India-WHO Essential Drugs Programme implemented by Delhi Society for Promotion of Rational Use of Drugs (since 1997)

Delhi State  Population – 14 million  Total no. of hospital beds – 4000  Teaching hospitals – 2  Total number of health centers – 158 Drug annual budget – Rs. 400 million ($ 8 million)

Before Drug Policy Access  30-35% of health budget spent on drugs yet scarcity of drugs in the hospitals and both patients and doctors were not satisfied

Access  Shortage of drugs in the public health facilities  Multiple procurement arrangements leading to sub-optimal utilization of resources  Uncertainty of quality of drugs Before Drug Policy

Quality assurance  Erratic and unreliable distribution system – –Drugs nearing expiry drugs –Drugs not needed (combination drugs) –Herbal drugs  Money wasted on substandard drugs

After Drug Policy-1997 Principles of procurement  Procurement restricted to essential drug list  90% of drugs budget spent on essential drugs

After Drug Policy-1997  Pooling of drug requirement of all state health facilities  System of inviting quotations by each institution independently abandoned

After Drug Policy-1997  Level playing field to all bidders –No special preferences to public sector undertakings and small scale units  Pooled procurement system set up with a standing Special Purchase Committee to secure transparency and objectivity

Standing Purchase Committee  Chairperson is a non-government person  Principal Secretary Health  State Director Health Services  State Drugs Controller  Nominee of the State Finance Department  Nominee of the State Law Department  An eminent clinical pharmacologist  Chairperson, Committee for selection of essential drugs  Head of institution

Non officials  An eminent administrator  An eminent clinical pharmacologist  A Finance & contract expert  A leading private practitioner This was an innovative move intended to bring outside expertise, transparency and objectivity

Purchase committee  Close linkages have been maintained with drug selection and use  The chairperson of the Essential drugs committee is a member of the purchase committee  Continual liaison with other agencies like Defence establishment for feedback about suppliers performance

Procurement methods  Empanelment of pre-qualified bidders Or  Open competitive bidding each year

 Bidding restricted to empanelled pre-qualified bidders not followed as it: –Debars new players albeit for a limited time –Leads to sense of complacency –Possibility of cartels developing amongst empanelled bidders Procurement methods

 Open competitive bidding each year with pre-qualification criteria introduced

Pooled procurement system Selection criteria  Tenders invited from manufacturers only in generic names in 2 envelope system –Technical and price bids  Price bids of only those manufacturers are opened who fulfill the technical criteria  Unsuccessful bidders are informed and earnest money returned

Pre-qualification criteria  Financial viability - at least annual turnover of Rs. 120 million ($ 2.5 million) Pooled procurement system

Pre-qualification criteria  Technical qualifications – bidder should have been –Manufacturing the drug for at least 3 years –WHO-GMP certification Pooled procurement system

Pre-qualification criteria  Services of at least one approved manufacturing chemist and one quality control chemist  No case pending against manufacturer for sub-standard or spurious drugs  No black listing by any other procurement agency Pooled procurement system

Quality assurance  Careful selection of the tenders  Criteria of cut off turnover – Rs. 120 million ($ 2.5 million)  Selective GMP inspections  Testing of batch samples  Samples sent for testing by the prescribers for quality assurance

Quality Assurance – GMP inspections  Panel of 12 experienced experts set up for GMP inspections  Two experts sent for inspection to any of the pharmaceutical  The inspection results of the approved firms (White list) shared with other states on request  Rejection rate is 25%  Samples sent to approved quality control laboratories for quality assurance

Quality assurance results -CPA cell  Total no. of drug batches tested in  No. of samples declared not of standard quality 20  Total expenditure on testing Rs. 25,92, % of the budget for drugs

Positive effects  Maximal use of available resources  Procurement at lower prices led to availability of more funds for procuring more essential drugs  Increased availability of drugs  Improved quality of drugs procured, therefore, building up trust in the system Pooled procurement system

 Better availability and accessibility to drugs in the public sector by savings through an efficient procurement system Conclusions No extra funds spent other than GMP inspections

Impact of State Drug Policy - Pooled procurement  Cost of procurement reduced  Holding the price line  Quality of medicines better  Access to medicines increased

Pooled availability of drugs, extent of prescriptions by generics and adherence to EDL Percent Year under review

Price/10 units (Rs.) Years  59%  37%  43% Cost Reduction of common drugs by pooled procurement (Rs.)