The primary function of a procurement office is to obtain the required items at the right time, in the correct quantities, and at the most favorable prices. The procurement office compiles a list of requirements, identifies potential suppliers, selects the most cost-effective supplier for each product, secures firm supply contracts, and makes sure that the suppliers and the health system comply with contract terms. Competitive tenders are recommended for most pharmaceutical procurement in public-sector pharmaceutical systems, so this chapter addresses the principles of efficient tender management, focusing on the most common tendering models.
To maximize the benefit of pharmaceutical purchases, corruption and favoritism in procurement must be minimized. Equally important is avoiding the appearance of favoritism, so the tender process should be as transparent as possible under national procurement laws. A formal tender process includes medicine selection, quantification, preparation of tender documents and contracts, notification and invitation to bid, formal bid opening, collation of offers, adjudication and supplier selection, contract award, performance monitoring of suppliers and clients, and enforcement of contract terms if necessary. Reliable suppliers are the cornerstone of effective procurement, and a prequalification process is recommended; tender adjudication and selection of suppliers is the critical step that determines the costs of medicines and defines the integrity of the procurement process. Adjudication should be based on formal written criteria and must be free from influence by special interests.
Accurate and timely information is critical at each stage of the process, and lack of effective information systems is a main cause of procurement delays and inefficiencies.
The information system must be able to -
- Produce information for quantification and tender documents
- Collate offers for adjudication
- Issue notifications of award and purchase orders
- Track order status and compliance with contract terms
- Manage communications with contract suppliers
- Track suppliers’ performance for future tenders