Supply Chain Management System Project The Partnership for Supply Chain Management March 2006

The President’s Emergency Plan for AIDS Relief (PEPFAR) Targets –Prevent 7 million new HIV infections –Provide treatment for 2 million HIV-infected people –Provide care to 10 million people infected and affected by HIV/AIDS, including orphans and vulnerable children Scope –15 initial focus countries –5 years –Up to $15 billion

SCMS Project Purpose To establish and operate a safe, secure, reliable, and sustainable supply chain management system (SCMS) to procure pharmaceuticals and other products needed to provide care and treatment of persons with HIV/AIDS and related infections Around the world, but initially focused on: Botswana Vietnam Côte d’Ivoire Ethiopia Guyana Haiti Kenya Mozambique Namibia Nigeria Rwanda South Africa Tanzania Uganda Zambia

Project Objective To create, enhance, and promote an uninterrupted supply of high-quality, low-cost products that flow through accountable systems which can: –Rapidly scale up to support HIV/AIDS prevention, treatment, and care –Ensure quality of drugs, test kits, and other supplies –Build capacity for long-term sustainable procurement and distribution of drugs and commodities –Respect intellectual property law at international and national levels

Procurement Perspective, Moscow Procurement is not an isolated activity, part of PSM Cycle Procurement should be embedded in local legislation, be transparent and accountable For professional procurement one needs a proper support framework, covering vital functions (admin, budgeting, timely payments, development of procedures, available in the public domain. Solutions should aim at capacity building, no duplication or programme or donor specific solutions. Demand forecasting is bottom up, defined by in country programmes

Categories of HIV/AIDS Commodities ARVs (including FDA tentatively approved generics) for adults and children Drugs for opportunistic infections Drugs for STIs Drugs for home care and palliative care Drugs for tuberculosis Rapid HIV test kits Laboratory equipment and supplies Medical supplies Miscellaneous (e.g., vehicles)

Project Components In-country technical support Competitive and transparent procurement capacity Quality assurance program Freight forwarding and warehousing services Comprehensive logistics Management Information System Comprehensive management system

In-Country Technical Support Assessments and technical assistance (where requested) Procurement assistance –Drug selection –Forecasting/quantification –Drug registration Customs clearance and delivery Theft/diversion – corrective actions Human capacity for supply chain management Quality assurance plans Sustainability plans

Procurement Volume purchasing leveraged to achieve best worldwide price Drugs and commodities of assured quality Compliance with all US Government (USG) laws and regulations E-catalog Manufacturing capacity constraints Clients –Initially, USG PEPFAR participants –After year 2, others

Procurement, Moscow Competitive (what is this and how to measure? Transparency (what does this mean) For ARV’s limited number of quality supplier, (innovators/generics, role of local industry?? Qty API sources even more limited( parallel with TB) Unknown capacity, eg shortages will occur in case short time horizon is used, or when no clear picture exists on where API/starting material is made. Complicated market, Access prices, rerouting of products, commercial versus other packs, Voluntary licensing, unclear IP issues, unclear local registration status in case of replacement (see FDA replacement,or voluntary licensing) Not only capacity is sufficient it is the quality is the Chain which should be ensured.

Quality Assurance Vendor, donor, and commodity qualification Quality assurance document maintenance Compliance testing Suspect commodity testing Storage, handling, and monitoring standards

Freight Forwarding and Warehousing Timely, accurate, and safe transport and warehousing Delivery of drugs and commodities “door-to-door”, ensure the last mile Appropriate cold/cool chain management Regional warehousing for efficiency and cost Shipment tracking from supplier to recipient Physical security measures

Logistics Management Information Systems Global supply chain visibility –Requirements estimates –Product registration status –Funds –Production capacity –Procurement status –Shipment and receipt status –Regional distribution center inventory management –Returns Product pedigree National/local supply chain visibility (on request)

Project Management System Project Management Office (PMO) –Virginia, near JSI and MSH –~ 70 central staff to start Global supply chain monitoring –Requirements estimates –Production capacity for key products –Supply imbalances of key products –Exception reporting Collaboration with USG, international donors, others

Cross-cutting Strategies One-stop shopping for HIV/AIDS programs Pooled procurement using framework contracts Begin and end in country Strengthen — don’t replace — in-country supply systems Regional warehousing and distribution –Protect country infrastructure –Increase responsiveness Collaboration, globally and locally

SCMS Implementation Pick and choose: one size does not fit all Additive to current supply chain management mechanisms Based on demand and requests from the field Public-private-NGO-FBO partnerships

The Partnership for Supply Chain Management (PSCM) Non-profit partnership established for SCMS –JSI Research & Training Institute, Inc. (JSI) –Management Sciences for Health (MSH) SCMS project team: 17 institutions –Nonprofit organizations –Commercial private sector corporations –Academic institutions –Faith-based organizations

Responsive EffectiveCost-effective Continuous availability Forward procurement Regional distribution One-stop shopping Simpler ordering Lower prices Reduced inventory Assured quality Secure supply chains Capacity building Sustainability SCMS SCMS Benefits

Questions? Thanks! For more information: Website: scms.pfscm.org Main phone: Main fax: