PAHO Policy in the Procurement of Pharmaceutical Products for Projects Financed by the Global Fund to Fight HIV/AIDS, TB and Malaria
The Pan American Health Organization has developed this short document titled 'PAHO Policy in the Procurement of Pharmaceutical Products for Projects Financed by the Global Fund to Fight HIV/AIDS, TB and Malaria' (GFATM) for countries and Principal Recipients (PR) of grants from the GFATM that may require support in the procurement of pharmaceuticals financed by the GFATM.
The document presents important information to support countries and PR in pharmaceutical procurement and health supplies management, coherent with the requirements of the GFTAM. The policy indicates that PAHO can provide procurement services to the PR, but within the broader context of technical support.
The document aims to clarify some important questions in relation to procurement of medicines financed by the GFTAM, and specifically:
• addresses criteria for the selection of health products to be purchased
• outlines methods for quantification of requirements
• specifies PAHO/WHO supplier selection criteria, including criteria for source selection of HIV/AIDS antiretrovirals
• presents details of PAHO procurement services, in support of technical activities
The procurement process should be considered as only one component of the supply management process, which requires continuous input, planning and programming at the national level in order to ensure the flow of products through the supply chain and to avoid possibilities of product stock-outs. The implementation of coherent and efficient pharmaceutical management policies can ensure continuity in treatment, reduce the possibility of drug resistance, and lead to significant improvement in the quality of life for persons living with HIV/AIDS, tuberculosis and malaria.
José Luis Di Fabio
Area Manager, THS
Policy Objective:
The following policy applies to the procurement of 'medicines', 'pharmaceutical products' or 'multisource pharmaceutical products' as defined by the World Health Organization in the glossary, 'Marketing Authorization of Pharmaceutical Products with Special Reference to Multisource (Generic) Products: A Manual for Drug Regulatory Authorities'. This information is found at www.who.int/medicines/.
The procurement policy aims to ensure that any pharmaceutical product financed by a GFATM program grant and procured through PAHO applying 'WHO Principles for Good Pharmaceutical Procurement', in accordance with the 'Global Fund Policy on Pharmaceutical and Other Health Products', and following 'PAHO Procurement Procedures and Regulations'. Specifically, it is expected that application of the policy will ensure that Principal Recipients receive the most cost-effective pharmaceutical products of quality, in correct quantities, procured on a timely basis, and at the lowest possible cost.
Operational Elements of the Policy
1. Selection of Pharmaceutical Products
In accordance with GFATM guidelines, Principal Recipients using PAHO procurement services for the purchase of pharmaceuticals must ensure that required products are included in national treatment guidelines, or the essential drug list of the WHO, the Member State, or the Principal Recipient as defined in the relevant grant agreement. Countries and recipients wishing to purchase products not included in one of the above lists should seek approval from the GFATM in writing before proceeding with procurement.
PAHO may provide technical assistance to the Principal Recipient on written request to ensure that drug selection conforms to the above criteria and needs of the country.
2. Estimation of Needs
Prior to requesting PAHO to solicit prices on its behalf, a Principal Recipient should ensure that product requirements are initially based on morbidity data, and thereafter on product consumption and estimated scale-up rates, and in accordance with the approved proposal. Stock management parameters within the supply chain must be taken into account to avoid stock outs. Upon written request, PAHO may provide technical assistance to countries to finalize the estimation of requirements, including supply chain management, product forecasting and evaluation of consumption patterns.
3. Selection of Suppliers
On official request by the Principal Recipient, PAHO will solicit prices from a list of pre-qualified suppliers of pharmaceutical product. Product quality is to be ensured through the rigorous application of criteria in the source selection of product:
• For single or limited-source pharmaceuticals including HIV/AIDS Antiretrovirals (ARVs):
- A product listed in the most recent edition of the UN Pilot Procurement Quality and Sourcing Project (ref. http://www.who.int/medicines/organization/qsm/activities/pilotproc/suppliers.doc) or
- A product authorized for use by the regulatory authority of a member of the Pharmaceutical Inspection Convention (ref. http://www.picscheme.org/index.htm) or
- A product authorized by the regulatory authority of a member of the International Conference on Harmonization of Technical Requirements for the Registration of Pharmaceuticals for Human Use (ref. http://www.ich.org/) (ref. http://www.ich.org/).
• For multisource pharmaceutical products:
- Manufacturers and secondary suppliers that have been evaluated and prequalified by PAHO, providing evidence from the National Drug Regulatory Authority that they conform to current requirements of Good Manufacturing Practices, and apply appropriate standards in quality assurance and control to the products they are selling.
• For Second Line Drugs used in the Treatment of Multi-Resistant Tuberculosis:
- Products supplied through the Green Light Committee of the Global Stop TB Partnership.
4. Price Solicitation and Procurement
At the request of the Principal Recipient, PAHO will solicit prices from pre-qualified suppliers in a manner that ensures effective competition, transparency and accountability in accordance with the 'Interagency Operating Principles for Good Manufacturing Practices', and following PAHO Procurement Rules and Regulations. The Principal Recipient will receive a consolidated price estimate indicating the lowest price per product consistent with quality criteria, and indicating the name of the product's manufacturer. Product prices normally are presented either on an FCA or CIP basis, freight and insurance at cost (ICC Incoterms 2000). The Price Estimate will include an administrative fee which is calculated by multiplying 3% times the cost of the product. Freight and insurance costs are not included in the calculation of the administrative fee.
It is the responsibility of the Principle Recipient to ensure that products selected comply with the Member State's patent protection regulations.
PAHO will proceed with procurement of a product upon receipt of a written request from the Principal Recipient, and upon receipt of funding adequate to cover the cost of the order plus PAHO's administrative fee.
5. Shipment
All pharmaceuticals purchased through PAHO will be consigned to the Principal Recipient who is responsible for all customs clearance procedures and associated costs. Copies of purchase orders and shipping documents will be provided to the Principal Recipient institution prior to delivery. PAHO will coordinate delivery with the consignee, normally through the PAHO Country Office.
6. Administrative and Technical Support
Principal Recipients wishing to avail of PAHO procurement services for the purchase of pharmaceutical products financed under a GFATM funded program must coordinate technical and administrative elements of the procurement process through the relevant PAHO Country Office. The Country Office, in turn, will coordinate with relevant technical program offices and the Procurement Services Unit at PAHO Headquarters, Washington DC. Similarly, PAHO communication and support to the Principal Recipient normally will be channeled through the PAHO Country Office.
