Regional procurement policies and access to medicines - lessons from the SADC Pooled Procurement project Wilbert Bannenberg SARPAM

Situational Analysis: Key Challenges Limited transparency and poor availability of information Prices, quality, sources of medicines Use of TRIPS flexibilities Reluctance to disclose information Varying availability of selected medicines Lack of standardisation on procurement and pricing information difficult to compare between countries Various levels of development of medicines regulatory systems – no MRAs in some countries Shortages of qualified staff in fields of specialisation No coordination in efforts to strengthen PSM systems Demographic and economic differences among countries 2

Percentage of NMPA prices below the international MSH benchmark 3

SADC Pharmaceutical Business Plan: Promoting joint procurement 1.Evaluate options for pooled procurement for priority medicines and harmonize procurement regulations 2.Identify the priority essential medicines which can bring about the largest savings from pooled procurement or price negotiations 3.Identify and facilitate access to funding sources and finance mechanisms for joint procurement 4.Establish a regional mechanism for pooled procurement of medicines 5.Assess and strengthen national procurement agencies and supply chain management systems

SARPAM Pooled Procurement project Based on SADC Pharmaceutical Business Plan SADC Health Ministers wanted PP since 1997! Efforts did not work due to Drug Regulatory and Procurement system differences SARPAM developed proposal to start with information exchange between Procurement Agencies 13 countries now sharing information At same time, SARPAM started Drug Regulatory harmonisation project Common Technical Document being implemented SADC PP Strategy developed in 2012

SADC Pooled Procurement Strategy Developed by a working group from SADC Member States and partners WHO, UNDP, MSH with technical assistance from SARPAM Discussed and approved by SADC Ministers of Health and HIV/AIDS – Nov 2012 SARPAM facilitating implementation of the strategy Member States choose taking a step-wise approach: Recognition of challenges – 14 sovereign states vs region Prioritise information and work sharing first Group contracting in a later phase

The 4 Pooled Procurement models (Adapted from MSH, 2012) Informed Buying Member States share information about prices and suppliers but undertake individual procurement. Coordinated Informed Buying Member States undertake joint market research, share supplier performance information and monitor prices. Countries undertake individual procurement. Group Contracting Member States jointly negotiate prices and select suppliers. Countries agree to purchase, individually, from selected suppliers. Central Contracting and purchasing Member States jointly conduct tenders and awards contracts through an organisation acting on their behalf. Central buying unit manages the purchase on behalf of countries 7

PP Strategic Objectives To establish a mechanism for regional procurement of medicines and related commodities. To mobilise resources for the SADC regional procurement for Essential Medicines and Commodities To develop and harmonise policies and guidelines for procurement of Essential medicines and Commodities. To facilitate trade and movement of Essential Medicines and Commodities in the region This includes working on using TRIPS flexibilities!

Intersectoral Cooperation Between the Health sector and Trade (and customs): increased medicines’ trade among MS Finance: ensure resources Procurement: procurement guidelines Legal affairs: legislation and regulations While including development partners, private sector (SAGMA) and Civil Society

Main Responsible Parties SADC Pharmaceutical Procurement Services (SPPS) SADC Secretariat MOH Pharmaceutical Departments Procurement Agencies (e.g., NDSO) Regulators (e.g., LMRA) Partners Suppliers Ministries of Trade, Finance, Justice

Pooled Procurement Benefits Considerable savings by applying information and work sharing among procurement agencies Leading to improved access to essential medicines Development and implementation of regional standards and procedures will lead to increased efficiency Quality assured medicines through regulatory harmonisation Functional regional pharmaceutical procurement agency (SPPS) offering procurement services like information sharing, work sharing, coordination, (e-) procurement services including group contracting

Information & Work Sharing Platform 1.To make available to stakeholders in SADC Member States all key information on medicines that are on the market in the region information on prices, sources and quality of at least 50 essential medicines and other difficult to source products 2.To make available information on ‘good practices’ in SADC Member States on pharmaceutical Procurement and Supply Management (PSM) systems including procedures and tools used a database of expert staff in Member States that apply these practices.

ACT prices on SADC e- platform

Price comparison per product

Big differences....

SADC can save 18% or $100m

Seychelles data (last 12 months)

ABC analysis data Medicine Dosage FormPack Size Unit of MeasureQuantity Pack PriceSupplier costperccum% Lopinavir 200mg, Ritonavir 50mg capsule/tablet120capsule/tablet667 $ 30,80Aspen $ ,7% Lopinavir 200mg, Ritonavir 50mg capsule/tablet112capsule/tablet625 $ 30,80Abbott Laboratories $ ,9%24,6% Paracetamol 120mg/5ml suspension/syrup100ml35000 $ 0,45Cipla Limited $ ,7%34,4% Salbutamol 100mcg/dose inhaler200dose8000 $ 1,20Cipla Limited $ ,9%40,3% Ceftriaxone 1g injection1vial5500 $ 1,59Sandoz Pty LTD $ ,4%45,7% Carbamazepine 200mg capsule/tablet100capsule/tablet1800 $ 3,95Medochemie Ltd $ ,4%50,1% Amoxicillin 500mg capsule/tablet1000capsule/tablet240 $ 28,90CSPC Zhongnuo Pharmaceutical (Shijiazhuang) Co. Ltd $ ,3%54,4% Sodium valproate 200mg/5ml suspension/syrup300ml700 $ 9,07Wockhardt Ltd $ ,9%58,3% Lamivudine 150mg, Zidovudine 300mg capsule/tablet60capsule/tablet667 $ 7,88Glaxo Smithkline South Africa Pty Ltd $ ,3%61,6% Lamivudine 150mg, Zidovudine 300mg capsule/tablet60capsule/tablet300 $ 16,20Aspen Pharmacare $ ,0%64,6% Amoxicillin 500mg capsule/tablet $ 0,02Adcock Ingram Healthcare Pty Ltd $ ,6%67,2% Amoxicillin 250mg capsule/tablet1000capsule/tablet240 $ 16,60CSPC Zhongnuo Pharmaceutical (Shijiazhuang) Co. Ltd $ ,5%69,7% Amoxicillin 250mg capsule/tablet1000capsule/tablet150 $ 26,20Kent $ ,4%72,1% Omeprazole 20mg capsule/tablet100capsule/tablet1200 $ 2,70Wockhardt Ltd $ ,0%74,1% Omeprazole 20mg capsule/tablet $ 0,04Bristol-Myers Squibb $ ,9%76,0% Omeprazole 20mg capsule/tablet100capsule/tablet1000 $ 2,70Wockhardt Ltd $ ,7%77,7% Carbamazepine 200mg capsule/tablet $ 0,03Sterop $ ,6%79,3% Erythromycin 250mg capsule/tablet $ 0,05Milpharm $ ,5%80,8%

What to do? Issues Frequent procurement (small warehouse, budget?) Small quantities (minimum order quantitiy) Buying from multinational companiesor private sector wholesalers Brandnames rather than generics Patient specific medicines selection in HIV/AIDS and cancer treatment Possible solutions Critically review sources, starting with ARVs, antibiotics, NCD meds and fast-runners Increase budget, warehouse? Framework contracts? Non-profit wholesalers Buy generics, inform consumers about generics Standardize protocols where possible

Finally... SADC member states: Pooled Procurement implementation plan approved Options paper for SPPS approved SADC Secretariat) agreed to establish the information sharing e-platform SADC member states meet week 22 September in JNB Acknowledgement - based on a presentation by : Geoffrey Ngwira, SARPAM Pooled Procurement Officer Phone: