OUR LADY OF FATIMA UNIVERSITY

COLLEGE OF PHARMACY

Supplier Selection and

Accreditation
MODULE 2, Part 2

Experiential Pharmacy Practice in Institutional Pharmacy

INPI 411
 CHECKLIST:
ü Attend Online Lecture via Zoom Meeting
ü Duration: 3 hours
ü Read course and unit outcomes.
ü Read study guide prior to online attendance.
ü Read required learning resources
ü Proactively participate in online discussions
ü Answer and submit course unit tasks
 LEARNING OUTCOMES:
At the end of this unit, the students are expected to:

1. Enumerate approved guidelines in supplier selection and

accreditation.
2. Discuss the general considerations in supplier selection
and accreditation.
3. Demonstrate competence in the supplier selection and
accreditation.
 OUTLINE:

ü Guidelines on Supplier selection and accreditation

ü Technical considerations on supplier selection
ü Distribution and Marketing sales policies
ü Responsibilities of purchaser
 Introduction
Procurement refers to a series of processes that are executed
to acquire goods and services for an organization.

Purchasing is the act of buying the goods and services that a

company needs to operate and/or manufacture products; an
important transactional step in the procurement life cycle.

It is the responsibility of the pharmacists (in-charge) to

select supplier that will provide pharmaceuticals of highest
quality and of lowest cost.
Introduction
 Introduction

Choosing the right supplier entails review of the price

offers by more than one supplier. Several factors will be
considered such as quality (value for money), reliability and
service.

There should be a system in place when qualifying a

supplier. A system that helps you determine what you need
from the supplier, identify potential suppliers and select the
right one.
 Steps in Selecting Supplier

1. Thinking strategically- Identify the need of the

company
- The most effective suppliers are those who offer products
or services that match - or exceed - the needs of your
business. Identify the need of the company and not just
what the suppliers offer. Having a choice of suppliers
would be better than having only one or exclusive
supplier.

- What may happen if you have an exclusivity contract with

a supplier?
 Steps in Selecting Supplier

2. Set the qualifications for the suppliers

- Reliability may be the top on the list, this is the supplier’s
commitment to you
- Customer associates quality with you not with the
supplier
- The quality in terms of value for money is decided based
on how much one is willing to pay for the supplies with
consideration of the cost, reliability and quality
- Strong service and clear communication
- Financial security to make sure that the supplier is
capable of delivering what you need
Technical Considerations:

Here are examples of Technical Considerations: (ASHP)

1. On request of the pharmacist, the supplier should furnish:
a. Analytical control data.
b. Sterility testing data.
c. Bioavailability data.
d. Bioequivalency data.
e. Descriptions of testing procedures for raw materials and finished products.
f. Any other information that may be indicative of the quality of a given finished drug
product

2. There should be no history of recurring product recalls indicative of deficient quality control
procedures.

“technical specifications” refers to the physical description of the goods

or services, as well as the Procuring Entity’s requirements in terms of the
functional, performance, environmental interface and design standard
requirements to be met by the goods to be manufactured or supplied, or
the services to be rendered
Technical Considerations:

3. The supplier should permit visits (during normal business hours) by the pharmacist to
inspect its manufacturing and control procedures.

4. All drug products should conform to the requirements

of The United States Pharmacopeia—The National Formulary (USP—NF) (the most recent
edition) unless otherwise specified by the pharmacist. Items not recognized by USP—NF
should meet the specifications set forth by the pharmacist.

5. To the extent possible, all products should be available in single unit or unit dose
packages. These packages should conform to the “ASHP Technical Assistance Bulletin on
Single Unit and Unit Dose Packages of Drugs.”

6. The name and address of the manufacturer of the final dosage form and the packager or
distributor should be present on the product labeling.

7. Expiration dates should be clearly indicated on the package label and, unless stability
properties warrant otherwise, should occur in January or July.
Technical Considerations:

8. Therapeutic, biopharmaceutic, and toxicologic information should be available to the

pharmacist on request. Toxicity information should be available around the clock

9. Patient/staff educational materials that are important for proper use of the product
should be routinely available.

10. On request, the supplier should furnish proof of any claims made with respect to the
efficacy, safety, and superiority of its products.

11. On request, the supplier should furnish, at no charge, a reasonable quantity of its
products to enable the pharmacist to evaluate the products’ physical traits, including
pharmaceutical elegance (appearance and absence of physical deterioration or flaws),
packaging, and labeling
 Steps in Selecting Supplier

3. Identify potential suppliers

• Prepare a shortlist of suppliers ( those that meet the set
requirements) is equally important as identifying what you need.

4. Choose a supplier
• Different procurement methods are used by different companies.
The most common are selective bidding and the single source
procurement (or request for quotation). From the selected
method, prices are compared.
• Price is an important consideration, however not the single one.
 Steps in Selecting Supplier

• Make sure that the supplier you employ is the one that will be
doing the work . Some uses a subcontractor which also needs to be
evaluated.
• Negotiate terms and conditions that will reflect on the final
contract
 Terms and Conditions Contract

• It establishes the binding legal contract between you and your

clients (set time to prepare this document, it will save the cost for
possible litigation problems)
• No two businesses will have the same terms and condition (specific
for your business)
• It must be written (provides certainty and ease in enforcing)
• It usually covers the following:
• Price It clarifies both parties’
rights, duties, roles and
• Delivery
responsibilities
• Payment terms
• Liability Example of terms and Condition by
• Disclaiming liability for failure or delay MedExpress Drugstore:
• Protection of Intellectual Property Rights https://www.medexpress.com.ph/abo
• Passing of title and risk ut-us/terms-and-conditions
• **Definition of terms
 Distribution Policies

Distribution Policies
• Whenever possible, delivery of a drug product should be confined
to a single lot number.
• Unless otherwise specified or required by stability considerations,
not less than a 12-month interval between a product’s time of
delivery and its expiration date should be present
• The supplier should accept for full credit (based on purchase price),
without prior authorization, any unopened packages of goods
returned within 12 months of the expiration date. Credits should
be in cash or applied to the institution’s account.
 Distribution Policies

Distribution Policies (Cont.)

• The supplier should ship all goods in a timely manner, freight
prepaid, and enclose a packing list with each shipment. All items
“out of stock” should be noted, and the anticipated availability of
the item should be clearly indicated. There should be no extensive
recurrence of back orders.
• The supplier should warrant title to commodities supplied, warrant
them to be free from defects and imperfections and fit for any
rational use of the product, and indemnify and hold the purchaser
harmless against any and all suits, claims, and expenses, includ-ing
attorneys’ fees, damages, and injuries or any claims by third parties
relating to the products..
 Marketing and Sales Policies

Marketing and Sales Policies

• The supplier should not, without written consent, use the
pharmacist’s or his or her organization’s name in any advertising or
other promotional materials or activities.
• The supplier should honor formulary decisions made by the
organization’s pharmacy and therapeutics committee, and the
supplier’s sales representatives should comply with the
organization’s regulations governing their activities.
• The supplier should not offer cash, equipment, or merchandise to
the organization or its staff as an inducement to purchase its
products.
 Marketing and Sales Policies

Marketing and Sales Policies (Cont.)

• Discounts should be in cash or cash credit, not merchandise, and
should be clearly indicated on invoices and bills rather than
consisting of end-of-year rebates or similar discount practices.
• In entering into a contract to supply goods, the supplier should
guarantee to furnish, at the price specified, any minimum amount
of products so stated. If the supplier is unable to meet the supply
commitment, the supplier should reimburse the organization for
any excess costs incurred in obtaining the product from other
sources. If, during the life of the contract, a price reduction occurs,
the lower price should prevail
 Marketing and Sales Policies

Marketing and Sales Policies (Cont.)

• Discounts should be in cash or cash credit, not merchandise, and
should be clearly indicated on invoices and bills rather than
consisting of end-of-year rebates or similar discount practices.
• In entering into a contract to supply goods, the supplier should
guarantee to furnish, at the price specified, any minimum amount
of products so stated. If the supplier is unable to meet the supply
commitment, the supplier should reimburse the organization for
any excess costs incurred in obtaining the product from other
sources. If, during the life of the contract, a price reduction occurs,
the lower price should prevail
• All parties to the bidding process should respect the integrity of the
process and the contracts awarded thereby.
 Methods of Procurement
(a) Limited Source Bidding, otherwise known as Selective Bidding (or ITB) - a method of
Procurement that involves direct invitation to bid by the Procuring Entity from a set of pre-
selected suppliers or consultants with known experience and proven capability relative to
the requirements of a particular contract
(b) Direct Contracting, otherwise known as Single Source Procurement (or RFQ) - a method of
Procurement that does not require elaborate Bidding Documents because the supplier is
simply asked to submit a price quotation or a pro-forma invoice together with the
conditions of sale, which offer may be accepted immediately or after some negotiations
(c) Repeat Order - a method of Procurement that involves a direct Procurement of Goods from
the previous winning bidder, whenever there is a need to replenish Goods procured under
a contract previously awarded through Competitive Bidding
(d) Shopping - a method of Procurement whereby the Procuring Entity simply requests for the
submission of price quotations for readily available off-the-shelf Goods or ordinary/regular
equipment to be procured directly from suppliers of known qualification
(e) Negotiated Procurement - a method of Procurement that may be resorted under the
extraordinary circumstances and other instances that shall be specified, whereby the
Procuring Entity directly negotiates a contract with a technically, legally and financially
capable supplier, contractor or consultant
Responsibilities of the Purchaser:

The following are the responsibilities of the purchaser:

1. Invitations to bid should be mailed to the suppliers’ home offices with copies
to their local representatives (if any), unless suppliers specify otherwise.
2. Potential bidders should be given no less than 3 weeks to submit a bid.
3. The opening date for bids should be specified and honored by the purchaser.
4. The language of the invitation to bid should be clear and should indicate the
person (and organization ad- dress and telephone number) the bidder should
contact in the event of questions or problems. Specifications should be
complete with respect to products, packagings, and quantities desired.

A purchase order is a commercial source

document that is issued by a business’ purchasing
department when placing an order with its vendors or
suppliers

The invoice is generated by the supplier and shows

how much the buyer needs to pay for goods bought.
Responsibilities of the Purchaser:

The following are the responsibilities of the purchaser:

5. If bidding forms are used, they should contain adequate space
for the bidder to enter the information requested.
6. The winning bidder should be notified in writing. Unsuccessful
bidders may be informed of who won the award at what price, if
they so request.
7. The quantities specified in the invitation to bid should be a
reasonable estimate of requirements.
8. If the invitation to bid is offered on behalf of a group of
purchasers, the individual members of the group should not
engage in bidding procedures of their own and should purchase
the goods in question from the winning bidder.
Supplier Selection Flowchart

LECTURE CONTENT

Supplier Selection Flowchart

Purchasing Process

LECTURE CONTENT

Purchasing Process
 REFERENCES:
Administrative-Order-No.-14-s.-2001 - Operational principles for good pharmaceutical
procurement: https://www.who.int/3by5/en/who-edm-par-99-5.pdf

Selecting Pharmaceutical Manufacturers and Suppliers – ASHP: https://www.ashp.org/-

/media/assets/policy-guidelines/docs/guidelines/selecting-pharmaceutical-manufacturers-
suppliers.pdf

What are the GMP Requirements for Supplier Qualification?: https://www.gmp-

compliance.org/gmp-news/what-are-the-gmp-requirements-for-supplier-qualification
https://picscheme.org/docview/3443
Manual of Procedures for the Procurement of Goods and Services:
https://www.gppb.gov.ph/downloadables/forms/GPM%20-%20Vol.2.pdf

https://asq.org/quality-resources/supplier-quality
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