procurement support services who/unicef technical briefing seminar on essential medicines policies,...
TRANSCRIPT
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Procurement Support Services
WHO/UNICEF Technical Briefing Seminar on Essential Medicines Policies,
October 29th - November 2nd 2012
Mariatou Tala Jallow
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Presentation Outline
• Rationale for VPP - Objectives
• Current status - Achievements and Challenges
• Procurement Strategy – Making VPP More Efficient
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Rationale for Voluntary Pooled Procurement Objectives
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Procurement and Supply ManagementHighest Areas of Risk
Extract from Final Report of the High-Level Independent Review Panel on Fiduciary Controls and Oversight Mechanisms of the Global Fund (September 2011), Annex E: Procurement, Construction and Supply-chain Management (PCSCM) weaknesses
Over 37 percent of funds are used for health products
Use of the Global Fund Grants
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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;• Quality of products
Supply Chain Management •Supply management•Distribution•Processes and safety
• Stock-outs• Overstocks and expiry of products• Degradation, losses• Thefts and diversion
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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 Chain
– Management Information Systems
– Quality Assurance system
• Out-sourcing / Use of procurement Agent/supply chain management assistance (Short Term Strategy)
– Voluntary Pooled Procurement / Capacity Building Services
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Market Dynamics / Shaping Strategies – Leveraging Purchasing Power to Improve Market Outcomes and Impact
IMPACT MARKET OUTCOMES GLOBAL FUND COMMITMENTS
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Voluntary Pooled Procurement – Objectives
• Market Dynamics / Shaping interventions – Influencing market of core health products to impact price, quality, supply
sustainability and design;
– Implementing targeted market shaping interventions – for example to secure the fragile pediatric ARV Market (small market and high risk)
• Grant performance – Addressing and resolving PSM challenges impeding grant
implementation
• Risk mitigation – Mitigating financial and PSM related risks
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Current Status Achievements and Challenges
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VPP – 115# Million LLINsSavings of > US$38 million (16%)*
lowest price achieved = US$ 2.80 (Liberia)
Cameroon, 20118.5 million LLINs and savings of US$ 5.7 million through managing the procurement and support to the PR to receive and distribute 500 containers of LLINS
# for period Jun 2009- Sep 2012 * Compared to budget based ; subset of largest transactions 2009-2011
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VPP – 421# Million Doses ARVsSavings of > US$11 million (17%)*
Unit Prices• 3% in the last year•14% below 2012 CHAI negotiated ceiling priceDelivery timelines• 15%, with 50% delivered in less than 5 months
Uganda 2011/2Procurement costs reduced by U$2.3 million (16%) through timely order placement and alignment of the procurement and financing timelines to obtain lowest available pricing and to be able to utilize sea/road freight
# for period Jun 2009- Sep 2012 * Compared to budget based ; subset of largest transactions 2009-2011
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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
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Some Challenges Related to Shipment & Distribution
• Logistical challenges
• Contingencies
• Volumes
• Logistical challenges
• Contingencies
• Volumes
237,000 LLINs
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Challenges• Demand aggregation – irregular participation of PRs; Global Fund
grant architecture (multiple grants); individual (multiple) PSM plans and non-coordinated procurement cycles;
• Emergency Orders - inadequate procurement planning; Use of VPP as “last resort”;
• Expectations from PRs – quicker results, especially unrealistic delivery times; resolution of long-standing PSM bottlenecks or Condition Precedent (CPs) on grants; abdication of responsibility
• Non-core products (Drugs for opportunistic infections; lab supplies) – low volume / low value; difficult to source; non-quality assurance standards; region specific, and non-focus for VPP
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Procurement Strategy Making VPP More Efficient
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VPP Procurement Process
Principal Recipient
Procurement agent
VPP team(value for money aspects,
budget, CPs etc.)
PSA confirms order to supplier
Price Quotation
Delivery
Final invoice & reconciliation
PQR data entry
PR approval
PR confirms receipt of goods
Procurement Request
VPP: oversight
Direct disbursement
Out-sourcedProcurement Request
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Market Shaping / Procurement Strategies
• Strengthen Secretariat capacity and systems to conduct strategic market shaping
• Improve and reform the VPP mechanism to enable it to shape markets
• Accelerate implementation of Market shaping interventions for ARV drugs
• Apply market shaping strategy to long-lasting insecticide-treated nets
• Develop expansion of market shaping interventions to other major products
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VPP Mechanism to be More Efficient
EXPECTATIONS
Cost efficient procurement
+
Improved grant performance
+
Procurement & financial risk mitigation
REQUIREMENTS
PRs and Procurement Agents meeting their responsibilities
+
Improved VPP financial and operational procedures
+
Support from partners and stakeholders
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Accessing VPP and CBS