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

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

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

Challenges / Risks linked with PSM activities PSM activity Risks Quantification and estimation of needs Management of Information / quality of data Stock-outs Overstocks and expiry of products Procurement Planning Quality Assurance Governance/ Competitive and transparent procurement Delays on supply; Tenders delayed or canceled Fraud, misappropriation of funds Stock outs / treatment disruption Supply Chain Management Supply management Distribution Processes and safety Degradation, losses Thefts and diversion

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

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

VPP contributing to improving grant performance, mitigating risk & influencing market dynamics Global Fund Board Decisions (2007 & 2011) Capacity building & supply chain management assistance (CBS) National procurement & supply systems Improve grant performance Identify challenges during grant negotiation Mitigate risks during grant implementation Strengthen management of grants and national procurement and supply chain systems 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 Participating Principal Recipients Pooled procurement service (VPP) One PSS Team. 2 services/mechanisms. Participation in 1 mechanism not conditioned to participation in the other. Non-core health products Support implementation of the disease program Complete package of essential health products (prevention, diagnosis & treatment)

VPP Participation Process Use Procurement Agent PSS Team Discussions Condition Precedent OR Fund Portfolio Manager Country joins VPP LFA Assessment PMAS Team Assessment Inadequate capacity in PSM Inadequate capacity in PSM Voluntary 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

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

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

VPP Confirmed Orders Reporting Period 2009 - Sep’ 11 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

Top Countries Reporting Period 2009 - Jun’ 11 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

Procurement Cycle (Days)* *Time from Request for quotes to planned/actual delivery date 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

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

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

Systematic Capacity Building Process

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

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 18 18

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

Accessing VPP and CBS