A Situational Analysis and Feasibility Study on Regional Pooled Bulk Procurement of Essential Medicines and Other Health Supplies in the East African Community Partner States. Final report, September 2007
(2007; 110 pages)

Abstract

The East African Community (EAC), in January 2007, requested the assistance of the WHO Department of Technical Cooperation for Essential Medicines (TCM) to conduct a situational analysis and feasibility study for implementing Regional Pooled Procurement of Medicines as part of their efforts to address issues of accessibility and availability of essential medicines in the region. Pooled procurement, otherwise known as joint purchasing, is increasingly being regarded globally as an efficient strategy to resolve challenges as high medicines prices, poor quality and other bottlenecks generally associated with Procurement and Supply Chains of Essential Medicines. A number of sub-regional and regional blocs as well as global initiatives have adopted the pooled procurement mechanisms with success stories to share.

The Gulf States, who have carrying out pooled procurement for over twenty five years reported that it had reduced costs and made millions of dollars in savings, whilst the East Caribbean Islands reported an average cost savings of 37% for 25 selected items over a five year period. Other successful pooled procurement initiatives includes the WHO Pan American Health Organization (PAHO) Strategic Funds and the WHO Global Drug Facility for TB medicines, have shown significant achievements in lowering medicines prices, improving procurement process and quality of medicines. The two models of pooled procurement, under review in this study are the Group Contracting and the Central Contracting. These models are similar as they both involve bulk purchasing of medicines on behalf of a group or countries, with the main difference being the level of collaboration and integration, the administrative infrastructure required to implement the pooled procurement and therefore the technical and financial resources needed. Thus in Group Contracting countries jointly negotiate prices and agree to purchase through the selected suppliers, but the various member countries conduct the purchasing individually. With Central Contracting, Member countries jointly conduct tenders and award contracts through a centralized procurement unit, which pools the financial resources from the member countries. Apart from reducing cost of medicines and contributing to a more cost efficient and transparent procurement system, pooled procurement also facilitates harmonization of standard treatment guidelines, medicines registrations and essential medicines lists.

The main objectives of this study are:

  • To analyse the legal and regulatory framework on procurement and delivery of pharmaceutical products and other essential medical supplies in the public sector of the EAC Partner States;
  • To determine the feasibility of pooled procurement of medicines
  • To recommend a specific model of pooled procurement and identify a potential target commodity list for bulk purchasing;
  • To develop guidelines and recommendations for the implementation of the recommended model.
 
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