DIRECTORATEOF

DIRECTORATE OFLEARNING
LEARNINGSYSTEMS
SYSTEMS

DISTANCEEDUCATION
DISTANCE EDUCATIONPROGRAMME
PROGRAMME

DRUGMANAGEMENT
DRUG MANAGEMENTAND
ANDRATIONAL
RATIONALUSE
USE

Unit33
Unit
ProcurementAnd
Procurement AndMedicine
MedicineQuality
QualityAssurance
Assurance

Allan and Nesta

Allan and Nesta
Ferguson Trust
Ferguson Trust

1
Unit 3: Procurement And Medicine Quality Assurance

A distance learning course of the Directorate of Learning Systems (AMREF)

© 2007 African Medical Research Foundation (AMREF)

This course is distributed under the Creative Common Attribution-Share Alike 3.0 license. Any
part of this unit including the illustrations may be copied, reproduced or adapted to meet the
needs of local health workers, for teaching purposes, provided proper citation is accorded
AMREF. If you alter, transform, or build upon this work, you may distribute the resulting work only
under the same, similar or a compatible license. AMREF would be grateful to learn how you are
using this course and welcomes constructive comments and suggestions. Please address any
correspondence to:

The African Medical and Research Foundation (AMREF)

Directorate of Learning Systems
P O Box 27691 – 00506, Nairobi, Kenya
Tel: +254 (20) 6993000
Fax: +254 (20) 609518
Email: [email protected]
Website: www.amref.org

Writer: Dr W.B. Odinga Oduol, DPharm. MSc (Pharmacol.), RFell. (BGA) Berlin
Chief Editor: Joan Mutero
Cover design: Bruce Kynes
Technical Co-ordinator: Joan Mutero

The African Medical Research Foundation (AMREF wishes to acknowledge the contributions of
the Commonwealth of Learning (COL) and the Allan and Nesta Ferguson Trust whose financial
assistance made the development of this course possible.

2
Contents

Unit Introduction.............................................................................................................1
Unit Objectives............................................................................................................1
Section 1: Procurement.....................................................................................................2
Introduction......................................................................................................................2
Section Objectives.......................................................................................................2
What is Procurement?......................................................................................................2
The Procurement Cycle...................................................................................................4
Forecasting...................................................................................................................6
Quantification of Drug Requirements.............................................................................8
Choice of Procurement Method.....................................................................................13
Distribution of the Medicines........................................................................................24
Steps in Quantification..................................................................................................11
Donations of Medicine And Health Commodities........................................................27
Summary........................................................................................................................30
Section 2: Quantifying Medicine Requirements...........................................................31
Introduction....................................................................................................................31
Section Objectives.....................................................................................................31
Quantification Methods.................................................................................................32
The Consumption Method.........................................................................................32
The Morbidity Method..............................................................................................32
Adjusted Consumption Method.................................................................................38
Service-Level Projection of Budget Requirements...................................................40
Sources Of Data.............................................................................................................41
Stock Records............................................................................................................42
Health Facility Registers............................................................................................43
Other Uses of Quantification Results............................................................................46
Summary........................................................................................................................47
Section 3: Medicine Quality Assurance........................................................................48
Introduction....................................................................................................................48
Section Objectives.....................................................................................................48
What Is Quality Assurance In Medicine Procurement?................................................48
Purpose of Quality Assurance.......................................................................................49
Principles of Quality Assurance....................................................................................51
Assessing Drug Quality.................................................................................................61
Critical Elements of A Comprehensive Quality Assurance Program............................63
Obtaining Products of Good Quality.........................................................................64
Maintaining Quality Of Pharmaceutical Products.........................................................67
Personnel And Training In The Supply System........................................................68
Summary........................................................................................................................69

i
Abbreviations and Acronyms

AIDS Acquired Immune Deficiency Syndrome

ARI Acute Respiratory Infections

ART Antiretroviral Therapy

CMS Central Medical Stores

GMP Good Manufacturing Practices

HIV Human Immunodeficiency Virus

INN International Nonproprietary Name

KEMSA Kenya Medical Supplies Agency

MIMS Monthly Index of Medical Specialties

NGO Non-governmental Organisation

UNICEF United Nations Children’s Fund

WHO World Health Organization

2
Unit Introduction

Welcome to Unit 3. In the last unit we discussed issues to do with selection of medicines. You
studied selection and formularies, systematic cost reduction and the roles and responsibilities
of stakeholders in managing drug supply. In this unit you will learn about procurement,
quantification and medicine quality assurance.

This Unit is also divided into three sections:

Section 1: Procurement,
Section 2: Quantifying Medicine Requirements, and
Section 3: Medicine Quality Assurance.

Unit Objectives

By the end of this unit you should be able to:

 Explain the process of procurement;

 Discuss how to maintain the quality of medicines;
 Quantify your medicine requirements and make reliable forecasts of needs;
 Discuss the importance of quality assurance in medicine procurement.
Section 1: Procurement

Introduction

The pharmaceutical procurement system is a major determinant of drug availability and total
health costs. In most developing countries, drug purchases represent the single largest health
expenditure after personnel costs. Drugs also consume the major share of health-related
foreign exchange.

The purpose of this section is to enable you to understand the process of procurement and
how to maintain the quality of medicines. This is important in order to ensure the availability of
affordable and good quality medicines when required.

Section Objectives

By the end of this section you should be able to:

 Explain the importance of effective and efficient procurement process;

 Describe the steps in the procurement cycle;
 Describe the methods of procurement of drugs;
 State the characteristics of a good pharmaceutical procurement system
 Identify potential problems associated with accepting medicine donations;
 Formulate and implement guidelines for accepting medicine donations.

What is procurement?

What is Procurement?

Procurement is defined here as the process of acquiring supplies from private or public
suppliers or through purchases from manufacturers, distributors or agencies such as the
United Nations Children’s Fund (UNICEF), the World Health Organization (WHO), or bilateral
aid programs.

These sources may be used individually or in combination to meet the entire range of your
drug needs.
Before you read on, do the following activity. It should take you 5 minutes to complete.

ACTIVITY

What qualities would you like to see in an effective procurement system?

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Qualities of an Effective Procurement Process

An effective procurement process should:

 Procure the right drugs in the right quantities;

 Obtain the lowest possible purchase prices;
 Ensure that all drugs procured meet recognized standard of quality;
 Arrange timely delivery to avoid shortages and stock-outs;
 Ensure supplier reliability with respect to service and quality;
 Set the purchasing schedule, formulas for order quantities, and safety stock levels to
achieve the lowest total cost at each level of the system;
 Achieve these objectives in the most efficient manner possible.

Given the impact of procurement activities on the operation and effectiveness of health
services, it is essential that these activities be performed by trained staff who:

 use sound procedures,

 work in adequate offices with good communications,
 have access to reliable inventory and consumption information.

Good procurement management demands medical, pharmaceutical, managerial, economic,

and often political expertise.

The key objectives of drug procurement are that the commodities must be:
 the right ones;
 in the right quantities (full supply);
 of good quality;
 and at the lowest possible or affordable price.
When a health system sets up a pharmaceutical procurement program, it is in effect,
developing a group purchasing program for health regions, districts, and individual health
facilities. The purchases of group members may be financed centrally through government
allocations or donor contributions, or in a decentralized way through drugs fees, or some other
combination of financing alternatives.

The Procurement Cycle

The procurement cycle includes most of the decisions and actions that determine the specific
drug quantities obtained, prices paid, and quality of drugs received.

Steps in the Procurement Cycle

The procurement cycle involves the following steps:

 reviewing drug selection;

 determining quantities needed;
 reconciling needs and funds;
 choosing procurement method;
 locating and select suppliers;
 specifying contract terms;
 monitoring order status;
 receiving and check drugs;
 making payment;
 distributing drugs;
 collecting consumption information.

See figure 3.1 for an illustration of the procurement cycle.

Drug Selection
As stated earlier, as many as 70% of the pharmaceuticals on the world market are duplicative
or nonessential. Many are minor variations of a prototype drug and offer no therapeutic
advantage over other drugs that are already available. Others show high toxicity relative to
their therapeutic benefit, or are newly released with insufficient information on efficacy and
toxicity. It is for this reason that the WHO set out a criteria for selection of essential drugs.
Figure 3.1: The procurement Cycle.

WHO Criteria

 Essential drugs are those that satisfy the health care needs of the majority of the
population; they should therefore be available at all times in adequate amounts and in
appropriate dosage forms.

The choice of such drugs depends on many factors, such as:

 o the pattern of prevalent diseases;
o the treatment facilities;
o the training and experience of the available personnel;
o the financial resources;
o the genetic, demographic, and environmental factors.

 You should only use drugs for which sound and adequate data on efficacy and safety are
available from clinical studies, and for which evidence of performance in general use in a
variety of medical settings has been obtained, should be selected.

 Each selected drug must be available in a form in which adequate quality, including
bioavailability, can be ensured. Its stability under the anticipated conditions of storage and
use must be established.

 When two or more drugs appear to be similar in the above respects, the choice between
them should be made on the basis of a careful evaluation of their respective efficacy,
safety, quality, price and availability.

 In cost comparisons between drugs, the cost of total treatment, not only the unit cost of the
drug, must be considered. The cost – benefit ratio is a major consideration in the choice of
some drugs for the list. In some cases, the choice may also be influenced by some other
factors, such as pharmacokinetic properties, or by local considerations, such as the
availability of facilities for manufacture or storage.

 Most essential drugs should be formulated as single compounds. Fixed-dose combination

products are acceptable only when the dosage of each ingredient meets the requirements
of a defined population group when the combination has a proven advantage over single
compounds administered separately in terms of therapeutic effect, safety or patient
adherence to treatment.

Forecasting

What do you understand by the term forecast? Put your thoughts on paper by doing the
following activity.

ACTIVITY

Write down your definition of the term forecast.

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Now confirm your answers as you read the following discussion.

The term “forecast” simply means estimating what will happen in future based on certain
assumptions. Therefore, forecasting in drug procurement simply means the ability to estimate
the future needs of a programme based on certain assumptions, so that we can plan to meet
those needs. The period of forecasting may be short-term (1 year or less), medium-term (1 to
3 years) or long-term.

Good forecasting requires the following:

 Technical skills;
 Financial resources;
 Well-informed policy makers;
 Political will;
 Good management systems in place at all levels.

What do you need to take into account when forecasting drug needs at the
National/Programme Level?

The following are the inputs used in forecasting drug needs at the national level. We shall use
an example of forecasting for HIV/AIDS related drugs:

 HIV prevalence data, i.e. the estimated number of people infected with HIV/AIDS in a
population. For example, the HIV prevalence in Kenya in 2006 was estimated at about
6%;
 Policy changes, e.g. change in guidelines for ART;
 National targets for patients on ART, e.g. the WHO 3 by 5 target for Kenya for patients to
be put on ART was 95,000 patients on ART by end 2005;
 Number of facilities offering HIV care and ART in a region;
 Service statistics, e.g. number of clients seen in a given period;
 Commodity consumption data from health facilities offering ART;
 ARV Stock status (at the central store (e.g. KEMSA), and at the health facilities offering
ART).

ACTIVITY

What would you take into account when forecasting your drug needs in your health facility?
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When forecasting at the Health Facility level, you need to take the following into account:

 Number of patients who need the drug;

 Capacity of the facility, such as:

- Are there adequate staff (e.g. clinicians, lab personnel, pharmacists, etc) available to
run the particular clinic, for example, a HIV clinic?
- How many patients can be seen per day, week, month?
- Is there adequate storage space for the quantities ordered?

 The need to change-over patients from one regimen to another over time, e.g. in the case
of HIV/AIDS, from 1st line to 2nd line ART, which means that the drugs ordered will
change over time.

Thus forecasting is very important because it ensures that you always have enough
commodities in stock to meet your needs.

Quantification of Drug Requirements

Quantification involves estimating the quantities of specific drugs needed for procurement.

Quantification is not a new concept. We do it everyday in our private lives. For example, we
quantify how many litres of milk we consume every day and use that as the basis to budget for
our monthly milk needs.

Why do we quantify?

We quantify in order to determine:

 If the commodities will be adequate for the number of patients targeted to be put on
treatment or maintained on treatment;
 The cost of commodities required thus enabling budgeting;
 To justify need for funding to donors;
 To ascertain if storage space for the commodities is available and adequate
 To factor in donations.

Thus most quantification exercises do not just look at the numbers required but also estimate
the financial requirements to purchase the drugs. The quantification methods presented here are
normally used to forecast needs for an annual or semi-annual procurement. They are not
usually used to calculate routine order quantities in an established supply system that uses
scheduled purchasing (periodic orders) or perpetual purchasing (orders placed whenever need
arises).

Figure 3.1: Successful drug quantification requires a team effort

Quantification Methods

The four general methods for quantification are:

1. the consumption method,

2. the morbidity method,
3. the adjusted consumption method, and
4. the service-level projection of budget requirements.

Table 3.1 below gives a comparison of these quantification methods.

Table 3.1: A Comparison of Quantification Methods

Method Uses Essential Data Limitations
Consumption First choice for Reliable inventory Must have accurate
procurement forecasts, records; consumption data
given reliable data; Records of supplier lead Can perpetuate
Most reliable predictor time. irrational use
of future consumption.

Morbidity Estimating need in new Data on population and Morbidity data not
programs or disaster patient attendance; available for all
assistance; Actual or projected diseases;
Estimating needs in incidence of health Standard treatments
programmes that are problems; may not really be used
scaling-up. Standard treatments
(ideal, actual);
Projected drug costs

Adjusted Procurement Comparison area or

consumption forecasting when system with good per
other methods are capita data on
unreliable; consumption, patient
Comparing use with attendance, service
other supply systems levels, and morbidity;
Number of local health
facilities by category;
Estimation of local user
population broken down
by age.
Service-level Estimating budget Utilization by service Variable facility use,
projection of needs levels and facility type attendance, treatment
budget Average drug cost per patterns, supply system
requirements attendance efficiency

These methods will be discussed in greater detail in the next section. Let us look at the
general steps in quantification.
Steps in Quantification

Step 1: Prepare a List of Drugs to be Quantified.

The drug list should be prepared and sorted into the order that will best facilitate data
collection, and distributed to those officials and facilities that will enter consumption data.

Step 2: Determine the Period of Time to be reviewed for Consumption.

If the procurement is to cover a twelve-month period, the consumption data for the past
twelve months should be reviewed (if a full year’s data are available).

A twelve-month review may also be used for a procurement covering six months, but if there
are no significant seasonal variations, it may be better to use the same six-month period from
the preceding year. A short review period such as three months is inadequate to plan a
procurement to cover twelve months, unless the three months reviewed reflect a steady state
of consumption for the entire year.

Step 3: Enter Consumption Data for each Drug.

For each drug on the list, enter:

 The total quantity used during the review period, in basic units;
 The number of days in the review period that the drug was out of stock (if it is impossible
to determine the number of days out of stock with accuracy, the estimated number of
months out of stock during the period can be entered);
 The lead time last procurement (or the average from the last several procurements).

It is important to use the most accurate and current record available. The likely sources for
consumption and lead time data are:

 Stock records and distribution reports from a central distribution point;

 Stock records and reports from regional or district warehouses;
 Invoices from suppliers;
 Dispensing records from health facilities

If projected pricing data are available at this stage, it may save time to enter prices while
entering consumption data.

Step 4: Calculate the Average Monthly Consumption.

The average monthly consumption is a key variable in the quantification formula and should
be as accurate as possible. The simple approach is to divide total consumption by the number
of months reviewed. If there were stockouts during that period, the average must be adjusted
to include the consumption that would have occurred if stock had been available.

There are two ways to account for stockouts when computing average monthly consumption.
The recommended method is to enter the total consumption and divide this by the number of
months in the review period minus (the total number of days out-of- stock in the same period
divided by 30.5 to convert to months).
Step 5: Calculate the Safety Stock Needed for each Drug.
Safety stock is the quantity of commodity kept as reserve to avoid stock-outs due to delayed
deliveries or increased demand. The longer the lead time, the more the safety stock needed.
Safety (buffer) stock is needed to prevent stockouts, although high levels of safety stock
increase inventory holding costs and should be avoided. In some supply systems, the safety
stock is set for each item at a fixed quantity or a fixed number of months’ worth of
consumption. However, the preferred method is to calculate the safety stock based on the
average consumption and the expected lead time. The average monthly consumption from
step 4 is multiplied by the average lead time.

This safety stock level is calculated in order to avoid stockouts, by assuming that the item is
reordered when only the safety stock remains, the supplier delivers within the projected lead
time, and consumption is no greater than the average.

For vital items, it may be necessary to adjust the safety stock to cover variations in
consumption or lead time. The simplest method multiplies the basic safety stock by an
adjustment factor.

Step 6: Calculate the Quantity of Each Drug Required in the Next Procurement Period.
The calculation is done in three main steps. First, the average consumption is multiplied by
the sum of the lead time and the procurement period, yielding the total needs before
considering safety stock, stock on hand, or the stock on order. The second step is to add the
quantity needed for safety stock. Finally, the quantity of stock on hand and the stock on order
are added together, and then subtracted from the previous total.

Step 7. Adjust for Expected Changes in Consumption Pattern.

Some changes in consumption may be independent of trends in overall patient utilization.
One example is predictable seasonal variation in the consumption of cough and cold
remedies. A potential spike in an epidemic disease such as cholera is another example. If this
is anticipated, it would be sensible to increase estimates for drugs such as ORS, parenteral
solutions, and some antibiotics; this does not mean that the need for all drugs will increase by
the same factor.

Step 8. Adjust for Losses.

To avoid stockouts, it is necessary to adjust quantification estimates to allow for losses.

Step 9. Compile Decentralized Quantifications (if Applicable).

In a decentralized quantification, staff at each facility or storage point enters their own
consumption quantities and stockout information, and the estimates of the individual facilities
are totalled and compiled on the master quantification list.

Step 10. Estimate Costs for Each Drug and Total Costs.
In order to estimate procurement costs, multiply the quantities estimated for each drug by the
most accurate prediction of the expected next purchase price (not the last one).

Once the expected price has been entered for each drug, multiply the price by the estimated
quantity needed to obtain the total procurement value for each drug.

After the estimated procurement value has been estimated for each drug, the final step in the
basic quantification process is to add up the estimated procurement values for all drugs to
obtain the total expected costs for the procurement.
Step 11. Compare Total Costs with Budget and Make Adjustments
If the total expected procurement cost exceeds the available budget, there are really only two
choices: either obtain more funds or reduce the number of drugs and/or the quantities
ordered.

So far we have looked at the whole issue of procurement and how to quantify your drug
requirements. Let us now look at drug donations and how we should handle them.

Adjusting and Reconciling Final Quantities

In life, we are often asked to make difficult decision, whereby we have to choose between
several very important alternatives. Similarly in drug management, one is also faced with
difficult decisions, whereby, you are called upon to reduce the number of drugs and /or the
quantities of drugs until the estimated quantities and costs correspond with the available
budget. These reductions may require policy decisions regarding priority diseases, priority age
groups, and priority facilities for supply, selection of less expensive therapeutic alternatives,
and changes to standard treatment guidelines.

In Unit 1, we learnt about the various tools that can help you to make reductions rationally,
such as, the VEN (vital, essential, nonessential) categories, ABC analysis, and therapeutic
category analysis.

Another way to provide a foundation for reduction is to cross-check the quantification method
you have used with another method. This will help you to find out whether the quantified
estimate is much higher than necessary based on known morbidity and attendance data or
much higher than that in a comparable health system.

When quantifying, we are always tempted to leave out adjustments for expected losses as the
first step in reducing quantities. You will agree with us that this is what is called false
economies, unless of course you can indeed eliminate losses. If not, then losses are likely to
occur and they must be incorporated into the final quantification, otherwise stockouts will
almost certainly result. It may be possible to cut the overall percentage allowed for losses by
targeting the allowance for those items most at risk and/or eliminating the adjustment for non-
vital drugs. Either way, some stockouts will result for drugs that are not covered.

Choice of Procurement Method

Before you read further, do the following activity. It should take you less than 5 minutes to
complete.
 ACTIVITY

List the methods that are used to procure commodities in your health facility?
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Now read through the section below and see if your ideas are included.

There are numerous mechanisms by which governments, nongovernmental organizations

(NGOs), and other organizations procure drugs. Virtually all pharmaceutical procurement
methods, at any level of the health system, fall into one of four basic categories: open tender,
restricted tender, competitive negotiation, and direct procurement.

Each of these methods can be used with any of the standards purchasing models – annual,
scheduled, or perpetual review – given the right sort of procurement contract.

Lets briefly discuss each of these procurement methods.

Open tender: Open tendering is a formal procedure by which quotations are invited from any
manufacturer or manufacturer’s representative on a local or worldwide basis, subject to the
terms and conditions specified in the tender invitation. International competitive bidding (ICB),
as specified in World Bank (1993a) guidelines, is a tender open to all interested international
manufacturers from World Bank member countries.

Restricted tender: In a restricted tender – also called a close bid or selective tender -
interested suppliers must be approved in advance, often through a formal prequalification
process that considers adherence to good manufacturing practices (GMPs), past supply
performance, financial viability, and related factors. The prequalification process is often open
to any supplier that wishes to apply.

Competitive negotiation: In competitive negotiation, the buyer approaches a limited number

of selected suppliers (typically at least three) for price quotations. Buyers may also bargain
with these suppliers to achieve specific price or service arrangements. Competitive
negotiation is also called negotiated procurement or international or local shopping.

Direct procurement: this is the simplest, but usually most expensive method of procurement.
It involves the direct purchase from a single supplier, either at the quoted price or at a
negotiated price. For single source drugs (that is, those under patent with no licensing
agreements that allow other firms to manufacture the drug), the buyer has two choices to
either use direct procurement or select an alternative drug.

In the initial stages of developing a new pharmaceutical procurement system, it may be best
to start with a relatively simple purchasing method. For instance you can have a combination
of negotiating with known suppliers, negotiating with international procurement agencies, and
local tendering. This will bring supplies into the system quickly while a more elaborate
tendering system is being developed.

Some of the well-known international procurement agencies are listed in the annual
International Drug Price Indicator Guide (MSH 1995).

International open tenders usually attract the most competitive offers and potentially the
lowest prices. Although international tenders are sometimes limited to primary manufacturers,
they should include reputable international procurement agencies to ensure that at least one
reliable bid is received for most tendered products.

Virtually all professionally managed pharmaceutical procurement organizations, such as

private companies, and government drug procurement units, purchase most large volume
items by restricted tender or by competitive negotiation from a limited list of reliable suppliers.

The following table gives a comparison of the various tender methods.

Table 3.2. Comparison of Procurement Methods

Procurement Brief Effect on Procurement Workload Need for Conditions
Method Descrip- Price Lead Time For Evaluating Favoring Use
tion Procureme Suppliers
nt
Office
Open tender Bidding open Usually Moderate to High High When many
for all lowest long reputable suppliers
interested price are available and
parties likely to be
interested
If prequalification is
not feasible or not
allowed by
regulation or
donors provisions
Restricted Participation Favor- Moderate to High High When substantial
tender of suppliers able long list of registered
is limited to suppliers has been
those who developed
have When capacity
registered exists to manage
with the prequalification and
government supplier monitoring
or who have
prequalified
Competitive The buyer Can be Short to Moderate High Experienced
negotiation approaches favourable moderate purchasing office
a small with good access to
number of market intelligence
potential Low-price or small-
suppliers volume items
and bargains When special terms
for specific or specifications are
price or required by the
service buyer for items not
arrange- widely available
ments Emergency
purchases to
supplement tender
Direct Purchase is Usually Short to Low High Emergency
procurement made highest moderate purchases when
directly from prices negotiation is not
a single possible
supplier at Purchase of single-
the quoted source drugs
price Low-price or small-
volume items

Some procurement offices use a combination of methods: open or restricted tender for large
volume items, and competitive negotiation or direct procurement for lower volume or
emergency supplies.

An experienced pharmaceutical buyer may be able to purchase effectively using only

competitive negotiations with known reliable suppliers. However, this requires excellent
access to market intelligence and reliable, flexible access to funds for procurement. In most
circumstances, procurement for the public sector is best done through formal competitive
methods.

In most countries, laws and government regulations dictate the procurement method to be
used, often based on the value of the goods being purchased

Good Pharmaceutical Procurement Principles

Pharmaceutical procurement practices vary widely from country to country. However, nearly
two decades of experience with essential drugs programs and many more years of experience
with large government-run pharmaceutical supply services in a number of countries have
suggested a number of key principles summarized below:

Procurement by Generic Name

 Use generic names (international nonproprietary names) for fair competition.
 Specify quality standards, not specific brands, for drugs with bioavailability problems.

Procurement Limited to Essential Drugs List or Formulary List

 Select safe, effective, cost-effective drugs.
 Use formal approval procedures for procurement of non-listed drugs.
Procurement in Bulk
 Concentrate purchases on limited list to increase quantities, reduce price.
 Specify divided deliveries.

Formal Supplier Qualification and Monitoring

 Use formal supplier qualification based on drug quality, service reliability, and financial
viability.
 Approve suppliers before tendering (prequalification) or after (postqualification).
 Use a formal monitoring system to ensure continued supplier qualification.

Competitive Procurement
 Use competitive bidding on all but very small or emergency purchases to obtain the best
prices.
 In restrictive tenders, only prequalified suppliers compete.
 In open tenders, suppliers must be evaluated after submission of bids.

Sole-Source Commitment
 All contracted drugs are procured from winning supplier.
 Enter into no separate deals with noncontracted suppliers.

Order Quantities Based on Reliable Estimate of Actual Need

 Develop reliable consumption records and morbidity data.
 Systematically adjust for past surpluses, shortages, stockouts.
 Adjust for expected program growth and changing disease patterns.

Reliable Payment and Good Financial Management

 Develop mechanisms for prompt, reliable payment.
 Prompt payment may bring down drug prices as much as bulk discounts.
 Financial mechanisms that establish separate drug accounts (e.g., revolving drug funds)
may allow the procurement cycle to operate on a separate schedule from the treasury
cycle.

Transparency and Written Procedures

 Develop and follow written procedures for all procurement actions.
 To the maximum extent possible, make information on the tender process and results
public.

Separation of Key Functions

 Separate key functions that require different expertise.
 Functions that involve different committees, units or individuals may include selection,
quantification, approval of suppliers, and award of contracts.

Product Quality Assurance Program

 Establish and maintain a formal system for product quality assurance.
 Include quality assurance product certification, inspection of shipments, targeted
laboratory testing, and reporting of suspect products.
Annual Audit with Published Results
 Conduct an annual audit to assess compliance with procurement procedures, promptness
of payment, and related factors.
 Present results to the appropriate public supervising body.

Regular Reporting on Procurement Performance

 Report key procurement performance indicators against targets at least annually.
 Use key indicators such as ratio of prices to world market prices, supplier lead times,
percent of purchases made through competitive tendering, and planned versus actual
purchases.

Selection of the Suppliers

All suppliers should be pre- or post-qualified through a process that considers:

 product quality,
 service reliability (and delivery time),
 financial viability.

The process for evaluating new suppliers can include:

 formal registration
 reference checks with past clients and international agencies,
 test purchases in small quantities,
 informal local information-gathering.

By first eliminating substandard suppliers from the tender process, prequalification ensures
that the lowest tender is qualified and thus expedites adjudication. With post-qualification, the
supplier evaluation is done after bids have been received.

Countries which do not have quality assurance testing laboratories must implement vigorous
efforts to check references of new suppliers and should buy only from suppliers that are
known to provide quality products.

Successful procurement agencies ensure continued good performance by suppliers through a

formal monitoring system that tracks lead time, compliance with contract pricing terms, partial
shipments, remaining shelf life, compliance with packaging and labelling instructions, and
compliance with other contract terms. A file for each supplier should have copies of
registration papers, references, special correspondence, complaints, and other anecdotal
information. The information system should track the number and value of tender contracts
awarded chronologically and the value of total purchases from the supplier by year.

Procurement programs using restricted tenders should make special efforts to seek out
potential new suppliers to maintain competitive pressure on established supplies.
Making the Order

Accurate estimates of drug requirements are needed to avoid stockouts of some drugs and
overstocks of others. In addition, suppliers are apt to compete for an estimated-quantity
supply contract if they believe that the quantities specified are reasonably accurate.

The most accurate way to quantify pharmaceutical needs is to start with accurate past
consumption data from all units being supplied. These data should be tempered by known or
expected changes in morbidity patterns, seasonal factors, service levels, prescribing patterns,
and patient attendance.

Unfortunately, in many countries, consumption data are incomplete or do not reflect real need
because the supply pipeline has never been full. In such cases, the morbidity-based and
adjusted consumption techniques may be needed for procurement quantifications.

Expert technical assistance in quantification may be useful in the initial phases of the
procurement program, with local officials participating to gain an understanding of the
methodology.

When funds are not available to purchase all the drugs listed in estimates, it is necessary to
reduce the list according to health system resources. The following three tools discussed
earlier can help with prioritization:

VEN (vital, essential, nonessential) analysis which classifies drugs in two or three
categories, according to how critical the drug is for treating commonly encountered diseases.
Priority is given to vital drugs.

Therapeutic category analysis which applies cost-effectiveness, cost-benefit, and/or cost

minimization methods to help select the best drugs for treating common diseases.

ABC analysis which assembles data from recent or projected procurements to determine
where money is actually being spent, allowing managers to focus first on high-cost items
when considering ways to reduce procurement costs.

Monitoring the Order Status

The recent introduction of standard indicators for monitoring performance and program
implementation has been a significant advance in drug management. Standard indicators
allow comparison of actual performance with targets, over time.

Some indicators use a standard list of ten to twenty indicator drugs, also called tracer drugs
or market basket of drugs.

Indicator drugs (or index drugs) are a small number of representative drugs. It is similar to
the market basket of common goods and services which Economists use to measure inflation
through the consumer price index. Similarly, the list of indicator drugs is sometimes called a
basket of drugs.
For ease of calculation and consistency of measurement, the number of drugs should be kept
small: a list of ten or twenty drugs usually suffices. For calculating rates and percentages, it is
convenient to use a number that divides easily into 100 (that is 10, 20, or 25).

The drugs selected should be on the national essential drugs list or national drug formulary
and should be therapeutically important. In general, drugs with a very high unit cost should be
avoided.

The table below provides a list of ten indicator drugs, grouped by therapeutic category of
tablet preparations, that should be available at all levels of the health system. Depending on
the purpose and uses of the indicators, it may be helpful to distinguish a list of ten core
indicator drugs for use at all levels of the health system and complementary list of ten
additional drugs (total list of twenty drugs) for central storage facilities and hospitals.

Table 3.3: Example of a List of Indicator Drugs

Drug Form, Dosage

Analgesic/antipyretics
Acetylsalicylic acid (aspirin) Tablet, 300mg
Paracetamol Tablet , 500mg
Anthelmintics
Mebendazole Chewable tablet, 100mg
Antibacterials
Amoxicillin Tablet, 250mg
Metronidazole Tablet, 500mg
Phenoxymethlpenicillin Tablet, 250mg
Sulphamethoxazole + trimethoprim Tablet, 400mg + 80mg
(cotrimoxazole)
Antimalarial drugs
Chloroquine Tablet, 150mg base
(as phosphate or sulphate)
Gastrointestinal drugs
Aluminum hydroxide Tablet, 500mg
Minerals
Ferrous sulphate Tablet, 60mg
(iron equivalent)

The complementary list of indicator drugs might include other dosage forms (such as
injections and topical preparations) and additional therapeutic categories (cardiovascular
drugs and contraceptives, for example). Additional drugs to consider include oral rehydration
solutions, procaine penicillin injection, paediatric paracetamol tablets, tetracycline eye
ointment, iodine, gentian violet or a local alternative, benzoic acid and salicylic acid ointment,
or retinol (vitamin A) (WHO/DAP 1993).

Larger or diverse list of indicator drugs may be useful for specific purposes.
 When first introducing performance indicators and indicator drugs, it is probably wise to keep
to a core list.

The procurement office should report on key procurement performance indicators at least
annually. Some procurement indicators such as supplier lead time and percentage of key
drugs in stock should be used to assess performance on a continuing basis.

These indicators can be adapted by mission drug services, other NGOs, and even private
health institutions seeking to control their drug costs.

Receiving the Medicines

In almost all cases, the importation and post clearing of imported drugs is carried out by an
import unit attached to the central medical stores (CMS). In the case of private organisation,
port clearing may be contracted to a clearing agent or made the responsibility of the supplier.
In such cases, the goods are delivered directly to the CMS or are collected from the agent’s
warehouse. Final responsibility for inspection remains with the CMS.

With the exception of locally purchased items, multiple copies of the supplier’s shipping
documents and supplier’s invoice should be received by the CMS before supplies arrive at the
port of entry. This information is recorded on a manual or computerized form to track each
purchase order.

In addition, the import unit should record the arrival information. This advisory is clipped to the
purchase order in the supplier’s file to await the arrival of the shipment.

When notice of shipment’s arrival at the port is received, the necessary custom’s forms are
completed.

Containers are inspected against the supplier’s shipping document. The first part of the
receiving report is completed. Any apparent damage and/or missing shipping cases are noted
and reported to the port authorities and customs officials.

When the shipment arrives at the warehouse receiving area, contents should be quarantined
until they have been checked. The receiving clerks systematically check the cases and their
contents against the supplier’s invoice. Discrepancies, variations, and damage are noted on
the invoice. A prompt and thorough inspection based on predefined criteria is essential for
quality assurance and as a precursor to any insurance claim. A checklist with sample
inspection criteria is shown below.

The annotated invoice is signed and dated by a senior staff member. Observations are
summarized on the second part of the receiving report.

One copy of the receiving report is filed according to the purchase order number to which it
corresponds. The other copy and the annotated supplier’s invoice are passed to the stock
control section. In some warehouses, a separate copy goes to the accounting department.
 Remember! When the shipment arrives at the warehouse receiving area, contents should be
quarantined until they have been checked.

The items are then entered on their respective stock record cards. The new stock-on-hand
totals are calculated, as well as the average cost per unit for each item. If a computerized
system is used, receipts are entered into the system as prescribed in the software manual.

After incoming stock has been received and approved, it is formally received from the
receiving area and moved to the warehouse to be stored in the appropriate zone.

Inspection Checklist for Drug Receipts

All Shipments
Compare the goods with suppliers with the supplier’s invoice and original purchase order or
contract. Note discrepancies on the receiving report.

CHECK THAT:
 number of containers delivered is correct;
 number of packages in each container is correct;
 quantity in each package is correct;
 drug is correct (do not confuse generic name and brand name);
 dosage form is correct (tablet, liquid, other form);
 strength is correct (milligrams, percent concentration, other measurement);
 unique identifiers are present if required, article code, ministry of health stamp, other
code);
 there is no visible evidence of damage (describe).

Take a sample for testing (if preacceptance sampling is a standard procedure).

Tablets
For each shipment, tablets of the same drug and dose should be consistent

CHECK THAT:
 tablets are identical in size;
 tablets are identical in shape;
 tablets are identical in colour (shade of colour may vary from batch to batch);
 tablet markings are identical (scoring, lettering, numbering);
 there are no defects (check for spots, pits, chips, breaks, uneven edges, cracks,
embedded or adherent foreign matter, stickiness);
 there is no odour when a sealed bottle is opened (except for flavoured tablets and
those with active ingredients normally having a characteristic odour);
 there is no odour after tablets have been exposed to room air for twenty to thirty
minutes.
Capsules
For each shipment, capsules of the same drug and dose should be consistent.

CHECK THAT:
 capsules are identical in size;
 capsules are identical n shape;
 capsules are identical in colour (shade of colour may vary from batch to batch);
 there are no defects (check for holes, pits, chips, breaks, uneven edges, cracks,
embedded or adherent foreign matter; stickiness);
 there are no empty capsules;
 there are no open or broken capsules.

Parenterals
Parenterals are all products for injection (IV liquids, ampoules, dry solids for reconstitution,
suspensions for injection).

CHECK THAT:
 solutions are clear (solutions should be free from undissolved particles, within
permitted limits);
 there are no leaking containers (bottles, ampoules).

Making Payments

Sources of Funds for Pharmaceutical Procurement

Sources of funds for pharmaceuticals include government financing, user fees, health
insurance, community co-financing and donor financing.

The most important considerations for procurement are availability of funds, adequate access
to foreign exchange, and regularity of access to funds.

Government funds are sometimes released irregularly throughout the financial year, and
regulations often specify that funds must be spent in the year for which they are allocated or
be returned to the treasury. Together, these factors make it difficult to operate proper
procurement systems and to obtain the best prices.

Strategies such as decentralized financial management and revolving drug funds are
increasingly being employed to separate drug procurement from the annual treasury cycle.
This separation also usually requires some form of cost recovery, which is managed by the
decentralized mechanism.

Uncoupling the procurement cycle from the treasury cycle has substantial management
advantages. Inventory management improves when drugs can be ordered when needed
rather than at an arbitrary point in the government fiscal year. Also prices tend to be much
more competitive when suppliers know that orders will be placed promptly after tendering and
that payment will be made upon delivery.

There are a number of drug financing issues that affect the procurement system. These
include how much revenue is raised in user fee programs, the management and accountability
requirements for successful user fee programs, the role of health insurance and other social
financing mechanisms, the role of donor financing, and related issues.

For donor financing, grants and loans should be clearly distinguished. Loans may be
necessary to finance the start-up capital for a revolving drug fund or for a major emergency.
However, they are an undesirable mechanism for financing the recurrent costs of supplying
drugs.

Access to Foreign Exchange

Pharmaceutical procurement almost always requires foreign exchange in the health system.
Shortage of foreign exchange continues to be a main constraint on international procurement
in many countries and is often a primary rationale for seeking donor support for
pharmaceutical purchases. In situations in which foreign exchange is constrained, it is
important that procurement and pharmaceutical management systems be maximally efficient,
that the best use be made of local supply sources, and that the best possible prices be
obtained in international procurement. Sound documentation of actual needs and of efficient
use of funds may help justify increases in foreign exchange allocation from the ministry of
finance or central bank.

Reliable Payment Mechanism

Sustained low drug prices are possible only when a procurement program can guarantee
prompt payment in full according to contract terms. Due to past payment problems, many
countries are forced to pay in advance through irrevocable letters of credit for international
purchases and, in some cases, for local purchases.

In the international market, it is possible to develop a payment mechanism that does not
require advance payment to suppliers. One example is the revolving fund. Suppliers care only
about payment performance, not the design of the payment scheme. Revolving drug funds
work only if there is the political will and financial capacity to replenish deposits in the fund
each time purchases are made.

Distribution of the Medicines

The distribution cycle begins when drugs are despatched by the manufacturer or supplier. It
ends when drug consumption information is reported back to the procurement unit.
 ACTIVITY

What is the importance of good distribution of drugs?

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Now read through the section below and see if your ideas are included.

Good distribution of commodities ensures that there are:

 Constant uninterrupted supplies;

 Commodities stay in good condition until they are used;
 Minimizes losses due to spoilage and expiry;
 Prevents theft and fraud;
 Maintains accurate stock;
 Uses storage locations that allow for on-time delivery;
 Efficiently uses transport resources;
 Enables collection of Accurate information for forecasting (World Bank, 2004)

The major activities of the distribution cycle include:

Drug procurement: The distribution sequence intersects the procurement process at the
point at which drugs are available for delivery to the health facilities.

Port clearing: Unless the drugs are acquired locally, or the international supplier takes
responsibility for it, port clearing is the first step in making drugs available for distribution.

Port clearing involves identifying shipments as soon as they arrive in port, processing all
importation documents, completing any customs requirements, storing drugs properly until
they leave the port, surveying the shipment for losses and signs of damage, and collecting the
drugs as soon as they have been cleared.
Port clearing may be managed directly or through a separate contract with a port-clearing
agent.

Receipt and inspection: Central stores staff must carry out a complete inspection of every
shipment as soon as it is received from the port or local supplier.
The shipment must be kept separate from other stock until this inspection has been
completed. Inspectors should check for damaged and missing items and for compliance with
the contract conditions concerning drug type, quantity presentation, packaging, labelling, and
special requirements.

Prompt and accurate inspection of all shipments is essential to ensure that suppliers fulfill their
contracts. Insurance companies will demand an accurate record of any losses incurred before
settling a claim.

Inventory control: Establishing and maintaining effective inventory records and procedures is
very important as it helps you to coordinate the flow of drugs through the distribution system
and guard against theft and corruption.

The inventory control system is used for requisitioning and issuing drugs, for financial
accounting, and for preparing the consumption and stock balance reports necessary for
procurement.

Record keeping must be sufficiently detailed to provide an “audit trail” that accurately traces
the flow of drugs and funds through the system. This audit trail must be designed to satisfy
requirements of government auditors (and sometimes donor agencies) as well as program
managers. An appropriate inventory management system should be adapted to suit the
capacity and needs of personnel at all levels in the health program.
Inventory records must be monitored regularly by supervisors to ensure accuracy and to avoid
or detect losses.

Storage: Storage facilities may range from large mechanized warehouses to at the national
level to small wooden boxes sitting in health centers or carried by community health workers.
Proper location, construction, organization, and maintenance of storage facilities help maintain
drug quality, minimize theft and maintain regular supply to health facilities.

Requisition of supplies: Drug supply systems may operate under a push or a pull system.
The forms and procedures for requisition are a key part of the inventory control system. They
may vary from country to country and from one level to another within the same country. The
requisition system may be manual or computerized, but it should always be designed to
simplify distribution by facilitating inventory control, providing an audit trail for tracing the flow
of drugs, assisting in financial accounting, and listing drugs issued.

Delivery: Drugs may be delivered by warehouses or collected by health facilities. Transport

may involve air, water, railway, or on- and off-road vehicles. Cost-effective choices between
public- and private-sector carriers need to be made. Transport managers should select
methods of transportation carefully and schedule deliveries realistically and systematically, to
provide punctual and economic service. Vehicle breakdowns; availability of fuel, lubricants,
and spare parts; seasonal variation in access routes; safety along specific supply lines; and
other local factors must all be considered in transport planning.

Dispensing to patients. The distribution process achieves its purpose when drugs reach the
health facility or centre, where they are appropriately prescribed and dispensed to patients.

Consumption reporting: The closing link in the distribution cycle is the flow of information on
consumption and stock balances back to the procurement office for use in quantifying
procurement needs. If adequate inventory and requisition records are kept, compiling
consumption reports should be straightforward

The distribution cycle begins when drugs are dispatched by the manufacturer or supplier. It
ends when drug consumption information is reported back to the procurement unit.

Collecting the Consumption Information

In the consumption method, a list is prepared of all drugs eligible for procurement, and the
most accurate inventory records of past consumption are used to calculate the quantities
needed for each drug.

Consumption during a recent period of six to twelve months is adjusted for stockouts to obtain
the average monthly consumption. Then the average monthly consumption is multiplied by the
number of months to be covered by procurement, and safety stock levels (in months) are also
multiplied by the average monthly consumption. These two figures are added to get the gross
needs during the period, with the stock on hand and any stock on order subtracted from the
gross estimate, to derive the quantity to purchase.

The anticipated cost for each drug (not the last unit cost) is multiplied by the number of units
to be purchased to obtain the expected value for the entire quantity. All purchase values for
individual drugs are added to obtain the total expected procurement cost. If this cost is greater
than the budget, adjustments are made.

Donations of Medicine And Health Commodities

Has your health facility ever received a

drug donation? How did you establish
whether they were fit for consumption?

Donations of medicines are an essential element in alleviating peoples’ suffering, and

international relief efforts benefit enormously from regular donations by private individuals,
groups, and organizations. Unfortunately many drug donations have caused problems instead
of being helpful. That is why the World Health Organisation, WHO developed guidelines to
streamline this activity.

WHO Guidelines for Drug Donations

There are many different scenarios for drug donations. They may take place in acute
emergencies or as part of development aid in non-emergency situations. They may be
corporate donations (direct or through private voluntary organizations), aid by governments, or
donations to single health facilities. And although there are legitimate differences among these
scenarios, the basic rules for an appropriate donation apply to all. The guidelines describe
good donation practices.

The guidelines aim to improve the quality of drug donations, not to hinder them. They are not
international regulations but are intended to serve as a basis for national or institutional
guidelines, to be reviewed, adapted, and implemented by governments and organizations
dealing with drug donations.

The guidelines basically cover issues to do with the following:

 Selection of Drugs;
 Quality Assurance and Shelf Life;
 Presentation, Packing and Labelling;
 Information and Management.

Let us look at what the guidelines say about each of the above issues.

Selection of Drugs

1. All drug donations should be based on an expressed need and be relevant to the disease
pattern in the recipient country. Drugs should not be sent without prior consent by the
recipient.

2. All donated drugs or their generic equivalents should be approved for use in the recipient
country and appear on the national list of essential drugs, or, if a national list is not
available, on the WHO Model List of Essential Drugs, unless specifically requested
otherwise by the recipient.

3. The presentation, strength, and formulation of donated drugs should, as much as possible,
be similar to those commonly used in the recipient country.

All donated drugs or their generic equivalents should be approved for use in
the recipient country and appear on the national list of essential drugs
Quality Assurance and Shelf Life

1. All donated drugs should be obtained from a reliable source and comply with quality
standards in both the donor and the recipient country. The WHO certification scheme on
the quality of pharmaceutical products moving in international commerce should be used.

2. No drugs that were issued to patients and then returned to a pharmacy or elsewhere, or
that were given to health professionals as free samples, should be donated.

3. After arrival in the recipient country all donated drugs should have a remaining shelf life of
at least one year.

Presentation, Packing and Labelling

1. All drugs should be labelled in a language that is easily understood by health professionals
in the recipient country; the label on each individual container should contain at least the
International Non-proprietary Name (INN, or generic name), batch number, dosage form,
strength, and name of the manufacturer, quantity in the container, storage conditions, and
expiry date.

2. As much as possible, donated drugs should be presented in larger quantity units and
hospital packs.

3. All drug donations should be packed in accordance with international shipping regulations,
and be accompanied by a detailed packing list which specifies the contents of each
numbered carton by INN, dosage form, quantity, batch number, expiry date, volume,
weight and any special storage conditions. The weight per carton should not exceed 50
kilograms. Drugs should not be mixed with other supplies in the same carton.

Information and Management

1. Recipients should be informed of all drug donations that are being considered, prepared or
actually under way.

2. In the recipient country the declared value of a drug donation should be based upon the
wholesale price of its generic equivalent in the recipient country, or, if such information is
not available, on the wholesale world- market price for its generic equivalent.

3. Costs of international and local transport, warehousing, port clearance, and appropriate
storage and handling should be paid by the donor agency, unless specifically agreed
otherwise with the recipient in advance.

Drugs should not be mixed with other supplies in the same carton
Summary

In this section we have learnt the importance of an effective procurement process and the
steps in the procurement cycle. We have also looked at the various methods used in
procuring drugs, characteristics of a good procurement system, and how to handle medicine
donations. We hope you have found this section enjoyable. In the next section we shall
discuss in detail how to quantify medicine requirements using the methods we mentioned
earlier in this section.
Section 2: Quantifying Medicine Requirements

Introduction

In section 1, you studied the process of procuring supplies, i.e. procurement. However, in
order to carry out effective procurement, it is necessary to estimate the quantities of medicines
required. In this section, you will learn the various methods you can use to estimate your
medicine requirements in a particular supply system. Can you remember how we defined
quantification in the last section? Start by doing the following activity.

ACTIVITY

What does quantification involve? Write down your answer in the space provided.
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Well done! I believe you said that Quantification involves estimating the quantities of specific
drugs needed for procurement.

The purpose of this section is to enable you to understand the process of quantifying medicine
requirements and make reliable forecast of needs for each item in the procurement list.

Let us start by looking at our objectives for this section.

Section Objectives

By the end of this section you should be able to:

 Describe common methods of quantifying requirements;

 Describe the sources of data needed;
 Identify situations that require various quantification methods;
 Describe other uses of medicine quantification results.
Quantification Methods

You will recall that in Section 1, we said that drug needs can be quantified by using one or a
combination of four standard methods. Most quantification exercises also estimate the
financial requirements to purchase the drugs. The quantification methods described here are
normally used to forecast needs for an annual or semi-annual procurement. They are not
usually used to calculate routine order quantities in an established supply system that uses
scheduled purchasing (periodic orders) or perpetual purchasing (orders placed whenever
need arises).

The four general methods discussed here are:

1. consumption method
2. morbidity method
3. adjusted consumption method
4. service-level projection of budget requirements

Let us discuss each method in turn starting with the consumption method.

The Consumption Method

In the consumption method, a list is prepared of all drugs eligible for procurement. The
most accurate inventory record of past consumption is used to calculate the quantities needed
for each drug.

Consumption during a recent period of six to twelve months is adjusted for stockouts to obtain
the average monthly consumption. Then the average monthly consumption is multiplied by the
number of months to be covered by procurement. Safety stock levels (in months) are also
multiplied by the average monthly consumption. These two figures are added to get the gross
needs during the period, with the stock on hand and any stock on order subtracted from the
gross estimate, to derive the quantity to purchase.

The anticipated unit cost for each drug (not the last unit cost) is multiplied by the number of
units to be purchased to obtain the expected purchase value for the entire quantity. All
purchase values for individual drugs are added to derive the total expected procurement cost.
If this cost is greater than the budget, adjustments are made.

The Morbidity Method

The morbidity method uses data on patient utilization (attendances at health facilities) and
morbidity (the frequency of common health problems) to project the need for drugs based on
assumptions about how the problems will be treated.

The morbidity method requires a list of common health problems, an essential drugs list that
includes therapy for the problems, and a set of standard treatments for quantification
purposes (based on either average current practices or “ideal” treatment guidelines. For most
health problems there are at least two alternative treatments, and a percentage must be
assigned based on how frequently each regimen is used. Then the expected incidence
(number of treatment episodes) of each health problem must be estimated.

The quantification formula involves multiplying the quantity of each drug included in standard
treatment for each health problem by the number of treatment episodes expected for the
health problem. The expected total need for each drug is the sum of the estimates from all
treatment regimens in which then drug is included. Then the estimates are adjusted to fill the
supply pipeline, allowing for losses to theft and wastage. Finally, the expected cost is
calculated based on the expected purchase price of each drug, and estimates are reconciled
with available funds.

Figure 3.2: Morbidity Method

Given the limited data likely to be available on morbidity patterns and the difficulty in defining
standard treatments that are meaningful for quantification, it is difficult to apply this method to
more than fifty to one hundred health problems. This limits the method’s utility for complex
health system with many types of health problems and several levels of health facilities. In
general, the morbidity method is useful when a relatively small number of different health
problems are seen, such as in primary care and special purpose-facilities and programs.

The morbidity method is useful when a relatively small number of different health problems
are seen

Since a limited number of health problems are likely to be addressed in most morbidity-based
quantification procedures, the resulting estimates for each drug must be adjusted to cover
health problems not considered in the quantification, usually using some variant of adjusted
consumption. Adjustments may also be required to fill the supply pipeline to account for
losses, and, in most cases, to reconcile the quantities needed with the funds available.

In a simple quantification for one health problem, such as cholera, the process can be done
manually (although it is easier with a computer).

Steps in the Quantification

Step 1. Specify the List of Problems.

List the major specific health problems encountered. If there is an existing information system
that reports on diseases, these disease codes should be used; if there is no existing coding
system, the International Classification of Diseases (ICD) system should be used.

The health problem list should not be broken down into too much detail but should be defined
according to the diagnostic capacity and health problems treated each type of health facility.
At the lowest level of the system, only a limited number of problems are recognized and
treated; the range of problems diagnosed and treated normally increases at health center,
district hospital, and referral hospital levels.

Since treatments differ markedly for adult and paediatric patients, it is important to include at
least two categories (under five years and over five years) for most problems. Although it may
be tempting to provide several categories (under five, five to twelve, thirteen to sixty-five, and
over sixty-five), it is best to avoid overcomplicating the development of treatment guidelines
and the process of compiling data on treatment episodes.

Step 2. Establish the List of Drugs to be Quantified.

The objective here is a list of essential drugs that covers the major health problems and forms
the basis for standard treatment schedules. A current and appropriate national or health
system formulary or essential drugs list should be used when available. If there is no official
list, one needs to be developed; it may grow out of the process of developing standard
treatments.
The drug list must be available in two formats – one organized in alphabetical order by generic
name (INN) and one by therapeutic categories. The therapeutic categories list is most useful
in developing standard treatment schedules, and the list organized by generic name is used
for the procurement list.

Step 3. Establish Standard or Average Treatments.

Standardized or average treatment regimens are required for each health problem to forecast
drug needs. This is the most complicated part of the method. There are two basic options for
developing standard treatments: average actual treatments or ideal standard treatments. The
components are the same, but there is an important difference between the approaches:
average regimens are based on observed or reported practices and are more likely to predict
what will actually happen, whereas ideal regimens define what should happen if prescribers
follow the ideal guidelines. The results can be different between average current treatments
and standard treatments.

Which should be used? Perhaps both, in a combination approach. For example, if one
treatment regimen is viewed as ideal but another is commonly used, include both regimens in
the guidelines for quantification and estimate the percentage of treatment episodes that will
receive each of the two regimens.

In most quantification exercises, it is necessary to develop (or modify) the treatment

guidelines. Ideal standard treatment guidelines should be developed by expert committees
(with expert assistance, if needed). Unless there is reliable information on drug utilization and
prescribing patterns, a special study may be needed to determine average actual treatment
patterns; this can be combined with a study to determine morbidity patterns and incidence of
health problems.

Whichever option is used, the same information must be compiled:

 the percentage of treatment episodes in which the drug will be prescribed;

 the name of each drug and strength, with separate treatments listed for age level, as
appropriate;
 the basic unit;
 the number of basic units in each average dose for the health problem in question;
 the average number of doses of each drug per day for the problem;
 the average number of days of treatment for each drug per episode.

These components are combined to project the quantity of each drug needed for each
treatment episode in each standard treatment regimen. This projection is made by multiplying
the basic units per dose by the number of doses per day. This result is multiplied by the length
of treatment per episode, in days.

In one example, three different drug products are prescribed for otitis media for both age
groups; the drugs are the same, but the dose and dosage form differ. The quantity of
cotrimoxazole suspension needed to treat otitis media in patients under five years old is
calculated as stated. This calculation is done for all drugs in all the standard treatment
regimens.
If different treatment regimens (perhaps with multiple drugs) are used for the same disease
according to its severity, separate standard regimens must be developed and assigned for
each.

For each regimen, the proportion of patients with each disease who will be treated with each
different therapy is estimated.

If there are major differences in the way common problems are treated by different levels of
prescribers, it may be useful to estimate how many (or what percentage of) treatment
episodes of each disease will be managed by each category of prescriber, and then specify
separate treatment regimens common for each prescriber category.

Step 4. Collect Morbidity Data for Each Health Problem.

This step estimates the expected number of treatments episodes for each health problem
from step 1.

A treatment episode is “a patient contact for which a standard course of drug treatment is
required” (WHO/DAP 1988, 6.1)

Information from the regular health information system on morbidity patterns and treatment
episodes can be used for quantification. In many cases, however, this information is not
available, and a special study is needed in sentinel facilities, from which data can then (with
caution) be extrapolated. The study can take two forms: a retrospective review of records in
selected facilities (if those records are relatively accessible, complete, and accurate), or a
prospective study in a sample of health facilities. The study must be completed prior to
actually starting the quantification.

There are some key issues in conducting these studies:

 Both the number of contacts and the number of treatment episodes must be obtained in
the study of sample facilities;
 Only patient contacts that normally result in drug treatment should be counted, separate
from those that do not (such as well-child programs);
 The sample data should specify the frequency of each health problem in terms of a
common denominator, such as 1,000 inpatients or 1,000 outpatient visits (for example ,
number of acute diarrhoea cases per 1,000 outpatient contacts);
 Separate frequencies must be developed for all age groups specified in the standard
treatment guidelines;
 It may be impossible to separate curative from non curative contacts in a retrospective
review of records. Even for curative contacts, not all patients who come to facilities with
health problems receive drug therapy (although the vast majority do if there are drugs in
stock). If this is thought to be important, the proportion of cases that will be treated with
drugs can be estimated;
 The number of treatment episodes must be compiled separately for each prescriber type;
 The sample data should also specify the number of patient contacts per total population in
the area served by the sample facilities. For example, if the total population in the sample
 area was 3.9 million, and there were 3,123,408 patient contacts per inhabitant. This
average could be used to project the number of contacts in another area.

Step 5. Calculate the Number of Treatment Episodes for Each Health Problem.
There are two options for calculating the number of treatment episodes. If the number of
expected patient contacts (outpatient contacts, inpatient admissions, or both) can be
estimated directly in the target facilities, the calculations are done in one step based on the
number of contacts. If the information on contacts is not reliable, it must be estimated from the
population in the area served and the frequency of contacts per inhabitant in the target
population.

The estimated total number of patient contacts for the past year is divided by 1,000, so that
the denominators of contacts and treatment frequency are the same. (The frequency of
treatment episodes is usually expressed in treatment episodes per 1,000 contacts.). Next
multiply the expected total number of contacts in thousands by the expected frequency of the
problem to obtain then number of treatment episodes based on last year’s data. This must be
done separately for each discrete age range used in the process. If there are multiple levels of
treatment, the number of treatment episodes at each level must also be estimated.

Step 6. Calculate the Quantity of Drugs Needed for Each Health Problem.
For each health problem, the projected number of treatment episodes from Step 5 is multiplied
by the quantity of basic units specified in the guidelines for each age group (and each level of
disease severity from Step 3). This result is then multiplied by the percentage of cases that
are expected to be treated.

Step 7. Combine the Estimates for Each Drug from the Various Health Problems into a
Master procurement List.
This step combines the estimated quantities from different treatment regimens into one
master list for procurement.

Step 8. Adjust Quantities to Cover Other Health Problems.

The reliability of morbidity-based quantification increases as the number of health problems
addressed increases, but it is rarely feasible to get reliable data or estimates for all major
health problems. In this situation, the morbidity-based quantification cannot predict total drug
needs, and it is necessary to adjust for drug needs not addressed in the quantification.
Otherwise there will be stockouts.

Very often, reliable consumption data from the target system is not available for comparison.
If it were, that is the method that would be used to do the quantification., Thus instead, the
adjusted quantification method or “expert opinion” may be used to estimate what percentage
adjustment should be made to the morbidity-based estimates.

If data on drug utilization are available from another similar health system, it might be possible
to extrapolate requirements for twenty or thirty commonly used drugs and determine the
average percentage difference between the estimates produced by each method. For
example, if the extrapolated method produces estimates that average 10% higher than those
produced by the morbidity method, the quantities of all drugs could be increased by 10%.

An alternative is to survey local experts to determine what percentage of overall patient

contacts have been captured in the list of health problems used for morbidity quantification.
For example, local experts agree that about 90% of the drug needs are covered in the
standard treatments; estimated quantities could again be increased by 10%.

Step 9. Adjust for Filling the Pipeline and Current Stock Position.
So far, the calculations assume that the supply pipeline is relatively intact and that the
procurement is only replacing drugs that are being consumed. If there have been major
stockouts that need to be corrected, additional stock will be necessary to fill the pipeline.
If applicable, make adjustments for stock on hand, stock on order, and lead time as described
in consumption method to finalize the preliminary estimates.

Step 10. Adjust Quantities for Expected Losses

This procedure is discussed elsewhere. In most supply systems, losses are a reality, and
unless they are considered in the quantification process, stockouts will be unavoidable.

Step 11. Estimate Costs for Each Drug and Total Costs.
With adjustments made to cover needs for additional health problems, losses, and filling the
pipeline (if necessary), the total estimated quantity can be divided by the purchase pack size
to determine the number of packs to be ordered.

If the basic unit price is used as the basic estimate of cost, multiply it by the expected package
size to determine the expected package price. If the available prices are based on package
price, enter it directly.

To calculate the estimated procurement value, multiply the expected pack price by the
estimated number of packages to be purchased. The prices used in the estimate should be
the expected next purchase price, not the last purchase price.

Step 12. Compare Total Costs with Budget and Make Adjustments.
Reduce the estimated quantities and/or the number of drugs to conform to budget realities, if
necessary. The morbidity-based method lends itself to considering the relative therapeutic
value of drugs on the list. The important point is that when reductions are required, they
should be made rationally, with the goal of maximizing the therapeutic benefit of expenditures.

Adjusted Consumption Method

When neither consumption nor morbidity methods are feasible, the best option is to use
consumption data from another region or health system as a basis for estimation. The
adjusted consumption method uses known consumption data from one system, called the
standard, to estimate the drug needs in a similar or expanded system, known as the target.

This method can be population based, defining drug use per 1,000 populations, or service
based, and defining drug per specified patient case, inpatient admission, or rural health
center. A complete quantification may use a combination of the two methods, with different
denominators for different products.

Steps in Quantification

Step 1. Select the Standard System for Comparison and Extrapolation.

The standard facilities should, if feasible, closely resemble the region or country for which the
estimate is made in terms of geography and climate, morbidity patterns, prescribing practices.
They should have an adequate and uninterrupted drug supply (but not greatly overstocked),
fairly rational prescribing practices, and complete and accurate records of patient contacts and
drug inventory movement. Of course it may be possible to find an ideal standard data
available.

Step 2. Develop the Drug List.

As discussed earlier.

Step 3. Establish the Time Period to be Covered in Review.

Determine the number of months’ worth of data to be reviewed in the standard system.

Step 4. Review Records from the Standard System to Compile Contact or Population
Data.
Use available reports on patient contacts in the standard system; if reports are not already
compiled with suitable data, a survey of standard facilities can be done to determine the
number of patient contacts during the time period established. A similar survey might be
carried out in the target system, but if the target system has had a severe problem with
stockouts, the attendance data may not reflect the number of contacts that can be expected
once drugs are available.

Step 5. Establish the Denominator for Extrapolation.

The denominator used to extrapolate consumption can be either population in the area
served or number of patient contacts, depending on the data obtainable through step 4.
Whichever one is used, the denominator is usually thousands of patient contacts or thousands
of inhabitants in the region. In very large systems, it might be preferable to use tens of
thousands or even millions of contacts or inhabitants.

Step 6. Determine the Consumption Rate in the Standard System.

For each drug, produce an adjusted average monthly consumption. The average monthly
consumption is multiplied by twelve to obtain the adjusted annual consumption. Then divide
the adjusted annual consumption by the number of thousands of contact or inhabitants to
establish the consumption rate.

Step 7. Extrapolate the Standard System’s Consumption Rate to the Target System.
Multiply the standard consumption rate for each drug by the estimated number of thousands
of contacts or inhabitants in the target system to yield the projected requirements in the target
system.

Step 8. Adjust for Expected Losses.

Because these are very rough estimates, and because it may be unclear what percentages of
losses were experienced in the standard system, it may not be realistic to adjust for losses.
However, if there are known losses, add a percentage allowance, at least for vital drugs.

Step 9. Estimate Costs for Each Drug and Total Costs and Make Adjustments.
Multiply the projected quantities for each drug by the most accurate prediction of the next
procurement cost and reconcile that with available funds, as discussed.
Service-Level Projection of Budget Requirements

This method is used to estimate financial requirements for drug procurement based on costs
per patient treated at various levels of the same health system or, with great caution, based
on data from other health systems. It does not forecast needs for specific drugs. It is more
reliable to generalize from one region in a country to another region in the same country than
it is to extrapolate to a different country.

Like the adjusted consumption method, this method produces rough estimates because there
may be significant, but not always apparent, variations between the target health system and
the system used as a source of standard data. Possible sources of error include prescribers in
the target system using a different mix of drugs from those in the source system, variability in
disease frequency and the number of patient attendances per facility, and differences in the
effectiveness of procurement and financial management systems in the two systems.

The main requirement for this method is fairly reliable estimate of average drug cost per
patient attendance, and average numbers of patient attendances at various levels of the
standard health system. This information may not be readily available, but it can be compiled
through a special study in one part of a health system where drug supplies are consistent and
where treatment practices are considered to representative.

It is necessary to compile:

 The average number of curative outpatient attendances, non-curative attendances, and

inpatient bed-days for each type of facility in the source health system;
 The average cost per outpatient attendance, per non-curative attendance, and per bed-
day in each type of facility in the source health system.

Steps in the Quantification Process

Step 1. Establish the Categories of Facilities and Determine the Number in Each
Category.
List each type of facility to be considered in the first column. The number of facility categories
used depends on the size and scope of target health system. The number of facilities in each
category is entered in the second column.

Step 2. Determine the Patient Contact Denominators for Each Type of Facility, and
Compile or Estimate the Average Number of Patient Contacts of Each Type at Each
Category of Facility.
These data can be obtained from centrally available information or from a special-purpose
survey to determine the average number of patient contacts for each category of facility. For
each category, there may be several different types of patient contact that result in drug costs.
Minimally, inpatient and outpatient costs and contacts should be separated.

Step 3. Calculate the Average Cost per Contact.

The average cost per attendance and or bed-day is derived by dividing the total drug
purchases for the facility or facilities in the class by the total attendances or bed-days. In
facilities with both inpatients and outpatients, it is necessary to estimate the fraction of total
procurement costs attributable to inpatients, outpatients, and non-curative visits. Column four
shows the average cost data.
 Step 4. Calculate the Total Projected Drug Costs.
Multiply the average number of patient contacts for each facility (column 3) by the number of
facilities (column 1). This result is then multiplied by the average drug cost for that type of
patient in that type of facility (column 4), which estimates total financial requirements for each
type of attendance in each type of facility (column 5). This is an estimate of the probable drug
costs, on average, for each type of facility and for the system as a whole. The results are not
necessarily applicable to any specific facility.

So far we have covered the four methods used in quantification. Next let us look at the
sources of quantitative data that can help you to compare drug use at different levels of our
health system.

Sources Of Data

As a health manager, you may be required to compare the use of specific drugs or drug
classes among different geographic areas, administrative units, or individual prescribers.
Sources of data for such purposes differ, depending on the setting. A hospital administrator
who wants to measure the use of expensive antibiotics requires different data than a program
manager who needs to know how children in the community are treated for acute respiratory
infection (ARI).

Common sources of drug utilization data and their uses are outlined in Table 3.3 below.

Table 3.4: Sources of Quantitative Drug Use Data

Location of Data Data Source Useful for Studying
Public-sector administrative offices, For retrospective studies Aggregate patterns of drug use and
medical stores -Drug supply orders expenditures;
-Stock cards Comparative use of drugs within
-Shipping and delivery therapeutic classes;
receipts Comparative use by different
facilities or areas.
Health facility clinical and medical For retrospective studies: Aggregate patterns of drug use and
record departments -Patient registers expenditures;
-Health worker logs Drug use per case, overall, and by
-Pharmacy receipts group (age, sex, health problem);
-Medical records Provider-specific prescribing
For prospective studies Characteristics of patient-prescriber
-Patient observations interactions.
-Patient exit surveys
-Inpatient surveys
Health facility pharmacies For retrospective studies: Aggregate patterns of drug use and
-Pharmacy logs expenditures;
-Prescriptions retained in Dispensing practices;
pharmacies Characteristics of patient-dispenser
For prospective studies: interactions.;
-Patient exit surveys
-Patient observations

Pharmacies and retail drug outlets For retrospective studies: Private-sector prescribing practices
-Prescriptions retained in Drug sales without prescription;
pharmacies Self-medication practices;
Characteristics of customer-
For prospective studies: salesperson interactions.
-Customer exit surveys
-Customer observations
-Simulated patient visits

Households For retrospective studies: Total community drug use;

-Family medical records Care-seeking behaviour;
-Household surveys Self-medication practices;
For prospective studies: Family drug use patterns;
-Household drug audits Patient adherence to treatment.
-Family medical care
logs

Stock Records

Stock records are the core records in the inventory management system. They are the
primary source of information used in the various reordering formulas; they are also the
source of data used to compile the reports. Stock records can be either manual or
computerized.

Commonly used manual stock records include:

 vertical file cards: File cards are stored vertically in alphabetical or numerical order in a
card file or drawer.

 “Kardex” system: File cards are stored in a visible-edge record tray system, with names
and stock numbers on the lower edge, overlapped to provide an index.

 bin cards: File cards are physically kept with the stock. This makes a visual check easy
and serves as a reminder to keep records.

 ledger system: Records are kept on ledger sheets in a bound or loose-leaf book.

Many supply systems maintain two stock records for each item, to improve accuracy and
accountability. Typically, there is a bin card kept with the stock, combined with a ledger,
Kardex, or computer system kept in the central office.
In most supply systems, computerization is desirable if the local situation can support
automation. Computers are essential to manage an inventory of any size with perpetual
purchasing. Moreover, a good software program, properly used, makes information retrieval
and reporting much easier than a manual system. However, stock can still be controlled with
manual records in most drug supply environments, if necessary.

The key point about stock records, whether manual or computerized, is that they must be
current and accurate. It is impossible to manage the reordering process well if stock
movement cannot be tracked.

Computers are essential to manage an inventory of any size with perpetual purchasing

There are several factors that contribute to inaccurate stock records. Some are totally
avoidable, but some are not. These include:

 High volume repetitious entries which lead to occasional entry errors;

 Drug names and descriptions which are similar – there may be ten items that are different
forms of the same drug, and an entry may be made for the wrong form;
 Duplicate entries for receipts caused by duplicate paperwork provided separately to
different clerks;
 Spoiled or junk stock may be destroyed but not written off the records;
 Theft produces inaccurate records, especially when they are deliberately altered to
conceal theft;
 Failure to conduct regular physical stock counts or to reconcile records after stock counts;
 Sloppy warehouse conditions may make it difficult to reconcile actual stock with recorded
stock;
 Clerical and stock management staff may be poorly paid, poorly trained and poorly
motivated;
 Minimal supervision of warehouse staff or clerical staff, and limited effort by management
to reconcile discrepancies.

Automation and newer technologies such as bar coding reduce some of the problems with
inaccurate data entries, but this technology is still expensive to implement and does not solve
all the problems. The best way to promote accuracy is better training and closer supervision,
with spot checks or records and regular stock taking by supervisors.

Health Facility Registers

Every facility needs an inventory management system – and written procedures – to deal with
ordering supplies, receiving and storing stocks, and recording and accounting for stocks.

In large facilities, inventory management requirements are greater. At large hospitals,

supplies are usually managed by pharmacists or other specialized staff. There may be
separate facilities for the various activities and types of stock.
In smaller facilities, such as health centers, activities tend to be integrated, and a single
person may have multiple responsibilities. Even in a small facility, stocks of food and linen
should be kept separate from medical supplies to maintain hygiene standards and to allow
non-professional staff easy access to the food and linen.

Keeping Records and Ordering Stock

Keeping Records: The most important record is the stock card. At a minimum, there should be
space for a description of the item and its stock number, the unit of issue (for example, 500
tablet jar, tablet, or ml.), and an expiry date, if applicable. Columns and rows to document
receipt and issue of stock should appear below this standard information. In addition to the
stock card kept next to the items on the shelf, there may be a stock ledger or stock book,
which maintains a duplicate record of each transaction.

Ordering Stock: Most health facilities use a requisitioning system to order supplies. Staff must
assess the rate at which individual items are used and have a clear understanding of the
safety stock concept. Various methods of calculating order quantity exist, but all are based on
monthly consumption. Monthly consumption can be determined from the stock card or from
the monthly stock check.

Various ways of calculating safety stocks and order quantities are described elsewhere in this
volume. One simple system of ordering for health facility use is the imprest or topping-up
system. This system is particularly suitable for hospital wards and small health facilities that
receive supplies frequently. In the imprest system, no running stock records are kept. The
only stock control document is a preprinted sheet that describes each item and gives its stock
number, unit of issue, and the imprest level, which is the recommended maximum stock level
for that item. The amount ordered is the difference between the stock on hand and the imprest
level.

Another effective system is ordering based on consumption versus maximum stock levels.
The facility orders on a monthly basis, against a maximum stock level calculated as average
monthly consumption multiplied by two. The monthly order quantity is then calculated as
follows:

Quantity to order = (maximum stock – stock on hand) + (average monthly consumption x lead
time)

Orders are sent to the issuing store on a requisition/issue voucher or imprest forms. These
should be compared with the stock cards to monitor consumption and prevent over-ordering

Receiving Stock
There should be a clear procedure for receiving stock. If goods are not checked into the store
on arrival, chaos occurs. The person in charge should be responsible, whether or not he or
she personally undertakes the task.
 All deliveries should be formally received, whether inside or outside normal working hours.
The number of packages delivered should be noted in a register and signed for by both the
person receiving and the person delivering the goods.

Unpacking and Checking Stock

Supplies should be unpacked and checked next to the storage area, which may also be used
for assembling stock for distribution. Two people should perform these activities, to provide a
witness in case supplies are damaged or differ in type or quantity from what was ordered (or
from what is shown on the packing list). Supplies should be individually checked using a
checklist and their receipt recorded on the supply documents (packing list or returned
requisition form). The copy of the original requisition form should always be compared with
documents from the issuing facility to prevent later disputes.

What discrepancies should you look out for when unpacking stock?

You should look out for the following discrepancies which you should note using a form and
communicate to the issuing store. These are:

 missing boxes or cartons;

 open boxes or cartons;
 missing items;
 quantity different from one shown on the packaging list;
 wrong items (items not ordered);
 damaged, broken, or poor quality items.

Checking should be seen not simply as counting the units delivered but as part of the quality
assurance system. This means visually inspecting the packaging, the integrity of the
containers, and the completeness and legibility of labels (approved drug name, strength, any
special storage instructions, and expiry date). The expiry date should be checked to ensure
that there is adequate remaining shelf lie.

Packaging is an important factor in maintaining the quality of drugs and other supplies when
stability is a consideration. Good packaging protects the product from light and air. Packaging
should be removed only after careful consideration of the impact on drug quality.

Finally, the delivery documents should be signed and filed for reference; they should usually
be kept for a minimum of two years or the time specified in the regulations.
Records related to patient treatment protocols

Patient Medication Profiles

Patient medication profiles are necessary if hospital pharmacists are to assume responsibility
for monitoring inpatient drug therapy. Each profile contains information on the patient’s current
and recent drug therapy, allergies, diagnosis, height, weight, age, and sex. Pharmacy patient
profiles work best in conjunction with unit-dose distribution systems but can be used with the
individual drug order system.

A pharmacy profile allows the pharmacist to review all the medications that a patient is taking
prior to dispensing the first dose and with each new drug order. Problems with drug therapy,
such as allergies, duplicate drug therapy, drug-drug interactions, drug-disease interactions,
inappropriate length of therapy, and inappropriate dosing, can be detected and avoided or
corrected.

Medication Treatment Record

This is also known as the medication administration record (MAR). The medication treatment
record helps the nurse schedule treatments for each patient and provides a permanent record
of the medications administered. It also allows nurses to review the patient’s complete drug
regimen and provides a means of conducting audits that compare quantities of drugs
dispensed from, and returned to, the pharmacy with quantities administered to the patient.

Other Uses of Quantification Results

Forecasting for Large- Scale Procurement

Formal quantification is mandatory before each annual or semi-annual procurement. These
estimates need to be accurate to avoid stockouts, emergency purchases, and overstocks and
to maximize the impact of procurement funds. The consumption method is the first choice,
cross-checked to assess the appropriateness of usage patterns. When consumption data are
unreliable, it may be necessary to apply the morbidity and/or adjusted consumption methods
for an initial quantification, switching to the consumption method once reliable data can be
compiled.

Estimating Budget Requirements

In many countries, the annual pharmaceutical procurement budget is determined by adding a
fixed percentage to last year’s request or allocation to allow room for expected cuts by the
ministry of finance. Both budget requests and cuts are frequently prepared without reliable
estimates of actual needs. This cycle can be broken with rational, well-documented
quantification.

Although consumption-based quantification is the best guide to probable expenditures, the

morbidity-based method may be the most convincing documentation for a budget request.
Adjusted consumption is useful for checking and justifying either consumption or morbidity
methods.

Forecasting for New Programs

When drugs are needed for a new full-service health system or a vertical program (such as
family planning or control of diarrhoeal disease), large-scale quantification serves two
purposes: to establish funding requirements for procurement and to develop the initial
procurement list. In most situations, the consumption-based method is not feasible, and some
combination of morbidity-based and adjusted consumption methods must be used for initial
quantification.

Forecasting for Assistance Projects

A donor organization may undertake ad hoc quantification studies to plan procurement needs
in the context of a development project. When local consumption data ate not sufficiently
reliable for quantification, the morbidity or adjusted consumption methods are required, either
singly or in combination.

Estimating Drug Requirements in Emergency Relief Situations

In emergencies such floods or earthquakes, the first step is to provide emergency kits quickly.
As local health problems become clear, a morbidity-based method can be used to project
requirements in the short and medium term, until regular supply system can resume services.

Comparing Actual Drug Consumption with Theoretical Need

In most functional supply systems, the regular procurement is based on past consumption.
However, it is useful to periodically compare consumption with theoretical need based on
public health priorities. The morbidity-based method provides the most informative
comparison, but simply comparing consumption data from different systems is worthwhile.

Summary

You have now come to the end of this section on quantification. We hope you now well
understand how to quantify medicine requirements and make reliable forecast of needs for
each item in your procurement list. In the next section we shall discuss medicine quality
assurance.
Section 3: Medicine Quality Assurance

Introduction

Welcome to the last section of this unit on procurement and medicine quality assurance. In
the last two sections we discussed procurement and quantification. As you will agree, there
would be no point in having an effective and efficient procurement and quantification system if
the drugs we end up with are all sub-standard and ineffective. As you are aware, in most
manufacturing processes, the quality of the final drug product is the most important outcome.
This is determined, not only by the raw ingredients, but also by the equipment and technical
know-how that go into producing and packaging it. Moreover, a drug may pass all laboratory
tests but upon entry into a tropical country become useless within a few months if the
packaging, storage, and transportation conditions have been substandard.

The purpose of this section therefore is to enable you appreciate the importance of quality
assurance in medicine procurement as a first step towards guaranteeing the effectiveness of
the treatment we give to our patients.

Let’s start by looking at our objectives for this section.

Section Objectives

By the end of this section you should be able to:

 Describe quality assurance in medicine procurement;

 Discuss the purpose of quality assurance in drug supply;;
 Describe the principles of a comprehensive quality assurance program;
 Explain how to assess drug quality;
 Maintain the quality of drug supplies;
 Demonstrate capability to disseminate information on quality assurance to relevant
personnel.

What Is Quality Assurance In Medicine Procurement?

Let us start our discussion by defining two important terms; quality and quality assurance. We
shall start with your thoughts on these two terms so start by doing the following activity.
 ACTIVITY

Write down the definition of quality and quality assurance in the space provided.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________

We believe your definitions included the following ideas.

 Quality: Quality is defined as a measure of how good something is.

 Quality Assurance: Quality Assurance is doing the right thing the right way and at the
right time.

Purpose of Quality Assurance

The purpose of quality assurance in a public drug supply system is to make certain that each
drug reaching a patient is safe, effective and of standard quality. The quality of drug products
is ensured by more than laboratory testing of drug samples. A comprehensive quality
assurance program includes the following activities:

 Technical competence
 Efficiency
 Effectiveness
 Continuity
 Safety
 Amenities

Let us discuss each of them one by one.

 Technical competence
The personnel working in the pharmacy should have knowledge, skills and attitudes
necessary to do a good job. They should be organized and of good conduct. These attributes
are prerequisites for making dosage forms, validating a prescription in a bid to ensure safety
and effectiveness of drugs. In addition, Good communication and interpersonal relationship
increase compliance of patient to medication.
 Efficiency
Efficiency involves making the best use of the available resources. Quality Assurance
ensures that quality services are provided within the available resources. The more carefully
resources are used the more the organization achieves its goals.

An efficient service is that service which achieves the goals and objectives set by the
organization.

 Effectiveness
Effectiveness is how well you accomplish the set objectives. Assessing effectiveness
answers the questions like: Does the treatment when correctly applied lead to the desired
results? For example does an Analgesic kill or reduce pain? Another example is the use of
sugar and salt solution by mothers for dehydration. If found to be ineffective, you may want to
find out the cause, for example, maybe the mothers do not know how to prepare the mixture.

 Continuity
Continuity is when a patient or client receives complete health services that he/she needs
without repetition of diagnosis or treatment. If continuity is to be achieved the health worker
should take the patient/client’s proper history and carry out a thorough physical examination in
order to arrive at a correct diagnosis and treatment.

Continuity also involves keeping the patient/client well informed about his/her condition. The
health worker who takes over the patient from the clinician should interpret the prescription
correctly, dispense the drugs and give proper instructions to the patient.

 Safety
This is a requirement, which should not be overlooked. Both the service provider and
patient/client need to be safe. For the safety of the patient it requires that you as a health
worker exercise care. You should not mix drugs for internal use with those of external use.
Spillages may contaminate drugs for internal use and therefore the product becomes
poisonous to the patient/client. Spillages could also result into interactions, which may
produce poisonous products.

You should label all your products well for easy identification. Keep chemicals and drugs in
the recommended manner to avoid possible accidents. Give proper instructions to the
patient/client so that s/he may not take overdose or under dose. As you ensure the safety of
the patients you should ensure your own safety too by wearing protective clothing where
necessary.

A proper referral system also plays a big role in maintaining safety in service. No single
person knows everything. We should therefore stick to the limit of our ability in knowledge,
skills and available facilities, and refer to the next level when we can not offer any more
solutions.

 Amenities
Amenities refer to the features of health services that do not directly relate clinical
effectiveness that may enhance patients/clients satisfaction and willingness to return to the
facility for subsequent health care needs. Amenities are also important because they may
affect the patient/client expectations about the confidence in other aspects of the service or
product. Where cost recovery is a consideration, amenities may enhance the patient/client’s
willingness to pay for services.

Amenities relate to the physical appearance of facilities, personnel, and materials; as well as
to comfort, cleanliness, and privacy. Other amenities may include features that make the
waiting more pleasant such as music, educational or recreational videos and reading
materials.

We have described the components of quality. Next let us now discuss the principles of
Quality Assurance.

Principles of Quality Assurance

Quality Assurance is a system that sets guidelines which when followed ensure that the end
products dispensed are consistently of high quality.

Before you read on, do Activity 7/3/1 below. It should take you 5 minutes to complete.

ACTIVITY

State one reason why Quality Assurance is important in pharmacy practice?

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Now read on to check your response to your activity.

Quality Assurance is important in pharmacy practice for production of effective and safe drugs
and services.

Now let us discuss the principles of Quality Assurance.

We have seen that the goal of Quality Assurance in pharmacy is for the health professionals
to give the best health care service to the patient/client. In our case therefore we should
produce quality products and dispense them correctly for the benefit of the patient/client.

These aspects of ensuring quality are called principles of Quality Assurance. There are five
basic principles of Quality Assurance. These are:

i. Meeting patient/client’s needs

ii. Focus on the processes of health care delivery
iii. Use of data to analyze service delivery
iv. Use of teamwork to improve quality.
v. Use of good communication to improve quality.

We shall discuss each of these in turn starting with meeting patient/client needs.

(i) Meeting patient/client needs

For any service to be of value it must meet the requirements of the users. Failure to meet
these needs may result in feelings of frustrations as well as potentially serious health
consequences.

Health needs include:

 Treatment of illness and injuries;

 Immunization;
 Control of epidemics;
 Change in behaviour towards more healthy practices.

What you should do in order to ensure quality services in the practice of pharmacy includes:

 Preparation of quality products;

 Storing these products in a proper manner;
 Dispensing these products in a manner that ensures quality of the product and service.

 Preparation
This is commonly referred to as manufacture. But we should restrict manufacture to apply to
large-scale processes in a factory. In our hospitals we prepare mixtures, ointments and other
dosage forms. To make sure that we get quality products, we should use quality materials
chemicals). Though we may not be able in our hospitals to analyze the quality of the
materials, we can see physically if the materials are spoilt. By seeing the colour or damage
on the container we can tell that the materials are spoilt.

Use appropriate equipment to ensure quality for instance our weighing scales must be
regularly serviced and kept well. The right equipment should be used for the right process. A
senior qualified person should oversee the other staff carry out the tasks.

 Storage
Ensure that the premises where you make the products from comply with the National Drug
Authority standards for suitability. Proper storage of raw materials, products and records
should be ensured to avoid damages.

 Dispensing
In dispensing drugs there are two major aspects you should observe. These are:

- You are expected to pack the drugs in a manner that they do not get spoilt until the patient
finishes them.
- You are expected to give the patient information. This includes proper instructions to the
patient/client about how to use these drugs, and any other relevant information about the
drug and his sickness.
 You need to provide information to other health workers for example prescribers about
which drugs you have in stock.

(ii) Focus on the processes of health care delivery.

Quality Assurance has shown that at least 85% of problems in providing health services are
related to weak steps in the process and only 15% are due to the fault of persons working in
the system.

Written procedures for every service we provide in the pharmacy profession for example the
production of pharmaceuticals, and dispensing of drugs must be followed. For high quality
products, written procedures of manufacturing or compounding must be followed. It is also
necessary to note that the procedure for dispensing drugs must be followed.

We shall now discuss good manufacturing practice.

 Good manufacturing practice

Good manufacturing practice (GMP) can be defined as that part of Quality Assurance which
ensures that products are consistently produced, and controlled to the quality standards
appropriate to their intended use. These products should be consistently safe, pure and
effective.

The following are components of Good Manufacturing Practice:

- Quality control.
- Premises and equipment.
- Personnel.
- Materials.
- Documentation.
- Standard operating procedures.
- Validation.
- Complaints handling and product recall.
- Audit.

Now let us discuss each of them in turn.

 Quality control
Quality control can be defined as a practice of checking raw materials and pharmaceutical
products as they are produced to make sure that their quality meets specifications of the
pharmacopoeia used.

It involves, sampling, testing, documentation and dispatch procedures of components and

products. It uses physical, chemical and other test methods.

Quality control tests components, like raw materials and finished products against set
standards. A batch of products must satisfy the set standards before it can be released for
use.

A standard is a statement of what is expected to happen in an activity that has been planned.

 Equipment & Premises

Equipment should always be chosen correctly. The right equipment for a right job should be
used. The equipment should be serviced regularly for accuracy.

The premises should be clean. It should be well ventilated and well lit.

 Personnel
Good manufacturing practice requires that the person doing the job of production, should be
qualified in that area.

Therefore, in the manufacturing process we need to train personnel in procedures and skills
relating to their jobs.

 Materials

Good manufacturing practice uses the term materials to describe both raw materials and
packaging materials. Raw materials are the chemicals like Magnesium Trinsilicate and
Ethanol, which we use to compound our products. Packaging materials include bottles, vials,
ampoules, labels and paper boxes.

It is mandatory that all materials are tested against specifications and should meet the
required standards before they are released for use in manufacturing or making preparations.

 Documentation

Documenting the process of pharmaceutical manufacturing is a key

feature of Quality Assurance.

Records must be kept at your work place for not less than 2 years and samples of drug
products for at least 1 year after expiry. Note that the drug products are kept for one year even
after expiry to allow for further study of their stability.

It is important to note that records must be documented promptly and accurately.

Documents have the following uses:

- They have the history of events that happen during manufacture of a batch of
products.
- They are training and reference materials to health workers.
- They help us to review our work.
- They are measures of standards of our performance.
- They are a proof that we have performed our duties according to GMP.

Production documents can be carefully classified into two namely, procedural and work
records. Let us describe each one in turn.

Procedural documents include:

- A set of standard operating procedures. These are step-by-step instructions of

how to perform a function or operate an equipment.
- A set of analytical procedures.
- A set of specifications for testing materials.
- A set of specifications for testing finished products.

Work records include:

- Batch manufacturing records.

- Batch control records.
- In process control records.
- Receipts and issues.

These documents must be written clearly in indelible ink and should be brief to encourage the
user to follow them. They should be kept within the reach of colleagues in your workplace.

Production of quality products requires skilled personnel trained in relevant aspects of GMP.
Materials are tested against specifications to ensure quality products. Documentation or
records are necessary for tracing faults if they occurred or for future reference in production of
drugs.

 Standard Operating Procedures

GMP defines “standard operating procedures” as step-by-step instructions to be followed

when performing any manufacturing function. Procedures have the following characteristics.
They should be:

- Clear;
- Brief and;
- Easy to follow.

Procedures have to be validated by testing to prove that they yield the intended product of the
required quality. The authorized persons should only institute change of procedures after
approval. Previous documents which have been superceded should be withdrawn from the
place of work so that they are not to be used again.
Validation
Validation is defined as proof that a system does what it is supposed to do. GMP requires that
all our procedures be validated before they are approved for use. For example; a weighing
scale should be tested with standard weights to check its accuracy. A fridge should be tested
to make sure that it reaches 4 oC suitable for the storage of Insulin. A procedure that is tested
consistently yields a product of high quality. GMP requires that Validation be documented.

 Complaints and product recall

A recall is defined as calling back to the manufacturer a defective product already on the
market. A complaint is a situation where the consumer is not satisfied with the quality of a
manufacturers product. All complaints and other information regarding defective products
should be handled carefully according to written procedures.

Complaints should be documented in a complaints file. They should be classified and

investigated. It is important to note the product identification numbers.

High-risk complaints can result into a product recall. However, product recall can be
expensive and may lead to closure of the production unit. This may endanger your reputation
and cause you to loose your job. This therefore means that product recalls should be avoided
by carefully following our written procedures and by carrying out validation of our systems.

You as a health worker can institute a recall when stored samples show some change in
appearance which threatens the quality of your products. KEMSA can institute recall when it
finds defective drugs on the market and in health units.

The recalled drugs should be recorded and stored properly until an action is taken. GMP
requires you to keep a complaints file in your work place.

 Audit

Audit means inspecting a system to establish its correctness. In this case, GMP stresses
Facility Audits to be carried out regularly. There are 3 types of Audits namely;

 Personal Audit.
 Internal Audit.
 External Audit.

Let’s now briefly describe each of them in turn.

Personal Audit

This is done by the health worker him/herself at the workplace. Before an internal Audit, you
should check that the performance of your daily activities are well done. Should you find
anything wrong, you should take corrective measures or report to your supervisors.
Internal Audit

Management does this regularly. An audit team is appointed and it moves around the facility
to assess in detail compliance with GMP. This Audit team also looks at the entire health unit
and notes down problems to be able to come up with a timely framework of corrective action.

External Audit

External experts usually perform external audit. Regulatory Authorities, like Pharmacy and
Poison Board and officials from MOH headquarters can also audit our work.

The Auditors take notes, compile a report and give feedback to the facility for timely corrective
action. The corrective actions that are implemented as a result of the report are documented.
A re-audit is sometimes necessary as a follow up.

Facility Audits are important because they:

- Determine level of compliance to standards;

- Generate confidence in you as a manufacturer with GMP and thus Quality Assurance;
- Promote interdepartmental understanding;
- Point out areas that need improvement;
- Recommend improvements.

External Audit helps to establish and monitor the capability of the manufacturer in delivering
suitable goods and offering good pharmaceutical services.

In good manufacturing practice, it is necessary to prove that an equipment is able to do what it

is supposed to do . It has to be checked. A manufacturing plant should strictly follow good
manufacturing practice in order to avoid product recall.

Audit is important in the manufacture of pharmaceuticals because it helps to determine level

of compliance to standards and generates confidence in GMP. It promotes inter departmental
understanding to point out areas that need improvement, and suggests action for
improvement.

 Good dispensing practice

Dispensing means giving out medication with relevant instruction. In this country, dispensing
is performed by a wide variety of personnel, not all of whom have had formal training in
Pharmacy.

All the resources required to bring the drug to the patient are wasted if we do not give the right
drug in the right amount and with clear instructions. We should also ensure that it is delivered
in packaging that maintains the drug potency.

Poor or uncontrolled dispensing practices can have a very damaging impact on the health
care delivery system. This is where you come in as a trained health worker to supervise the
dispensing activities of drugs.
There are three important things you should ensure in the proper dispensing of drugs to the
patient:

1. Receive a correctly written prescription from the patient or prescriber and note the
following:

 Origin of the prescription;

 validity of the prescription;
 patient information.

2. Retrieve medication appropriately.

3. Communicate to the patient the correct way of taking the medication, and ensure that
he/she understands the instructions.

(iii) Use of data to analyze service delivery

Data is needed:

 to prove statements with facts;

 for planning and identification of needs;
 to identify route causes of the problem;
 to monitor and evaluate services.

For data to be useful, it should be reliable.

Before you read on, do the following activity. It should take you 5 minutes to complete.

ACTIVITY

1. List two sources of data at your place of work, and for each source
give three examples.

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Now read on to compare your answers with the information given below.
In work places, there is always data. If we compile this data and study it, we will get the trend
of events. Analysis of the data will reveal to us information that can be used to improve
pharmaceutical services.

There are two sources of data. These are Data collected locally and Data obtained from
reference materials.

 Data collected locally can be routinely collected data which includes:

 Number of patients attended to in a day, week etc.

 Number of prescriptions dispensed.
 Name and amounts of drugs used.
 Number of hours worked.
 In a manufacturing unit, Standing Operating procedures.
 Types of diseases and their frequency.
 Out patient and In patient returns

The records that enable us monitor and collect the above data include:

 Patient attendance register;

 Purchase order books;
 Stock cards;
 Inventory book;
 Prescription book;
 Classified drugs book;
 Batch manufacturing records and standard operating procedures.

All these data can from time to time be, studied to see if there are any problems in the health
facility, which could impair the quality of services. If so then solution may be sought for
correction or improvement.

Standard reference books in pharmacy contain useful information. You should always consult
these reference books when in doubt. Never assume, as this may cost life.

 Data from reference materials:

The sources of data for reference materials include:

 Extra Pharmacopoeia (martindale).

 African MIMS (Monthly Index of Medical Specialties).
 National Drug Register.
 British National Formulary.
 British Pharmacopoeia (BP).
 European Pharmacopoeia (EP).
 International Pharmacopoeia (IP).
 National Standard Treatment Guidelines.
 The National Drug Policy and Authority Statute.
 National Drug Policy guidelines for licensing premises for pharmaceutical service
provision.

These reference books are regularly updated, you should obtain most recent copies.
 Pharmacopeias are published references which provide detailed descriptions of drug
characteristics and analytical techniques.

In order to improve your performance, it is important that you read these materials. You
should also enroll for continuing medical education courses, subscribe for journals,
newsletters and other publications. These are sources of current knowledge.

(iv) Team work

A team is a group of interacting individuals sharing a common goal and has the responsibility
for achieving it. To improve quality, team spirit should be built and maintained.

Teamwork therefore implies that there are many categories of persons involved in the
provision of various services for the good of a patient/client. You have seen that in most
cases patients come from Clinicians to the Pharmacy Technician after going through other
departments for example the laboratory.

Team work is important because:

 Many ideas/opinions are contributed;
 Best ideas are selected out of many;
 There is collective decision making;
 There is shared responsibility;
 There is division of labour.

It is necessary that health workers consult each other and share professional information.

(v) Use of good communication to improve quality

Communication is a process by which messages are transferred from a source to a receiver

and back to the source. Effective communication between health worker and patient/client,
the health system and health worker and then the health system and the community is
essential for ensuring the quality of health care delivery.

In a communication process there is a source, a message, the channel, the receiver and a
feedback. It is import to emphasize that the communication process is complete. The sender
who may be an individual, group or organization, must be credible or believable, good listener,
emphatic and knowledgeable.

The message must be in a language easily understood by both the receiver and sender. It
must be relevant, interesting, simple, concise, and clear. The channel must be relevant,
accessible and familiar to the receiver. The receiver should be interested in the message and
capable of understanding it.
Having discussed the principles of Quality Assurance, let us look at how drug quality is
assessed.

Assessing Drug Quality

There are many ways of defining and monitoring drug product quality. Established quality
standards are published periodically in pharmacopeias, which provide detailed descriptions of
drug characteristics and analytical techniques. Standards vary slightly from one
pharmacopoeia to another, so a particular drug product may meet the standards of one
pharmacopoeia and not quite meet those of another. When standards have not been
established, as is sometimes the case for newly marketed drugs, analytical methods
developed by the supplier are usually applied.

Drug quality is assessed in terms of how it complies with the following important
characteristics which are specified in its pharmacopoeial:

 Identity,
 Purity,
 Potency,
 Uniformity of the dosage form,
 Bioavailability and stability.

Let us look at each in turn.

Identity.
The identity test should confirm the existence of the active ingredient(s) indicated on the label.
This characteristic is generally the easiest to check.

Purity
Most drug products are made with the ingredients added for bulk, consistency, or color.
These ingredients should not contain potentially harmful contaminants or significant quantities
of other drugs (sometimes found when manufacturing plants are not kept clean), or micro-
organisms that could infect the patient.

Potency
The drug should have enough (but not too much) of the active ingredient. Harmful by-products
of degradation must be absent or should be below defined limits. Most pharmacopoeias
specify a content range, such as 95 to 110% of the amount written on the label, rather than
the exact amount. To ensure a long shelf life, manufacturers often produce drugs with then
maximum allowable amount (for example, 110 mg rather than 95 mg): this provides a margin
of safety for slight losses in potency over time.

Uniformity of Dosage Form

The consistency, color, shape, and size of tablets, capsules, creams, and liquids should not
vary from one dose to the next. Any lack of uniformity may suggest problems with identity,
purity, or potency. Problems with uniformity may not influence the acceptability of a drug
product to pharmacists, medical practitioners, and patients.

Bioavailability
Bioavailability refers to the speed and completeness with which a drug administered in a
specific form (tablet, capsule, intramuscular injection, subcutaneous injection) enters the blood
stream.

Generally, this depends on how the other ingredients solvents, binders, colouring agents,
coatings are combined.

Below are listed some drugs documented to have problems in bioavailability that require
studies to determine the bioequivalence of products.

Table 3.5. Some Substances Exhibiting Potential Bioavailability Problems in Conventional Oral
Forms

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Aminophylline Ergotamine Iron sulfate

Ampicillin Estrogens, conjugated or Isosorbide dinitrate

Carbamazepine esterified Levodopa

Chloramphenicol Furosemide Methotrexate

Chloroquine Glibenclamide Methyldopa

Chlorpromazine Glyceryl trinitrate Nitrofurantoin

Digoxin Griseofulvin Phenytoin

If purchasing is done through established and reliable suppliers, the bioavailability of most
brand-name and generic drugs used in primary health care is sufficient to ensure that the
patient receives the intended effect from the drug product. It is important to decide which
drugs have a potential bioavailability problem, since manufacturers cannot supply clinical
studies for all products and government procurement programs generally cannot perform
bioequivalence testing.

Even though they contain the correct amount of active ingredient,

preparations may not give the expected therapeutic result if the active
ingredient is released too quickly, too slowly, or incompletely.

Stability
A drug product must retain its properties within specified limits in order to be useful. The time
that a drug’s stability is under warranty is established by the manufacturer and, in some
cases, by a country’s regulatory body. This period ends with the product’s expiration date. The
stability of a drug product depends on the active ingredient, which can be affected by its
formulation and packaging. Inadequate storage and distribution can lead to physical
deterioration and chemical decomposition, reduced potency, and occasionally, formation of
toxic byproducts of degradation. This is more likely to occur under tropical conditions of high
ambient temperature and humidity.

The WHO has published a list of drug substances that are less stable and thus require
particular attention (WHO 1999). However, there are very few data on the stability of drug
products under true field conditions.

Figure 3.6: Drugs Found to Have StabilityProblems under Tropical Conditions

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Oral Solids (tablets) Oral Liquids (syrups)

Acetylsalicylic acid Paracetamol

Amoxicillin

Ampicillin Injections/Injectable

Penicillin V Ergometrine

Retinol Methylergometrine
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The dynamic nature of drug products and the cumulative effects of the
production process, right through packaging, handling, transport, and
storage conditions, require quality assurance at all levels in the drug supply
system.

Critical Elements of A Comprehensive Quality Assurance Program

The procedures to establish a comprehensive quality assurance program can be divided into
three categories:

1. Procedures to ensure that only drug products that meet current standards for quality are
bought. These include:-
  Careful product selection;
 Careful supplier selection;
 Certification of good manufacturing practices;
 Batch certification (WHO – type certificate of a pharmaceutical product)
 Inclusion of detailed specifications in the contract

2. Procedures to verify that shipped goods meet the specifications. These include:

 Pre and post shipment inspection;

 Analytical drug testing.

3. Procedures to monitor and maintain the quality of drug products from the moment they are
received until the drug is finally consumed by the patient. These involve:
 Proper storage and distribution procedures;
 Appropriate dispensing;
 Instructions to the patient on proper use of medications;
 Product defect reporting programs

Few drug management programs can effectively manage all the possible quality assurance
activities for all the drug products that are procured. Consequently, realistic goals must be set
to identify the combination of managerial and technical quality assurance activities that will be
most effective under existing conditions.

Obtaining Products of Good Quality

Obtaining drug products of good quality involves careful selection of suppliers and products,
adherence to GMPs, reliance on appropriate pharmaceutical product and/or batch certificates,
and detailed contract specifications.

Careful Product Selection

In many systems, therapeutic drug formulary committees first assess the safety and efficacy
of selected drugs on the basis of evidence from clinical trials. Specific product selection
involves assessing the technical documentation provided by the supplier on pharmaceutical
characteristics of the dosage form.

Dosage forms that may offer longer shelf life include:

 Powders for reconstitution instead of injectable liquids;

 Powders for reconstitution instead of oral suspensions;
 Tablets instead of capsules.

For a small number of drugs (certain heart, asthma, and seizure drugs, for example), studies
that demonstrate bioequivalence may also be necessary.

It is prudent to select products with packaging that can withstand rough transport and extreme
climatic conditions, such as high heat and humidity. Plastic containers may be more
appropriate than glass bottles for intravenous solutions, oral liquids, and disinfectants. Avoid
metal tins that will rust.
 In some countries, unit dose or unit-of-use packages (blister packs) and containers with
smaller quantities (for example, 100 tablets as opposed to 1,000 tablets) may be cost
effective. These measures aim to avoid loss of product quality after the containers are
opened, or as a result of frequent handling. These increased purchase costs should be
weighed against the wastage that occurs with bulk containers, plus the costs of any
repackaging.

Careful Supplier Selection

This is perhaps the most critical step in quality assurance. Suppliers can be selected
competitively as we mentioned earlier by restricted tender with prequalification, through open
tender with post-qualification, or, in some cases, through less formal procedures. Standard
procedures should include requiring certifications, gathering information on supplier reliability
and product quality, inspecting product samples, and, if necessary, conducting laboratory
testing of drugs with high potential for bioavailability or stability problems.

Information on suppliers’ performance needs to be analyzed, and operational definitions and

criteria must be developed and applied to assess the reliability of suppliers to avoid
subjectivity. Lack of explicit definitions and criteria provides rejected suppliers with the
opportunity to question the integrity of the procurement process.

For new suppliers, it is important to visually inspect samples of the drug product, packaging,
and labelling. Some programs send samples for laboratory testing on a routine basis; others
do so only when there are concerns about specific products. Although pre-purchase testing
may detect defective products, bear in mind that the samples are provided by the supplier,
which will make every effort to ensure that the samples meet the standards. The samples
may not, however, be representative of what will actually be sold or delivered.

Product Certification
WHO has established GMPs for pharmaceutical products, similar to those enforced by the
national drug control agencies in industrialized countries. They include criteria for personnel,
facilities, equipment, materials, manufacturing operations, labeling, packaging, quality control,
and, in most cases stability testing.

In countries with effective drug control agencies, adherence to GMPs in enforced by a system
of inspections and regulatory controls, often specific to individual drug dosage forms. A
manufacturer may have acceptable standards for solid dosage forms but not for sterile
injectable preparations. Recent reports of GMP inspections and drug recall histories can be
obtained by writing to the Pharmacy and Poison Board. GMP reports can sometimes be
obtained form other procurement programs or from international procurement agencies such
as the Pharmaceutical Inspection Convention (PIC) and the Product Evaluation Report
Scheme (PER). Both of these were established by the European Free Trade Association
(EFTA) in Geneva.

Buyers with pharmaceutical staff trained in GMP inspection may perform their own inspections
of local manufacturers that are potential suppliers, if funds are available to do this.
This certification scheme provides some assurance, based on inspection of the manufacturing
facilities for GMPs by the competent authority of the exporting country. For the procurement
office, it is an inexpensive means to help ensure the quality of purchased products.

Through the certification scheme, the procurement office should be able to obtain the
following information:

 Whether a product is licensed to be placed on the market in the exporting country, and if
not, the reasons whey;
 Whether the supplier manufactures the dosage forms, packages and/or labels a finished
dosage form manufactured by an independent company, or is involved in one of these
activities;
 Whether manufacturer of the product has been inspected and the periodicity of inspection;
 Whether the certificate is provisional, pending technical review;
 Whether the information submitted by the supplier satisfies the certifying authority on all
aspects of manufacture of the product undertaken by another party.

The reliability of the pharmaceutical product certificates issued under the WHO scheme and
access to them depend largely on:

 The reliability and responsiveness of the exporting country’s authority;

 Capability of the exporting country’s authority to make adequate GMP inspection;
 Capability of the importing country’s authority to assess the authenticity or validity of the
certificate of a pharmaceutical product submitted, especially when it is submitted through
the manufacturer or importing agent.

Therefore, product certification under the WHO scheme is only as reliable as the agency
performing it. Although national drug control agencies in the major drug-exporting countries
are generally conscientious in their assessments, it may take some time to receive reports.
Agencies in some countries have been found to be less reliable and responsive.

Batch Certificates
Reliable pharmaceutical manufacturers that actively attempt to comply with GMPs conduct
batch analyses. Small local manufacturers that do not have their own quality control
laboratories may contract quality control testing services from other manufacturers, private
testing facilities, or national reference laboratories.

Some national drug control agencies provide individual batch certificates or certify the
accuracy of the manufacturer’s analyses. Laboratory analyses of sample from individual
batches can also be obtained through international quality control organizations such as the
Societe Generale de Surveillance or the service de Controle des medicaments of the Belgina
Pharmaceutical Association.

Drug Regulatory Authorities (DRAs) and the Procurement Market Today

In many countries, DRAs and procurement offices do not work together effectively, nor are
there integrated information systems in place. Ideally, when a DRA exists and drug
registration is operational, procurement by government agencies should be limited to drugs
registered by the DRA. Procurement offices should both seek information from the DRA and
strive for closer cooperation with the authority.

Contract Specifications
Detailed specifications to help ensure that high-quality products are bought and received
include:

 Name of the pharmacopoeia reference standard to assess drug quality;

 Language for the product label;
 Minimum information required on the label (generic name, dosage form, strength,
quantity, expiration date, manufacturer, batch number);
 Additional information, such as the product registration number and date of
manufacture;
 Standards for packaging that will withstand the specific storage and transport
conditions (for example, corrugated boxes with specifications for maximum size and
maximum weight).

To reduce theft and resale, some programs may also require labelling and
logos to indicate that the product is solely for distribution within a particular
health care program (for example, Ministry of Health).

Maintaining Quality Of Pharmaceutical Products

Maintaining drug product quality requires careful attention to storage and transport, as well as
to dispensing practice and use.

Appropriate Storage and Transport

Procedures to help maintain drug quality begin with proper storage at the port and prompt
release.

Appropriate Dispensing and Use

Inappropriate dispensing procedures contribute to drug product deterioration and
contamination or medication errors. The following procedures help maintain the quality of
drug products:

 Use only proper dispensing containers (for example, airtight containers, light-resistant
bags or vials); the paper envelopes often used for end-user dispensing do not protect
tablets and capsules.
 Require clear labelling of dispensed drugs and enforce procedures to label products with
the patient’s name, drug’s name, strength, expiration date, and instructions for use and
storage.
 Write dispensing information and instruction in the local language, avoiding the use of
abbreviations, or use symbolic instructions.

The prescriber and the dispenser should counsel the patient on the proper use of medications,
explaining what the drug is, why the patient needs it, how to take it, and where and how to
store it until treatment is completed.

Personnel And Training In The Supply System

Central to the operation of most well-run drug supply systems is at least one qualified
pharmacist with some training or experience in industrial pharmacy and procurement. Such
an individual can be invaluable in establishing and overseeing quality control practices suited
to local requirements. This person should participate in:

 Selecting drugs;
 Setting technical specifications for drug contracts;
 Reviewing supply offers and selecting suppliers;
 Reviewing storage and transportation facilities;
 Coordinating any drug quality testing and helping to train the inspectors who check
drug shipments.

In some government systems, qualified pharmacists are employed at all levels, including the
district hospitals, and they are expected to oversee local storage and transportation
conditions. In addition, they report problems or questions concerning individual drugs to the
main office. In other countries, locally trained dispensers are responsible for much of the day-
to-day work and must be trained to detect and report quality problems.

In addition to pharmacists and pharmaceutical assistants, other staff members involved in

quality assurance need training and supervision as a part of quality assurance efforts:

 In order to make informed decisions about supply sources and to monitor and promote
quality assurance in their facilities, physicians, health administrators, and health system
officials must know about the factors that influence drug quality.
 Port-clearing personnel should be trained to identify the categories of drugs requiring
special storage and transportation conditions.
 Clerks responsible for inspecting drug shipments should receive formal training in
inspection procedures.
 Drug inspectors must be familiar enough with drug labelling and packaging materials to
determine whether contract conditions have been met with regard to the correct drug
dosage, packaging, and labelling.
 When local repackaging is done, the staff involved should be trained to assure drug
quality.
 Finally, physicians, nurses and paramedical personnel handling drugs throughout the
health system need to know about the factors that influence drug quality and what they
can do to ensure that the drugs dispensed to patients are safe and effective.
Quality assurance is a widely shared responsibility. Within the organizational structure of a
supply system, responsibilities for the review and preservation of drug product quality at all
levels need to be clearly established. If a drug becomes ineffective or unsafe by the time it
reaches the patient, then all the other activities of the supply system have been in vain.

Summary

You have now come to the end of this section. In this section you have learnt about medicine
quality assurance. We saw that the main purpose of medicine quality assurance is to ensure
that each drug reaching a patient is safe, effective, and of standard quality.

You have also come to the end of this unit on procurement and medicine quality assurance.
You can now take a well deserved break before you complete the attached assignment.

Good luck!
 DIRECTORATE OF LEARNING SYSTEMS
DISTANCE EDUCATION COURSES

Student Number: ________________________________

Name: _________________________________________

Address: _______________________________________
_______________________________________________

DRUG MANAGEMENT AND RATIONAL USE

Tutor Marked Assignment
Unit 3: Procurement and Medicine Quality Assurance

Instructions: Answer all the questions in this assignment.

1. Explain the 5 characteristics of a good procurement system

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2. Describe the four procurement methods that can be used to purchase drugs

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3. You have been asked to receive a supply of drugs in tablet forms. What would you look for to ensure
that they are of good quality?

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4. What is drug quantification?

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5. Outline the three (3) components of drug quantification.

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ii. ___________________________________________________________________
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iii. ___________________________________________________________________
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6. Outline three (3) reasons why drug quantification is carried out.

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ii. _____________________________________________________________________
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iii. _____________________________________________________________________
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7. State the pre-requisites, which must be present to enable you, carry out proper drug quantification.

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ii. ___________________________________________________________________
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iii. ___________________________________________________________________
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8. Outline four (4) of the steps for carrying out drug quantification using each of the two (2) methods
below:

(a) Using the consumption method:

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ii. ___________________________________________________________________
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iii. ___________________________________________________________________
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iv. ___________________________________________________________________
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b) Using the morbidity method:

i. _____________________________________________________________________
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ii. _____________________________________________________________________
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iii. _____________________________________________________________________
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iv. _____________________________________________________________________
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9. What do you understand by the term “Quality Assurance”?

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10. When dispensing medicines, you should make sure that you: (Circle the correct statements)

a. Dispense medicines that will not expire during the period the patient will be taking them
b. Do not directly touch tablets to avoid contaminating them
c. Maintain the patient’s confidentiality so that they listen attentively to your advice
d. Pour liquids into a bottle with its label kept downwards
11. You have just received a consignment of drugs from the central medical stores. While receiving them
you noticed that one of the products is not labeled. What should you do? Tick the correct answer.

a. Look for products that look similar in the consignment and place it amongst them
b. Decline to receive it and return it with the van that delivered it.
c. Arrange with the environment health protection department at your facility to dispose it.

12. Describe at least three characteristics that are used to assess the quality of drugs as laid out in
established quality standards.

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Congratulations! You have now come to the end of this unit. Remember to indicate your Student Number,
names and address before sending the assignment. Once you complete this assignment, post or bring it in
person to AMREF Training Centre. We will mark it and return it to you with comments.

Our address is:

AMREF Distance Education Project
P O Box 27691-00506
Nairobi, Kenya
Email: [email protected]