Managing Drug Supply for the Public Sector Mauritius Essay Example

a shift from a mono-crop agricultural economy to an exported oriented manufacturing economy, with a buoyant tourism and service sector. Mauritius is classified as upper middle income country by the World Bank.

Health Profile

Mauritius has reached an advanced stage in its epidemiological transition. Communicable diseases, problems of maternal and child health has markedly decline and are controlled effectively. On the other hand non-communicable and chronic diseases are on the rise. Non-communicable diseases in Mauritius represent 74 per cent of the total burden of disease in men and 76 per cent in women and include diabetes, hypertension, cerebrovascular diseases, cancer, mental illness and substance related diseases linked to tobacco use and alcohol abuse.

The rapid industrialization along with the openness of the island to the external world has brought in its wake changes in life styles in turn impacting on the health and nutritional welfare of the communities. Prevalence of obesity and overweight is high. Negative effects that arise from a more sedentary life style are associated with lowered physical activity; issues related to time allocation; tendency to consume more convenient foods; and preference to settle for less strenuous recreational activities. Cancer is the third most common cause of death in men.

This pathology is likely to increase with the aging population and the increase of risk factors related to changes in lifestyles. The HIV epidemic in Mauritius is classified as ‘Concentrated’ with prevalence of around 30 – 60% among vulnerable groups such as prison inmates, intravenous drug users and commercial sex workers Mauritius provides state health services throughout the country free at the point of use to all its 1. 2 million people. The state health services employ

over 650 doctors, 2,700 nurses, about 50 dentists and 17 pharmacists.

At primary care level, the state health services have 134 facilities (Including Area Health Centres, Medi-clinics, a Community Hospital and Community Health Centres) which provide medical, nursing, dispensary ,pharmaceutical services and other support services at local level. In addition, there are 5 regional hospitals and 3 district hospitals with over 2500 beds. Separate specialist hospitals include a Mental hospital with 800 beds, and an Eye hospital, an Ear, Nose and Throat hospital, a Cardiac Centre and a Chest hospital which together have over 200 beds. In the state health services, at primary care level, there are about 2. million attendances a year; at hospital level, in a year there are nearly 2. 5 million outpatient attendances and nearly 200,000 inpatient admissions This means that there will be 5. 5 million visits to the public health institutions. The system seem to give good results as the Health indicators show. We have compared results with South Africa as both countries are grouped in the WHO Afro Region and are classified as upper middle income countries. However the health profile is not the same. There HIV /AIDS represents the most important health burden in SA whereas in Mauritius it is non communicable diseases .

Legal Framework:

• The budget for drugs for the Public Sector : 800 000 000 MRU Public procurement for pharmaceuticals is ruled by
• the Public Procurement Act 2006
• the Pharmacy Act 1983
• the Dangerous Drugs Act Managing drug supply for the public sector is a daunting task.

Drugs are not consumable goods like others. Their production, procurement, storage, distribution or use are highly regulated. The consumer is

usually a person who is ill and who needs the drug to cure an ailment(gastro-enteritis) or stabilize a condition(diabetes) The level of regulation depend in which of the six schedules of the Pharmacy Act a particular drug falls into.

Some Drugs are classified as Dangerous Drugs fall in the fifth schedule eg.

Morphine Injection Or Methadone Syrup

The laws expect us to be able to account to the injection unit near or to the milligram near all through the procurement cycle . These drugs will require an extremely high level of security which will reflect on the logistics. Note: All drugs in the public sector are delivered on prescription only E. Objectives The objectives for the management of drug supply:

1. Obtain the highest quality for the lowest price
2. Ensure fairness to all parties concerned :taxpayer, supplier, MOH.
3. Maintain transparency and accountability at all steps
4. Ensure suppliers’ reliability in terms of service and quality
5. Achieve these objectives within reasonable time F. The Procurement Cycle

The Procurement cycle starts with the Selection of Drugs . This is done by the Drugs and Therapeutics Committee. The terms of reference of this committee is to decide wich drug molecule will appear on the Drug List for Hospitals. Only generic names(800) appear on the list and never brand names. Quantification is done at the level of each health institutionsent to the the Central Supplies Division where they are collated.

• Procurement is done either by open tender , restricted tender and very rarely by direct procurement
• Once procured the drugs are warehoused at the Central Supplies Division in Plaine Lauzun
• From there it is distributed to Health Institutions throughout the country

In Health Institutions they are

distributed free of charge either to in- patients or to out- patients Procurement Methods Drugs are procured from countries all over the world. But the biggest supplier in terms of volume remains India. In terms of budget it is the USA, the Eurozone or South Africa that earns the lion share.

Two star drugs account for one third of the budget:human insulin and cyclosporin used in the pevention of rejection in organ transplant . These drugs are only sourced from USA or Europe . Procurement is done mainly by tender exercises:open and restricted. For a tender exercise of less than 50 million,proceedures are done at Ministry’s level whereas for tender exercises of more than 50 million proceedures are done at the Central Procurement Board as summarised in the following table. Evaluation is done by a multidisciplinary team consisting of prescribers,pharmacists and health technicians.

After evaluation both winners and losers are notified. They have 14 days to appeal against decision of the evaluation team near the Independent Review Panel(IRP). If there is no challenge , the contract is awarded to the winner. If there is a challenge , then the appeal is heard by the IRP and a contract will only be awarded after decision of the IRP. G. Terms of Contract International contracts between the Ministry of Health and suppliers are based on the standard model for contracts of the World Bank and contain the following: The Incoterm : CIF

The Terms of Payment: Cash against Documents

The Performance security:5%of contract value Liquidated damage: 0. 5% of contract value per week of delay Expiry date: not less than 18 months at receipt of goods Special Documents:Quality Control certificate Under

the item Special Conditions of Contract of the Tender Documents, it is highlighted that: Standard accepted: USP,BP,EP,FP Packaging labels /Inserts:English or French Cold chain (Vaccines ,Biologicals etc) Stability testing: Zone 4 It also specifies that disputes will be settled under the Mauritian Jurisdiction H. Work Distribution

Two ministries share supply chain responsibilities for Government procurement: Ministry of Finance and the Ministry for which the goods or service is being procured. In the case of pharmaceuticals, Procurement, Clearance and Warehousing falls under the responsibility of officers from the Ministry of Finance. They work under the direction of the Permanent Secretary of the MOH Officers of the Pharmacy Section of the Ministry of Health gives in technical input only. Distribution falls under Ministry of Health Suppliers rating is made by both officers from the Ministry of Health and Ministry of Finance.

This situation partly explains the lack of integration of the supply chain.

1) Clearance : The Ministry of Health has in its vicinity a special shipping department responsible for clearance . Suppliers need to send : Bill of lading/Airway bill, Invoice,Package List and special certificates eg. Quality Control Certificates Import Permits are delivered on Line

2) Warehousing Goods are warehoused at the Central Supplies Division in Plaine Lauzun where a Buffer Stock of 6 months are kept. All health institutions send their orders on store forms 3 to the section A of the Central Supplies Division . They usually put Monthly orders.

In the Warehouse :drugs are picked up , orders prepared, stacked according to geographic region ready to be distributed. The warehouse is in an old building that dates from as far as 1968 and poorly maintained.

3) Distribution to Health

Institutions There is a fleet of six lorries which ensures the monthly supply to all health institutions Intermediate supplies are done as and when as and when required on the premises of the warehouse , but in this case ,the health institution is expected to ensure its own means of transport. * Health intitutions are expected to keep a Buffer stock 3 months.

4) Reverse Logistics

Reverse Logistics i. e the movement of goods between from the user department to the warehouse and eventually to the vendor occurs for two reasons: Product Recall and for Drug Disposal

I) Product Recall

• In case Adverse Drug Reactions
• Drugs nearing Expiry date
• Complaints on quality
• Redistribution to other centres.

II) Disposal Expired Drugs are disposed either at the:

• Centre d’enfouissement
• Incineration  ( except for Radio pharmaceuticals)

I. Supply Chain Impact or the Coweb Transparent and institutionally strong pharmaceutical supply chains can strongly contribute towards improving access to essential drugs.

Before proceeding to the SWOT analysis of the supply chain for pharmaceuticals we need to understand the interrelation between the supply chain and actions taken at institutional, national,supplier’s and patient’s level . The Supply Chain will both influence actions and be influenced by actions taken at those levels Substandard drugs Hidden costs PoorSupply chain mgt Lack of transparency For example : Inadequate procurement laws at national level may contribute to a lack of transparency in the supply chain at institutional level. It may also open doors to political intervention on the supply chain.

Both may lead to poor supply chain management which in turn ,may give rise to hidden costs with implication on the national economy. On the other hand, a poor management of the supply

chain may make us lose credibility near suppliers on the international level. A poor supply chain management may put the institution at the risk of attracting unreliable suppliers with lower service level, lower grade of drugs . There’s a risk of receiving substandard or counterfeit drugs at institutional level which is in turn responsible of inadequate disease control . This impacts the national economy.

On the other hand, poor drug quality usually ignites consumer outcry with subsequent political implication J.

SWOT Analysis

Among the opportunities of the supply chain is a real possibility of public private partnership. The warehousing and distribution could be privatized. Health institutions will then have to pay for the service procured. Drugs for orphan diseases , drugs difficult to procure or even dangerous drugs could be procured and sold with profit margins Among the threats there may be a public perception of general inefficiency with a subsequent risk of privatization of the whole system K. Recommendations Urgent need for integration In order to optimise performance, supply chain functions must operate in an integrated manner.

An Integrated Supply Chain Management (ISCM) project addresses coordination problems at the tactical and operational levels. Information must flow easily and without hindrance throughout the supply chain. Departments must be able to collaborate together to ensure the availability of drugs in a timely manner and at a reasonable price. One major barrier to integration is the fact that different ministries look after different steps of the supply chain and very often working in isolation.

For efficiency,the whole process should fall under the aegis of the Ministry of Health only.

Agressive IT penetration Information is a driver that serves as a glue to create

a coordinated supply chain. With adequate IT penetration, information will be available in an accurate and timely manner. It will allow stakeholders to have the right kind of information at real time. It will also allow supply chain visibility within the ministry. Furthermore, availability of information will facilitate decision making processes in the supply chain. Information Flow

Warehouse Distribution Procurement Programs Suppliers Patients/Prescribers Finance & Customs Program managers will be able to communicate their requirements rapidly to the warehouse and to procurement. A barcode system should be implementedurgently for better inventory management 3PL (transport, warehousing) Third party logistics is when one or more logistics functions is outsourced to a 3PL party provider.

In this case warehousing and distribution could be outsourced. Although a public private partnership(PPP) would be the ideal , 3PL could offer an easier immediate option Go green as per Government Policy To be in line with the Mauritius Ile Durable concept, the Ministry should adopt a greener supply chain. Some immediate action would be to send the large quantity of Carton boxes for recycling. Pharmaceuticals are ideally disposed of by high temperature (i. e. above 1,200? C) incineration.

Such incineration facilities should be equipped with adequate emission control so as to prevent the reject of toxic gases in the atmosphere. Research and development Supply chains in the public sector are never profit oriented, they are neither lean nor agile. Fat and messy would be more appropriate adjectives. Concepts which are successful in private firms may not work in the public sector without adaptation. The SC could be made leaner if it could deliver according to the different health programs needs. Program managers should be able

to discuss with supply chain managers on how best to decrease waste.

The SC could be made virtual :a virtual supply chains aim to reduce inventory levels through the more effective use of information In an agile supply chain, there are high levels of integration between processes within the department and between the stakeholders upstream and downstream in the external supply chain. A department of Research of Development would be able to continuously analyze the supply chain and find means to adapt concepts prevalent in firms of the private sector to the public sector. It would be responsible to develop best practices.