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Drug supply management (Phar3144)

for 4th year pharmacy students, 2021

By: Nimona B. (B.Pharm, MSc.)

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Course outline 3/30/2021

• Overview of the drug supply management and concept of EML

• Formulary process and national drug policy(NDP)
• Drug management cycles
🞄 Selection and quantification
🞄 Inventory management and distribution

 Drug use
 Rational and irrational drug use
 Factors contribute to irrational drug use and its
consequences
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3/30/2021

Course outline…
• Tools to investigate the use of medicines and WHO/INRUD
drug use indicators
• Drug management information system and monitoring
and evaluation
• Accounting principles
▫ Introduction and developing accounting system
▫ Interpretation of financial statements
• Pharmaceutical marketing principles
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Objectives of the course

3/30/2021

• Intended to prepare pharmacy students;

 To be knowledgeable managers and decision makers in
pharmaceutical supply management
 It empowers students to be active participants in the formulation,
implementation, monitoring and evaluation of national drug
policies.
 Promote rational drug use and control of irrational drug use
 Objectives of the course…

• In general this course is empower students to

 Properly select, quantify, procure and distribute

the right pharmaceuticals to right place and customer
 Promote rational drug use
 Describe the basics of rational drug policy

 Principles of pharmaceutical marketing

 Overview the accounting principles

3/30/2021 5
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Drug supply management 3/30/2021

• Drug: Natural or synthetic substance when taken into a

living body affects its functioning or structure, and is used in
the diagnosis, mitigation treatment, or prevention of a
disease or relief of discomfort.
• Management is the process of setting and achieving
goals through execution of five basic functions of Mgt.
Planning, organizing, staffing, directing and controlling
• That utilizes human, financial and material resources
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3/30/2021

Drug supply management…

• Supply: Is an economic term that refers to the amount of a
given product or service that suppliers are willing to offer
to consumers at a given price level at a given period.
• A performance-improving approach that develops seamless
linkages between the various staff, levels, and functions
within a given supply chain in order to optimize customer
service.
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Why worry about medicines? 3/30/2021

1. Drugs save lives and improve health

• Most leading causes of discomfort, disability, and premature
death can be prevented, treated, or at least alleviated with cost-
effective essential medicines.
• a huge burden of illness that can be substantially reduced if
carefully selected, low-cost medicines are available and
appropriately used.
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2. Drugs promote trust and participation in t h e h 3 / 30/ 202 1

ealth services
• The credibility of health workers depends on their ability to save
a dying and sick community members by using cost effective
essential medicine with affordable price .
3. Drugs are costly
• Although medicines are cost-effective, they can be quite

costly for an individual, a household, a government health

system, or a country
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3/30/2021

Cont’d…
• Represent the major out-of-pocket health expenditures at an
individual level
• WHO estimates that up to 90% of the population in low- and
middle-income countries purchases medicines through out-of-
pocket payments.
• Medicines account for 20% to 60% of health spending in
low-
and middle-income countries (WHO 20017)
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4. Drugs are different from other

consume r p r oducts
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• Drug should not left to market forces just like other consumer
products due to the following reasons.
 The patient often does not choose the medicine. It is
prescribed by a clinician or recommended by pharmacy staff.
 Even when the consumer chooses the medicine, he or she is
not trained to judge its appropriateness, safety, quality, or
value for money.
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3/30/2021

Cont’d….
 Fear of illness can lead patients to demand costly medicines
from health workers, or to buy such medicines for themselves,
when cheaper medicines or no medicines would achieve the
same result.
 The consumer often cannot judge the likely consequences of
not obtaining a needed medicine.
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3/30/2021
5. Practical improvements in the supply and use of
drugs are possible
Even small improvements, when made in a number of
related areas of pharmaceutical Mgt, can yield
substantial overall savings.
 Savings in drug costs (Competitive
procurement)
 Improved drug availability (better
quantification)
 More reliable delivery (redesigning of
distribution systems)
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3/30/2021

Challenges for drug management

• The major bottle neck for policy-makers and managers in the area of
drug supply Mgt are:

1. Achieving financial sustainability

• This is realized when expenditures and financial resources balance
are sufficient to support a given level of demand.
• In the absence of such a balance the health system is left with only
four options:

– Improve efficiency, increase financial resources,

reduce
demand, or accept a decline in quality of care.
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3/30/2021
2. Improving Efficiency in Public drug supply

• Public-sector drug supply in many countries continues to

be challenged by
 Ineffective management systems

 Lack of staff incentives

 Inability to control fraud and abuse

 Political pressures that channel drug supplies to

better-off areas and
 Insufficient drug selection and use.
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3.Changing the perceptions and behaviors of provi3d/3e0r/2s02,1

patients and the public

 Major problems with this regard include:

– Prescribing and dispensing incorrect, harmful, or

unnecessary drugs
– Non-adherence to treatment instruction by patients

– Wasteful or harmful self-medication practices.

4. Reorienting the role of government:

• A challenge for the public sector is to work with the private sector
and NGOs to achieve universal access to EDs and rational use of
drugs.
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Cont’d… 3/30/2021

• This involves mutual understanding, constructive partnerships,

and the right incentives.
• Greater coverage of essential drug need by the private sector
promotes
 The use of public resources on prevention, control of
communicable diseases, and on the poorest segments of the
population.
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3/30/2021

5. Regulating Safety, Efficacy and Quality:

• Many governments in the developing world are characterized

by very low regulatory capacities which are characterized by
 Absence or lack of legislative basis
 Trained personnel
 Specific technical resources, adequate funding
 Public commitment to establishing and maintaining basic
standards
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Concept of Essential medicine

3/30/2021
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3/30/2021

Concept of EM
• Essential medicines - “indispensable and necessary for the
health needs of the population. They should be available at all
times, in the proper dosage forms, to all segments of society.”
(WHO, 1975)
• Essential medicines safe lives, reduce suffering and improve
health, but only when they are:
 Good quality
 Safe
 Effective
 Available and
 Properly used by providers and patients.
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3/30/2021

History of the Essential medicine

• Starting from the second world war (1939-1945)
there were significant developments in the field of
therapeutics.
• The whole field of therapeutics had been revolutionized
• This was described by many authors of the mid 1950s as
“Miracle”.
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History of the Essential med i c i ne

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…• But … Increasing gap in access to drugs

• The “miracles” were only for people living in the developed nations
 No drugs at all in the countryside, but 100s or 1000s of drugs
competing for customers' attention in the cities [accessibility
issue was major challenge].
• The pharmaceutical market also produced a series of problems.

 The already available medicines had very high

prices
(mostly due to protection of medicine by patents)
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3/30/2021

History of the Essential medicine …

Inadequately tested or misused drugs resulted in many cases
of serious or fatal drug-induced diseases before sufficient
evidence accumulated in the public eye to mandate change.
 Example: Thalidomide(fetal deformation) in 20th century
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3/30/2021

History of the Essential medicine …

• from the thousands of high price brand name products that
were flooding the market, some were with questionable
efficacy and safety

• A growing recognition of pharmaceuticals often brought

problems as well as great promise.
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History of the Essential med i c ine 3/3 0/ 2021

…
• Large portions of the population frequently lack access to even
the most essential drugs
• The limited available resources are spent on
frequently ineffective, unnecessary, or even
dangerous drugs.
 Complaints in the early 17the century:
 No links between drugs and health needs

 No access to most essential drugs

 Rising costs of pharmaceuticals

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3/30/2021

History of the Essential medicine …

 Uneven rural-urban distribution

 Protests against industry marketing practice

Against this background, birth of the essential drugs

concept
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3/30/2021

The rise of the essential drugs concept

• An idea gradually emerged: why not concentrate first
on a basic list of reliable drugs to meet the most
essential needs.
• The basic list idea, whereby a limited range of
affordable drugs used to meet basic needs of whole
populations, had been in place before the World War
II, in Norway.
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3/30/2021

Rise of the concept…

• In 1974 the International Labor Office adopted the idea of
defining and meeting “basic needs” in the developing
world
• At the same time, the WHO director general proclaimed a
new policy aimed at improving the health of rural and
peri-urban populations.
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Rise of the concept…

3/30/2021

• In 1975,WHO defined essential drugs as “Those considered to

be of utmost importance, basic, indispensable, and necessary
for the health needs of the population.
 They should be available at all times, in the proper dosage
forms, to all segments of society.”
• A year later, the WHO prepared its first Model List of
Essential Drugs, contains 224 drugs and vaccines.
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3/30/2021

Rise of the concept…

• In Alma Ata in 1978, the WHO/UNICEF Conference on
Primary Health Care adopted the essential drugs concept as
one of its basic tools.
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3/30/2021

Concept of essential drugs

• According to WHO, Essential medicines are those that
satisfy the priority health care needs of the population.
• They are selected because of
 Public health relevance
 Evidence on efficacy and safety
Comparative cost-effectiveness.
• The appropriate use of essential medicines is one of the
most cost-effective strategies a country can endorse.
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Concept of essential drugs… 3/30/2021

✓ Essential medicines are intended to be available within the

context of functioning health systems

 At all times in adequate amounts,

In the appropriate dosage forms, with assured quality
and adequate information and
At a price the individual and the community can
afford.
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3/30/2021

Concept of essential drugs…

• The implementation of the concept of essential
medicines is intended to be flexible and adaptable to
many different situations.
• The responsibility of determining exactly which
medicines are regarded as essential is left to the
decision of the adopting nations based on their
requirements.
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Concept of essential drugs… 3/30/2021

• National EML should be revised periodically to reveal

emerging health priorities, and to reflect updates in
the evidence.
• WHO published the first Model list of essential drugs in
1977
• It identified 208 medicines which together could provide
safe, effective treatment for the majority of communicable
and non-communicable diseases.
• Since then the list has been updated every two to four
years.
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3/30/2021

Concept of essential drugs…

• The list is updated using a systematic approach. by
An expert advisory committee consisting different
profession background are decided through a
transparent process involving several rounds of
external review.
• WHO Model EML serves as a guide for the
development of national and institutional EMLs
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Concept of essential drugs… 3/30/2021

• In Ethiopia EML is developed by Ethiopian Food,

and drug administration (EFDA) depending
on
 Public health relevance

 Evidence on efficacy and safety, and

 Comparative cost-effectiveness

• First Edition 1980 ,Second Edition 1989 ,Third

Edition 1996 ,Fourth Edition 2002 , Fifth Edition
2007, Sixth Edition 2010
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Basic steps for determining

essen t i a l medicine list
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 It include the following steps:-

1. Established drug selection committee
2. Determine the prevalent health problems and patient
characteristics (age, sex, etc…)
3. Decide which health problem may be treated at the level
of drug selection
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3/30/2021

Basic steps for determining essential

medicine list….
4. Choose the drugs
5. Structure the list of drug products
- pharmacotherapeutically/ alphabetically
- by level of health care
- by level of importance (VEN)

6. Introduce the list of drugs

7. Update the list of drugs
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Usage of essential medicine lists

• The Model list serves as a baseline for further
modification (addition and deletion of new medicines)
• Selection of correct dosage strength, and form depending
upon
the national priority and available evidence.
• It can assist national decision-makers in managing costs
by helping them identify priority medicines to meet their
country’s health needs.
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3/30/2021

Usage of essential medicine lists…

• EML is guide the selection, procurement, production,
distribution and storage of medicines.
• It can also serve as an informational and educational tool for
health care professionals involved in diagnosis and
treatment of diseases as well as dispensing of medicines.
• Furthermore, it can improve availability and promote
rational
use of medicines.
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