Procurement and Logistics

The pharmaceutical procurement system is a major determinant of pharmaceutical availability and total pharmaceutical costs. In most developing countries, pharmaceutical purchases represent the single largest health expenditure after personnel costs. An effective procurement process helps ensure the availability of the right medicines in the right quantities, at reasonable prices, and at recognized standards of quality. A country can acquire pharmaceuticals through purchase, donation, or local manufacture. Quantification is an important step in the procurement process that involves estimating not only the quantities needed of a specific item, but also the financial means required for purchasing the item. MSH has been a leader in promoting rational pharmaceutical selection for procurement, based on cost-effectiveness analysis and comparison of actual consumption and use patterns with theoretical need. MSH has also provided technical assistance and training to many countries in how to properly quantify the amount of medicines needed from the facility to the national level

When it comes to distributing medicines, the primary goal is to maintain a steady supply of pharmaceuticals and supplies to facilities where they are needed, while ensuring that resources are being used in the most effective way. The distribution cycle begins when pharmaceuticals are dispatched by the manufacturer or supplier. It ends when medicine consumption information is reported back to the procurement unit. Designing systems for distributing and storing medicines, supplies, and equipment is complex and important. Effective pharmaceutical distribution relies on good system design and good management, which is why supply management is a major part of MSH’s technical assistance. Recently, we have focused on promoting public-private collaborations to create innovative approaches to supply chain management issues.