Introduction to Drug Supply

Management
 Presentation Outline
• Why Proper Supply System?
• Previous Supply System VS The Current
• Drug Supply Management Cycle
• Opportunities
• Selection
• Quantification
• Procurement
• Storage and distribution
 Why Proper Supply System?
• Effectiveness of health programs depend on a
number of factors but largely on proper supply
management of inputs:
• Availability of the right commodities at the right time in the
right quantities at the right place that are used correctly.
• Inputs: supplies for preventive interventions,
diagnostic supplies, drugs and others.
• As the saying goes: “NO PRODUCT - NO
PROGRAM”.
 The management process

Planning Implementing Controlling

Vision, mission Organizing  Comparing
Setting goals & Staffing performance
objectives, targets
Operating with goals
Selecting tactics, (leading,
strategies, coordinating,
resources, motivating)
responsibilities
Feed back

Feed back
 Supply System
• Previous:
– Sources
• PHARMID (P+P)
• Private importers (P+P)
• Local manufacturers (P+P)
• FMOH/PSLD/RHB/ZHD/Wo
HO (Pu)
– Distributors
• Public HFs (Expt Local ma.)
• Private Sector (Expt PSLD)
• PLMP/Current:
– Sources
• PFSA/New PHARMID (Pu)
• Private importer/s (Pt)
• Local manufacturers??
• Distributors
• Public HFs (Only PFSA)
• Private Sector (Expt PFSA)
Drug Supply Management
Cycle

Selection

Use Management Procurement

Support

Distribution

Policy and Legal Framework

 Drug Supply Management Cycle
• Opportunities
– National Health Policy
– National Drug Policy
– National PLMP
– Funding (FGOE, GFATM, UN-agencies, Government
Development Agencies…)
– National Diagnosis and Treatment Guidelines
– Partners’ interest in supply management
– Expanding public, private and other infrastructures
– Introduction of HEP/HEWs
– Better epidemiological data/HMIS
 Selection
 Definition
 The process of deciding the type of
pharmaceuticals needed for successful
implementation of a program.
 Why drug selection?
 Too many drugs VS limited funds
 Price advantage of bulk procurement of
fewer drugs
 Prescribers can become familiar with a
smaller number of drugs
 Procurement, storage and distribution are
simplified
 Facilitates drug information and education
efforts
Advantages of selection
 Brings changes or improvesprescribing,
dispensing and use behaviors

 Reduces confusion
 Improve drug availability
 No irrational treatment alternatives available
 The Essential Medicines
Target National list of
Registered medicines essential medicines
All the drugs
in the world
Levels of
use

S CHW S
dispensary

Health center Supplementary

Hospital specialist
Referral hospital medicines

Private sector
The process of medicines
selection
List of common diseases and
complaints

Treatment
choice

Essential medicines list

Treatment
/ National formulary
guidelines

Training and Financing and

Supervision Supply of drugs

Prevention
and care
 Selection criteria
 Inclusion of the drug in the national drug
list/Treatment Guideline
 Proven quality, safety and efficacy/only from pre-
qualified suppliers and/or manufacturers by DACA
 Preference for drugs that are well known and
possibilities for local manufacture
 Ability of the drug to treat more than one disease
 Availability of the drug in the market
 The comparative price of the drug with other
alternative drugs
 The health facility standard
 Other considerations
 Selection Committee- PT committee/DTC
 Familiarization of the selected list to all
concerned parties.
 Qualification level of the staff
 Patient compliance
 Existing treatment guideline, LIDE
 Therapeutic efficacy evaluation to change
treatment guideline.
 Quantification
 Definition
Process of estimating the quantities
of specific drugs needed for the
next procurement period
 Poor quantification symptoms
 Poor quantification results in:
Frequent shortage of drugs
Excess stock due to overestimation
Wastage of resources
Unnecessary suffering and death
Inappropriate and ineffective prescribing
 Prescribers shorten course of treatments to
stretch the inefficient supply
 Substitute with inappropriate alternative drugs
 Quantifications methods
1. Consumption method
2. Morbidity method
 There is no single method best available
 Each method has its own strengths and
weaknesses
 The method used should be chosen
according to:
• actual and potential availability of data.
• the organization of the drug supply system
 Comparison of quantification methods
1 Consumption method
Appropriate when the health
facility :
 is adequately funded
 has acceptable prescribing pattern
 has adequate and uninterruptible
drug supply
 Has good stock management
 Complete and accurate
consumption data and stock out
information
 Has low level of wastage and
losses
2. Morbidity Method
This method is appropriate:
When available consumption
data are incomplete or
unreliable
When we have reliable and
complete epidemiological data
When prescribing practices
are expensive and irrational
When the budget is unlikely
to be sufficient to meet
requirements
When the facility is new or
expanding
 Procurement
 Definition: Procurement is the process of
acquiring goods and services (drugs, MS and
ME) through purchase, donation or manufacture .
 Procurement …
 Procurement Objectives
 Plan to get the right drug (right quality and
quantity)
 Acquire from the right source at the right price
 Obtain at the right time
 Make available at the right place
 Procurement Key Principles

 procure drugs by generic name

 limit the procurement to a selected list
 procure in bulk
 order quantities based on reliable estimates of
the actual need
 practice good financial management
 apply transparent and written procedures
 have a product quality assurance program
 perform auditing and reporting regularly
 The Processes of Procurement
 It is a cyclic process that involves a
number of steps.  
a. Correct quantification
b. Determine when to buy
c. Identify and select suppliers
e. Prepare the purchase order/requisition
f. Monitor the order status
g. Receive and inspect drugs
 Methods of Procurement

 Open tender(more appropriate method)

 Request for proposal mainly for consultancy services)
(

 Restricted tendering short listed Bidders)

(

 Request for quotation (Performa invoices )

 Single source procurement

 Distribution
 Definition
 Distribution is a process of receiving,
storing, stock controlling, delivering,
record keeping and reporting.
 Distribution …
 it is cyclic process which begins when
supplier dispatches the drugs and ends when
drug consumption information is reported
back to the procurement unit
 Pull Vs Push and quota systems
 distribution encompasses a number of
processes but activities such as:
 receipt and inspection
 storage and inventory management
 consumption reporting will be discussed.
 Distribution System
• Pull: quantity determined by the facility;
can be collection and/or delivery
• Push: quantity determined by the next
higher level/supplier; can be collection
and/or delivery
• Push Vs Pull is all about decision
• Quota: Determining quantity by mere
proportion than actual need.
 Inspection
 When drugs and medical supplies arrive at the
facility store from the supplier, they should be
properly inspected.
 This is done to ensure that the type, quality,
quantity, packaging, labeling and any other
information are as per the specifications.
 If any discrepancy is observed, it has to be
communicated and verified.
 Discrepancy Reporting using a form which at
least contains the following information.
 Receiving

 Items should be received by the store

manager using the Goods Receiving
Memo/Voucher
 The receiving memo should contain
information on complete description of the
items (generic name, strength, unit and
pack size of the products), quantity
received, unit and total costs and space for
signatures.
 Storage
 The quality of drugs can be affected by heat,
moisture, sunlight, dirt and other extreme climatic
conditions
 Drugs and medical supplies must be properly
stored in order to maintain their stability and
quality up to the expected shelf life
 The store should be located in a place that is not
easily reached by flooding
 It should be accessable to transport and secured
from theft and fire.
 The store should have enough shelves and
pallets to allow the proper arrangement and stock
rotations of drugs and medical supplies.
 Storage
Stock Rotation 
First-In First Out (FIFO)method
 it is generally true that the first-in drug should be
picked and issued first - Items arrived last should
be placed at the back.
 Last-In-First Out (LIFO)/First Expiry First
Out: there is a case where the last in item can be
first out. This happens if the last in item has a
shorter shelf life.
 Distribution
• Previously:
– Delivery is made from the federal level using distribution
plans or quotas.
– Collection could be made by the regions or FMOH deliver
the drugs to the RHBs
– Feedback or discrepancy report is expected form the RHB
– RHBs are expected to distribute the drugs to the Hospitals,
Zones or Woredas
– Zones or Woredas distribute the drugs to the HFs
• Currently/planned:
– Goods’ flow: PFSA to PFSA hubs to Health facilities
– Information flow: Health facilities to WoHO to RHB to
PSLD/FMOH OR Health facilities to PFSA hubs to PFSA
(central)
 Inventory management
 Inaccurate records produce inaccurate need
estimates
 this is manifested with problems of stock-outs
and expiry
 It is the sources of information used to calculate
needs
 prevents shortage of drugs and medical supplies
 Proper inventory control helps also to monitor
the expiry of drugs and the movements of stocks
 Inventory management
Stock Levels  
 Minimum Stock Level: the minimum sock that
should be available in the store.
 Maximum Stock Level: the maximum level of stocks
allowed to hold in store
 Reorder Stock Level: This is the level of stocks at
which the new orders should be placed
 Safety stock: this is the buffer stock kept in reserve to
prevent stock outs
 Lead-time:
 it is the time interval needed to complete the
procurement cycle
 Inventory management
Stock record and Bin cards: these are very
important tools used to control the sock movement of
items in the store
 Stock record card: this contains information:
about supplies and prices
about stock receipts, stock issues ,stock losses
and balances of each items
 they are the primary source of information
 one card is used for each product
 it is usually kept in the office of the store manager.
 Bin Card: keeps information about a single product. It is
usually displayed at the shelf where the lot is found
 Stock Record card
Name of Health Institution ____________ Maximum Stock level _____
Name, Strength, and Dosage form of Item _______ Reorder Stock Level _____
___________________________ Minimum Stock Level_______ Unit
of Issue______ Location______ Average Monthly Consumption____

Date Document Issued to Quantity Unit Price Expiry Remark

No. (M 19 or Rece Issu Bala Birr Cents date
or M22 received ived ed nce
No.) from
 BIN CARD
Name of Health Institution ____________________________________________

Name, Strength, and Dosage form of Item _______________________________

Unit of Issue______________________________________________________

Date Document Issued Quantity Expiry Remark

No. to or Received Issued Balance Date
(receiving or receive
issuing d from
form)
 LMIS

 The strong link in the distribution chain is

the flow of appropriate information
 Reporting information on consumption to
the procuring section or any other relevant
and responsible party contributes towards
the efforts of ensuring the continuous
availability of essential drugs
 It is necessary for health care facilities to
report and provide reliable information on
quantities received, distributed and
consumed on regular basis.
 Consumption Reporting
 A two-way information flow regarding drug consumption is
important:
for coordinating drug distribution
to project future drug needs
to revise budgets
to assess drug utilization etc.
 In order to prepare a reliable consumption report, it is a
must to have proper inventory managements and correct
stock records
 If these are available, the generation of data and
preparation of consumption reporting would be an easy
process
 The sources of information are stock record cards, bin
cards, requisition forms, purchase invoices etc.
 
Thank You!