Best Practices in Pharmaceutical Procurement and Medicines Management

In the wake of government initiative to constitute J&K Medical Services Corporation, streamline procurement and ensure availability and supply of standard quality drugs Dr Geer Mohammad Ishaq enumerates best practices in supply chain management of medicines in tune with international norms and standards

 

Government of Jammu and Kashmir has in its cabinet meeting held on May 21^st, 2013 approved the establishment of J&K Medical Supplies Corporation (JKMSC) with an objective to streamline the terribly derailed drug procurement and supply chain management system for government hospitals in the state. In view of the recently surfaced spurious drug debacle, credibility and faith of patients upon hospital drug supplies has received a serious jolt. Consequently it has turned out to be truly a Herculean task for the state govt. to restore its credibility and peoples’ trust upon the quality of drugs that are supplied at its healthcare centres. Constitution of JKMSC though late, can still be termed as a right step in this direction. As they say, “better late than never”. Civil Society Forum Kashmir had persistently been insisting upon the government to frame JKMSC and replicate TNMSC taking due care of local contexts, sensitivities and requirements.

 

Now that the govt. has made up its mind to establish JKMSC, it is time to set the drug procurement mechanism in order through “Standard Operating Procedures” and highlight best practices in tune with international norms and standards. The effectiveness of the medication management system depends on adherence to policies (broad, general statements of philosophy) and procedures (detailed guidelines for implementing policy). Four strategic objectives of Drug Procurement in the state should be to procure the most effective and safe drugs in right quantities; select reliable suppliers of high quality products; ensure timely delivery, reduce lead time and achieve the lowest possible total cost. Other best practices are as under:

Selection of Drugs:

 

The selection of pharmaceuticals is a basic and extremely important professional function of the JKMSC that may be charged with making decisions regarding products, quantities, product specifications, and sources of supply. It is the JKMSC’s obligation to establish and maintain standards assuring the quality, proper storage, control, and safe use of all pharmaceuticals and related supplies. ABC/VED analysis of past procurement has to be conducted regularly and drugs categorized into basic, supplementary and specialized lists. Drugs should preferably be selected for procurement from the specific Essential Drugs List of the state. While selecting drugs local factors like local diseases, regional differences in sensitivity and resistance of micro-organisms, local climate, topography, environmental factors etc, should be duly considered. While selecting formulation types, stable forms should be chosen, giving preference to tablets over capsules, ointments over creams, powder for reconstitution over injectable solutions and avoiding syrups, to achieve a low-cost, high impact intervention in maximizing the therapeutic lifespan of medicines. Expensive combination drugs should be kept out of the supply list to reduce the actual cost of drugs to the state by as much as half. As far as possible generic drugs should be purchased to reduce the cost.

 

Quantification of Drugs:

 

To avoid wastage through over-stocking or stock-outs of pharmaceuticals, a reliable system of forecasting or quantification of drug needs should be used that includes a combination of past consumption based and morbidity based methods. Accurate quantification of drug requirements, competitive drug procurement based on generic names, prompt payment and regular audits, and efficient distribution are some of the major aspects of effective pharmaceutical management. Budgetary allocations for drugs and pharmaceuticals should be kept anywhere between Rs. 100-200 per capita per annum.

 

Procurement of Drugs:

 

Competitive bid purchasing is an important method for achieving a proper balance between quality and cost when two or more acceptable suppliers market a particular product meeting the JKMSC’s specifications. Drugs should be purchased directly from the manufacturers and not from their agents, stockists or sub-stockists. Drug procurement through brokers and agents has to be avoided since brokers are prone to using corrupt practices such as paying kickbacks to secure their businesses. Economic considerations should be made subordinate to those of quality. A company which does not fulfill the technical criteria of a minimum annual turnover of Rs 50 crores, market standing of minimum five years and adherence to prescribed Good Manufacturing Practices (GMP), should be disqualified from making a price bid. ORG rankings of pharmaceutical companies may also be followed wherever required. 

 

A double-envelope system should be used for bidding and the drugs should always be purchased using VFM (Value For Money) criteria instead of Low Bid criteria. Envelope B (price bid) of Companies not fulfilling technical criteria should be returned to them without opening. To eliminate sole dependence on one supplier, the next two lower suppliers willing to match the lowest price should also be approved. To the extent possible, all products should be made available by the supplier in single unit or unit dose packages. Procurement should be effected in the largest possible quantities in order to achieve economies of scale.

 

With the dual objectives of maintaining quality and preventing wastages and pilferages, all tablets and capsules should be procured with only strip or blister packing, as against bulk packing which requires manual handling at the time of distribution. Both inner and outer packages of all items may bear the logo of JKMSC or labeling instructions to show that the drugs are manufactured only for JKMSC and are not meant for sale outside JKMSC. On account of this, the credibility and acceptability of the drugs by the public shall improve immensely. Doctors should be advised to prescribe only products on the procurement list, although anywhere upto 10% of drug budget can be used on unlisted products. The procurement office should have at least one senior qualified pharmacist as part of its senior staff, in addition to having qualified pharmacists’ all along the pharmaceutical procurement chain.

 

Pre-Qualification of Suppliers:

 

Pre-qualification should assess the quality of the manufacturer (respect for Good Manufacturing Practices-GMP); the quality of the product (registration status, Certificate of Pharmaceutical Product) and the quality of the batch (Certificate of analysis, labeling, appearance, packing and shelf life inspection, chemical analysis). It should be the responsibility of the drug supplier, if any, to sell only drugs from GMP-compliant manufacturers and drugs that are duly licensed. Technical specifications should include Analytical control data, Sterility testing data, Bioavailability data, Bioequivalence data, Descriptions of testing procedures for raw materials and finished products, Testing data developed by independent laboratories, and any other information that may be indicative of the quality of a given finished drug product. All information should be supplied at no charge. A Model Questionnaire consisting of four main sections: Business Information, Manufacturing Information, Quality and Product Information should be used for prequalification of suppliers. Pre-qualification should be done continuously as prospective suppliers express their interests and even before tenders are floated.

Evaluation of Bids:

 

Selection of suppliers should be done through a transparent, clear and explicit bidding process. After thoroughly evaluating the bids, a special committee or tender board usually awards the tenders. It is important that a pharmacist or a person with technical knowledge of pharmaceutical products and its manufacture be a member of the tender board. As often the case, the determining factor for awarding a tender is price. Quality must be a more important consideration due to the fact that purchase of cheaper pharmaceuticals without quality assurance invariably result in losses like expiration of stocks soon after delivery because of too short shelf-life; substandard drugs and health hazards. In selecting a vendor, the Corporation must consider price, terms, shipping times, dependability, quality of service, returned goods policy, and packaging; however, prime importance always must be placed on drug quality and the manufacturer’s reputation. Transparency must be maintained throughout the procurement cycle by following formal written procedures. Decisions should be based on explicit criteria. A list of all contracts awarded, specifying the supplier and price for each product, should be made available to all bidders.

 

Monitoring Supplier’s Performance:

 

A continuous supplier performance monitoring system which tracks lead time, compliance with contract terms, partial shipments, quality of drugs, remaining shelf-life, compliance with packaging and labelling instructions of drugs should be evolved. Monitoring should include an annual external audit too. The supplier’s compliance with the terms and conditions of the contract should be recorded, with emphasis on timely delivery, quantities delivered as ordered, shelf life after delivery and quality. A system for reporting and recording quality problems noted by the healthcare professionals throughout the state should be part of the post qualification procedures.

 

Quality Assurance System:

 

A comprehensive Quality Assurance system involving both surveillance and testing of drug quality and including both technical and managerial activities, spanning the entire supply process from drug selection to patient use should be established. Quality should be checked through visual inspection of incoming consignments and randomly drawn samples from different batches should be coded and sent to private approved laboratories to ensure effective quality control. Drug quality should be assessed as compliance with pharmacopoeial specifications concerning a drug’s identity, purity, potency and other characteristics like uniformity of the dosage form, bioavailability and stability.

 

Proper Storage of Drugs:

 

Correct storage of drugs to avoid deterioration distribution and wastage should be developed through systematic stock inventory control system should be ensured using modern tool of computerization and management information system so that drugs are always available when needed in the state. IT enabled infrastructure is therefore an essential component of the supply chain management of medicines so that real-time monitoring of drug stocks at district and divisional levels could be monitoring round the clock.

 
(Author is senior faculty at the Department of Pharmaceutical Sciences, University of Kashmir and can be reached at ishaqgeer@gmail.com)

J&K Medical Supplies Corporation - Issues at hand and challenges ahead

After immense public and media outcry over the spurious drugs debacle and after four years of sustained lobbying and persistent advocacy by Civil Society Forum, Government of J&K has finally risen to the occasion and decided to constitute J&K Medical Supplies Corporation (JKMSC) with an aim to centralize and ensure the supply of standard quality drugs and other medical supplies to healthcare centres in the state. Proposed Corporation shall function under the chairmanship of Chief Minister, with Ministers of Health and Medical Education serving as its Vice-Chairmen. It may undertake procurement, testing, storage and distribution of human drugs, medical equipments & devices, surgicals & sutures, kits and reagents to the government health institutions of the State. Constitution and other modalities of the Corporation are at present being finalized for getting it approved by the state cabinet.

This is truly a welcome decision that if executed in a proficient manner shall pave way for an effective implementation of the approved Drug Policy besides streamlining the terribly deranged drug procurement mechanism of the state. While this initiative needs to be applauded and encouraged by one and all, there are several issues and challenges confronting the proposal whose redressal assumes importance for accomplishing the dream of this Corporation in a timely manner and for making it a roaring success. Some of these issues at hand and challenges ahead that have the potential to mar the prospects of realization of this government proposal are discussed here with a sole intention of overcoming all possible hurdles and paving way for an unhindered functioning of the proposed Corporation.

Standard Operating Procedures (SOPs)

 

First and foremost issue is that in relation to procurement of drugs and other medical supplies, the approved Drug Policy of the state just mentions that the existing procurement mechanisms of drugs & supplies shall be improved with a view to ensure timely availability of quality drugs, however it does not put forth any discrete policy framework before the upcoming corporation as required for tendering, supplier selection, ordering, pre-qualification, post-qualification, resource allocation, quality assurance, distribution etc. Therefore there is urgent need to chalk out a comprehensive and robust drug procurement policy framework for the state so that there are “Standard Operating Procedures” available to the Corporation that can serve as its guiding roadmap and devise modalities for its day-to-day functioning. Due to some mutual differences between two erstwhile ministers of Health and Medical Education over the constitution of this Corporation, the procurement part had been left incomplete in the approved drug policy of the J&K state. Unless this deficiency is duly addressed well in time, there will always be a scope for gratification practices and bending of rules for some illegitimate gains. Strong lobby of the drug mafia that has successfully scuttled any moves to establish a drug procurement corporation in the past may once again attempt to sabotage the establishment or working of this Corporation which needs to be fought out with firm conviction through strong policies and stringent procedures.

 

Warehousing and Transportation

 

Second big challenge confronting the upcoming JKMSC is to have adequate, state-of-the-art warehousing facilities for drugs and other medical supplies both at divisional and district levels in the state alongwith sufficient transportation laced with cold chain facilities. Madhya Pradesh government’s centralized drug procurement policy of 2004 failed on account of non-availability of adequate drug storage and transportation facilities at district level and consequently they had to revert back to decentralized procurement in their revised drug policy of 2009. Therefore it is extremely important to have warehouses with enough storage space, fitted with heavy duty racking system to avoid wastage of space alongwith pallets, hydraulically operated hand-trolleys and pedestrian controlled electric stackers to handle the medicines scientifically and efficiently. An earlier draft of the drug policy prepared in 2009 had mentioned that the government shall establish modern warehouses at divisional and district levels under the proposed J&K Medical Supplies Corporation keeping in view the state’s topography, climatic conditions and issues of accessibility and that the capacity of warehouses/stores would be in line with the actual requirement to ensure constant supply of drugs to all healthcare institutions of the state. Surprisingly this provision was dropped in the final draft approved by the state cabinet. Therefore if the govt. has decided to procure drugs centrally and then distribute to various district level hospitals, this clause needs to be incorporated into the procurement part of the policy.

 

Skilled manpower trained in procurement

 

Procurement and supply chain management of medicines is a highly sophisticated and professional activity that can only be satisfactorily and successfully undertaken by suitably qualified, adequately trained, sufficiently skilled manpower both at managerial and ground level. At present no executive or administrative staff is available in sufficient numbers at any of the government departments including Departments of Health, Family Welfare, Medical Education, Provincial Stores or Drugs Control that are amply trained to serve the purpose of the upcoming Corporation. Therefore need of the hour is to create sufficient vacancies in the proposed Corporation for such staff, arrange capacity building workshops for the existing staff of Provincial Medical Stores and impart sufficient training to them regarding modalities of modern drug procurement in tune with international standards and norms. Many international Universities conduct summer schools in Pharmaceutical Procurement and Medicines Management from time to time. Government needs to identify and appoint the managerial staff for the proposed Corporation on priority basis and depute the same to these training courses for gaining required expertise so that they can serve the Corporation better and in an effective manner on their return. Given the impact of procurement activities on the operation and effectiveness of health services, it is essential that these activities be performed by trained staff only using sound procedures. Main activities of drug selection, quantification, procurement, quality assurance, storage and distribution must exclusively be carried out by graduates and post-graduates in Pharmaceutical Sciences, who are best suited and well trained for this purpose.

 

Integrity and transparency in tendering

 

Most of the apprehensions and skepticism of common masses in relation to the functioning and success of the proposed Medical Supplies Corporation are linked with the degree of integrity, openness, transparency and efficiency of procedures adopted for awarding tenders to the drug suppliers that will in turn decide the standards of quality of drugs and equipments procured by the Corporation. Majority of people fear that undue political or bureaucratic interference may mar the prospects of such transparency in tendering and procurement and that may in turn bleak the chances of success of this Corporation. In this regard state government needs to display its writ and throttle any such overt or covert moves to undermine the fairness of the tendering practices. Proposed Corporation has to be an absolutely autonomous, open and constraint-free body with full decision-making powers devoid of any undue political or bureaucratic influences. In this regard JKMSC needs to follow the footprints of Tamil Nadu, Kerala and Rajasthan Medical Services Corporations and ensure transparency in all its dealings. Full authority and autonomy needs to be vested upon its Managers and Board of Directors in making their decisions. No transfers of its managers should be allowed under statutes for a specified period unless there are any proven accusations of impropriety. Transparency and integrity will be the benchmark and the key litmus test for the success of this Corporation that alone will decide its future progress. If it succeeds, it makes history and if it fails it fails forever.

Financial/budgetary allocations

 

Besides divisions for procurement, storage and distribution of drugs and other medical supplies, JKMSC must have a separate department of Quality Control where an in-house QC Laboratory equipped with all sophisticated equipments, staff and infrastructure required to test the quality of drugs, should be a established. Therefore besides sending drug samples for testing to government and empanelled private laboratories, Corporation should itself be able to carry out in-housing Quality Control of some of the supplies on urgent basis. To fulfill this and other needs of the Corporation, it must receive sufficient and liberal finances from the govt. through plan as well as non-plan budgetary allocations. Since healthcare has to be on top of all priorities of any government, no stone should be left unturned to ensure adequate monetary support from internal as well as external resources for smooth functioning of the Corporation. It has come to the fore that inadequate funding has over the years left govt. drug testing laboratories of the state in shambles which in turn has resulted into large scale resentment among masses regarding govt. apathy towards these vital institutions. Therefore there should be no dearth of funds at any stage that may impede effective functioning of the proposed Corporation.

Conclusion

An effective procurement process ensures the availability of the right drugs in the right quantities, at reasonable prices, and at recognized standards of quality. Effective procurement is a collaborative process between the procurement corporation, suppliers, an appropriate management system, and committees which make decisions as to which drugs to buy, in what quantities and from which suppliers. In order to put the existing derailed drug procurement system back on track, government has to move several extra miles at a brisk pace and take bold decisions in making this entire concept a grand success. Let our healthcare not fall prey to corrupt practices prevalent elsewhere and let this sector at least be spared from the monetary lust of human kind. States like Tamil Nadu and Rajasthan have shown how this model can be made a success despite all odds; we just need to replicate their success in our own small world.

 

(Author is a senior faculty at the Department of Pharmaceutical Sciences, University of Kashmir and can be reached at ishaqgeer@gmail.com)