PROCUREMENT SUPPORT SERVICE

WHO/UNICEF Technical Briefing Seminar on Essential Medicines Policies,

October 31st -November 4th 2011

Mariatou Tala Jallow, Pharmaceutical Management Unit

PRESENTATION OUTLINE• Procurement Support - Voluntary Pooled

Procurement (VPP) and Capacity Building Services (CBS)

Why Global Fund is providing this serviceHow the services operatesAchievements and challengesHow to access the service

Use of the Global Fund Grant Funding

Pharmaceutical Products, 19.7%

Health Products and Health Equipment,

17.0%

Human Resources, 14.6%

Training, 11.0%

Infrastructure and Other Equipment,

9.6%

Planning and Administration, 5.8%

Monitoring and Evaluation, 4.4%

Expenditure by cost category

37% percent of funds are used for medicines and health products procurement

Challenges / Risks linked with PSM activities PSM activity Risks

Quantification and estimation of needs•Management of Information / quality of data

• Stock-outs• Overstocks and expiry of products

Procurement •Planning•Quality Assurance•Governance/ Competitive and transparent procurement

• Delays on supply; • Tenders delayed or canceled• Fraud, misappropriation of funds• Stock outs / treatment disruption

Supply Chain Management •Supply management•Distribution•Processes and safety

• Stock-outs• Overstocks and expiry of products• Degradation, losses• Thefts and diversion

Pharmaceuticals & Health Products Management

• Challenges in Procurement and Supply Management (PSM) impacts on:

Grant negotiation – PSM Plan approvalGrant implementation – Procurement plan/ processDisbursement – PSM plan approval; Condition

Precedents; Progress update on PSM activitiesGrant Performance – meeting targets; Scaling up

Contributes to delays in procurement and stock-outs

PSM Challenges affect Grant Implementation

Measures to mitigate PSM risks / address challenges

• Investments on Pharmaceutical Systems Strengthening

• Strengthening of in-country processes / systems (Long Term Strategy):

Quantification / procurement planning Storage / Distribution ChainManagement Information SystemsQuality Assurance system

• Out-sourcing / Use of procurement/supply chain agents (Short Term Strategy)

• Voluntary Pooled Procurement / Capacity Building Services

VPP contributing to improving grant performance, mitigating risk & influencing market dynamics

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Capacity building &

supply chain management assistance

(CBS)

Capacity building &

supply chain management assistance

(CBS)

• Identify challenges during grant negotiation• Mitigate risks during grant implementation• Strengthen management of grants and national

procurement and supply chain systems

• Identify challenges during grant negotiation• Mitigate risks during grant implementation• Strengthen management of grants and national

procurement and supply chain systems

Core health products(ARVs, ACTs, LLINs, rapid diagnostics for HIV & malaria)

Core health products(ARVs, ACTs, LLINs, rapid diagnostics for HIV & malaria)

• Support implementation of the disease program• Leverage the Global Fund’s purchasing power• Improve price, quality, supply & sustainability• Address global supply challenges

• Support implementation of the disease program• Leverage the Global Fund’s purchasing power• Improve price, quality, supply & sustainability• Address global supply challenges

Non-core health productsNon-core health products

• Support implementation of the disease program• Complete package of essential health products

(prevention, diagnosis & treatment)

• Support implementation of the disease program• Complete package of essential health products

(prevention, diagnosis & treatment)

Pooled procurement service

(VPP)

Pooled procurement service

(VPP)

National procurement & supply systems

National procurement & supply systems

VPP Participation Process

LFA Assessment

LFA Assessment

PMAS Team AssessmentPMAS Team Assessment

Use Procurement Agent

Use Procurement AgentPSS Team

DiscussionsPSS Team Discussions

Inadequate capacity in PSM

Fund Portfolio Manager

Fund Portfolio Manager

Condition PrecedentCondition Precedent

Country joins VPP

Country joins VPP

Inadequate capacity in PSM

OR

PR’s Self Assessment

PR’s Self Assessment

Inadequate capacity in PSM / VPP benefits

LFA: Local Fund AgentPSS: Procurement Support ServicesVPP: Voluntarily Pooled ProcurementPMAS: Procurement Management Advisory ServicesPSM: Procurement & Supply Management

VoluntaryVoluntary

VPP Procurement Process

Principal RecipientPrincipal Recipient PSAPSAVPPVPP

PSA Confirms Order to Supplier

PSA Confirms Order to Supplier

Procurement Request

Price QuotationPrice Quotation

DeliveryDelivery

Final Invoice and reconciliation

Final Invoice and reconciliation

PQR Data Entry by PSA on PR’s

behalf

PQR Data Entry by PSA on PR’s

behalf

PR ApprovalPR Approval

PR Acknowledgement of goods receipt

PR Acknowledgement of goods receipt

Procurement Request

VPP: OversightVPP: Oversight

VPP: Direct DisbursementVPP: Direct

Disbursement

VPP Participation: 46 Countries 85 Grants

• Participation is defined as an order being confirmed during applicable period. Disbursement or delivery may occur in subsequent period.• Some countries/grants may be registered and not confirm/place an order during applicable period• Based on data from PFSCM Client center and PSI status report

Reporting Period 2009 - Jun’ 11

VPP Confirmed Orders

• Based on data from PFSCM Client center and PSI status report. Data includes only confirmed orders by Principal Recipient (PR)• A PR's Order is divided into several “Price Quotes (Orders)” – each representing a different product category (e.g. ARVs, ACTs, Tests, Lab, Non Core Drugs etc.)• Tests include HIV and malaria rapid tests and other diagnostic tests/reagents. Non Core Drugs Include all Non-ARV and Non-ACT medicines

Reporting Period 2009 - Sep’ 11

Category 2009 2010 2011 Grand TotalCore Product 242,057,528 215,493,561 129,957,357 587,508,446

ACTs 9,504,723 13,284,866 8,016,156 30,805,744ARVs 21,395,847 49,215,432 19,470,214 90,081,492HIV Test 139,880 14,106,190 6,365,816 20,611,886Malaria Test 368,869 3,561,313 1,946,255 5,876,437LLINs 210,648,209 135,325,761 94,158,916 440,132,886

Non Core Product 4,663,746 37,615,889 15,568,654 57,848,289Condoms 3,172,495 1,561,316 4,733,811

Lab 971,421 18,535,469 10,837,300 30,344,190

Non Core Drugs 3,165,289 13,638,054 3,141,523 19,944,866Others 527,036 2,269,870 28,516 2,825,422

Grand Total 246,721,274 253,109,450 145,526,010 645,356,734

Top Countries

• Based on data from PFSCM Client center and PSI status report. Data includes only confirmed orders by Principal Recipient (PR)• A PR's Order is divided into several “Price Quotes (Orders)” – each representing a different product category (e.g. ARVs, ACTs, Tests, Lab, Non Core Drugs etc.)• Tests include HIV and malaria rapid tests and other diagnostic tests/reagents. Non Core Drugs Include all Non-ARV and Non-ACT medicines

Reporting Period 2009 - Jun’ 11

Procurement Cycle (Days)*

*Time from Request for quotes to planned/actual delivery date• Based on data from PFSCM Client center and PSI status report. Data includes only confirmed orders by Principal Recipient (PR)• A PR's Order is divided into several “Price Quotes (Orders)” – each representing a different product category (e.g. ARVs, ACTs, Tests, Lab, Non Core Drugs etc.)• Tests include HIV and malaria rapid tests and other diagnostic tests/reagents. Non Core Drugs Include all Non-ARV and Non-ACT medicines

Reporting Period 2009 - Sep’ 11

Prod Category Transactions Avg Time (Months) Min Time (Wks)Core Product 1169 7 1

ACTs 176 8 12 ARVs 834 6 1 Malaria Test 34 10 15 HIV Test 125 7 6

Non Core Product 3810 9 5 Condoms 44 9 16 Lab 2432 9 11 Non Core Drugs 1334 8 5

Total / Avg 4979 8 1

VPP Challenges• Unrealistic expectations, including delivery times• Emergency/Late orders with unrealistic timelines• Limited freight options (flights, logistics, storage)• Conditions precedent on grant disbursement / Disbursement

delays

• Limited demand aggregation – Irregular and unpredictable participation

– grant architecture; individual PSM plans and non-coordinated procurement cycles; Fragmented orders

– A high proportion of emergency procurements (40%) and inadequate procurements planning

• Custom clearance delays

• Long list of Non core items with small quantities

In-Country PSM Capacity

• Pharmaceutical Systems Strengthening

– Holistic approach, with emphasis on investments on Pharmaceutical Systems

• Strengthening Procurement and Supply Chain Management Systems

– Quantification / forecasting;– Procurement planning– Logistics management (storage, inventory control,

transportation, distribution and management information systems)

– Quality assurance activities– National / Central Medical Stores and its affiliates

5th MDC Meeting Geneva, 6-7 October 2011

Systematic Capacity Building Process

PHPM

tools

PHPM skills training

PHPM staff, facilities, infrastructure

PHPM structures, systems and roles

Enable effective use of

Require

Require

RequireEnable effective use of

Enable effective use of

Time

Change is more difficult and more “socio-cultural”

Change is easier and more technical”

Capacity Building Services (CBS)

• Options – Service providers – solicited through competitive

process and contracted on a case by case basis– Partners (regional /global / in-country) – through

collaborative process where feasible

– Secretariat can be requested to provide support by facilitating the process (scope of work, selection process and work plan with deliverables)

– Alternatively it is done at country level

5th MDC Meeting Geneva, 6-7 October 2011

CBS/ SCMA: Mechanism and Process

Financing

Contracting CBS / SCMA

• PR pays for service from grant• Global Fund Direct Payment to service providers at

request of PRs

• PRs choose from available services • PRs manage implementation of service contracted• Global Fund supports and monitors deliverables

Identifying needs

• PRs identify CBS/SCMA needs (LFA assessments / reports of partners etc)

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CBS/SCMA update

CBS/Supply Chain Management Assistance (SCMA) – currently ongoing

– Nigeria, Gambia, Liberia, Malawi; Djibouti; Guinea Bissau, Zambia; Cameroun

•Technical support is country specific to address PSM challenges during grant negotiation and signing, Facilitate resolution of Conditions Precedents (CP) and improving PSM during grant implementation

• Ranges from short term to long term (weeks – months)

• Technical Support activities - Procurement, Quantification, QA, storage, distribution, transportation, LMIS, PSM unit strengthening, LLIN mass campaign

Accessing VPP and CBS