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close this bookOperational principles for good pharmaceutical procurement (UNICEF - UNFPA - WB - WHO/EDM, 1999, 32 p.)
close this folder3. Operational principles for good pharmaceutical procurement
View the documentEfficient and Transparent Management
View the documentDrug Selection and Quantification
View the documentFinancing and Competition
View the documentSupplier Selection and Quality Assurance

Supplier Selection and Quality Assurance

11. Prospective suppliers should be pre-qualified, and selected suppliers should be monitored through a process which considers product quality, service reliability, delivery time and financial viability.

Justification and explanation

Pre- and post-qualification procedures help to eliminate substandard suppliers, if properly managed. Pre-qualification is the procedure of evaluating supplier capacity and reputation before bids are solicited for specific products. This is the preferred procedure, especially for ongoing drug procurement systems. Although substantial time is required to establish an initial list of pre-qualified suppliers, once this has been done the lowest pre-qualified tenderer for each product is deemed to be qualified, which expedites adjudication and contract award.

Post-qualification evaluates the suppliers after bids have been received. If there are numerous offers from unknown suppliers there may be long delays in awarding contracts, as it will be necessary to validate suppliers’ capacity to supply good-quality products.

Practical aspects

Most established procurement systems use some form of restricted tender with pre-qualification, soliciting bids only from suppliers that have been pre-qualified. Procurement systems using restricted tenders with pre-qualification should make continuous efforts to seek out potential new suppliers in order to maintain competitive pressure on established suppliers that had been pre-qualified previously. Drug regulatory authorities may provide relevant information regarding new suppliers.

The process for evaluating new suppliers can include formal registration, formal inspection, reference checks with past clients and international agencies, test purchases in small quantities and informal local information-gathering. Countries that do not have functional regulatory agencies and drug quality control laboratories must make vigorous efforts to check references of new suppliers and should buy only from those suppliers that are known to provide quality products. One important aspect of quality assurance is the concept of “traceability”. The supplier must be able to trace the product to the finished product manufacturer, and the latter must be able to trace the ingredients to their producers, all in a transparent manner.

In addition to using pre- or post-qualification procedures, successful procurement offices ensure continued good supplier performance through a formal monitoring system which tracks lead time, compliance with contract terms, partial shipments, quality of drugs, remaining shelf-life, compliance with packaging and labelling instructions, etc. A cumulative file for each supplier should have copies of registration papers, references, special correspondence, complaints and other anecdotal supplier information. The information system should track chronologically the number and value of tender contracts awarded, and the value of total purchases from the supplier by year and performance for each tender.

12. Procurement procedures/systems should include all assurances that the drugs purchased are of high quality, according to international standards.

Justification and explanation

Four components make up an effective quality assurance system:

· selecting reliable suppliers of quality drugs;

· using existing mechanisms, such as the WHO Certification Scheme on the Quality of Pharmaceutical Products Moving in International Commerce;

· establishing a programme of product defect reporting; and

· performing targeted quality control testing.

The selection of suppliers that are known to provide high-quality products as discussed in Operational Principle 11 is the primary key to ensuring drug product quality. When using new suppliers whose products are not familiar in the country, the procurement system must be particularly alert to product quality issues.

Practical aspects

Some products vary substantially in formulation and bio-availability from supplier to supplier. When this difference is therapeutically significant, purchasing offices should be cautious about making changes in supplier from year to year, and particularly about accepting unknown suppliers. Even when new products are completely equivalent in content and effect, changes in dosage form can be problematic, requiring patient and provider re-education. For drugs used in chronic diseases there should be a significant cost benefit before changes are made.

The WHO Certification Scheme on the Quality of Pharmaceutical Products Moving in International Commerce is a way of exchanging information on the supplier between the regulatory authorities of the exporting country and those of the importing country. It does not constitute an absolute assurance of product quality but does provide a mechanism for ascertaining that a drug product comes from a reputable source. The certificate is as independent and reliable as the regulatory authority that issues it.

All shipments from suppliers should be physically checked on receipt. A formal system should be established which encourages health workers to report potential problems with poor product quality, ideally using pre-printed, simple reporting forms. All reports should be carefully assessed to establish the need for laboratory testing and appropriate follow-up action must be taken, including product recall if warranted. The reporter should be informed about the results and the action taken, even if products are not defective, in order to encourage continued participation in the reporting programme. Product defect reports and results should be recorded as part of the supplier monitoring system.

If supplier selection is managed effectively it is not necessary to carry out quality control testing on every batch of every drug received. Many procurement agencies limit routine testing to new suppliers and to sensitive products. However, all public drug supply systems should have access to quality control laboratories to test suspect drug products.

Unfortunately, not all governments have been able to sustain government-operated laboratories. In some countries a college of pharmacy or an independent laboratory may have the required testing facilities. Also, quality control laboratories in industrialized countries will provide drug analyses against payment. If analyses must be performed by foreign laboratories, foreign exchange problems may be reduced by requiring the suppliers of suspect products to pay the laboratory directly, with the arrangement clearly described in the purchase contract. Financing for quality control testing is a difficult problem in many countries, and governments and donors should collaborate to find viable solutions.