[insert country] [insert name of component] [insert Principal Recipient] [insert proposal title]

Pharmaceutical and Health Product Management (PHPM) Assessment Tool

INTERNAL USE AND CONFIDENTIAL The information in these documents is confidential and is not subject to public disclosure pursuant to the Global Fund Documents Policy.

This report is prepared for the Global Fund by: [insert name of LFA] [insert name of LFA lead assessor] [insert date]

Introduction Pharmaceutical and Health Product Management (PHPM) are cornerstone activities of most Global Fund grant recipients. The availability of Global Fund resources provides unprecedented opportunities to procure, store and distribute significant volumes of health products used in the fight against AIDS, tuberculosis and malaria. However, there are also significant risks involved; not only could scarce resources be wasted, poor quality products may potentially cause severe damage to the health and well-being of those affected by the diseases. Purpose This tool allows for a focused assessment of systems and structures to be used for the effective management of pharmaceuticals and other health products within public health interventions financed by the Global Fund. The purpose of the assessment is to determine whether (1) the procurement and supply management plan of a nominated Principal Recipient (PR) adheres to the Global Funds policies, (2) the nominated PR has the capacity to implement the plan. Based on the findings of the assessment, the LFA will provide recommendations to the Global Fund as to whether a nominated PR has the capacity to implement its proposed procurement and supply management plan or, which next steps should be taken before it may do so. Application This tool is a checklist that reviews the various activities related to Pharmaceutical and Health Product Management to be used during grant implementation. It is to be used in order to complete Part VI of the Principal Recipient assessment report. The completed tool should not be submitted to the Global Fund. Please note that all questions included in this checklist should be considered when completing Section VI of the PR assessment report. Please ensure that any additional relevant issues that may arise during the assessment should also be addressed in the PR Assessment report Mandatory standard background reading Guide to Global Funds Policies on Procurement and Supply Management. Geneva, Switzerland, November 2006. Available at:

http://www.theglobalfund.org/pdf/guidelines/pp_guidelines_procurement_supplymanageme nt_en.pdf

The Global Funds Procurement and Supply Management Assessment Tool

 Interagency guidelines on operational principles for good pharmaceutical procurement.

1999 (available at: http://www.who.int/3by5/en/who-edm-par-99-5.pdf)

Sources and prices of selected medicines and diagnostics for people living with HIV/AIDS, June 2005 (available at: http://www.unicef.org/supply/files/sourcesandprices2005.pdf ) Untangling the Web of Price Reduction, 10th edition. Mdecins Sans Frontires. July 2007.

The Global Funds Procurement and Supply Management Assessment Tool

(available at: http://www.msf.or.jp/pressroom/img_press_report/pdf/Untangling_10th_edition_July2007.p df) Drug patents under the spotlight, sharing practical knowledge about pharmaceutical patents. MSF, May

2003. (available at: http://www.accessmed-msf.org/documents/patents_2003.pdf) Determining the patent status of essential medicines in developing countries. Health economics and drugs. Geneva, World Health Organization, 2004. EDM series No.17 (WHO/EDM/PAR/2004.6) Fact Sheet: Pharmaceutical Patents, Obligations and Exceptions. Geneva, World Trade Organization,

The Global Funds Procurement and Supply Management Assessment Tool

Sept 2006 (http://www.wto.org/english/tratop_e/trips_e/factsheet_pharm00_e.htm accessed 1 August 2007).

A. Procurement policies and systems

Yes, No, N/A A.1 Who among the PR staff is responsible for procurement under the Grant? Comments: The procurement officer is responsible for procurement under the grant. The JD &CV of Procurement Officer NZ is attached along with JD and CV of Senior Executive Officer NZ who is in charge of all activities of procurement at NZ. Does the above entity(ies) have a procurement procedure manual in adherence to the Interagency Guidelines on Operational Principles for Good Pharmaceutical Procurement? If yes, skip to question A.5 Review procurement procedures manual and identify its strengths and weaknesses. Please note if such a manual does not exist or if it does not correspond with the A.2 Interagency Guidelines on Operational Principles for Good Pharmaceutical Procurement. Comments: The Procurement Manuals of NZ are attached (Drugs Procurement & General Procurement) A.3 Is the actual procurement process competitive, efficient and transparent? Comments: As practiced by NZ the procurement process is competitive, efficient and transparent. (Example: Comparison of 3 quotations on current market rates and also taking into consideration limited time frame in which the product/s need to be procured and delivered in different cities. Comparison format attached) What is the anticipated duration of the procurement cycle (as applied under this Grant) calculated in months from "product selection" until "arrival of goods"? Comments: The anticipated duration of procurement cycle is 1 month.

A.4

B. Intellectual Property Rights B.1 Is the country a Member of the World Trade Organization (WTO)? Comments: Yes the country is a member of WTO since 1995 B.2 If yes, is the country least developed according to its submissions to the WTO? Comments: Does the country have a patent law that allows for the patenting of pharmaceutical products? Is the country a member of a regional organization administering a patent system that includes pharmaceuticals?

B.3

Comments: B.4 If the country is classified as a Least developed country, have government authorities within the country taken steps to permit the non-enforcement of patents on pharmaceutical products? Comments: If the country is not a least developed country, does its national patent law (or/and , if it apply, the regional intellectual property agreement) provide for the grant of government use and/or compulsory licenses? Comments: Are the procurement authorities presently purchasing generic (off-patent) versions of pharmaceutical products that are on-patent in the country? Comments: All pharmaceuticals procured are procured under patent names only that have been approved by NDRA and are available in market. Does national law permit parallel importation of patented pharmaceuticals? Comments: NZ will not be importing any pharmaceuticals as all pharmaceuticals required for service delivery under PR-1 in Year 1 & 2 are for primary care and are available in local market. (please see Medicine and ASD material list attached)

B.5

B.6

B.7

C. Quality Assurance systems and capacity National Drug Regulatory Authority (NDRA) C.1 Is there an established NDRA performing the drug regulatory functions? If not, please describe the national drug regulatory system currently in place. Comments: NZ as PR-1 will only be procuring drugs for primary care and these medicines are available in local market with approval of National Drug Regulatory Authority of Pakistan and to my understanding the Drug regulatory functions in this question is related to drugs to be procured for TB, Malaria and HIV& AIDS only. Which of the following QA/QC procedures does the NDRA apply: Drug registration? Import-licensing? Quality Control Pharmacovigilance Are NDRA requirements likely to have a negative impact (e.g. delays, limiting competition etc.) on the implementation of the Grant? Comments: Drugs to be procured by PR-1 are for primary care (e.g. cough, fever, headache, stomach problem, STIs medicine etc) which are available in market after approval of NDRA and PR-1 will be procuring these medicines from local market so there will be no negative impact on the implementation of the grant. If yes, how can this impact be overcome (e.g. registration waiver, fast-track registration etc.?). Comments: Who/which department is responsible for quality assurance and quality control (QA/QC) of products procured under the Grant?
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Yes, No, N/A

C.2 a) b) c) d) C.3

N/A YES YES YES N/A

C.4

N/A

C.5

The Global Funds Procurement and Supply Management Assessment Tool

Comments: Quality Assurance of pharmaceuticals to be procured by PR-1 is for primary care of clients (e.g. cough, fever, headache, pain killers, infections, wounds dressing etc). These medicines are available in local market. The Quality Assurance of these medicines will be done by PR procurement department and Medical Officer of NZ with the supervision from NZ Management Team at the time of selecting product and vendor. The Quality Control of these medicines will be done by Procurement Officer of PR-1 with the support from SRs and through M&E department as well. Goods received note will be confirmation of good quality product received at Coc site. It will also be done by M&E through field visits and randomly asking clients about the services provided to them by SRs Single and limited-source pharmaceutical products Is the PR familiar with the Global Fund QA policy and does the PR have the capacity C.6 to implement the QA policy? Comments: Yes. Multi-source pharmaceutical products C.7 Are the multi-source products procured under the Grant subjected to and in compliance with NDRA requirements (e.g. registration)? Comments: N/A

Quality control Does the party responsible for QA/QC systematically draw random samples of all C.8 pharmaceutical batches? Comments: To my understanding this question is related to pharmaceutical batches for HIV & AIDS related pharmaceuticals, However NZ has a history of requesting their centers in different cities to send random samples of pharmaceuticals received by vendor to NZ head office so it can be made sure that the procured pharmaceuticals comply with standards as described by NZ and agreed with supplier at the time of product selection and placing order. C.9 Are samples regularly tested by a qualified laboratory (e.g. accepted for collaboration with WHO pre-qualification project; accredited in accordance with ISO17025; AND/OR accepted by a stringent authority)? Comments: The pharmaceuticals procured under GF grant by PR-1 will be used for Primary care of clients. These pharmaceuticals are approved by NDRA and are available in local market for purchase by general public. The medical stores and suppliers obtain license from government after proper verification and meeting the requirements as set out by government, However to my understanding the above mentioned testing is required for product procured related to HIV/AIDS.

N/A

D. Product Selection D.1 Who/which department is responsible for product selection under the Grant?

10

Comments: Procurement Officer / Procurement department will be responsible for selection of products in consultation with NZ Senior Management Staff, Medical staff and relevant center Managers and also based on prior experience. NZ management staff, NZ doctors, Managers and procurement department staff are well experienced to select, negotiate, arrange and manage the product selection process. D.2 Is the nominated PR aware of Global Fund policy regarding product selection and how does the nominated PR (intend to) adhere to this policy? Comments:

E. Management Information Systems E.1 Does the PR have an adequate Management Information System(s) to keep track of stock levels and consumption data of health products to be procured under this grant? (Please describe the system in place) Comments: The track of consumption for health products (namely syringes, condoms, avil, sunny plast and spirit swabs) are all available through the software currently used by NZ. (Hard copy of Data sample from software attached) The consumption of health products can be calculated if and when required on daily, weekly, monthly or annually basis which ever the case may be. The stocks of health products can be verified at any given day through stock registers as they are properly recorded on daily basis at all centers. Also when ever new demand is generated it is required by procurement department that copy of stock register showing updated current balance and quantity required for next period to be mentioned in demand form so consumption and stock balance can be calculated and also to confirm that the forecast is properly done. For this purpose the daily demand form, service delivery form, daily report and cumulative monthly report are also used. (the different form are attached) Is the system in place adequate to provide reliable, complete and regular reports to central level to enable appropriate revision of quantities to be ordered? Comments: Yes the system is reliable and reports are generated regularly(e.g. daily reports , weekly reports and monthly reports) so that consumption and stock balance can be calculated at any day. This data is also a major factory for procurement department in deciding the revision of quantities to be ordered for next period if and when required. As the data gives the information regarding use per day, per week and per month it is reliable and is very useful in deciding consumption on daily, weekly and monthly basis. (Software print out, daily report & monthly report format attached)

E.2

F. Forecasting F.1 Who/which department is responsible for forecasting (including forecasting of buffer stocks) under the Grant? Comments: Procurement Officer with supervision by Senior Executive Officer, Doctor and M&E department is responsible for forecasting based on targeted population as shown in the plan. (see forecasting and distribution plan attached for health products) Practically every NZ center has at least 1 (one) Medical Officer who generates demand for next month keeping in mind last month consumption. The demand is forwarded to Head Office for procurement. The demand generated is forwarded to Senior Medical Officer for scrutiny by procurement officer if required and after verifying the demand is sent back to Head Office as final list for procurement. (Please see attached monthly demand form format.
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The Global Funds Procurement and Supply Management Assessment Tool

F.2 a) b) c) F.3

How were forecasts developed for required quantities of health products under this Grant? Consumption method, using quantities of drugs distributed and dispensed to patients? : NZ uses this method as it is the most reliable source of data and this is calculated by looking at the mobile van medical register for daily service delivery. Morbidity method, using population, case detection rate, and patient segmentation? Other method? Comments: The forecasts are developed keeping in mind the number of clients to be served in each quarter under GF for Yr1 & Yr2. (Please see attached Annex A-1) How are forecasts validated? Comments: This is done by regularly checking service delivery reports generated on daily basis forwarded to M&E and management section to keep a track record of consumption of all products forecasted. Are adequate volumes of buffer stocks planned at relevant levels? Comments: According to NZ current practice when the stock of health products and pharmaceuticals reaches a point of request indicator (RI) new demands by centers are generated. The RI is identified by keeping in mind the time required for next delivery by supplier. This is also explained in procurement manual. The request indicator is based on daily consumption or monthly consumption and new demand should be generated when RI is reached so that the remaining days are treated as buffer stock till next supply is made. (Please see example in procurement manual) How is forecasting data managed (e.g. use of Information Systems)? Comments: All forecasting for centers and demands by centers are maintained on computers as soft copies and also in form of hard copies for future reference and for comparison to decide if forecasting needs to be revised. Are forecast presented based on reliable data and methods? Comments: All forecast are based on actual consumption and service delivery reports by centers, However in GF grant PR-1 has made forecasts considering targets set for each quarter for each SR. Are (and how are) forecasts of parallel procurement efforts appropriately harmonized with the procurement under this Grant? Comments:

F.4

F.5

F.6

F.7

G. Receipt and storage G.1 Who/which department is responsible for receipt and storage of procurements under the Grant? Comments: The PR office will carry out all activities of procurement and the procured items will be delivered to SRs directly. The SRs will be responsible for receipt and storage of procured items. It will be made sure that the Coc sites are adequately equiped and in accordance with good storage standards as described in NZ Manual. Is the storage capacity adequate and appropriate for the expected products? If not, describe plans to which plans exist to improve and/or expand storage capacity (with a timetable).

G.2

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Comments: The store capacity is explained in procurement manual of NZ. As described in manual all requirements as per GF standards will be met and SRs will also be educated and trained regarding good storage practice. All standards required for good store capacity will be adhered to as also explained in NZ procurement manual. (Please see NZ manual attached) G.3 Is sufficient and adequately trained staff available to handle the supplies procured under the Grant? Comments: The items to be procured under GF fund are similar to what NZ has been procuring and keeping in mind the previous outcomes it is quite evident that NZ has sufficient and adequately trained staff available to handle the supplies procured under the Grant. (JDs and CVs of concerned staff are attached for review) G.4 Is adequate storage equipment available at critical levels (e.g. pallet racks, trolleys, forklifts, refrigerators etc.) to handle products procured under the Grant? Comments: All equipment required to handle products procured under GF grant will be available and also that the equipment available is relevant to activities to be performed to make sure that all products procured are handled and stored properly. Are storage conditions (e.g. temperature, humidity, cleanliness) appropriate? Comments: Fridges will be available where items need to be stored in temperature controlled environment (like medicines) proper racks will be installed, cleanliness will be made sure. All points mentioned in NZ procurement manual regarding storage conditions will be made sure by regular visits and inspections and also by giving proper training to relevant staff regarding proper storage conditions and proper guidance on how to maintain a store which will be done through NZ procurement manual (see manual attached) Which inventory control mechanism is used (e.g. bin cards, ledgers, computers) and is this system reliable? Comments: Stock Registers and soft record on computers for inventory control are maintained at all sites. (see copies of stock register attached) Is a physical inventory check of all products carried out at least annually? Comments: Physical inventory check is done regularly. This is also done to confirm FEFO. Further to this inventory is done at three different levels. (1) When daily demands are taken out for service delivery the store in charge after taking out daily demand rechecks the inventory to make sure that it is in accordance with the physical balance available. (2) During visits from Head Office including but not limited to Internal Auditor the physical inventory of stocks is also checked and verified, this can also be verified from Internal Audit department. (3) During Visit by funding authority / donor the visiting member is also shown and he/she checks the physical stock again stock registers and signs the stock registers as confirmation of verification. (see copies of stock register attached) What is the average stock turnover time? Comments: Since demands are generated on monthly basis considering monthly service delivery reports so all procurement for pharmaceutical and Health products are done on monthly basis. So average stock turnover time is 1 month. In GF procurement will be done on quarterly basis so average stock turnover will be 3 months. Are adequate security measures in place to prevent theft of stored products?

G.5

G.6

G.7

G.8

G.9

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Comments: Security guards are hired at sites where store facilities are maintained. Addition to this it is made sure that the locks on doors are properly working. (see also procurement manual security measures) G.10 Does the PR have an insurance cover for the stock in case of damage or theft? Comments: Since the quantity of items being procured by NZ are for consumption within 1 month therefore insurance cover for the stock procured is not done previously, but if its compulsory requirement by GF it can be adopted where applicable. Is there a policy and practice of storing and issuing stock according to first expiry/first out inventory control procedures at all levels? Comments: On every fresh delivery by supplier item/s received are physically examined and checked one by one for quality control and also for expiry date. This is also done to make sure that the items received reconcile with the copy of purchase order. Also as explained earlier in point G.7 this is also practiced after every 15 days to make sure that the items near to expiry are distributed first, this is also explained in NZ procurement manual for Drugs. (See procurement manual attached) What systems are in place to deal with expired products at either the nominated PR or sub-recipient sites? Comments: As per previous practice the expired item/s are returned to supplier. At time of receiving fresh supplies from supplier if an item is expired it will be handed over to the supplier for proper disposal of the item/s under good faith. Since there is continuous process of checking of all consumable items for expiry dates after every 15 days if an items is about to reach its expiry the vendor is requested on during his visit for delivery of supplies to change the near to expire items (This may happen when one items is not being used in field as much as it should be and the shelf life is about to expire due to usage of that item, the vendor may be asked to replace that item with some other item which is near to stock out or which is more in use).

G.11

G.12

H. Distribution H.1 Have detailed distribution arrangements been described and agreed upon? Comments: Medicine distributors, Medical stores /suppliers which have adequate arrangements for delivery of pharmaceutical at various cities of the country have been contacted. Distribution can also be carried out through local goods distribution service provider as per previous practice. Is there a documented product distribution schedule for all (sub-) recipients (e.g. monthly, quarterly etc.)? Comments: Yes a detailed product distribution plan for all products have been documented (this included Distribution schedule of syringes, condoms etc please see distribution schedule attached) Are resources available for product distribution, including number and storage capacity of vehicles as well as availability of petrol and drivers, sufficient for the approved Global Fund proposals? Comments: As practiced all items procured by NZ are ordered on monthly basis and these quantities were manageable within the centers. The products procured were delivered directly to NZ centers by selected suppliers and these products were distributed to clients by these centers. Distribution of these products was done by mobile service delivery vans and through Out Reach Workers on motorbikes. Is transportation outsourced at any level of the supply chain management system? If yes, to whom is the responsibility outsourced and how effective has it been?

H.2

H.3

H.4

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H.5

Comments: As per previous practice the suppliers were contracted with the condition that they will supply procured products at NZ offices / sites. This has been very effective, cost efficient and also less time consuming. Describe the sources of significant delays to AIDS, TB and/or malaria product distribution in the last 12 months (if any) and the actions taken since to prevent such delays in the future. Comments: To ensure secured distribution of products, what additional security measures are taken in distribution systems, e.g. insurance cover, locked cases or covered vehicles? Comments: Since the services are provided to clients in field it is made sure that the vehicles are covered (in GF Suzuki Bolan will be used as same vehicle are used by NZ which is already a covered vehicle) Services are also provided by Out Reach Workers on motorbikes, to make sure that the items are securely delivered to clients on bikes special bags are procured by NZ to unsure safety of items carried by ORWs on bikes.

N/A

H.6

H.7

What material accounting systems and processes are in place to ensure that the exact amount and type of products dispatched from the nominated PR site are received at the sub-recipient sites? Comments: Goods received note is required from all centers where procured items are delivered. The Center in charge is required to complete the goods received note with quantities received for each item/s from supplier and center in charge is required to send one copy to Head Office and one copy to supplier as receipt. This is done to make sure that the exact numbers of items procured are delivered at relevant center and it is also required by accounts department for release of payment to supplier. This also helps in QA/QC of the item/s procured and supplied by the supplier as each items is checked one by one after verification of item/s Goods received note is forwarded. Does the shelf life of products appear to be well-managed throughout the supply chain? Comments: Since NZ procured products that are to be consumed within 1-3 months duration so it is made sure that the shelf life is more than at least three months, and also since the FEFO is followed and products inventory checked after every 15 days and also forecast is validated every month it is made sure that the product is distributed and consumed well before the shelf life expires.

H.8

I. Rational drug use Standard treatment guidelines Are updated National Standard Treatment Guidelines available for relevant diseases? I.1 Comments: Yes guidelines are available (STI & VCT see attached guidelines) Are available guidelines consistent with protocols specified in Global Fund proposals? I.2 If not, how will inconsistencies be resolved? Comments: National guidelines are used by NZ Are all guidelines supposed to be available at central, regional, district, and local I.3 levels? If not, explain which guidelines are available at which level. Comments: Yes guidelines are available at all centers. Adherence, resistance and adverse drug reactions Are there appropriate mechanisms (including but not limited to fixed dose combination drugs, once-a-day formulations, blister packs, peer education and I.4 support and in accordance with existing international guidelines) in place to encourage:
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N/A

a) b) c)

Adherence to treatment? Monitor and contain resistance? Monitor adverse drug reactions? Comments:

N/A N/A N/A

J. Health products other than pharmaceuticals Are non-durable products quality assured adhering to the same principles as for pharmaceuticals, namely from lists of 1) pre-qualified products, where they exist, or 2) products accepted by stringent regulatory agencies or 3) products accepted by national standards? Comments: All non-durable products procured are under national standards. For durable products(equipment), has the lowest possible price taken into account the Total Cost of Ownership (TCO), including the cost of reagents and other consumables as well as costs for user training, warranty, maintenance ? Comments: The lowest price for durable good have been taken into account and also considering prices of previous procurement of similar products. (See copies of current market quotations attached) Has the nominated PR provided a plan for service and maintenance of durable products? Comments: NZ has a policy of signing of contracts with service providers or companies who provide maintenance and carry out service of durable products for a fixed annually payment as agreed. NZ prefers that such a company should either have offices in all cities where our sites exist otherwise service providers of relevant cities are contacted for maintenance and to carry out service as and when required for a fixed annual contract.

J.1

J.2

J.3

K. Management and Coordination (including of sub-recipients) Who/which department level is responsible for the overall management and K.1 coordination of activities related to pharmaceutical and health product management under the Grant? Comments: Senior Program Manager & Procurement Officer of PR-1 is responsible for the overall management and coordination of activities related to pharmaceutical and health products management under this grant with the support from NZ management staff. Program Officer of each Coc site will also be responsible for overall management and coordination. K.2 Does this overall management and coordination capacity appear to be adequate? Comments: NZ has experience of providing services simultaneously in eight (8) cities of Punjab and has done an excellent job in management and coordination of activities related to pharmaceutical and health product management. Are competent and adequate numbers of staff available to conduct and/or coordinate the proposed PHPM activities under this grant? Comments: Please see CVs attached

K.3

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K.4

How does the nominated PR intend to direct, monitor (and where necessary, take corrective action) and report on the PHPM activities conducted by sub-recipients to ensure that the Global Funds policies are implemented and enforced? Comments: SRs will be trained and educated about PHPM activities as per global fund policies and monitoring of PHPM activities of SRs will be done through visits by procurement officer and also with the help of M&E department. Different types of service delivery forms developed by NZ will play major role in monitoring service delivery and management of pharmaceutical and health product. (please see forms) Does the nominated PR have adequate capacity to ensure sub-recipients compliance with Global Funds procurement policies? Comments:

K.5

K.6

Are plans in place to expand the availability of human resources where applicable? Comments:

K.7

Have any PHPM activities been underestimated or overlooked in the budget/PSM plan? Comments:

K.8

Will patients/clients be charged for products procured under the Grant? If yes, explain in detail (in principle, this is against Global Fund policy). Comments: All services provided by NZ are free cost and same will be practiced in GF funded program. Is there a risk of overlap or duplication of health product provision by the Global Fund and other donors? If yes, how is this risk mitigated?

K.9

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Comments:

18