Six Years of Progress: The Evolution of Ukraine’s Medical Procurement System
Six Years of Progress: The Evolution of Ukraine’s Medical Procurement System
Six years ago, the Government of Ukraine set out to establish a central procurement agency as part of the country’s rollout of health care reforms to ensure that patients have access to the medicines and medical devices they need. With support from the USAID Safe, Affordable, and Effective Medicines (SAFEMed) for Ukrainians Activity led by Management Sciences for Health, the country successfully launched Medical Procurement of Ukraine (MPU). MPU subsequently was established as a financially independent and sustainable agency that achieved over $200 million (UAH 8.3 billion) in central budget savings from October 2018 to June 2024, which helped lower patients’ out-of-pocket expenses. By strengthening the capacity of MPU—from procurement to warehousing to distribution—SAFEMed helped advance Ukraine’s pharmaceutical and supply chain systems and develop digital innovations, anti-corruption practices, and efficient processes those systems can use and build upon for years to come.
Digital Transformation
To better streamline and integrate information systems, SAFEMed helped MPU develop and expand its use of digital technologies. These innovations help collect, analyze, and consolidate data, ensuring high data integration, reducing costs, and increasing supply chain management efficiency. These digital innovations include the following:
- MedData: This system tracks the stock level of medicines, supplies, and blood supply.
- eStock: This system provides up-to-date information on the need for and delivery, availability, and usage of medicines and medical devices at health facilities, enhancing the timeliness and accuracy of data. The eStock system consists of four modules—two that are already operational and two that are expected to be fully released in May 2025: Demand Collection, Procurement, Logistics, and Accounting.
Anti-Corruption
Following years of corruption and integrity issues within Ukraine’s public sector, it was essential for MPU to serve as a transparent enterprise and adopt best global anti-corruption practices. In 2022, with SAFEMed’s support, MPU became the first procurement organization in Ukraine to receive compliance certification under international anti-corruption standards. The following year, MPU successfully passed its surveillance audit, reaffirming its continued compliance with those standards.
Expansion of Storage and Distribution
To further improve efficiency and sustainability, SAFEMed helped the Ministry of Health (MOH) integrate the state enterprise “Ukrmedpostach” into MPU. Ukrmedpostach has maintained a warehouse and logistics infrastructure for more than 30 years, and the merger marked the beginning of MPU’s transformation into a full-cycle agency. SAFEMed provided integral support throughout the two-year integration process and worked closely with the MOH and MPU to overcome challenges and delays brought on by the war and other factors. The integration enabled MPU to ensure faster delivery of medical goods between regions and reduce the risk of shortages in hospitals.
Prozorro Market eCatalog
MPU also runs the medical section of the Prozorro Market known as the eCatalog. The Prozorro Market, which functions like an online store through which public procurers can quickly and cost-effectively purchase the goods they need, is valued for its efficiency and convenience. MPU fills the catalog with goods, creates competitive technical specifications, and qualifies suppliers, thereby allowing hospitals to bulk order small-value items at reduced prices. Currently, the eCatalog offers over 40,000 items and 80% of procurement procedures are successful—all thanks to the higher competition and simplified process for both suppliers and buyers the Prozorro Market provides compared to open bidding procedures.
Strategic Planning
In 2023, MPU focused on improving hospital supply management by signing three-year contracts for centralized procurements under the MOH’s direction. These contracts allow suppliers to plan production and deliveries in advance, which in turn lets them offer better prices and helps minimize the risk of shortages–thereby leading to cost savings and continuous patient access to essential medicines.
What’s Next
In line with its 2023–2026 strategy, MPU continues its transformation into a full-cycle medical supply agency. A key next step is establishing a Supervisory Board made up of mostly independent members to ensure effective management and minimize political influence. Efforts are also focused on further developing the Prozorro Market and expanding international cooperation.
“MPU will continue to strengthen relationships with national and international stakeholders,” said Oleg Klots, Acting General Director of MPU. “We thank our partners for their ongoing support and collaboration, especially USAID and its SAFEMed Activity.”
