Health Policy Issues and Health Programmes in ... - Amazon S3

Streamlining the Drug Procurement and Supply System in Uttaranchalconditions specified in the tender invitation. In many states, procurement is limited to theEssential Drugs List. The supplies are centrally pooled and in bulk. In states such as Delhi, TamilNadu, and Karnataka, such a procurement system has reduced the cost of drugs significantly. InDelhi state, for example, a saving of approximately 30% was made through the centrally-pooledprocurement of drugs. The method adopted in Delhi consists of a two-envelope system; onecontains the technical bid that ascertains the manufacturers, the products, and their quality, andthe other contains the prices of the various drugs in the bid. 3 The Delhi government has laiddown the criteria for qualifying manufacturers for the supply of drugs. These include a ceiling ofRs 120 million annual turnover of a manufacturing firm, adoption for good manufacturingpractices, non-involvement in tax evasion practices, and so forth. Drugs purchased using a twoenvelope-tendersystem are substantially cheaper than those purchased by government agenciesusing the open-tender system. Procurement of drugs by generic names has now become standard.A supplier of “brand name drugs” may also compete, but its bids should be with generic names.This system has been adopted in some of the states mentioned above; however, implementationhas been difficult because of various internal and external pressures.Procurement AgenciesIn most states, a Store Purchase Committee, constituted by the Medical and Health Department,consists of specialists drawn from medical colleges, the district health system, hospitaladministrators, and financial and legal experts. Such committees set down their own processesand standards for selection of drugs. However, there have been limitations on account of variouspolicy decisions at the state/national level. In some states, preference is still given to small-scaleindustries for the purchase of drugs. Under these circumstances, it is not possible to set downand adopt standards for the quality of supplies. Wherever such committees exist, they have asmall core staff to maintain continuity and facilitate implementation. Sometimes, the staff is notonly inadequate but also under-qualified. The appearance of transparency and fairness isessential to attract the best suppliers at the most competitive prices. However, there have beenlimited efforts to develop standard procedures and promote transparency in the procurementsystem. Sometimes product specifications are inadequate and this leads to problems inselection of drugs and items. The procurement process might be influenced by special interestgroups of suppliers/procurement personnel; orders to increase quantities of certain productsmight be manipulated; supplier qualification decisions might be prejudiced; and the final awardof tenders might be manipulated. The above observations indicate that the procurement processcould be vitiated because of inefficient methods adopted, policy decisions at different levels, orthe influence of interest groups, political leadership, and bureaucratic preferences.Product Quality AssuranceIt has been observed that some of the suppliers decide which drugs are to be made available inview of their cost benefits. Some drugs that are essential for prevalent diseases and arecost-effective are not supplied in adequate quantities at all the centres, while costly drugs aresupplied in excess quantities in selected institutions. Hence, the performance of all suppliersneeds to be monitored and reviewed to determine their continuation as suppliers. Efforts havebeen made to set down procurement system procedures and performance indicators. Theseinclude the percentage of drugs purchased through competitive tenders, from local219