Mapping of the medicines procurement and supply management system in Tanzania

Transcription

1 MINISTRY OF HEALTH AND SOCIAL WELFARE Mapping of the medicines procurement and supply management system in Tanzania Ministry of Health and Social Welfare in collaboration with: 0

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3 MINISTRY OF HEALTH AND SOCIAL WELFARE TANZANIA MAPPING OF THE MEDICINES PROCUREMENT AND SUPPLY MANAGEMENT SYSTEM IN TANZANIA

4 Published by the Ministry of Health and Social Welfare, Dar es salaam, Tanzania 2008 Ministry of Health and Social Welfare, Tanzania Printed by: Any part of this document may be reproduced in any form without the prior permission of the publisher provided that this is not for profit and that due acknowledgement is given. Any reproduction for profit must be made with the prior permission of the publisher Copies may be obtained from: The Permanent Secretary, Ministry of Health and Social Welfare, PO Box 9083, Dar es Salaam Tel: Fax:

5 TABLE OF CONTENTS ABBREVIATIONS...6 ACKNOWLEDGMENTS...9 EXECUTIVE SUMMARY INTRODUCTION Rationale of the study OBJECTIVES METHODOLOGY Sampling Selecting the geographic area Approvals and authority to meet with Partners Collection of Data Data processing, analysis and reporting: Limitation of the study RESULTS Map of the procurement and supply management system Financial resources Procurement of medicines Forecasting and quantification Partners and programs procurement policies Coordination Agencies responsible for procurement Placement of orders & contract management Monitoring Supplier Performance Quality assurance Stock Management (LMIS) Support of other supply management activities Storage and distribution DISCUSSION Procurement of medicines Quality Assurance RECOMMENDATIONS ANNEXES

6 LIST OF FIGURES Figure 1 Figure 2 Figure 3 Figure 4 Figure 5 Figure 6 Figure 7 Map of medicines supply systems in Tanzania Product category Vs No. of funders Percentage expenditures by source Procurement agents/implementing agents Procurement Agents grouping Monitoring performance of suppliers First point of storage LIST OF TABLES Table 1 Development partners Table 2 Product category Vs financial support given Table 3 Procurement agents/implementing partners Table 4 Types of Support Funds amount USD

7 ABBREVIATIONS AXIOS International Philanthropic Organization Donation ABBOTT CCT CDC CIDA CHAI Program for Nevirapine, Determine HIV test kits and Fluconazole Abbott Fund A Philanthropic wing of Abbott Laboratories USA Christian Council of Tanzania US Centers for Disease Control and prevention Canadian International Development Agency Clinton HIV/AIDS Initiative - William J. Clinton Foundation COLUMBIA Columbia University Mailman School of Public Health - USA CUAMM Collegues Universitaires Aspirants et Medecins Missionnaires - Italian non-governmental health organization Crown Agents Procurement agent world wide CRS CSSC DANIDA DELIVER EGPAF GAVI Catholic Relief Services Christian Social Services Commission Danish International Development Assistance DELIVER PROJECT collaborate with USAID to help developing countries improve essential health commodity supply chains Elizabeth Glaser Pediatric AIDS Foundation Global Alliance for Vaccines and Immunization - GAVI Alliance GLOBAL FUND Global financial assistance for the fight against AIDS, HAVARD IMA JICA JSI Tuberculosis and Malaria Harvard University - USA Interchurch Medical Assistance Japan International Cooperation Agency John Snow Inc (USA) 6

8 NORAD Norwegian Agency for Development Co-operation OMS / WHO World Health Organization PEPFAR President Bush's Emergency Plan for AIDS Relief PFIZER Multinational Pharmaceutical Company Donates Diflucan (Fluconazole) SCMS Supply Chain Management System ( USA ) SIDA Swedish International Development Cooperation Agency TEC Tanzania Episcopal Council (Roman Catholics) TMAP Tanzania Multisectoral HIV/AIDS Project UNICEF The United Nations Children's Fund UNITAID International facility for the purchase of drugs against HIV/AIDS, Malaria and Tuberculosis (Initiative of Air France). USAID United States Agency for International Development WB World Bank AIDS Acquired Immunodeficiency Syndrome EM Essential Medicines EML Essential Medicines List ARVs Anti-Retrovirals EPI Expanded Program on Immunization GOT Government of Tanzania FBHF Faith Based Health Facility HF Health Facility HIV Human Immunodeficiency Virus ILS Integrated Logistics System MOHSW Ministry of Health and Social Welfare MSD Medical Stores Department NACP National Aids Control Program NGO Non-Governmental Organization NMCP National Malaria Control Program NTLP National Tuberculosis and Leprosy Program 7

9 NEMLIT OI PHLB PSU STG SRA STI SOP TFDA US FDA National Essential Medicine List for Tanzania Opportunistic Infection Private Health Laboratory Board Pharmaceuticals Supplies Unit Standard Treatment Guidelines Stringent Regulatory Authority Sexually Transmitted Infections Standard Operating Procedures Tanzania Food and Drugs Authority Unites States of America Food and Drug Administration 8

10 ACKNOWLEDGMENTS The Ministry of Health wishes to thank the World Health Organization (WHO) whose financial support enabled the conduct of this survey. The Ministry would like to acknowledge all people who contributed their time and expertise to carry out this survey. In particular we would like to mention the following: The Director for Hospital Services Ministry for Health, Dr Z. Berege; The WHO Country Office Essential Medicines and Medicine Policy National Professional Officer (EDM NPO), Ms Rose Shija and the Chief Pharmacist, Mr Joseph Muhume. The Ministry is grateful to all health workers in the surveyed departments, sections and facilities for facilitating the data collection process, these include Program Manager for NTLP, Dr. S. Egwaga; MSD s management team members, Director of Pharmaceuticals and Technical Services, Ms. L. Nderimo; Procurement Officer for Vertical Programs Mr. S. Samwel, and Vertical Programs Manager, Mr. Msoma; also Program Administrator at EPI head office, Ms. Jean Bomani; Logistics officer at NACP, Ms. Emma L. Msuya; Logistics officer at the National Malaria Control Program, Mr. Wina Shango for setting aside their time during interviews. The Ministry is also grateful to all health care delivery partners involved in this survey for their cooperation and time for interviews. The support extended by the various supervisors and management team members of these partners and individual staffs is highly appreciated. The valuable work done by the data collectors who devoted their time and commitment to collect the data for this survey is acknowledged. These are Dr. R. S. Malele, Senior Lecturer, Faculty of Pharmacy, Muhimbili University Collage of Health Sciences (MUCHS) and Mr. V. Manyirizu of Department of Pharmacy, at Muhimbili National Hospital. 9

11 We thank the Software Engineer Mr. James Annan from Ministry of Health Ghana/WHO AFRO for his support on the use of the data analysis software as well as Mrs Helen Tata WHO/HQ for her technical input particularly in the preparation of this document. Finally, the Ministry of Health wishes to acknowledge the study Coordinator Mr. Heri Mchunga for his role in this study. 10

12 EXECUTIVE SUMMARY This report describes a field study carried out in Tanzania mainland to map the procurement and distribution of essential medicines and medical supplies in both public and private not for profit sectors. The mapping identified partners, government, donors, faith based organizations, non-governmental organisations, private organisations, and health facilities involved in the medicines supply chain systems. The study looked into three parameters Financing, procurement and distribution circuits. Data was collected using a questionnaire tool that was developed by WHO specific for this study. The study looked into the financial flows, processes of selection of products, quantification / forecasting procedures and how procurement is effected. Other areas verified in this study include quality assurance systems, warehousing and storage, inventory management, distribution, information management and human resource aspects. All vertical disease programs under the ministry of health and social welfare that are directly involved in the essential medicines supply chain management were examined for their ordering processes, storage and distribution management functions. The same was done to partners that are directly or indirectly supporting or complementing the delivery of healthcare services in Tanzania. It was found that donors have varied and diverse interests in health care service delivery programs. Most of bilateral donors, NGO, FBO and Private partners are mainly targeting disease programs related to HIV/AIDS, this is evidenced by the big numbers of this group of donors who are supporting procurement of medicines, medical supplies and laboratory reagents and test kits to fight against HIV/AIDS and related diseases. On the other hand multilateral donors such Global Fund, GAVI, UNICEF, 11

13 World Bank are targeting enhancement of interventions against all major endemic and epidemic diseases, HIV/AIDS, TB, Malaria, Measles, DPT etc Whereas the Multilateral and Bilateral donors largely use the public channel to procure and distribute their targeted donor products, most of the NGO, FBO and Private partners do not follow public channels. At the same time there is limited information sharing among this group of partners. 12

14 1.0 INTRODUCTION Pillars for medicines access include evidence based selection and rational use, adequate resources (human and financial), affordable prices and adequate and reliable Supply Systems. The major challenge of National Medicines Policy is assuring an uninterrupted supply of essential medicines that are efficacious and of good quality, physically and financially accessible and used rationally. To attain this objective, many countries have set up national essential medicines supply systems, most of which consists of a Central Medical Stores and distribution facilities from the central to regional and district levels. Unfortunately, in some countries these national systems are unreliable and do not ensure regular supply of essential medicines. In Tanzania essential medicines in the public sector are mainly procured, stored and distributed by the Medical Stores Department (MSD) an autonomous department within the Ministry of Health and Social Welfare. The increase of scope of activities within the past few years has seen an increase in the number of partners involved in the procurement and supply management of essential medicines, especially those for priority diseases such as HIV/AIDS, TB and malaria. This increase in roles and number of partners to service the health facilities have affected the way the overall medicines supply system operates. To-date several partners are involved in the medicine supply chain of countries, these include Multilateral and Bilateral Donors, Non Governmental Organizations, Faith Based Organizations and Private Sector. Most have varied and diverse interest in health programs which results into an uncoordinated multiple vertical supply chain arrangements, wastage of scarce resources and inefficiency in supply system management. 13

15 On a positive note, within the past decade, there have been increased funds from these partners for medicines. However, most of the funding is targeted to a small portion of the essential medicine list as they focus mainly on a few disease programs. Also, unfortunately few of these put enough funds for strengthening the procurement and supply management system. According to the Paris Declaration on Aid Effectiveness 1, which many countries have signed, the need for donors to align with country`s agenda using its systems as well as for harmonization of their procedures is a cornerstone for increased aid effectiveness. Adherences to the five principles of aid effectiveness do not need to be over-emphasized as illustrated below: D EVELOPMENT R ESULTS Ownership (Partner countries) Alignment (Donor Partner) Harmonization (Donor Donor) Establishing com mon arrangements Aligning with country agenda Countries set the agenda Simplifying procedures Using country systems Sharing information 4 &5 Mutual Accountability and Managing for Results Against this background and with the aim of improving access to essential medicines WHO is assisting 11 countries in the WHO African region (Cameroon, Ethiopia, Nigeria, Tanzania, Kenya, Zambia, Senegal, Rwanda, Mali, Uganda and the Republic of the Congo) for the mapping 1 The Paris Declaration on Aid effectiveness;

16 and assessment of medicines supply systems and subsequently addressing the gaps identified for the improvement of the systems. 1.1 Rationale of the study Mapping of procurement and supply management system of essential medicines and medical supplies in Tanzania is one of the two areas of study that was identified by the Ministry of Health and Social Welfare Tanzania and got support from the WHO for funding. The objective of this study was to map carry out in-depth assessment of all the country s procurement and supply management systems and also the financial flows for essential medicines and medical supplies and to develop a strategy for strengthening the system. The MOHSW in Tanzania carried out this study with the aim of assessing the current situation with respect to access to essential medicines and medical supplies in the country. Subsequently it aims at addressing the gaps identified in order to improve the system. It is envisaged that the map and data obtained can be used by both partners and the Ministry to provide factual evidence for: Knowing all those working in the medicines supply system within the country Mobilizing resources for under-financed product categories within the national framework on health needs Targeting gaps and redefining strategies for strengthening medicines procurement systems Providing information for program monitoring and future projects Sharing information among partners to support planning for a coordinated, coherent and efficient national medicines supply system 15

17 To re-schedule procurement priorities, facilitate coordinated forecasting and maintain an un-interrupted supply chain To ensure full supply and security for all categories of essential medicines. 16

18 2.0 OBJECTIVES The general objective is to map the procurement and distribution as well as the financial flows for essential medicines including medicines for HIV/AIDS, TB, malaria, opportunistic infections, contraceptives, vaccines, condoms, HIV/AIDS test kits, medical devices and laboratory products Use the results from this study together with those results from another study (the in-depth assessment of all the country's procurement and supply management systems and also the financial flows for essential medicines and medical supplies) conducted at same time, to develop a strategy for strengthening the systems. To develop a coordinated, coherent and efficient national medicines supply plan or strategy. 17

19 3.0 METHODOLOGY In this study, data were collected using a questionnaire tool that was developed by WHO specific for this study and was used in some other 10 African countries. The study looked into the financial flows, processes of selection of products, quantification / forecasting procedures and how procurement is effected by various partners. Other areas verified in this study included quality assurance systems, warehousing and storage, inventory management, distribution, information management and human resource aspects. The mapping identified partners, government, donors, faith-based organizations, nongovernmental organizations, private organizations, and health facilities involved in the medicines supply systems. All vertical disease programs under the ministry of health that are directly involved in the essential medicines supply management system were examined for their ordering processes, storage and distribution management functions. The same was done to partners that are directly or indirectly supporting or complementing the delivery of healthcare services in Tanzania. The data collected were entered into a database. This software produced automatically a spreadsheet data and a schematic chart, which were analyzed and interpreted to form this report. The results are presented by examining the spread and involvement of the various partners in the support of various healthcare delivery programs and services. 3.1 Sampling A list of all partners in the country involved in the procurement and distribution of essential medicines, including medicines for priority 18

20 diseases such as HIV/AIDS, TB, malaria etc, was established. All the partners on the list were included in the study. Essential products used in the study included: 1. Essential Medicines 2. HIV/AIDS medicines 3. Medicines for opportunistic infections 4. STI drugs 5. Antimalarial 6. TB medicines 7. Pediatric formulations for HIV/AIDS and malaria 8. Vaccines 9. Contraceptives 10. Condoms 11. Medical supplies 12. Reagents for blood safety including HIV test 3.2 Selecting the geographic area Dar es salaam which is the capital city of the country was selected. This is because most of the partners or donors and the different Disease Programme Managers have offices or representatives in Dar Es Salaam, therefore were easily reached. 3.3 Approvals and authority to meet with Partners The Ministry of Health issued an introduction letter to Partners requesting them to provide the necessary information and data related to procurement and supply of health commodities being provided by the partners/donors. 19

21 3.4 Collection of Data Questionnaire No 1 was used to collect information from partners and also from vertical disease programs (See appendix 1). Appointments for interviews were made before the study started in some instances, questionnaires were hand carried to the interviewee to be completed and later picked up. In the event of missing or inadequate information in this latter case, face to face interviews were organized to clarify and validate information submitted. 3.5 Data processing, analysis and reporting: A software developed by WHO, was used to capture the mapping data for funding, procurement and distribution or goods delivery points. The study team was trained on the use of this analysis tool from data entry to report generation and interpretation. This was done in Accra- Ghana from 21 st 23 rd August Two types of reports were automatically generated by the software. One is a schematic presentation of the procurement and distribution pathway for essential medicines, elaborated from information collected. The second presentation is the spread sheet (Excel format) containing all the input data. The spread sheet report was used to prepare various graphs and figures to illustrate the results. Illustrative tables were drawn for those study areas that were not captured in the software, these include the following activities; selection of products, forecasting and quantification, procurement work groups and policies, contract managements activities, quality assurance, stock management and capacity building in supply chain management. All data were counterchecked against the original filled-in questionnaires to ensure accuracy. During this exercise data entry errors were corrected. 20

22 3.6 Limitation of the study The financing figures and funding flows of many partners could not be captured since most of the interviewed officers / partners were reluctant in providing their budgets. Some either needed some approval from their abroad Principals or had limited access to the respective consolidated budgets. Most of the financial information is said to be kept by Executive Officers. Furthermore, it was not easy to determine the actual value of in-kind donations as many invoices declare value for customs purposes that do not reflect the true value of the donation. 21

23 4.0 RESULTS The results of this study will be presented under the following subsections. The Map of the procurement and supply management in Tanzania Financial resources / funders Procurement of medicines i. Procurement of Essential medicines and supplies ii. iii. iv. Procurement of Vertical Programs Selection of Products Selection of medicines for Vertical Programs Forecasting and quantification v. Forecasting and quantification for Vertical Programs Partners and programs procurement policies Coordination Agencies responsible for procurement Placement of orders & contract management Monitoring supplier performance Quality assurance Stock Management (LMIS ) Financial resources for support of supply management activities Storage and distribution 4.1 Map of the procurement and supply management system Data obtained from the questionnaires after compilation and analysis provided the following schematic drawing: 22

24 Figure 1: Map of Medicines supply systems in Tanzania Medicines supply systems in TANZANIA United Republic of Tanzania ESSENTIAL MEDICINES ARVs MALARIA TB OI ARVs Ped REAGENT Blood safety (+ HIV test) VACCINES CONDOMS CONTRACEPTIVES MEDICAL SUPPLIES GOVERNMENT BILATERAL DONOR MULTILATERAL DONOR NGO/PRIVATE Source Of Funds C S S C W H O S I D A N O R A D C I D A U N I T A I D H A V A R D P E P F A R GLOBAL FUND C L I N T O N A X I O S P F I Z E R GOVERNMENT J I C A C D C C O L U M B I A A B B O T T G A V I C U A M M U N I C E F U S A I D W B Procurement Agent/Body TEC & CCT C L I N T O N H A V A R D MEDICAL STORE C R S S C M S E G P A F MOH & SW A X I O S U N I C E F J I C A C D C C O L U M B I A A B B O T T G A V I C U A M M CROWN AGENTS U S A I D T M A P Point of 1 st warehousing TEC &CCT HOSPITAL CRS IMA MEDICAL STORE AXIOS HEALTH FACILITY COLUMBIA HOSPITAL CUAMM Point of 2 nd warehousing TEC &CCT REGIONAL/DISTRICT VACCINE STORE ZONAL MEDICAL STORE HEALTH FACILITY HOSPITAL Point of Distribution TEC &CCT ZONAL BLOOD SAFETY CENTRE DISTRICT STORE HEALTH FACILITY PRIMARY HEALTH CARE FACILITY HOSPITAL PATIENT 23

25 How to read the map 1. The first row of boxes in the map corresponds to the categories of products studied and each category of product is designated by a specific color. 2. The next row of boxes represent various partners supporting the different categories of products and each partner is identified by a specific color under the four main groups of donors (government, bilateral, multilateral and NGO or private). 3. To inform on what categories of products each partner supports, there are arrows from each partner to a category of product bearing the color designated to the product category 4. The third row of boxes stand for the Agents which procure products on behalf of financing partners 5. The last three but one row of boxes represent the various levels of warehousing after the products have been procured by the procurement agents. 6. The last box in pink is the final beneficiary of the products, the patient. NOTE: Government Multilateral Bilateral NGO FBO Private MOH, MSD, MNH, Public HF in TZ, Public HF in Zanzibar (HF- ZB) : Global Fund, GAVI, UNICEF, WHO, World Bank : USG (PEPFAR), USAID, USG (CDC), NORAD, JICA, CIDA, SIDA, UNITAID : CHAI, CUAMM, FHI, AXIOS, EGPAF : CSSC, CRS, IMA, Faith Based Hospitals (FBH) under TEC and CCT ABBOTT, HAVARD, COLUMBIA, SCMS, CROWN AGENTS, DELIVER 45

26 4.2 Financial resources The study looked at 21 cooperating partners operating in Tanzania. Of these, six are multilateral, eight bilateral, three NGO and four private partners Table 1: Development Partners Types of Partners Multilateral Partners Bilateral Partners NGO partners Private Partners Partners GLOBAL FUND UNICEF WB GAVI WHO UNITAID CIDA CLINTON HIV AIDS INITIATIVE JICA NORAD SIDA USG - PEPFAR USG - CDC USAID, AXIOS DONATION PROGRAM CSSC CUAMM ABBOTT FUND COLUMBIA UNIVERSITY HAVARD UNIVERSITY PFIZER DONATION PROGRAM At the same time, the following programs of the MOHSW provided information. 1 Safe Blood / Blood Transfusion 2 National TB& Leprosy 3 National Malaria Control 4 National Aids Control 25

27 5 Reproductive and Child Health 6 Extended Program on Immunization Categories of products supported The following figure shows the categories of products supported by the partners in Tanzania. Figure 2: Product category Vs No of funders As can be seen support for laboratory reagents, HIV test kits ranked number one followed by ARVs and Opportunistic Infections medicines Sources of funds Essential medicines account for the greatest percentage of funds (21%) even though they are supported by only three donors. HIV/AIDS medicines account for 18% of funds and are supported by nine partners, while Antimalarial and Vaccines account for 17% and are supported by three. Reagents for blood safety are the category of product with more donors (13) and receive 12% of funds. The other categories receive less than 6% of funds. 26

28 Table 2: Product Categories Vs financial support given Total Total Expenditures 2006-Expenditures Category of Product # Donors 2007 ($) 2007 (%) Essential Medicines 3 $65,869, % Anti-retroviral HIV/AIDS medicines 9 $56,853, % Antimalarial 3 $54,201, % TB medicines 2 $4,700, % Medicines for opportunistic infections 7 $3,722, % Pediatric formulations for HIV/AIDS and malaria 4 Vaccines 3 $17,300, % Contraceptives 2 $17,734, % Condoms 3 $3,905, % Medical supplies 5 $53,859, % Reagents for blood safety including HIV test 13 $37,027, % TOTAL $315,170, % NB: Actual value of the directly donated goods was not wholly captured; the percentage contribution by partners would have been significantly higher if the actual value of all donated goods is captured). When looking at expenditure by source, (see annex 2 for table of funding by category and source) overall Government funding was over USD Million (53%), followed by Global Fund amount USD Million (32%) and development partners contributed over USD 46.2 Million (15%). Figure 3: Percentage expenditures by Source Expenditures by Source Global Fund 32% Development Partners 15% Government 53% Government Global Fund Development Partners 27

29 4.3 Procurement of medicines Procurement of essential medicines and supplies The centralized procurement system is in place whereby the whole requirements of all levels of health facilities in Tanzania are purchased by a single agency, The Medical Stores Department. The MSD Tender Board is in place and is the legal entity under Tanzania Public Procurement Act 2004 and Regulations 2005 that is empowered to advertise, receive, evaluate and awards successful bidders. Price and quality of product are given equal consideration when determining factor for awarding tender. Public health facilities draw their requirements from MSD either through their respective funds deposited at MSD direct by MOHSW or by direct purchase using their own funds from other sources including government basket funds Procurement of Vertical program items These are mostly non MSD catalogue items (only about 5% are on MSD list of products) and are procured only under special request by the respective programs. MOHSW and the programs mobilize enough funds from the government or development partners or both and deposit the same to MSD which in turn advertise tenders. In some incidences development partners donate direct goods to the programs. The study showed that 75% of Multilateral donors such as Global Fund, WHO, WB and 40% of Bilateral donors such as CIDA, SIDA, NORAD give financial support to the government whereas the rest such as GAVI, UNICEF, PEPFAR, USAID, CDC, CHAI, UNITAID, JICA prefer direct donation of goods through their own procuring section eg GAVI, UNICEF, JICA or international procuring agents such SCMS, DELIVER, JSI and Crown Agents or through implementing partners such as CRS, IMA, Columbia university, Harvard University, EGPAF, AXIOS and FHI. About 90% of NGO and Private Partners such as CUAMM, CSSC and ABBOTT FUND 28

30 prefer direct donation of goods to beneficiary sites, whereas the rest such as PFIZER prefer direct donation of goods but through the government channels. On the other hand the MOHSW utilize the technical expertise of some multilateral partners to procure specialized goods. For instance vaccines for EPI are solely procured by UNICEF under special arrangements Selection of the general essential medicines In Tanzania selection of the essential medicines is done at the national level by the National Medicine and Therapeutic Committee which has the overall responsibility of making appropriate selection, supervising adequate procurement and rational management and use of essential medicines to public health facilities within the available budge limitation. It ensures that only efficacious, safe, cost effective and good quality medicines are used. The committee not only develops and guides implementation of an efficient cost effective National Medicine Formularly and Standard Treatment Guidelines (STG) but also develops and publishes the National Essential Medicine List for Tanzania (NEMLIT). All these three are periodically updated in order to address new diseases or medical challenges that require new or alternative interventions and or treatment protocols Selection of medicines for Vertical Programs The various Vertical programs under MOHSW such as NACP (HIV/AIDS), NTLP (TB and Leprosy), EPI (Vaccines), RCHS (Reproductive and Child Health), NMCP (Malaria), BTS (safe blood) keep a list of medicines, laboratory reagents and medical supplies appropriate to their programs plan and need. This selection is done by the MOHSW in collaboration with the program managers. Treatment protocols are developed and implemented by the programs. National advisory sub-committee for the 29

31 respective programs are in place. These committees play great roles in monitoring the performance of the programs. Program managers maintain and regularly update list of their respective medicines and or medical supplies. The Survey showed that all programs adhere to the MOHSW selection criteria 4.4 Forecasting and quantification At MSD, procurement plans are based on requirement estimates derived mathematically from the following data: (i) forecasts, (ii) stock on hands at all levels of distribution system, (iii) previous procurement quantities ordered or deliveries expected, (iv) losses expected to occur due to damage or expiry, (v) direct donations from development partners (vi) desired stock at the end of each planning period (including safety stocks and working stocks at all levels). The estimated quantity of medicine required in a successive planning period, usually an year, is calculated as: Quantities required = (Stock on hand + Quantities already ordered + direct donations expected from any other source - Estimated consumption for the period - Losses - Desired stock at the end of period). When the net supply requirement is a negative number, the quantity equivalent to the integer must be obtained to maintain the desired stock level. If the number is positive, there is a possible over supply of stock and no order is required to be placed. Order deliveries are planned in a staggered manner to enable not only proper utilization of warehouse space but also enabling good cash flow by not holding unnecessary excess stocks at any time. The VEN (vital, essential and non-essential) analysis, therapeutic category analysis and ABC analysis techniques are utilized at MSD to 30

32 select priorities and reduce the quantities of less cost-effective medicines. Items pulled by primary healthcare facilities under the newly introduced Integrated Logistics Systems (ILS) are another priority area Forecasting and quantification for Vertical programs This is performed by all programs. It is however, conducted once each year as the base for determining annual needs. Programs work closely with partners (90%) to determine the quantities and generate a procurement plan. JSI and SCMS have played a great role in forecasting and quantification for ARVs, Laboratory reagents and HIV test kits, Antimalarials, Products for RCHS, Condoms, and safety syringes. On the other hand EPI program manager works very closely to Regional and District vaccine cold chain coordinators together with partners at UNICEF to generate the annual procurement plan for vaccines. 4.5 Partners and programs procurement policies It was noted that over 95% of programs and partners follow the applicable policies in procuring of their respective medicines. Procurement is limited to products on the EML, treatment protocol of the program, made on the basis of plan and according to needs. Procurement is limited to only those manufacturers and products that are WHO pre-qualified, registered in the country of origin and also registered in Tanzania by TFDA in case of medicines and PHLB for Laboratory reagents, HIV test Kits and related test kits. Procurement of medicines, reagents and related goods under financial assistance from Global Fund follow the laid down policy of the fund. Procurement is limited only to those goods that are pre-qualified by WHO or other Stringent Regulatory Authority (SRA) included in the approved list of the GF such as US FDA. Likewise procurement of goods using USG fund follow the applicable USG procurement policy that prescribe the 31

33 eligibility of products source and applicable quality assurance conditions. For example, only USFDA approved ARVs are to be procured using USG funds. Approval has to be previously sought from the funding partners for any deviation that is absolutely necessary. 4.6 Coordination It was noted with satisfaction that there exist good collaboration between the MOHSW, Vertical Programs and development partners. Over 88% of partners collaborate with the government and participate in many guided decisions include product selection, forecasting and quantification, procurement planning, monitoring and evaluation. More than 75% of partners prefer that there should be coordination mechanisms which meet on qurterly basis, whereas the remaining prefer semesterial meetings. Currently the co-ordination among partners especially in generating their respective procurement plan is relatively low (68%). 4.7 Agencies responsible for procurement A number of procurement agents are involved in procurement of medicines and medical supplies for public health facilities. Goods procured under government budget (including budget support by development partners) were either procured through MOHSW ministerial tender board (5%) or by Medical Stores Department (90%) or by Multilateral procuring agent UNICEF (5%) for procurement of specialized product vaccines. As earlier on indicated 75% of Multilateral donors and 40% of Bilateral donors procure through the government channels (MSD), whereas the rest use international procurement agents. Only 6% of NGO and private donors use the service of MSD, remaining 40% use appointed agents and 54% procure on their own both delivering goods direct to beneficiary health facilities. Figure 4: Procurement agents / implementing partners 32

34 When grouped together the procurement agents it can be seen that although MSD is the largest procurement agent representing about 14 partners including the government itself, however a significant number of partners do not use it as seen in Figure below. Figure 5: Procurement agents grouping 4.8 Placement of orders & contract management The MOHSW ministerial tender board and MSD award contract to successful bidders and initiate contract management activities for each award. Whereas most of MOHSW tenders and awards are based on Lots, at MSD, tenders and awards are on individual item basis. The later strives 33

35 to get the lowest or competitive price of individual items, where as the former benefit on managing fewer contracts at a time. This practice has enabled MSD to get prices of medicines and supplies at low rate than the respective international price indicators 2. All programs funded by the government and budget support partners place their orders through MSD (90%), MOHSW (5%) and through UNICEF (5%). 4.9 Monitoring Supplier Performance Only 20% of the surveyed partners have a formal procedure to monitor supplier performance. MSD follow the PPA 2004 and Regulations 2005 which in one way or another provided the SOP for procurement of goods using public fund. However the study has revealed that there are no written down simple, clear and user friendly Standard operating procedures (SOPs) in procurenmet in most agents. Despite this, a good number of procurement agents 95% observed that goods are in conformity to the order, delivery dates are respected 60%, storage conditions on transit are adhered to 92%, but only 40% rapidly address problems identified during procurement process. Figure 6: Monitoring Performace of suppliers 2 MOHSW/WHO; Survey of the Medicine Prices in Tanzania,

36 Monitoring Supplier Performance 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Goods in conformity with order Delivery dates respected Storage conditions respected Problems rapidly addressed 4.10 Quality assurance All procurement agents except MSD do not systematically take samples from batches procured and send for quality analysis. Only few agents 30% include MSD keep track of batch records. MSD send samples to appropriate quality control laboratory either TFDA 90%, Government Chemistry Agency (GCA) 5%, and sometimes Tanzania Bureau of Standards (TBS) 5% for analysis Stock Management (LMIS) The survey revealed that all programs and partners have some kind of special tools for stock management, Ledger or stock cards for inventory control 92%, requisition forms 76%, discrepancy report 42%, expiry products report 77%, computerization of inventory 80%. The inventory of all vertical programs in the MOHSW is managed at MSD by the oracle based Orion system Support of other supply management activities Many partners set aside budget allocation for support of medicines supply management activities these include capacity building in supply chain management (60%), computerization of inventory control (50%), quality control of products (10%), and test results (70%), warehousing and 35

37 storage 60% (mainly GF), medicines and medical supply distribution (82%) Storage and distribution The schematic presentation of the map of the procurement and supply management system in Figure 1 above explains how the medicines and supplies are handled right from procurement, warehousing, first, second and third delivery points. About 61% of partners use MSD as first point of warehousing, 29% use their own storage facilities and 10% send products directly to the health facilities. Figure 7: First Point of storage First Point of storage 29% 10% 61% MSD Health Facility Partner Store With regards to distribution of products, for the vertical programs this is carried out by MSD in accordance with the schedules provided by the programs. Private/NGOs/FBOs and some developmental partners procure and distribute medicines and medical supplies directly to beneficiary health facilities. Only few partners use MSD s distribution circuit. 36

38 5.0 DISCUSSION From the schematic presentation of the map of the procurement and supply management system it is obvious that the government of Tanzania has a number of Partners supporting the pharmaceutical sector; from multilaterals to NGOs. These support the government in its aim of implementing the national medicine policy goal which aims at providing accessible, equitable and quality pharmaceutical services to all Tanzanians. They also support the government in its quest to achieving the millennium development goals and other disease elimination targets. The map also shows that Partners have varied and diverse interests in health programs. However support from the majority of the partners was limited to a few products of the NEMLIT leaving the country to handle the rest of the medicines for the disease problems affecting the majority of the population. It was found that most of bilateral donors, NGO, FBO and Private partners mainly targeted disease programs related to HIV/AIDS; this is evidenced by the big numbers of this group of donors who are supporting procurement of medicines, medical supplies and laboratory reagents or test kits to fight against HIV/AIDS and related diseases. On the other hand multilateral donors such Global Fund, GAVI, UNICEF targeted enhancement of interventions against all major endemic and epidemic diseases, HIV/AIDS, TB, Malaria and vaccines. When looking at the product category versus financial support, essential medicines constituted only 21% of the total expenditure of pharmaceuticals compared to medicines for vertical programmes. With such a significant share of pharmaceutical resources tied up in a few vertical programs, this distorts the budget ceilings with under-funding for medicines and supplies for other major health problems in the country. The survey also showed that the Government of Tanzania provides the largest share of funds for the procurement of medicines and other 37

39 supplies ie 53%. Although the government is still the biggest source of funds for health interventions, the contribution of the development partners is quite significant, without which the situation would have not been the same as it is now. However a better coordination is missing. Direct donation (in table in annex 3 indicated as in kind ) is gradually replaced by the budget support to the government, which then define the necessary priorities and funding needs in close collaboration with the development partners. One can recognize a wide spectrum of funding partners with a large variation in approach, way of working, demands and operations. Multilateral and some of Bilateral Donors prefer budget support to the government. Many of Bilateral Donors however prefer direct donations through international procurement agents and or implementing partners. NGO and private partners prefer direct donation to health facilities by themselves or through implementing partners. 5.1 Procurement of medicines In this survey it was observed that MSD procures for almost all Government funds, Global fund, some of bilateral donors, FBOs and NGOs. On good technical reasons the government contracted UNICEF as a procurement agent for all vaccines and related supplies. Few private partners sporadically use MSD as a procurement agent. Some bilateral donors such as USG (PEPFAR), USAID, and UNITAID, World Bank use procurement agents of their own choice with limited information sharing among partners. Similarly, most NGOs, FBOs and Private Partners have their own procurement system and also in most cases there is very limited information sharing among this group of partners and MoH. Therefore there is a significant portion of medicines and supplies bypassing the Medical Store department which is the body mandated to procure and distribute medicines in Tanzania. Qualitative feedback from survey respondents and health system workers indicate that this makes supply management and quality control even more difficult. Also with 38

40 such different procurement systems in Tanzania there is no one comprehensive procurement plan for the medicines and supplies requirements in the country making it difficult to do proper forecasting. On a good note, the global fund used the Government existing systems for cash flow, procurement and distribution of medicines and medical supplies exemplifying an excellent government-partner alignment and harmonization according to the Paris declaration. Some partners also allocated funds for capacity building of some health workers. However, strengthening the medicines supply system may not be fully achieved through capacity building alone. 5.2 Quality Assurance The quality assurance begins with product selection; procurement policy, and also the quality control of receivables. It has been noted with a concern that most partners rely much on the procurement policy and give little weight to the quality control of the received medicines. Apart from visual inspection a regular analysis of the batch representative samples is a good practice to ensure bioequivalence, efficacy and effectiveness of the product. Survey results showing that all procurement agents except MSD do not systematically take samples from batches procured and send for quality analysis to the in-country quality control laboratories raise a concern. 39

41 6.0 RECOMMENDATIONS 1. Move towards reducing Donor direct funding to budget support to the government need to be addressed 2. Improving access to Strategic Public Health supplies is a priority, where principle determinants in product sourcing and availability, pricing, procurement and supply management, need to be addressed. 3. A mechanism that links technical cooperation in procurement and supply management with broader concept of enhancing availability of essential medicines and medical supply need to be put in place. 4. Challenges in coordinating management of financing from separate channels, supplier participation in procurement processes, stock management and distribution, as well as the technical support that has been received from international donors and agencies need to be addressed. 5. Procurement planning for HIV/AIDS commodities is a critical component of the scale-up process in Tanzania, that requires an intense and coordinated effort at the national level to collect and process data, estimate needs, execute tenders and product orders, receive and distribute product. The need to initiate planning to ensure the sustainability of processes once the Global Fund and other development partners financing is no longer available is mandatory. 6. Training in forecasting and quantification for HIV/AIDS related commodities is a priority together with proper inventory management leading to availability and accuracy of raw data. 7. Emphasis is made that there is a need to develop a coordinated, coherent and efficient national medicines supply strategy. 40

42 7.0 ANNEXES Annex 1: Questionnaire for the Mapping of the PSM Country: Name of Partner/Donor: Person Interviewed: Position: Address: Tel: Fax 1. Which of the following program components are being supported by this organization in procurement and supply management of medicines and medical supplies. For each program component, please state year when this support started and when it is foreseen to end. Program components Yes No Starting Year Year foreseen to end Support Essential Drug Program HIV/AIDS Malaria TB STI OIs Family Planning EIP Blood safety Laboratory Others (specify) 2. What type of support is involved? a. Financial Yes No b. Technical Yes No c. Others (specify) Yes No If the support is financial, please answer the question below: 3. Which of the following applies to the funds provided to procurement of products by this Partner? a. Loan Yes No 41

43 b. Grant Yes No c. Donation Yes No 4. List in the table below the amount spent in 2006 and budget allocation in 2007 for the procurement of medicines and supplies in each product category Specify the main products financed in each program component. Program component Essential Medicines HIV/AIDS Malaria TB STI OIs Family Planning EIP Blood safety Laboratory Other (specify) Amount Spent in 2006 Products supported in 2006 Amount Spent in 2007 Products supported in 2007 If there are different focal persons in this organization managing different program components please complete one questionnaire for each program component. In this case, also provide the following information: Name of program component supported: Name of focal person in the organization: Name of person interviewed: 5. The products to be procured in each program components are selected by: a The Donor Agent Yes No b The Ministry of Health Yes No c The Program Manager Yes No d Others (please specify) Yes No 6. Who is responsible for the quantification of needs a. The Donor Agent Yes No b The Ministry of Health Yes No c The Program Manager Yes No d Others (please specify) Yes No 7. Which of the following criteria is considered for procurement of medicines and medical supplies: 42

44 a Procurements are limited to products on the EML Yes No b. Procurements are made on the basis of a plan Yes No c. Procurements are made according to needs Yes No 8. Do you belong to a working group in the country that coordinates procurement activities? Yes No If yes, which of the following leads this working group? a. Ministry of Health Yes No b. UNICEF Yes No c. World Bank Yes No d. WHO Yes No e. UNDP Yes No f. Others(Please specify) 9. How often does this working group meet? Monthly Quarterly Yes No Yes No 2 times a year Yes No Yearly Yes No Others (Please specify) 10. Which Agency is responsible for the procurement (preparing tender and awarding contract) of products financed by this partner? a. Ministry of Health Yes No b. Central Medical Store Yes No c. Privately contracted Agent Yes No d. The organization itself Yes No e. Others (Please specify) Yes No 11. Does this partner have a specific policy for the procurement of essential medicines and medical supplies? Yes No 12. If yes, Which of the following criteria are considered in procuring products? a. WHO prequalified suppliers and products Yes No b. Products registered in a country whose DRA is ICB/ICP compliant Yes No c. Products registered in the country of use Yes No d. Others (Please specify) 13. Who is responsible in making an order for products financed by this partner? a. Ministry of Health Yes No b. A procurement agent (UNICEF etc) Yes No c. World Bank Yes No d. The Partner Yes No 43

45 e. The CMS Yes No f. Others(Please specify) 14. Which are the suppliers contracted by the Partner and the total value of procurement in US$ for each category of products from the various suppliers mentioned in the table below in 2006: Source of Procurement Category of Products Internationa l supplier US$ International manufacture r US$ Local Distribut or US$ Local Manufactur er US$ Others Specify US$ Essential Medicines HIV/AIDS medicines Antimalarials TB medicines Medicines for opportunistic infections Pediatric formulations for HIV/AIDS and malaria Vaccines Contraceptives Condoms Medical supplies Reagents for blood safety including HIV test kits 15. Which of the following criteria are used to monitor supplier performance? a. Products received conform to what was ordered Yes No Comments.. b. Delivery deadlines are respected Yes No Comments c. Storage conditions during transportation are respected Yes No Comments. d. Rapidly address problems identified during procurement Yes No Comments. e. Others (Please specify) If yes, provide copy of SOP for procurement 44

46 16. Are samples systematically taken from batches procured and sent for quality analysis? Yes No 17. If yes, to which of the following laboratories are the samples sent?: a. National Quality Control Laboratory (NQCL) Yes No b. Regional Quality Control Laboratory (RQCL) Yes No c. Laboratory in Donor country (LDC) Yes No d. Others (please specify) (0) Yes No 18. Has the Partner provided special tools to manage the following: a. Daily dispensing Yes No b. Delivery/receipt of products Yes No c. Discrepancy report Yes No d. Expired products Yes No e. Inventory Control Yes No f. Issue Voucher Yes No g. Requisition form Yes No h. Stock card Yes No i. Others (Please specify) 19. Which of the following structures is responsible for the distribution of products procured by this Partner? a. Ministry of Health Yes No b. Central Medical Store Yes No c. Privately contracted Agent Yes No d. The Partner itself Yes No e. Others (Please specify) Yes No 20. Does the procurement plan consider some budget allocation for the following activity areas?: No Activity area Yes No If Yes, Budget in (US$) Comments a b c d Medicines & medical supplies distribution Warehousing and storage Remuneration for warehousing staff Staff development for supply chain 45

47 management e Computerization of inventory 21. First Delivery Point: Indicate against each product category in the table below which of the following is the first point of delivery after procurement? a Central Medical Stores b. Regional Stores c. District Stores d. Health facility e. Others (Please specify) Product category Essential Medicines HIV/AIDS medicines Malaria Medicines TB medicines STI Medicines Contraceptives Condoms Blood safety reagents Laboratory reagents Other (Please Specify) First Point of delivery 22. Second Delivery Point: Indicate against each product category in the table below which of the following is the second point of delivery after procurement? a Central Medical Stores b. Regional Stores c. District Stores d. Health facility e. Others (Please specify) Product category Contraceptives Essential Condons Medicines Blood safety HIV/AIDS reagents medicines Laboratory Malaria reagents Medicines TB Other medicines (Please STI Medicines Second Point of delivery 46

48 Specify) 23 Third Delivery Point: Indicate against each product category in the table below which of the following is the third point of delivery after procurement? a Central Medical Stores b. Regional Stores c. District Stores d. Health facility e. Others (Please specify) Product category Essential Medicines HIV/AIDS medicines Malaria Medicines TB medicines STI Medicines Contraceptives Condons Blood safety reagents Laboratory reagents Other (Please Specify) Third Point of delivery 47

49 Annex 2: Types of Support Funds amount USD For Essential medicines (EM) Essential medical supplies (MSD) National Aids Control Program (NACP) (MSD) Medicines Medical ARVs OI STI Lab Supplies Reagents/ HIV test kits GOVERNMENT 65,831 53,859 16,484 Include Include 1 OF TANZANIA d in EM d in EM National Blood Transfusion (Safe blood) National Malaria Control Program (NMCP) Extended Program on Immuniz ation (EPI) National TB & Leprosy Program (NLTP) Condo HIV Anti Vaccines Anti TB ms /Hepatitis Malarial & tives test kits (ACT) Leprosy medicine s Included in Include 17, ,700 EM d in EM Reproductive and Child Health Section (RCHS) Contracep Condom 2 GLOBAL FUND 22,380 3,707 12,940 3,219 54,201 4,250 USG PEPFAR/ 7,540 3 JSI/SCMS In kind in kind 4 USG - CDC In kind In kind USAID/DELIVE 3170 In kind 5, R/JSI in kind In kind UNITAID/ CLINTON HIV 9,450 In kind AIDS 6 INITIATIVE 7 JICA In kind In kind 8 SIDA 5, ,888 9 CIDA 4, NORAD 1,279 45

50 11 UNICEF In kind 12 WB/TMAP In kind 13 GAVI In kind 14 WHO ABBOTT FUND In kind In kind 1, PFIZER In kind 18 AXIOS DONATION In kind In kind in kind PROGRAM 19 CSSC In kind In kind In kind 20 COLUMBIA In kind In kind 21 HAVARD In kind In kind 22 CUAMM In kind In kind In kind 65,869 53, ,853 3,722 + EML + 37,027+ 3,219 EML + 54,201 17, ,700 17, in kind + in kind in kind in kind in kind in kind in kind in TOTAL kind 1