manual on management of drugs

ANNEXURE XIV
ABC Analysis
This is an analysis based on issue values of all drugs consumed during the
year.
In this method, items are divided according to their annual usage
value (unit cost x number of units consumed during the year)
When the values of items are tabulated in descending order, it is
observed that a
a) small number of items account for 70% - 80% of the total
budget (A category)
b) intermediate number of items account for 15% - 20% of the
total budget ( B Category )
c) vast majority of items account for 5% - 10% of the total
budget (C Category )
Category Value % of items
A 80% 10 - 15
B 15% 20 - 30
C 05% 60 – 70
This analysis is very useful in reducing cost and improving
efficiency in areas such as
a. Planning procurement pattern
b. Establishing delivery schedule
c. Stock control and monitoring
which will lead to effective management of drugs.
It is the responsibility of the Heads of Institutions to closely
monitor the proper management of A category drugs.
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