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

2. 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

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

4. 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

5. 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

6. 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

7. 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)

8. 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

9. 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

10. 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 Jun’ 11

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 Sep’ 11

12. 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 Jun’ 11

13. 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 Sep’ 11

14. 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

15. 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

16. Systematic Capacity Building Process

17. 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

18. 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

19. 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

20. Accessing VPP and CBS