Quantification is the first step in the procurement process (see Chapter 18). In general terms, quantification is the process used to determine how much of a product is required for the purpose of procurement. But more specifically, quantification involves estimating not only the quantities needed of a specific item, but also the financial means required for purchasing the item. Needs are estimated for a given context, and the analysis must include contextual factors, such as available funds, human resources capacity, storage space capacity, and capacity to deliver services.
The methods and strategies described in this chapter can be used as tools to -
- Prepare and justify a pharmaceutical budget
- Plan for new and expanding programs
- Optimize pharmaceutical budgets based on priority health problems to be treated and the most cost effective treatment approaches
- Calculate emergency needs for disaster relief and epidemics
- Resupply an existing supply network that has become depleted of products
- Compare current medicine consumption/demand with public health priorities and usage in other health systems
The quantification method must be chosen in light of the resources and information available.
The consumption method, which uses data on medicine consumption, gives in many instances the most accurate prediction of future needs. Large, well-established pharmaceutical supply systems rely primarily on the consumption method. To be reliable, the consumption data must come from a stable supply system with a relatively uninterrupted supply and a full supply pipeline. Consumption data may or may not reflect rational prescribing and use of medicines or actual demand for medicines.
The morbidity method quantifies the theoretical quantity needed for the treatment of specific diseases. This method requires reliable data on morbidity and patient attendances (visits to health facilities) and uses standard treatment guidelines to project medicine needs. This method is the most complex and time-consuming, and it can produce major discrepancies between projections and subsequent use. Nevertheless, this method is often useful for new and expanding programs and may be the most convincing approach for justifying a budget request.
If no reliable information is available on past consumption or morbidity, use can be extrapolated from data for other facilities, regions, or countries. The proxy consumption method is flexible enough to apply to various situations and can be either population or service based. Service-level quantification of budget requirements can be applied when only budget requirements, and not specific medicine quantities, are needed. It provides a clear, logical, one-page justification of pharmaceutical financing requirements.
Several critical issues are common to all methods. The medicines list is the central component and must be produced in a format suitable to the type of quantification. In a new supply system, or one in which shortages have been widespread, quantification estimates must be adjusted because the supply pipeline must be filled. The lead time has a major effect on quantities required for safety stocks. In virtually all supply systems, adjustment is necessary for losses caused by wastage and theft.
Quantification estimates can be cross-checked by combining different methods. No matter which method is used, a gap may exist between the initial estimates of medicine needs and the allocated budget. The quantification process itself may help justify an increase in the budget, but often the quantification estimates must be adjusted and reconciled to match available funds. The choice between manual and computerized quantification may be dictated by circumstances, but the process is much easier with computer assistance. Quantification can be centralized, or it can be decentralized to staff of peripheral warehouses and health facilities. The personnel and time requirements depend on the quality and accessibility of source data and on the type and scope of quantification.