Apply principal of

national drug supply

management

Mr Abdifatah Ibrahim
 Definition of Essential Medicine

• Are those that satisfy the priority health care needs of the population Are
selected with due regard to public health relevance,
relevance evidence on efficacy and
safety, and comparative cost-effectiveness
effectiveness

• Are intended to be available at all times in adequate amounts, in the

appropriate dosage forms, with assured quality and adequate information and
at a cost that individuals and the community can afford
 Definition of Essential Medicine
• Are medicines that satisfy the priority health care needs of the population
and therefore should be available?
at all times,
in adequate amounts
in appropriate dosage forms and
at a price the individual and the community can afford
 Essential drugs concept

• Limited number of carefully selected drugs based on

agreed clinical guidelines leads to more rational
prescribing, to a better supply of drugs and to lower cost
 What is a national drug policy

• A political commitment to a goal and a guide for action. It expresses and

prioritizes the medium- to long-term
term goals set by the government for the
pharmaceutical sector, and identifies the main strategies for attaining them
 Why is a national drug policy needed?
• To present a formal record of values, aspirations, aims, decisions and
medium to long-term
term government commitments;
To define the national goals and objectives for the pharmaceutical sector,
and set priorities;
To identify the strategies needed to meet those objectives, and identify
the various actors responsible for implementing the main components of
the policy;
To create a forum for national discussions on these issues
 What is a national drug policy

• A political commitment to a goal and a guide for action. It expresses and

prioritizes the medium- to long-term
term goals set by the government for the
pharmaceutical sector, and identifies the main strategies for attaining them
 Objectives of a national medicine policy
The general health related objectives is to ensure

Access: equitable availability and affordability of essential drugs

Quality: the quality, safety and efficacy of all medicines

Rational use: the promotion of therapeutically sound and cost-effective

cost use of

drugs by health professionals and consumers.

 Introduction to pharmaceutical supply chain
• Pharmaceutical Supply chain management encompasses the planning and
management of all activities involved in sourcing and procurement,
manufacturing and all pharmaceutical logistics activities such as
warehousing, Inventory management, Distribution and transportation,
customer services.

• Supply chain management integrates supply and demand management

within and across channel partners.
 Definition of terms

• Pharmaceutical Logistics:: Logistics is the flow of Pharmaceuticals material,

related information, and money between consumers and suppliers

• A supply chain is a network that includes vendors of raw materials, plants that
transform those materials into useful products, and distribution centers to get
those. Products to customers
 Introduction to pharmaceutical supply chain

• Supply chain management: - Managing supply and demand, sourcing raw

materials and parts, Manufacturing and assembly, warehousing and
inventory tracking,, order entry and order management, distribution across
all channels, and delivery to the customer
The six rights of SCM (Supply chain management
The RIGHT goods
in the RIGHT quantities
in the RIGHT condition
deliver to the RIGHT place
at the RIGHT time
for the RIGHT cost
 Benefit of SCM (Supply chain management
I. Increases program impact

 If the system provides a reliable supply of pharmaceuticals, more people are

likely to use health services

 Customers feel more confident about the health

system and the facilities when they have a constant supply of pharmaceuticals
II. Enhances quality of care

 Well-supplied
supplied health facilities can provide superior service, while poorly supplied
health facilities cannot

 well-supplied health workers can use their training and expertise fully, directly
improving the quality of care for clients

 It helps in increasing their professional satisfaction, motivation, and morale

• III. Improves cost efficiency and effectiveness

• Reduces losses due to overstock, waste, expiry, damage, pilferage, and

inefficiency;

• Protects other major program investments

• Maximizes the potential for cost recovery

 The need for logistics

• Logistics is the branch of science relating to procuring, maintaining and

transporting materiel,, personnel and facilities

• The provision of complete health care necessitates the availability of safe,

effective and affordable drugs and related supplies of the required quality,
in adequate quantity at all times
logistics can be considered activities as the operational component of
supply chain management, including

Selection

Quantification

Procurement

Reporting and ordering

Drug Selection:
Abdulfetah
Selection
• Is the process of determining which types of medicines should be
used for what clinical indications? It is often done by a committee
(Drugs and therapeutic committee)
committee that includes clinicians,
pharmacists, policy makers and others

• Drug selection is a process of deciding the type of drug products

needed for the prevalent diseases
 Key Factors that should be considered in drug
selection include
• Keeping costs of drugs and dosage forms affordable and cost-effective
cost

• Having drugs available for the treatment of most prevalent diseases

• Availability of safe, effective and good-quality

good drugs

• National health policy like program pharmaceuticals (free service,

exempted services) and revolving drug fund (RDF) pharmaceuticals

• Training and experience of available personnel

Basic steps and criteria in drug selection
• The list of selected drug should be categorized: Pharmaco-
therapeutically and/or alphabetically

• By the level of health care If the prepared list includes drug

products to be used by different level of health care and
dispensing units, it should be structured accordingly to the level of
importance (VEN)
VEN
Quantification
 Quantification
• Is the calculation of required quantities of medicines, tests or services
essential to correctly treat patients for a certain period of time

• usually one year for the national level and one month to a quarter for
the district and/or health center level

• The management of the drug supply works best when products are
available

• Supplies should be ordered based on their use (consumption)

Quantification methods
1. Consumption Method: uses records of past consumption of individual
drugs

2. Morbidity Method: estimates the need for specific drugs based on the
expected number of attendance, the incidence of common diseases the
incidence of common diseases and the standard treatment patterns for
the diseases considered

• Each of the method has its own advantage and disadvantage as detailed in
table below
Estimation of drug requirements

• The estimate of the drug and medical supplies required for a

given period is undertaken

To avoid shortages (out of stock) and ensure credible health care
service

To prevent excess stock and avoid waste

 Factors that influence choice and quantity of
drugs include
• Catchment population which the health institution serves

• Disease pattern and seasonal variation in disease pattern

• Monthly (rate of) drug consumption, Knowledge of quantity of each dosage

form that is regularly consumed

• Delivery (lead) time, Request indicator (re-order

(re level) as as the basis for
calculating the appropriate quantity of a particular drug to be ordered

• Quantity of drug product that serves as a signal for re-ordering

re
Delivery (lead) time: -

• it is time lag between placing orders and receiving the orders

• It is important to establish how long it takes to have a drug

delivered and receipted in the store so that the drug does not
become out of stock
Factors that can increase Delivery (lead) time

• Poor road conditions, particularly in the rainy season

• Poor condition of delivery vehicles , Increased work load at the

issuing store

• Stock out of drugs at the central store

Monthly consumption (AMC)

• is obtained by calculating the average consumption over period

of time (e.g. three, six months)

• or dividing the total consumption over the period by the number

of months the a drug was consumed
Example 1: Average monthly consumption
 Budget reconciliation

• The need of drugs should be reconciled with funds allocated for

drugs purchasing. This can be done by using

1. VEN analysis:

2. ABC analysis:
Procurement of pharmaceuticals
 Procurement
• Procurement” is the overall function that describes the activities and
processes to acquire goods and services

• involves the activities involved in establishing fundamental requirements,

sourcing activities such as market research and vendor evaluation and
negotiation of contracts

• The pharmaceutical procurement system is a major determinant of

pharmaceutical availability
• Pharmaceuticals also consume the major share of health-related
health
foreign currency exchange

• procurement is process of purchasing selected and quantified

products/drugs for use

• An effective procurement process ensures the availability of five

rights.
Procurement methods and management
• There are four types of procurement methods used to purchase
drugs
pen tender
Open
Restricted tender
Competitive negotiation
Competitive
Direct procurement
• They vary with respect to their effect on price, delivery times, and
work load of the procurement office
The procurement method chosen should
Obtain the lowest possible purchase price for high quality products
Obtain

Ensure suppliers‘ reliability, in terms of both quality and service

Ensure

Maintain transparency in the process

minimize the opportunity for illicit influences on procurement decisions

Principles of Drug Procurement
• Good procurement is a linchpin of access to quality and
appropriate medicines

• better quality and more reliable delivery of essential medicines,

based on four strategic objectives:
 Procurement process

• The procurement cycle includes most of the decisions and actions

that determine the specific medicine quantities obtained, prices
paid, and quality of medicines received
Factors influencing price
Unit prices

• Increasing competition among suppliers usually decrease drug price the

number of different drug products

• different generic versions of the same product on market influence

competition and pricing

• Government policies on registration, licensing for manufacturing &

distribution, authority to prescribe & dispense, generic substitution
Purchasing models & the total variable cost of purchasing

• Total purchasing costs can be minimized by choosing the optimal

purchasing model

• There are three common purchasing models used in drug supply

system

1. Annual purchasing
2. Scheduled purchasing
3. Perpetual purchasing
Annual purchasing
Scheduled purchasing
 Storage and Product Shelf Life

• Shelf life is the length of time a product may be stored without

affecting the usability and safety of the item, if the product is
stored under the prescribed conditions

• In general, supplies should be protected from sun, heat, and

water
General storage guidelines for pharmaceuticals