Project Proposal (Foundations in Management)

Context The Project report is to present an innovation in the Indian Public

Healthcare sector related to procuring, storage and distribution of
essential drugs in the state run hospitals and polyclinics. This innovation
started in the state of Tamil Nadu by the setting up of Tamil Nadu Medical
Services Corporation Ltd. (TNMSC) in July 1994 as a Government of Tamil
Nadu undertaking. The simple goal of this foundation is to make essential
and quality drugs and medical equipment available to all at an affordable
cost i.e. to manage the supply chain of essential drugs efficiently and
effectively. After the year 2000, TNMSC became the role model for other
State Public Healthcare systems.
Model
TNMSC follows the basic characteristics of an autonomous procurement
agency which include
Independent Management for Supervision and Audit
Competent Pharmacy Managers
Sufficient Funding
Essential Drug List fundamentals
Implementation of Quality Assurance
Public Accountability
Following are some innovation highlights that TNMSC has implemented as
a procurement agency (Source -Tamil Nadu Medical Services Corporation A Critical Study on
its Functioning During the Period 1995- 2012)

Procurement and timely availability of cost effective medicines.

Benefit to the poor sections of the society within their available
budget.
Effective procedure to identify efficient suppliers.
Transparent procurement and distribution system that relies on
effective use of IT Enabled Services.
Maintaining a balance between cost effectiveness and quality of
health care.
By removing intermediaries, control over the issue of counterfeit
and inferior drugs.
Awareness amongst the public healthcare administration with
regards to unnecessary margins and profits for procuring
medicines.
Total revamp of the procurement process making it more effective
and efficient.
Publishing of small pocket size books like pass book, pharmacy
handbook, EDL leading to optimal use of medicines.

Impact
This innovation has drastically reduced the price of drugs and medicines in
Tamil Nadu and also made them readily available to the poor and needy.
As per the National Sample Survey Organizations (NSSO) sixtieth round
survey in 2004, the average cost of drugs for inpatients in the public
hospitals in Tamil Nadu is INR 102 which is much lower than states like
Haryana (INR 3268), Himachal Pradesh (INR 2166) and Rajasthan (INR

3187). This significant achievement has urged the Central Government to

use the TNMSC model as a benchmark and apply the same across other
states for effective procurement and distribution of essential drugs and
medicines in the Public Health Sector.