Optimizing PSM Performance Priorities for Procurement Support Services for Malawi

The Global Fund Strategy on PHPM Realizing Health Millennium Development Goals Channeling resources of donors, stakeholders and partners Funding high impact country programs on the 3 diseases Increasing access to Pharmaceuticals & Health products  Be a significant contributor to making progress towards the MDG  Mobilize and intensify the international response to three global diseases  Be an effective and efficient mechanism for flow of resources  Operate as financing institution  Build on a country-driven approach to ensure long-term sustainable success  Be the driver of integrated approaches covering the 3 diseases and cross-cutting efforts, balancing needs of different regions, diseases and interventions  Prevention, diagnosis, treatment and management  ARVs, ACTs, other medicines, laboratory equipment and supplies, test kits, condoms, LLINs

This translates into an overall aspiration to be a unique catalyst in the global arena to fight HIV/AIDS, tuberculosis and malaria Donors and other stakeholders Global Fund Public and Private Partners Highest quality Programs Affected societies and individuals in greatest need Link funding and ambitions of donors and stakeholders with experiences and knowledge of partners to support high quality programs that reach those in greatest need

Board Approved a Specific VPP and Capacity Building Services Model, now being Implemented by Secretariat VPP:  PR participation Voluntary except for PRs that have inadequate capacity to procure  Use of agents Be operated by one or more procurement service agents (PSA) selected in a tender  Direct payment Require participants to allow the GF trustee to make direct payments Capacity building:  PR participation Voluntary or based on LFA assessment of PSM capacity  Use of Agents Provided by CBS/SCMA providers contracted for the purpose VPP:  PR participation Voluntary except for PRs that have inadequate capacity to procure  Use of agents Be operated by one or more procurement service agents (PSA) selected in a tender  Direct payment Require participants to allow the GF trustee to make direct payments Capacity building:  PR participation Voluntary or based on LFA assessment of PSM capacity  Use of Agents Provided by CBS/SCMA providers contracted for the purpose Participating PRs Consulting /TA agencies Fund portfolio manager Procurement team The Global Fund ”PQR” TGF Secretariat Data input Pooled orders Coordinated CBS/SCMSA Procurement agent(s)* TGF PRs TGF designated VPP Agent TA Services VPP Orders / Information TGF designated CBS Agent Manage Agent/ Service Providers on behalf of PRs CBS/SCMA Providers Suppliers/ Manufacturers VPP Pools PRs orders CBS/SCMA Coordinates Services Delivery Case Studies

Why is Procurement and Supply Chain Management (PSM) important? Approximately 45% of grant funds are budgeted for the procurement of medicines and health commodities Challenges / bottlenecks on PHPM impact on grant implementation and performance Access to Pharmaceuticals and Health Products – strategic role in meeting Health MDGs Meeting health targets and scaling up

Bottlenecks and Challenges in Access to Pharmaceuticals and Health Products System Process Infrastructure / Human Resource Forecasting / Quantification Pricing Policies & systems Product Selection Quality Assurance systems / Quality Control Policy compliance PROCUREMENT QUALITY MANAGEMENT Inadequate PSM Plans Management Information Systems Distribution Inventory management A c c e s s

Malawi PSM Challenges The quality of forecasting => procurement planning and implementation are inadequate Stock outs of test kits, ARVs and ACTs => several calls for emergency procurements Central Medical Stores does not have a reliable inventory management system => Distribution/delivery problems of test kits and OI drugs Inadequate Stores management and record keeping at health facilities Storage and inventory management of ART has gradually declined as treatment centres have been added Other commodities, which pass through Central Medical Stores, have suffered from inadequate storage arrangements and inventory management

Proposed Interventions: Product Acquisition: Use Procurement Agent while Building CMS Capacity Outsource Procurement Services to External Agent, e.g VPP CBS of CMS in GF, international and national procurement standards External Procurement Agent identified and appointed Staff capacity assessed Training Curriculum developed Job descriptions and reward level updated SOPs developed Procurement Procedures and processes revised MOU with other agencies developed CBS Interventions Deliverables Results: Procurement of Products optimized CMS capacity for procurement increased, Mechanism for staff retention indentified/implemented

Proposed Interventions: Delivery - Optimization of CMS Storage and Distribution Services Build capacity of CMS to out- source and manage service contract for commodity storage and distribution MOU with Partners developed Staff capacity assessed Key Staff Identified Job descriptions updated Services and standards defined Tenders for service providers conducted Contracts signed and implemented CBS InterventionsDeliverables Results: Capacity of CMS for service delivery Increased, CMS capacity for procurement of services increased CMS capacity for management of Storage and Distributions service levels increased

Proposed Interventions: Planning - LMIS and Inventory Management Inventory Management and LMIS Review, redesign and implementation Description of LMIS challenges Agreed design, New/revised LMIS SOPs, Tools and Trained operators of LMIS, within DHOs and HFs Improved health commodity supply data recording and reporting roll out CBS InterventionsDeliverables Results: Visibility of Supply Chain, Sound basis for quantification and programme planning

Proposed Interventions: Planning - Quantification and Forecasting Systematic Quantification and forecasting, with priority focus on Malaria Quantification assumptions agreed, Quantification completed, Procurement plan prepared, Pipeline monitoring system installed/employed CBS InterventionsDeliverables Results: early warning system => Reduced stock wastage or stock outs, procurement achieving optimum stocking (min/max stock levels)

Proposed Mobilization Timeline Activity Responsible Planned time to complete Preparation of Work Order Proposal Requests Global FundJuly 30 Circulation of Work Order Request to pre-selected and appropriate partners, and/or IQC holders/ CBS/SCMA providers Global FundAug 15 Work Order Proposal Submission to the Global Fund TA ProvidersSept 15 The Global Fund review of Work Order Proposals Global FundSept 30 CCMs/PRs review of Work Proposals and selection CBS/SCMA providers and award to providers PRsOct 15 CBS/SCMA Planning Workshop Global Fund, CCM, PRs, TA Providers, Partners Oct 30 Global Fund facilitates formal contracting between PR and CBS/SCMA provider for services Global FundNov 15 Fielding and implementation of TA by CBS/SCMA providers TA ProvidersDec 1 Monitoring and Evaluation of services by the Global Fund and Partners throughout the implementation process Global Fund, PRs, Partners

Extra Slides

Meeting the Health MDG Access to Pharmaceuticals and Health Products Addressing challenges / bottlenecks Pharmaceutical Systems Effective/ Efficient Identifying gaps / challenges / bottlenecks Ensuring adequate investments (Health System Strengthening) Coordinated approach Meeting Targets / Scaling Up

Allocation of PSM Functions Demand Creation Supplier Agreements Financing Receipt, Storage, Distribution Forecasting Quality Assurance Effective Use Product Procurement Product Selection Monitoring Acquisition Planning Delivery MOH CMS & AGENTS CMS

Global Fund Procurement Support Services Strategies Pooled procurement Information sharing and using internally Forecast sharing externally Competition fostering StrategyMechanismDescription Contracting with one or more external procurement agent(s) to offer comprehensive procurement services to recipients Collecting information on recipients’ procurement activities and strategically sharing and using it to enable better market outcomes Aggregating demand forecasts from recipients and sharing them strategically with selected external entities to achieve positive market outcomes for recipients Supporting the increase in number of suppliers  PFSCM  PSI  PQR  Country Profile and PSM Plans  Supplier Meetings  Funding Availability  Direct Payment  ITBs

VPP Procurement Principles Main Objective Resolve procurement bottlenecks & contribute to improved grant implementation and performance. 1.Simplify the procurement process but maintain transparency and competition 2.Ensure compliance with GF Quality Assurance Policy 3.Establish procurement methods for each product category reflecting market situation 4.Reduce the timelines for procurement process 5.Ensure globally accepted prices 6.Facilitate timely payments 7.Ensure timely deliveries of health products

VPP Enrollment and Participation - April 2010

Capacity Building Services Addressing Systems and Building Capacity Nigeria – Budget $9m –Review and re-design of LMIS –Store assessment and upgrading/renovation to standard –Transport system design –Quantification and procurement planning Gambia – Budget $400,000 –Orientation of PR PSM units and organisational capacity building –Store assessment and upgrading/renovation to standard –Quantification and procurement planning –Improvement of LMIS –Quality Assurance procedures Liberia – Budget $ 1.5m –PSM Organization and Coordination (Master Plan development ) –MOHSW leadership capacity building –Legal Framework, QA –Partner Coordination