2.1 The government shall
either on its own or in joint venture with private
investors.

• Favourable conditions shall also be created for private

investors to participate in the manufacture of drugs on
their own.
2.2 The government shall provide the
 directly involved in the
production of raw and packing materials for drugs, as well as
for those who produce essential drugs and market them in
their generic names.
2.3 Compounding of drugs in hospitals, pharmacies and drug
formulation laboratories shall be carried out by pharmacists
and by adhering to the required quality and standards.
2.4 The government shall establish an enterprise, which shall
be independent of producers and suppliers, to procure and
distribute drugs at national and regional levels.
2.5 Domestic procurement and distribution of drugs shall be
effected through drug distribution networks to be established at
regional levels.

2.6 Favourable conditions shall be created for government drug

procurement enterprise/s so that the public is served with essential
and generic drugs which are reliable in terms of their safety,
efficacy, quality and are affordable in price.
2.7 Both the public and private sectors shall procure drugs
through suitable methods of procurement.

2.8 The government shall give incentives to private

importers and distributors who are engaged in the import
and distribution of essential drugs with generic names and
at reasonable prices.
2.9 Foreign procurement shall be carried out in such a way that it
does not weaken local drug manufacturing. On the other hand the
necessary precaution will be taken to avoid monopolistic
tendencies by local manufacturers.

2.10 Imported drugs, secured either in the form of international aid

or as part of health related programmes, shall be on the basis of
the national need and shall be abided by the pharmaceutical laws
of the country.
3. Stock Management and Distribution

3.1 which
are suitable for proper stock management and pertinent to the
climatic conditions of the locality shall be issued.

• The availability of storage facilities which meet the required

standards shall be ensured.
• 3.2 The movement of drugs from ports and distribution points shall
be given priority and an efficient transport services shall be
provided for timely delivery to consumers.

• 3.3 Every distribution network shall be subject to strict drug

inventory control, supervision and data exchange in order to
forecast drug demands, to prevent wastage and avoid shortage of
drugs.
•3.4 Distribution of drugs shall be carried out in accordance
to a of the
health institution and retail enterprise.

•3.5 Public health institutions and pharmacies within them

shall be given priority by the government owned drug
distribution system.
4. Drug Administration and Control
4.1 The National Drugs Advisory Committee shall the
safety, efficacy, quality, price and other vital information about drugs
and register them before they are marketed.

4.2 shall be issued for drugs that meet

the required standards. Drugs already on the market shall also be
subject to periodic evaluation and registration.
• 4.3 Drug quality standards shall be set. Government operated
quality control laboratories will be established both centrally and
regionally.

• 4.4 Drug samples for quality control shall be collected from

manufacturing plants, distribution outlets, retailers, etc. and
substandard products shall be withdrawn from the market.

5. Manpower Training and Utilization

5.1 Formal pharmaceutical trainings shall be based on the
requirements and health needs of the country. Strategies shall be
devised to upgrade professionals who are in service.

5.2 Appropriate strategies shall be designed for the local training of

biomedical technologists.

6. Drug Information and Promotion

6.1 The content and distribution of drug information to

health professionals and the public shall be subject to
6.2 Current and accurate information and reference
materials on drugs shall be produced and distributed to
practitioners in the field.
7. Trading Agencies and Scientific Bureaus
7.1 Manufacturers shall be allowed to set up

about drugs.
However, regulations for their establishment and control, shall be
instituted to regularize their functions. These functions shall be
managed by competent professionals in the field.

8. Drug Use

8.1 A shall be prepared to show prescription and non-

prescription drugs.

8.2 form to be used all over the country

shall be instituted and its usage shall be controlled.
 8.3 Health practitioners shall be advised and encouraged to
prescribe drugs in their

9. Traditional Drugs

9.1 Attention shall be given to through

research and development. Research priorities shall be given to
those traditional drugs which are in wide use.
 9.2 Favourable conditions shall be created for the application of
traditional drugs ascertained to be safe and effective for
treatment.
Private participation in the field shall be encouraged.
10. Research and Development

10.1 Favourable conditions shall be created for the

introduction of appropriate technology and know-how to
vitalized the drug sector.
•The government shall provide appropriate incentives and
support to those engaged in such activities.
11. Drug Pricing

The government shall make all efforts to make sure that the public
gets drugs which are within its means.

12. National, Regional and International Relations

12.1 National, regional and international relations shall be
established with the aim of strengthening and expanding the
sector.

13. Policy Enforcement

•Relevant laws, regulations and rules shall be instituted to

enforce the policy.

Concept of essential medicine

• Essential medicines
 • Are medicines that satisfy the priority health care needs of the
population ,therefore should be

List of Essential Drugs

• Essential drugs concept (list)

• “A limited number of carefully selected drugs
leads to more rational prescribing, to a better supply of drugs
and to lower costs”.
The essential drugs (then known as the Essential Drugs Concept) was defined
in 1975, and followed up in 1977, with the first WHO Model List of
Essential Drugs.

WHO Model Lists of Essential Medicines

• The WHO Model Lists of Essential Medicines are by
the Expert Committee on Selection and Use of Essential Medicines.

• The current versions, updated in July 2023, are the 23rd

Essential Medicines List (EML) and the 9th Essential Medicines List for
Children (EMLc).

• https://www.who.int/publications/i/item/WHO-MHP-HPS-EML-2023.02
Ethiopian Essential Medicine List
• There are vast numbers of medicine in the market. Availing all this

medicine in a certain country will

never be a wise choice as well the
cost of those medicine is
.
• Therefore, for insuring the availability of the safe, effective and good quality
medicines,

• Hence,

Formulary process
The formulary process
 • Consists of preparing, using and updating a
• Formulary list or essential medicines list (EML)
• Formulary manual
• Standard treatment guidelines (STGs)
•The formulary list/ essential medicines
•Is a list of pharmaceutical products
approved for use in specific health care setting .
E.g National formulary list, provincial formulary list,
Hospital list .
•Alphabetically and therapeutically arranged lists of drugs
• Formulary manual –is the publication that brings all the important
summary information on medicines in the formulary list together in a
manual.
• Formulary manual –contains summary drug information that describes
medicines that are available for use in the hospital and clinics.
 – Is drug centered .

–Handy reference that contains selected information relevant to

prescriber, dispenser, nurse or other health worker.

STG:

• Is also called Treatment Protocol or Clinical Guideline.

• Systematically developed statements that help practitioner or prescriber in

deciding on appropriate treatments for specific clinical conditions.

• It reflect consensus on the optimal treatment option within health facility or

health system.
oThe information disease- isemphasizing the common diseases
centered,
& complaints & the various treatment

alternatives oMost guidelines indicate a treatment of first

choice

oSome include diagnostic criteria for starting the treatment or for

choosing among treatment alternatives

• STG exist for various level of health care

E.g Hospital, health center, region, nation

Pharmaceutical sector transformation plan of Ethiopia
Based on the situational assessment, stakeholder feedback, and the revised
mission and vision statements, the agency will focus its new 10 Year program

1. Excellence in Customer Service

2. Financial Sustainability

3. Operational Excellence

4. Excellence in Human Resource Management,

Leadership and Governance

1. Excellence in Customer Service

• It refers to at public health

facilities at affordable prices in adequate quantities and in a sustainable
manner.

2. Financial Sustainability

• This strategic theme encompasses strengthening cost recovery and financial

capacity to sustain the revolving drug fund (RDF) scheme for uninterrupted
supply of pharmaceuticals.

• It also focuses on the mobilization and efficient utilization of funds from different
sources.
3. Operational Excellence

• This theme focuses on

supply chain system that is responsive to the rapidly growing customer
needs.

4. Excellence in Human Resource Management, Leadership and Governance

• This theme refers to creating shared vision and values, formulation of policies
and procedures, evidence-based resource allocation, communication and
coordination that integrates all thematic areas.
These four (4) strategic themes have been broken down into twelve (12)
strategic objectives that describe the focus of the key activities and
initiatives that the agency believes are needed to deliver the changes in
performance set out through the vision and mission statements.
The strategic objectives include:
C1: Enhance customer and stakeholder satisfaction
F1: Improve financial performance and sustainability
P1: Enhance the use of supply chain planning and analytics
P2: Advance the procurement process
P3: Enhance warehousing, order management & distribution processes
P4: Enhance financial efficiency

P5: Enhance compliance

P6: Strengthen risk management

P7: Strengthen strategic partnerships

CB1: Strengthen leadership, governance & human resource management

CB2: Transform the SCM information system

CB3: Strengthen monitoring & evaluation, and knowledge management

Chapter two
 Health commodity security
Outline
What is health commodity security?

Strategic pathway to health commodity security

Steps involved in health commodity security

The purpose of logistics system

Major activities of the logistics system

Components of a logistics cycle

 Key logistics terms

What is health commodity security?

•Achieving access to essential medicines is also defined by
the concept of which is described
as the ability of clients or end users to obtain and use health
commodities when and where they need them.
Strategic pathway to health commodity security

• SPARHCS (pronounced “sparks”) – Strategic Pathway to

Reproductive Health Commodity Security – is an approach to help
countries address these concerns and develop and implement
strategies for reproductive health commodity security (RHCS).
• SPARHCS takes a multidisciplinary, multistakeholder perspective to
demonstrate the complex set of relationships inherent in
reproductive health commodity security. It is built of three parts:

1. A goal statement. Reproductive health commodity security

exists when people are able to reliably choose, obtain, and use the
contraceptives, condoms, and other essential reproductive health
supplies they want.
2. A conceptual framework. The framework identifies key
elements that are involved in securing client access to reproductive
health supplies and related services and that should be considered
during country-level assessment, planning, and implementation for
RHCS.

3. A diagnostic guide. The guide follows from the goal statement

and framework, and supports stakeholders to assess their present
RHCS situation, define future expectations, and take into account
trends from the past.
 Steps involved in health commodity security

• Here are the key steps involved in achieving health commodity security:

Forecasting and Quantification:

commodities.

• Determine the quantities of each health commodity required to meet the

anticipated needs of the population.
Procurement and Supply Planning:
• Identify and
terms.

• Develop a procurement plan that ensures timely ordering,

production, and delivery of health commodities.

• Coordinate logistics and transportation to optimize the supply

chain and minimize stockouts.

Inventory Management:
• Establish effective storage and distribution systems to maintain

appropriate inventory levels.

• Implement inventory control measures, such as regular stock

monitoring, to prevent overstocking or stockouts.

• Develop a robust system for managing expiration dates and the

rotation of products.
Distribution and Logistics:

• Design an efficient distribution network that reaches all levels of

the healthcare system, including remote and underserved areas.

• Ensure the timely and secure transportation of health commodities

to the points of service delivery.

• Develop contingency plans to address disruptions in the supply

chain.
Financial Management:

• Secure sustainable funding sources, such as government budgets,

donor support, and health insurance schemes.

• Implement financial management systems to track expenditures,

monitor budget utilization, and ensure cost-effective

procurement.

• Explore innovative financing mechanisms, such as pooled

procurement, to
 Discussion (be in a group of 5/6)

•Discuss the concept of pooled procurement and

present to the class.
Quality Assurance:

• Establish robust quality control measures to ensure the safety,

efficacy, and quality of health commodities.

• Conduct regular inspections and audits to monitor the integrity of

the supply chain.

Information Management and Monitoring:

• Develop robust data collection and reporting systems to track the

availability, consumption, and performance of health commodities.

• Analyze data to identify trends, challenges, and opportunities for

improvement.

• Regularly review and update the forecasting and quantification

processes to ensure responsiveness to changing needs.

Capacity Building and Coordination:

• Invest in training and capacity development for healthcare workers

and supply chain professionals.

• Establish coordination mechanisms among stakeholders, including

government agencies, donors, and private sector partners.

• Foster collaboration and knowledge-sharing to promote best

practices and continuous improvement.

The purpose of logistics system

• The CSCMP also defnes logistics management as—

• “The part of supply chain management that

 forward and reverses flow and
storage of goods, services and related information between the
point of origin and the point of consumption in order to meet
customers’ requirement.”

Why Logistics Matters

•The goal of a health logistics system is much larger than
simply making sure a product gets where it needs to go.
Ultimately,
to

A restaurant is one example of a simple logistics system.

•The kitchen is a storage facility; the food is held there until it is

delivered to the customer.

•Waiters provide the transportation; they carry the food from the
kitchen to the customer.
•The tables are the service delivery points, where customers sit to
order and eat the food.
 Logistics matters.
Logistics enhances quality of care

can provide superior service, while

poorly supplied programs cannot. Likewise,
can use their training and expertise fully, directly
improving the quality of care for clients. Customers are not the only
ones who benefit from the consistent availability of commodities.
 Logistics matters.
Logistics improves cost effciency and effectiveness
•An effective supply chain contributes to
in all parts of a program, and it can stretch limited
resources.
•Strengthening and maintaining the logistics system is an
investment that pays of in three ways. It reduces (1)
Components of a logistics cycle
 Major activities of the logistics system
Serving customers
• Everyone who works in logistics must remember that
.
Storekeepers do not store drugs just for the purpose of storing; they
store products to ensure that commodity security exists for every
customer to obtain and use the health commodities when they need
them.
 What is the difference between end customers and immediate
customers ?

• In addition to serving the needs of the end customer— the

customer seeking health services—each person in the
process is also serving the needs of more
Product selection

. In a health logistics system, a national formulary and

therapeutics committee, pharmaceutical board, board of
physicians, or other government-appointed group may be
responsible for product selection.
so the
logistics requirements must be considered during the
product selection.
Quantifcation.
• After products have been selected, the required quantity and cost of
each product must be determined.

• Quantifcation is the process of

the products required for a specifc health program (or service), and,
to for the program, determining
when the products should be procured and distributed.

Procurement.
• After a supply plan has been developed as part of the quantifcation process,

. Health systems or programs can

procure from international, regional, or local sources of supply; or they can

use a procurement agent for this logistics activity.

• In any case, procurement should follow a set of specifc procedures that ensure

an open and transparent process that supports the six rights.

Inventory management; Storage and distribution. After an item has
been procured and received by the health system or program, it
must be
.

• During this process, the products must be until they are

sent to the next lower level, or until the customer needs them.
Almost all businesses store a quantity of stock for future customer
needs.
 Key Logistics terms
• Service delivery point. Any facility where users receive supplies
related to health services. Service delivery points (SDPs) are usually
hospitals and health centers, but may also include mobile
units,community-based distributors, laboratories, and health posts.
These facilities are called SDPs because

• Pipeline- The
 through which supplies move from the
manufacturer to the user, including port facilities, central
warehouse, regional warehouses, district warehouses, all SDPs,
and transport vehicles, including community-based distribution
networks.

• Lead time. The time between when

• Lead time can be calculated within the entire in-country system,
from arrival in port to the end user, between specifc levels of the
system, or even the procurement lead time from when a product is
ordered with the manufacturer until it arrives in port.

Allocation (push) versus requisition (pull)?

•Placing orders is a routine activity in logistics. In most
logistics systems, an order is placed for new supplies every
month, or every quarter, from an SDP to a higher level.
•In some logistics systems, the quantity to be resupplied is
calculated by the person placing the order. This is called a
•In other systems, the quantity to be resupplied is
determined by the person who fulflls the order. This
is called an system.
In a requisition system, the person who receives the supplies
calculates the quantities of supplies required.

In an allocation system, the person who issues the supplies

calculates the quantities of supplies required.
Rationing versus allocation
• Information about the quantity of products given to customers is
called dispensed-to-user data, often abbreviated as
Because an SDP is the only place
where supplies are given directly to customers, this is the only
level where we can collect dispensed-to-user data.

• The supply pipeline includes all intermediate storage facilities.

The term for information on the movement of products between
any two storage facilities is
 For example, when the regional level distributes supplies to the
district level, the data on the quantity of product moved is issues
data. Or, when a hospital pharmacy store gives supplies to
other departments or wards in the hospital, or to the
dispensary, this is also issues data.

If the regional warehouse issued

50,000 condoms to the district warehouse last quarter, should it
issue the same number this quarter? The answer is not
necessarily, because condoms may be piling up in the district
warehouse.

• The issue quantity will be more accurate if information is

available on the quantity of condoms that were dispensed to
users during that time period.

Summary questions
•Define logistics.

•What is reverse logistics?

•Define health commidity security.

•Why do we need essential medicine list?

Chapter three
Essentials of Health care Supply
Chain Management
 Outline
• What Is Supply Chain and Supply Chain Management?
• Key Supply Chain Terminology and Concepts (value, push strategy, pull
strategy, postponement strategy, bull whip effect, strategic alliance, core
competency)
• Developing Health care Supply Chain Maps
• Globalization and supply chains
• The importance and integrity of the supply chain to global health
(universal health coverage; sustainable development goal; medicines
availability, access and shortage; substandard and falsified medicines
and supply chain security)
 Supply chain
• is a network of interconnected organizations or organizational entities
developed with the goal of getting the right product to the right place at
the right time.
• Two or more parties linked by a flow of resources – typically material,
information, and money – that ultimately fulfill a customer request.
• SCM term coined 1980.
• Before 1980, logistics, operations management terms were used.
What Is Supply Chain and Supply Chain Management?
•Supply chain management encompasses the planning
and management of all activities involved in sourcing
and procurement…and all logistics management
activities.
• Importantly, it also includes coordination and collaboration with

channel partners, which can be suppliers, intermediaries, third

party service providers, and customers.
 Key Supply Chain Terminology and Concepts
•Value-adding/non-value-adding—The assessment of each
of the company’s activities to determine if that activity adds
value to the organization or its customers. If an activity is
considered non-value-adding it should be eliminated to
increase an organization’s efficiency.
 Bull-whip effect
•An extreme change in the supply position upstream in a
supply chain generated by a small change in demand
in the supply chain.
 Case example
• During the COVID-19 pandemic, panic buying caused a
surge in demand for toilet paper. Stores rushed to
increase their orders and keep their shelves stocked,
while manufacturers further up the supply chain also
increased production to meet the excessive demand.
However, this sudden increase in demand was
shortlived, resulting in inefficiencies and increased costs
—a classic bullwhip effect.
 Strategic alliance—A relationship formed by two or more
organizations that share information (proprietary), participate in
joint investments, and develop linked and common processes to
increase the performance of both companies. Many organizations
form strategic alliances to increase the performance of their
common supply chain.
Example: Pharmaceutical Companies Collaborating on Vaccine Distribution
• During a global health crisis (such as the COVID-19 pandemic), multiple
pharmaceutical companies may form a strategic alliance to ensure
efficient vaccine distribution.

• Alliance Formation:

Several pharmaceutical companies join forces.

They share information, resources, and expertise.

Each company contributes its manufacturing capabilities, research data, and

logistical networks
•Core competencies—Bundles of skills or knowledge sets
that enable a firm to provide the greatest level of value to
its customers in a way that is difficult for competitors to
emulate and that provides for future growth.

Developing Health care Supply Chain Maps

What is supply chain mapping?
•Supply chain mapping is the process of visualizing and
documenting the flow of materials, information, and
money through a supply chain.

•Supply chain mapping identifies and connects all the

companies, stakeholders and supply chain partners
 that are involved in creating a product and sending
that product to consumers.
• Depending on the level of complexity, a supply chain map might include the
following:
 The entities that source raw materials and ship the materials to factories for
manufacturing into parts or products.
 The process through which manufactured inputs are used for the creation of
other parts or products.
 The ongoing manufacturing process to create consumer-ready products.
 Key transport nodes, such as ports, warehouses or transportation hubs, for
the domestic and international movement of goods.
 The logistics networks for collecting, storing and distributing parts or products
to wholesalers and retailers.
 The delivery process for sending products to the end consumer.
Ethiopia’s Health Commodity Supply Chain.
 Globalization and supply chains
• Many experts have already commented on theme of globalization
and supply chains. In the following paragraphs we bring some of
the answers.

• Greg Shnerer, supply chain and logistics professional based in

Toronto, claims that to understand the role of globalization in the
supply chain, it is necessary to first understand what a supply chain
is and how it works.
•A key component of supply chain logistics is global
transportation and supply chain would not be
possible without it in our global and interconnected
world.
• Greg defines the supply chains as the paths between suppliers and
receivers. Then he calls supply chains like the "behind the scenes
work" that gets a product from inception all the way into a
 consumer’s hands. In order to reach as many markets as possible,
these products must cross international borders. Without supply
chains the products that suppliers produce would not efficiently
get out into the world markets, therefore they are vital for markets
all around the world.
• Opinion of Ani Mithra, supply chain analyst, is following:
Globalization and Supply Chain Management (SCM) are
interconnected. In other words, they cannot exist separately,
 without each other. Globalization gives access to new customers
and new sources of procurement. However, the worldwide reach
requires the understanding of the different markets, including the
potential partners, risks, and regulations.

The importance and integrity of the supply

chain to global health
• In 2015, the Sustainable Development Goals (SDG) were
adopted by countries focused on 17 critical goals to ensure a
 “better world with no one left behind” by 2030. SDG 3
represents health and focuses on ensuring healthy lives and
promoting well-being at all ages.
• It includes ambitious goals to

• End preventable deaths of newborns and children under 5 years of age,

• End the epidemics of AIDS, tuberculosis, and malaria,

• Ensure universal access to reproductive health care services, and

• Achieve universal health coverage and access to safe, effective, quality

and affordable essential medicines and vaccines for all.

• The health supply chain is comprised of people, processes,

policies, technology and resources to ensure the right products
reach the right place in the right condition.
• Supply Chain Integrity and Security (SCIS) is defined as a set of
policies, procedures, and technologies used to provide visibility
and traceability of products within the supply chain. This is done to
minimize the end-user's exposure to adulterated, economically
 motivated adulteration, counterfeit, falsified, or misbranded
products or materials, or those which have been stolen or diverted.

• This is minimized by implementing procedures to control both the

forward and the reverse supply chains.