procurement

From 2006 to 2014, Supply Chain Management System (SCMS), the global procurement and distribution project for the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR), distributed over US$1.6 billion worth of antiretroviral drugs and other health commodities, with over US$263 million purchased from local vendors in 14 countries in sub-Saharan Africa. A simple framework was developed and 39 local suppliers from 4 countries were interviewed between 2013 and 2014 to understand how SCMS local sourcing impacted supplier development. SCMS local suppliers reported new contracts with other businesses (77%), new assets acquired (67%), increased access to capital from local lending institutions (75%), offering more products and services (92%), and ability to negotiate better prices from their principals (80%). Additionally, 70% (n=27) of the businesses hired between 1 and 30 new employees after receiving their first SCMS contract and 15% (n=6) hired between 30 and 100 new employees. This study offers preliminary guidance on how bilateral and multilateral agencies could design effective local sourcing programs to create sustainable local markets for selected pharmaceutical products, laboratory, and transport services.

Key strategies of the main antiretroviral (ARV) procurement program for PEPFAR to reduce supply chain risks include: (1) employing pooled procurement to reduce procurement and shipping costs and to accommodate changing country needs by making stock adjustments at the regional level, and (2) establishing regional distribution centers to facilitate faster turnaround of orders within defined catchment areas.

Problems with the quality of medicines abound in countries where regulatory and legal oversight are weak, where medicines are unaffordable to most, and where the official supply often fails to reach patients. Quality is important to ensure effective treatment, to maintain patient and health-care worker confidence in treatment, and to prevent the development of resistance. In 2001, the WHO established the Prequalification of Medicines Programme in response to the need to select good-quality medicines for UN procurement. Member States of the WHO had requested its assistance in assessing the quality of low-cost generic medicines that were becoming increasingly available especially in treatments for HIV/AIDS. From a public health perspective, WHO PQP’s greatest achievement is improved quality of life-saving medicines used today by millions of people in developing countries. Prequalification has made it possible to believe that everyone in the world will have access to safe, effective, and affordable medicines. Yet despite its track record and recognized importance to health, funding for the programme remains uncertain.

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