India-WHO Essential Drugs Programme

implemented by Delhi Society for Promotion

of Rational Use of Drugs (since 1997)

Delhi State

Population – 14 millionTotal no. of hospital beds – 4000Teaching hospitals – 2Total number of health centers –

158

Drug annual budget – Rs. 400 million

($ 8 million)

Before Drug Policy - 1994

Access30-35% of health budget spent

on drugs yet scarcity of drugs in the hospitals and both patients and doctors were not satisfied

AccessShortage of drugs in the public

health facilitiesMultiple procurement

arrangements leading to sub-optimal utilization of resources

Uncertainty of quality of drugs

Before Drug Policy - 1994

Before Drug Policy - 1994

Quality assurance Erratic and unreliable

distribution system – – Drugs nearing expiry drugs – Drugs not needed (combination

drugs)– Herbal drugs

Money wasted on substandard drugs

After Drug Policy-1997

Principles of procurement Procurement restricted to

essential drug list90% of drugs budget spent on

essential drugs

After Drug Policy-1997

Pooling of drug requirement of all state health facilities

System of inviting quotations by each institution independently abandoned

After Drug Policy-1997

Level playing field to all bidders– No special preferences to public

sector undertakings and small scale units

Pooled procurement system set up with a standing Special Purchase Committee to secure transparency and objectivity

Standing Purchase Committee

Chairperson is a non-government person Principal Secretary Health State Director Health Services State Drugs Controller Nominee of the State Finance Department Nominee of the State Law Department An eminent clinical pharmacologist Chairperson, Committee for selection of

essential drugs Head of institution

Non officials

An eminent administratorAn eminent clinical

pharmacologistA Finance & contract expertA leading private practitioner

This was an innovative move intended to bring outside expertise, transparency and

objectivity

Purchase committee

Close linkages have been maintained with drug selection and use

The chairperson of the Essential drugs committee is a member of the purchase committee

Continual liaison with other agencies like Defence establishment for feedback about suppliers performance

Procurement methods

Empanelment of pre-qualified bidders

Or

Open competitive bidding each year

Bidding restricted to empanelled pre-qualified bidders not followed as it:– Debars new players albeit for a

limited time– Leads to sense of complacency– Possibility of cartels developing

amongst empanelled bidders

Procurement methods

Procurement methods

Open competitive bidding each year with pre-qualification criteria introduced

Pooled procurement system

Selection criteria Tenders invited from manufacturers

only in generic names in 2 envelope system– Technical and price bids

Price bids of only those manufacturers are opened who fulfill the technical criteria

Unsuccessful bidders are informed and earnest money returned

Pre-qualification criteriaFinancial viability - at least

annual turnover of Rs. 120 million ($ 2.5 million)

Pooled procurement system

Pre-qualification criteria Technical qualifications –

bidder should have been – Manufacturing the drug for at

least 3 years– WHO-GMP certification

Pooled procurement system

Pre-qualification criteria Services of at least one approved

manufacturing chemist and one quality control chemist

No case pending against manufacturer for sub-standard or spurious drugs

No black listing by any other procurement agency

Pooled procurement system

Quality assurance

Careful selection of the tendersCriteria of cut off turnover – Rs.

120 million ($ 2.5 million)Selective GMP inspectionsTesting of batch samplesSamples sent for testing by the

prescribers for quality assurance

Quality Assurance – GMP inspections

Panel of 12 experienced experts set up for GMP inspections

Two experts sent for inspection to any of the pharmaceutical

The inspection results of the approved firms (White list) shared with other states on request

Rejection rate is 25% Samples sent to approved quality

control laboratories for quality assurance

Quality assurance results -CPA cell

Total no. of drug batches tested in 2000-2002 3529

No. of samples declared not of standard quality 20

Total expenditure on testingRs. 25,92,750

0.53% of the budget for drugs

Positive effects Maximal use of available resources Procurement at lower prices led to

availability of more funds for procuring more essential drugs

Increased availability of drugs Improved quality of drugs procured,

therefore, building up trust in the system

Pooled procurement system

Better availability and accessibility to drugs in the public sector by savings through an efficient procurement system

Conclusions

No extra funds spent other than GMP inspections

Impact of State Drug Policy - Pooled procurement

Cost of procurement reducedHolding the price lineQuality of medicines betterAccess to medicines increased

Pooled availability of drugs, extent of prescriptions by generics and adherence to EDL

0

20

40

60

80

100

120

1995 1997 1999 2000

Availability

Generics

EDL

Perc

en

t

Year under review

0

5

10

15

20

25

30

35

1995 1996 1997 1999 2000

Amoxycillin Chloroquine Omeprazole

Pri

ce/1

0 u

nit

s

(Rs.)

Years

59%

37%

43%

Cost Reduction of common drugs by pooled procurement (Rs.)