With regard to quality assurance, all factors relating to the manufacture and supply of finished products should be in place and functioning according to required quality standards. Efforts should be made to ensure that products in the supply system are safe, and will not need to be replaced due to failure in quality.

A. About the manufacturer Good manufacturing practice (GMP) certificate:

Applies to manufacturers of all medicinal products (drugs and medical devices). This certificate ensures that products are consistently manufactured and controlled to quality standards necessary for intended use, and as established by the 'country of origin' regulatory authority. The certificate is issued following inspection of the premises, manufacturing equipment, personnel, product and marketing documentation, in-house quality control, in-house process validation, etc. and is valid for a certain period of time. Its usefulness in assessing quality is debatable, largely due to the differing rigour with which assessments are carried out in different countries. None the less, lack of a GMP certificate from a manufacturer should be a cause for concern.

ISO Standards: These are standards of general quality assurance issued by the International Organization for Standardization (ISO), a nongovernmental organization. The standards are not official standards and may be seen as voluntary, unless a government adopts them as part of regulatory legislation. ISO standards apply to manufacturing systems, or the creation and provision of a service, with a view to assuring customer satisfaction.

The following is information relating to the supply of pharmaceutical products that must be requested from the manufacturer or the wholesaler:

Country of origin: Regulatory authorities in the end-user's country may have a list of countries (as well as of manufacturers) whose regulatory and licensing procedures are not approved because the quality and safety of the products cannot be guaranteed. Products from these countries will not be authorized for importation.

Manufacturer's name: Information will need to be provided on whether the name of the manufacturer appearing on the product is that of the actual manufacturer, whether the product is made by a subcontractor, and what the implications for product quality, safety and efficacy are.

Current manufacturing licence: Shows that the manufacturer is legally licensed to produce the listed pharmaceutical products.

Good distribution practice (GDP) certificate: This measure ensures that the quality of products is maintained during internal and external transport and distribution of goods.

Certificate of a pharmaceutical product (CPP):

This certificate is part of the WHO Certification Scheme on the Quality of Pharmaceutical Products Moving in International Commerce. The regulatory authority in the country of manufacture (exporting country) issues this certificate to the regulatory authority of the importing country. The certificate contains all the relevant information on a stated product (its manufacture, quality, etc.) that would be required by regulatory authorities in the importing country. A CPP can contain a list of products to be supplied with individual information for each product.

A CPP relating to one product cannot be taken as acceptable evidence of licensing for another product not mentioned in the document. As well as indicating that a manufacturer has been licensed to produce a particular pharmaceutical substance, the CPP also states whether the product is for export only, or if it is authorized for use in the country of manufacture (issuing country). Finally, it gives an indication of whether the manufacturer is routinely inspected by the relevant authority.

Free sale certificate: The regulatory authorities may wish to know whether the products being offered for sale by the manufacturer or wholesaler are in fact registered for use in the country of manufacture. This certificate is supported by a product licence (PL) issued by regulatory authorities in the manufacturing country; the PL is issued for the purpose of marketing and free distribution. However, the WHO certificate of a pharmaceutical product (CPP) is increasingly superseding this document, since many manufacturers tend to produce for export.

Certificate of analysis (COA): This document applies to a specific batch of product being offered for sale. It shows whether the product in question has been manufactured according to a stated international standard by comparing actual chemical analysis of a sample from the batch in question with the minimum requirements set out by the standard chosen. A buyer will generally look for equivalence of British Pharmacopoeia (BP), European Pharmacopoeia (EP) or US Pharmacopeia (USP) standards.

It should be noted that in the absence of other supporting evidence these documents alone do not constitute guarantees of product quality. However, the inability of a manufacturer or supplier to provide such basic information should alert you as a buyer.

B. About the wholesaler

While manufacturers will supply directly to the larger customers, such as a government central medical stores, they tend not to supply to low value buyers.

The wholesaler is not a manufacturer, but offers the flexibility to deal with a large number of customers, and has the expertise to source from a wide geographical area and offer goods at affordable cost. Due to low overheads, the wholesaler is also able to entertain a variation in order sizes, unlike a manufacturer. And this is the advantage wholesalers offer.

As a buyer, you may request the wholesaler to provide any information normally available from a manufacturer. In addition, a Letter of authorization to supply can be requested which ensures that the wholesaler is legitimately offering products which he has the authority to sell.

C. About the agent or representative

Many manufacturers and some wholesalers will not have offices in the recipient country for business reasons. In order to effectively market their goods, they normally appoint an agent or representative to look after their business interests. Increasingly, one finds that there is a regulatory obligation for an overseas supplier (manufacturer or wholesaler) to have such representation in the recipient country. The advantage is that the regulatory authorities and potential clients have someone to whom they can address their concerns and needs. If such an agent is not exclusively representing one supplier, he or she may be a source of valuable product-related information (e.g., cost, alternatives, product literature, research papers, brochure, etc.). There are disadvantages, however. For example, the cost of the goods procured through the agent will include commission. Further, and more worrying, in places where laws and regulations affecting the supply of medicinal products are weak, one finds that anyone with capital can work as an agent. In this case, professionalism or a concern for safety and quality of the product may be lacking.

D. About the product

Original manufacturer: As mentioned above, it may be important to know who is the original manufacturer of the product. Many manufacturers are now able to subcontract production of licensed products to other local or international manufacturers. This is acceptable practice which is necessary for economies of scale to be achieved in production. In this case, the original manufacturer is considered to be the contractor. However, the subcontractor's identity must appear on the documents relating to the product. Further, the subcontractor must be inspected with the same rigour as for the contractor.

Manufacturing date: This date must appear on the label and all documents relating to the product.

Expiry date: This date must appear on the label and all documents relating to the product.

Expected shelf life upon sight or receipt by the buyer: You may set a standard requirement that all pharmaceutical and other date-related products such as consumable items and sterile items must have a minimum life span once opened. In some cases, the national regulatory authority will have set this limit, which you must follow.

The supplier must state these dates, or state that they will supply goods according to your requirements, demonstrating that you will receive products that meet the shelf life requirements. Note that this becomes a contractual obligation on the part of the supplier.

Label requirements: Clear, informative labels on medical products are part of regulatory requirements. Pharmaceutical product labels should state:

• The International Nonproprietary Name (INN) or generic name of the active ingredients and formulation in addition to the brand-name.

• Pharmacopoeial standard of the formulation (e.g. BP/EP/USP).

• Dosage form (e.g. tablets, capsules, syrup, injection).

• Quantity of active ingredient(s) in the dosage form.

• Appropriate cautionary advice (use, warnings and precautions),

• Number of units per package.

• Batch number.

• Date of manufacture.

• Expiry date of the product.

• Storage or handling instructions.

• Manufacturer's name and contact details.

If the product carries the wholesaler's logo, the label must also contain the manufacturers name and all other details listed above.

Quality of packaging (both inner and outer): Packaging is also an important issue, particularly as it can have a substantial impact on damage in transit/storage and on potential degeneration of products. Do not be afraid to ask your supplier what kind of packaging you can expect to receive as part of the price. Inadequate packaging can cause very significant hidden costs to purchasers.

E. Heat-sensitive products

Cold storage items refer to those medical products that are heat sensitive; that is, their efficacy is dependent on the surrounding temperature. Effectiveness may be reduced by a decrease or increase in the surrounding temperature. It is important to note that most terms apply to temperate climates and in many cases may not apply to the tropics or other climatic zones.

Generally speaking, substances that appear in the pharmacopoeias are formulated to be stable at a specific temperature, or within a range of temperatures. One of the tests performed to this end is the accelerated stability test, where a batch undergoes a series of temperatures for a defined period of time, to assess product viability and therefore effectiveness. Depending on the product, temperatures may range from freezing to simulated temperatures found in extreme conditions. The marketing licence will be related to these and other factors.

If a product is reformulated to be stable at non-standard temperatures, it ceases to be a standard product (i.e., it cannot be referred to BP or USP). Be aware that products developed to be stable at temperatures prevailing in tropical areas will need a new monograph and may require specific stability, safety and bioequivalence tests and further clinical trials. This is a very expensive process.

Store frozen: This refers to some products such as vaccines which need to be transported within a cold chain and stored at -20 °C.

Store at 2-8 °C: This is for very heat sensitive products. Products must not be frozen. Traditionally they are kept in the first and second part of the refrigerator (never the freezer compartment).

Keep cool: This will mean storage between 8-15 °C. Traditionally, the bottom part of a refrigerator.

Store at room temperature: This is generally assumed to mean storage at 15-25 °C.

Store at ambient temperature: This means storage at the surrounding temperature. Not a widely used term, due to significant variation in ambient temperatures. It must be assumed to mean 'room temperature' as above.

Storage: This means keeping in one place, and can be short-term (such as the period of waiting to be sent to consumer), medium-term (as when waiting at freight forwarders) or long-term (long term storage at the consumer's premises).

Storage temperature: Advice from the manufacturer applies to long-term storage at the supplier's premises, at the freight forwarder's premises and at the consumer's premises. The supplier will hold such items in stock at the specified temperature. The freight forwarder is expected to keep the item at this specified temperature if the length of time it will take to actually ship the item is longer than the recommended period.

Transit: refers to the period in which a product is being shipped from one place to another.

Transit time: This is the time a product is in the state of moving from one point of storage (for example, the wholesaler's warehouse or the freight forwarder's warehouse) to another point, the latter-being a point of medium- to long-term storage. Manufacturers will recommend a time-scale in which a 'keep cool' item can remain outside its storage temperature.

Transit temperature: Where a product requires shipment at a specific storage temperature, the manufacturer will recommended the appropriate temperature.

F. Medical equipment and medical devices

This is one of the rather complex areas of procurement and supply. There is no essential list of commonly used medical equipment and devices. While it may be considered 'generic' to use the description 'X-ray machine' or 'ultrasound machine', this does not suggest that these machines are available in generic form. They remain heavily patent bound and available to buyers in brand form. This situation applies equally to surgical instruments which tend to be known by a combination of the descriptive and name function e.g. Lange Hohmann elevator, for reducing fractures; Kocher intestinal clamp, for occlusion of a section of intestine, rather than some generic functional name. This also applies most famously to suturing materials, where the manufacturer and brand name Ethicon is accepted as an alternative name for 'suture'. Users of equipment tend to be the ones who decide on the machine to buy for their facility or practice.

As users change, new staff will also request the purchase of different machines or products, reflecting their own experiences of those machines, and not other makes. Consequently, there is no universally agreed minimum requirement with respect to specifications or quality. The cost of procuring new and discarding other makes of machines can account for a great proportion of public health expenditure. There is therefore a serious need to standardize equipment at all levels of health care services. This not only saves money, but it also helps in training. It is advisable to use a source with an appropriate level of technical knowledge of the products, who can advise and give support where necessary.

Owing to the absence of clear guidelines, variations exist in the quality and specifications of products available in the market place. When it comes to larger capital items, either new or reconditioned, issues such as reliability, technological appropriate-ness, mains supply (voltage and frequency), warranties, spare parts/technical support and consistency with what is already available in a country are all factors which should be borne in mind.

Ready-made kits: In certain situations, particularly in the initial response phase of a rapid onset emergency or when building up a specialty or primary facility from scratch, ready-made kits offered by a number of suppliers can sometimes be a very practical way forward. However, buyers should be aware that even where kit contents are supposedly standardized, such as with the WHO New Emergency Health Kit 1998, variations in product quality and specifications between suppliers could be enormous. Quality assurance considerations which are applicable to pharmaceuticals, consumables and equipment generally should also be applied to the individual components within a ready-made kit.

G. Samples

Health authorities may advise that samples of medicinal or consumable products, or certain medical devices should be supplied to the appropriate regulatory authority. The regulatory body will impose requirements for samples needed in quality control testing or for the retention of a reference sample.

The requirement for samples applies mainly to pharmaceuticals and sterile consumable products. Rarely would the authorities require samples of expensive capital equipment, such as X-ray machines, preferring to inspect the products at the point of manufacture or wholesale. Ensure familiarity with any requirements and request the supplier to provide samples whenever possible.

Sample invoice: The supplier will raise an invoice of all required samples for the attention of customs. The invoice must show that the goods are for sample purposes only, and that they are free-of-charge to the customer, and have no commercial value. There should be no requirement to pay duty on samples. However, this should be verified through the customs office.

Terms and definitions for medical equipment

Capital Equipment: This term is used loosely to describe whatever medical equipment has required considerable capital to finance its procurement. For example, a self-financing primary health care centre may describe forceps as capital equipment, whereas a referral hospital may not. Therefore, it depends on the buyer to define what is meant by 'capital equipment'.

Consumable Products: This term refers to non-medicinal products. These products are 'consumed' and require regular replacement. This term can apply to disposable sterile items such as syringes, needles, cannulae, etc.

ISO Standards: These are standards of general quality assurance issued by the International Organization for Standardization (ISO), a nongovernmental organization. The standards are not official standards and may be seen as voluntary, unless a government adopts them as part of regulatory legislation. ISO standards apply to manufacturing systems, or the creation and provision of a service, with a view to assuring customer satisfaction.

ISO 9000 to 9004: refer to Quality Management and Quality Systems. In this group, other related ISOs are 8402 and 1013. These standards recommend modern approaches to management and how to assure general product quality. They therefore cover issues such as quality policy, manufacturing process, design and development, construction, installation and services.

European Norms (EN): These are standards similar to ISOs set by the European Union. For example, EN 29000 is identical to ISO 9000; EN 45001 is similar to ISO 9001.

The European Committee for Standardization (CEN): The CE symbol (which is the CEN's seal of approval) indicates that the products are manufactured in accordance with ISO 9001 and EN 46001. This specifically applies to medical devices and surgical products for use within the EU.

In the same way that the manufacture of pharmaceutical products is subcontracted, a number of manufacturers of medical devices and surgical products (cannulae, catheters, etc) based in the EU subcontract the manufacture of these products outside the EU (either through pure subcontracting, or through joint venture agreements). In this event, the subcontracted party must meet the same rigour of quality assurance as expected of an EU-based manufacturer.

While many buyers use the CE symbol as the highest indicator of quality, they miss out on a number of excellent and good quality products produced specifically for non-European markets by manufacturers outside the EU.

Electrical Safety: With electrical equipment, it is worth asking what safety and performance standards the item you are buying meets. This information will tend to appear on technical specification sheets and in operation and service manuals, but if in doubt, ask the supplier to clarify. The main accepted international standards for both electrical safety and performance are those set by the IEC (International Electrotechnical Commission) in Geneva.

Uninterruptible Power Supply (UPS): When ordering electrical equipment, you should not forget the importance of obtaining a stabilizer or UPS as appropriate, to protect electrical equipment from possible damage due to uncontrolled fluctuations in electrical supply.

When looking at complex or expensive capital equipment, it is prudent to stick to well-known and reputable manufacturers. Check which ones can offer technical support in the region where the equipment will be in operation. It is wise to buy from suppliers who have both the technical capacity and the ability to support you with accessories, spare parts, advice, technical backup and support as well as in troubleshooting, maintenance, servicing and repair.

Responsibilities of the parties

The following categories of responsibilities are important with respect to claims being made if goods are damaged during storage at any one point or during transit. The point handling cold storage items would be liable in the event the goods were damaged due to being kept at the wrong temperature, or under wrong storage conditions

The supplier

The supplier is expected to:

• Ensure that appropriate storage facilities for heat-sensitive products are available and in working order;

• Store the products at the recommended temperature;

• Ship the goods at the recommended temperature (documentation and information on packs to follow); and

• Inform the freight forwarder and the customer about the storage and transit requirements and recommendation for heat-sensitive products being shipped as set out in the shipping documents.

Freight forwarder

• Ensures that appropriate storage facilities for heat-sensitive products are provided;

• Refers to shipping documents for information on heat-sensitive products;

• Stores the goods at the recommended storage temperature, as advised on documents and on packs.

• Ships the goods at the recommended temperature; and

• Ensures that the delivery period will be within the recommended transit time and temperature requirements will be respected.

Freighter or carrier

• Ensures that appropriate storage facilities for heat-sensitive products are available at their premises;

• Ensures that they have appropriate storage facilities for heat-sensitive products on board the chosen vessel or aircraft;

• Refers to shipping documents for information on heat-sensitive products; and

• Ensures that the delivery period will be according to the recommended transit time and temperature.

Customs

• Will ensure that they have appropriate storage facilities for heat-sensitive products;

• Will refer to shipping documents for information on heat-sensitive products;

• Will receive heat-sensitive goods upon arrival;

• Will store heat-sensitive goods at recommended temperature as advised by the supplier (shipping documents); and

• Will inform the end-user of the arrival and storage of heat-sensitive products at customs.

Customer (end-user)

• Ensures that appropriate cold storage facilities are available;

Depending on the freight contract:

• Refers to shipping documents for information on heat-sensitive products;
• Clears through customs all heat-sensitive products upon arrival in timely manner;
• Stores heat-sensitive products at recommended temperature.

Freight: shipping goods and the risks involved

Shipping of goods is a cost to be considered as part of the overall price. A variety of freight contracts are available to both the buyer and seller when shipping goods. Knowing the types of contracts available enables an informed choice in freighting of goods. Knowing and selecting the appropriate contract may often reduce the cost of procurement.

The method or mode selected to ship goods to the end-user or buyer's destination must be seen as a contract to supply. This is the second part of the procurement exercise, the first being the actual placing of the order for the goods. Various freight contracts are available, based on the International Chamber of Commerce terms: the current edition being INCOTERM 2000. These terms have historically applied to shipping of goods by sea and carriage by road. However, they now apply to air; where a shipper or carrier is used, terms will apply to both 'ship for sea freight' and 'airfreight' carrier.

It is important to note that INCOTERMS are voluntary and provide importers and exporters with guidelines on the responsibilities to be borne by the parties. Being terms that are reviewed annually, it is important to keep and refer to current terms in use.

Costs

It is important to define the term 'Free' as set out in some of the contracts. This does not mean that the buyer is exempt from paying for the service. As with all other freight contracts, the cost of shipping is to be borne by the buyer. In this event, it may be prudent to request the separation of freight and insurance charges from the cost of goods.

Risks of loss or damage to goods

A number of freight contracts require that insurance is taken out against loss or damage of goods. In these contracts, the risk and the cost of covering such a risk is borne either by the seller (in the event the buyer has not requested insurance) or by the buyer. Risk is, however, passed on from seller to the buyer once the goods become the responsibility of the buyer.

Terms and definitions

The following are the most common freight contract terms:

Ex Works (at sellers' premises): The seller's only obligation is to provide goods at his premises for collection by the buyer. It is the buyer's responsibility and obligation to load the goods and transport them to the buyer's destination.

FCA (Free Carrier to a named port of carriage): The seller's obligation is to deliver goods into the hands of the first or only carrier, present at a named port of carriage (seaport or airport). The buyer's responsibility is to pay for the onward shipment of goods to the destination.

FAS (free alongside ship): The seller's obligation is to ensure that the goods are placed alongside the ship, on the loading platform (or quay). The seller will be charged up to this point and it is for the buyer to pay for the loading and onward shipping. This generally applies to sea freight.

FOB (free on board the carrier at a named port of shipment): The seller is responsible for placing the goods on board the first ship or carrier at a stated port of shipment. Once the goods pass the rails of the ship and are on the ship's platform, the risks and responsibility pass onto the buyer, and so does the cost of onward shipping.

CFR (cost and freight to a named port of destination): The seller covers all cost for freight of goods to a named destination port. Once the goods leave the ship, the risk and other costs become the responsibility of the buyer.

CIF (cost, insurance and freight to a named port of destination): As above, but the seller also pays for the insurance on behalf of the buyer against loss or damage to goods. This cost is passed onto the buyer.

Where insurance is not included, the seller may take out additional insurance cover for loss or damage to goods.

CPT (carriage paid to a named place of destination): The sellers' responsibility is to pay for freight of goods to the destination, loading onto the first carrier at the destination port. Costs of using subsequent carriers will be borne by the buyer.

CIP (carriage, insurance paid to a named place of destination): As under CPT, but that the seller has insured against loss or damage to goods during transportation to the first carrier.

DAF (delivered at frontier of a named port of entry): The seller's obligation (cost and risk) terminate once the goods arrive at the port of entry of a named country, and the export clearance has been granted. The buyer is obliged to pay for customs clearance and onward transportation in the country.

DES (delivered ex-ship, at port of destination): This means that the seller will bear the cost of shipping the goods up to the docking of the ship at the port of destination, making the goods available to the buyer. It is then the buyer's responsibility for customs clearance and unloading the goods, and for onward carriage.

DEQ (delivered ex-quay at port of destination):

The seller is obliged to present the goods to the buyer at the quay or wharf at the destination port. That is, the seller pays for unloading of goods off the ship and onto the quayside, bearing all risks. The buyer is responsible for customs clearance. DEQ is further subdivided into:

• Ex-quay duty paid: where the seller pays customs duty; or

• Ex-quay duty on buyer's account: where the duty is paid by the seller, but is then reimbursed by the buyer.

DDU (delivered duty unpaid to named port of destination): The seller covers all costs and risks for taking the goods to the port of destination, the goods remaining uncleared, import arrangements to be administered by the buyer. The seller is not responsible for duty or taxation.

DDP (delivered duty paid to named place of destination): This is where the seller delivers the goods to the buyers' door, meeting all costs and risks incurred, including duties. Of course, this contract may be negotiated to exempt the seller from paying local value added tax (VAT) and taxes.

Where one has no experience in freighting goods, it is best to contract an established freight forwarder who can act on your behalf and make these arrangements for you (at a fee). Using established freight forwarders can result in great savings in costs, as they have access to price cuts that may not be available to the small or inexperienced buyer.

Taxes and duties

Value added tax (VAT): An added cost to the procurement of medical products is VAT or value-added tax, collected by the government. It is a percent charge of the value of the goods being sold. This VAT affects those buyers based in the country of the seller (manufacturer or wholesaler). Many organizations based in Europe, purchasing medical products in Europe for use overseas, are charged VAT. They can claim this fee back from customs at the time of export of goods. A quality supplier will provide you with all documents relating to reclaiming VAT. However, an organization can be VAT-exempt (i.e., it has this notification), and may not be charged this tax if the goods procured are for charitable work in-country, or for use overseas.

Many charitable and nongovernmental organizations providing health care services in developing countries qualify for VAT-exemption. A buyer should be aware of the VAT status. If this status is unknown, VAT may be charged by the seller, thus increasing costs unnecessarily.

Customs duty: A duty is charged on all types of goods exported and imported. The organization exporting goods to its projects overseas will have to pay duty at the time of export, and duty in the country of import. In some cases, an organization offering charitable or free-of-charge health care services, may be exempt from paying these duties. However, this is an exception rather than the rule.

As a buyer, you need to be familiar with the duties to be paid. Do find out if you are exempt from paying duties in the recipient country. In some cases, religious organizations offering health care are also exempt from duties and VAT.