PROCUREMENT SUPPORT SERVICE

1. PROCUREMENT SUPPORT SERVICE WHO/UNICEF Technical Briefing Seminar on Essential Medicines Policies, October 31st -November 4th 2011 Mariatou Tala Jallow, Pharmaceutical Management Unit

2. PRESENTATION OUTLINE • Procurement Support - Voluntary Pooled Procurement (VPP) and Capacity Building Services (CBS) • Why Global Fund is providing this service • How the services operates • Achievements and challenges • How to access the service

3. Use of the Global Fund Grant Funding 37% percent of funds are used for medicines and health products procurement

4. Challenges / Risks linked with PSM activities

5. Pharmaceuticals & Health Products Management PSM Challenges affect Grant Implementation • Challenges in Procurement and Supply Management (PSM) impacts on: • Grant negotiation – PSM Plan approval • Grant implementation – Procurement plan/ process • Disbursement – PSM plan approval; Condition Precedents; Progress update on PSM activities • Grant Performance – meeting targets; Scaling up • Contributes to delays in procurement and stock-outs

6. 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/supply chain agents (Short Term Strategy) • Voluntary Pooled Procurement / Capacity Building Services

7. VPP contributing to improving grant performance, mitigating risk & influencing market dynamics National procurement & supply systems • Capacity building & supply chain management assistance (CBS) Global Fund Board Decisions (2007 & 2011) • Improve grant performance • Identify challenges during grant negotiation • Mitigate risks during grant implementation • Strengthen management of grants and national procurement and supply chain systems Participating Principal Recipients Pooled procurement service (VPP) Non-core health products • Support implementation of the disease program • Complete package of essential health products (prevention, diagnosis & treatment) 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

8. VPP Participation Process Use Procurement Agent PSS Team Discussions Condition Precedent OR Fund Portfolio Manager Country joins VPP PMAS Team Assessment LFA Assessment Voluntary Inadequate capacity in PSM Inadequate capacity in PSM PR’s Self Assessment LFA: Local Fund Agent PSS: Procurement Support Services VPP: Voluntarily Pooled Procurement PMAS: Procurement Management Advisory Services PSM: Procurement & Supply Management Inadequate capacity in PSM / VPP benefits

9. VPP Procurement Process Procurement Request Procurement Request Principal Recipient VPP PSA Price Quotation VPP: Oversight PR Approval VPP: Direct Disbursement PSA Confirms Order to Supplier PR Acknowledgement of goods receipt Delivery Final Invoice and reconciliation PQR Data Entry by PSA on PR’s behalf

10. 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

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

12. 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

13. Procurement Cycle (Days)* • 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 *Time from Request for quotes to planned/actual delivery date Reporting Period 2009 - Sep’ 11

14. 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

15. 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

16. Systematic Capacity Building Process

17. 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

18. CBS/ SCMA: Mechanism and Process Identifying needs • PRs identify CBS/SCMA needs (LFA assessments / reports of partners etc) Contracting CBS / SCMA • PRs choose from available services • PRs manage implementation of service contracted • Global Fund supports and monitors deliverables Operational Model Financing • PR pays for service from grant • Global Fund Direct Payment to service providers at request of PRs

19. 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

20. Accessing VPP and CBS