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Pharmaceutical Procurement Demystified

This article explores the importance of supply chain management in pharmaceutical procurement, focusing on the public sector. It highlights the increasing health expenditures globally and the need for attention to be given to supply chains. The article also examines the World Bank's investment in healthcare and its impact on supply chains.

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Pharmaceutical Procurement Demystified

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  1. Pharmaceutical Procurement Demystified Managing supply chains through the Public Sector Sangeeta Raja ACTafrica

  2. Why care about supply chains? • Over the last decade – health expenditures continue to escalate worldwide. • High-income countries spend 10% of their GDP for health • Middle-income countries average 6 percent of their GDP and • Low income countries, about 5.3% of GDP (Source: WB 2007) • Expenditures for medicines and medical consumables has also increased. (Source: WHO, 2004) • Despite increased spending – little attention is given to supply chains. (Source: DELIVER, 2006) Source: World Bank 2007

  3. The Burning Question for the Bank • Is the Bank investment in HNP significant? • Does it buy enough medicines and health supplies to make a difference? • Does the Bank’s procurement practices impact the supply chains • Does the Bank invest in supply chains? • What are the entry points for the Bank?

  4. Supply Chain management in WB Portfolio • The objective of the ACTafrica review was to: • establish the level of Bank support in the procurement of health sector goods and its impact on supply chains • determine the extent to which the Bank has had a role in addressing supply chain management through its various products and instruments

  5. Looking within…. WB financed procurement of medicines and medical equipment FY99-07 (US $billion) Source: WB Business Warehouse

  6. Trend by Year

  7. Who is buying what? Medical Equipment (EMD) versus Pharmaceutical Procurement by Region FY 99 - 07 Source: WB Business Warehouse

  8. Procurement trends that impact supply chains Number of medicines contracts by Region FY99-07

  9. Procurement Efficiency Uganda HIV/AIDS Control Project, number of repetitive procurements

  10. Procurement lead times

  11. WB Procurement of key public health commodities

  12. Trends in procurement of key public health commodities FY 99- 07 ARVs Vaccines Malaria Contraceptives

  13. Are we diagnosing and mitigating the risks? • 33 CPARs conducted from FY99-07 in Africa • Less than 30% conducted a specific assessment of health sector • Only two addressed the impact of procurement processes on healthcare supply chains

  14. Are we addressing the health sector in procurement reforms? • Review of Procurement Reform Projects in top 10 African countries conducting the most healthcare procurement – 9 out of 10 did not address any specific procurement reform for the health sector. (Documentation was not available for the last one)

  15. However, there is hope...

  16. Strategies • Supply Chains, discussed and identified: • HNP Sector Strategy • Global HIV/AIDS Program of Action • The World Bank’s Commitment to HIV/AIDS in Africa: Our Agenda for Action, 2007 – 2011 • Booster Program for malaria Control in Africa – Phase II strategy

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