Stages of Distribution, Moh/Kimadia Distribution Network and Size of the Health Care Delivery

Medicines and Medical Supplies

1. Background

Kimadia, the State Company for Importation and Distribution of Drugs and Medical Appliances, is the main drug supplier Iraq. Founded in 1966, Kimadia is a highly centralized and fairly secretive organization with a distribution network of specialized central, governorate, and district warehouses. Kimadia supplies 7,500 public, semi-private and private facilities. Annex 1 provides a schematic diagram of Kimadia’s distribution network.

Kimadia has for over 20 years been the sole body authorized by law to carry out management, planning, selection, quantification, procurement, storage and distribution of medicines and medical equipment. In 1989, it was estimated that 70% of drugs are imported. The other 30% come from a network of five pharmaceutical plants known as Samara Drugs Industries (SDI). SDI drugs and supplies including 160 different dosages and forms.

Until 1994 medicines supply was dominated by the public and semi-public sector. About 90% of drugs made available using public budget were allocated to the public/semi-public sector. By law all drugs are to be marketed via the Kimadia system. Private pharmacies estimate that a quarter of pharmaceuticals they sell are not.

Since 1994, the Government of Iraq facilitated private practice and 700 new pharmacies were opened. Private pharmaceutical manufacturing such as the Arab Company for Antibiotic Plants (ACAI) and 18 other small plants are reportedly producing a wide variety of drugs and medical supplies.

MOH and Kimadia had various committees for drug selection, regulation, quality assurance, monitoring and evaluation. There was a pharmaceutical law and the health worker union had some regulatory functions.

The government subsidized the price of health services heavily in the 1980s, including the provision of free drugs and other hospital consumables. In 1989, the Ministry of Health (MOH) reports spending:

 $360 million for imported pharmaceuticals, vaccines, medical appliances and disposable supplies  $100 million for raw materials for SDI, $30 million spare parts and maintenance of health services equipment  $10 million for ambulances and logistical vehicles.

MOH estimated that the local currency component for operating the health care system in 1989 represented at least double the drug bill (approximately US$ 1.0 billion).

In September 1990 GOI started to ration drugs. WHO estimates that between 1990-1997 the Government contributed approximately $40-50 million per annum for medicines, covering about 10- 15 per cent of the needs.

2. Human resources

Before the 2003 war, information on Kimadia staffing (number and level of expertise) was very limited. We now know that there are about 2,880 KIMADIA staff in the 15 centre south governorates. The breakdown by categories of staff is summarised below:

1 Table 1: Category of Kimadia staff in the 15 Center/South governorates

Location Categories of Kimadia staff Medical Technical Support staff Total Kimadia Baghdad 58 391 561 1010 Kimadia Governorates 195 1,126 549 1870 Total 253 1,517 1,110 2,880 Note: The following terms are used by Kimadia to categorize the various types of staff: Medical: includes medical doctors, dentists, pharmacists, veterinarians, laboratory technologists, microbiologists Technical: includes accountants, administrators, finance officers, engineers Support staff: includes clerks, operators, labourers, drivers, and guards

Most of these staff are working with out of date training and knowledge. Modern management of drug supply requires a multi-disciplinary approach with many specialties.

3. Resources allocated for the procurement of medical items under the Oil for Food Programme

Since the inception of the Oil for Food Programme in November 1996, there was a gradual improvement. The OFFP was mainly an import programme and therefore the resources could not be used to halt the deterioration of physical infrastructures. With the exception of the three northern governorates, there was little budget allocated to renovation and upgrading of the already aging health information system services, communications, warehousing facilities and drug quality control testing.

The Kimadia planning department responds to requests by the governorate Departments of Health. Items ordered under Oil for Food Programme were delivered to MoH/Kimadia central warehouses after authentication by COTECNA at the points of entry (Trebil, UmQasr, Zakho, Al-Walid and Ar’ar) and customs clearance in Baghdad. Contracts for local drug production were delivered to the different production sites.

At the warehouse, the shipments were inspected for verification of integrity, and details of quantities, expiry dates and any discrepancies with the invoices were recorded. These data were entered in the computerized drug stock management system (Microdrug) used by all central and governorate warehouses.

Samples were taken from each batch and sent to the National Quality Control Laboratories (NQCL). Once the batch passed the test, the NQCL informs MOH/Kimadia planning department in order to prepare an allocation and distribution plan for that item to governorate Directorates of Health (DOHs), including the three northern governorates.

At the DOH warehouses, stock records are up-dated (Microdrug system) and allocation finalized for actual distribution to sub warehouses (called also distribution points in the 3NGs) and individual end- user facilities in the governorate. MOH/Kimadia started in 2002 to implement a new computerised stock management system but was not fully operational by the 2003 war.

Each facility is responsible for collecting and transporting its allocation. Similarly, DOH governorate warehouses arrange collection of their shares from Kimadia central warehouses.

5. Availability of drugs, shortages and underlying reasons under OFFP

In March 2003, the total value of OFF acquired stock the central warehouses was about $ 460 million. In the three Northern Governorates, the total value was $17 million.

2 Shortages were inherent in this system with lengthy procedures for contracts processing and approval, holds, availability of funds and shipping of goods. At end-user facilities level, there was non- adherence to treatment guidelines and over prescription of antibiotics and analgesics.

II. Effect of the 2003 war on the health supply system

1. Damage of Kimadia network infrastructure and partial loss of stocks. The warehouse for IV fluids was the most affected. However, all other central and governorate warehouses require rehabilitation and replacement/repair as most of them are aging and have not been regularly maintained. The drug stock situation was not as alarming as it was initially feared, except in the case of vaccines and sera.

2. Interruption of the supply chain and exacerbation of shortages The OFFP supply delivery chain was interrupted from March 2003 until the beginning of June 2003. This exacerbated some of the shortages, particularly at hospitals and health centers in remote areas. These included commonly used antibiotics, drugs used in anesthesia and anti cancer drugs; medical supplies such as surgical gloves, sutures, surgical blades, IV cannulas and blood bags and the majority of laboratory reagents. Gradually, distribution activities resumed when some contracts previously submitted by the former government were adopted by WHO pursuant to SCR 1472 and 1476.

3. Status of local production plants The IV fluid plant in Ninewah completely stopped their activities as a result of looting and vandalism. The Arab Company for Antibiotics Industries (ACAI) was not affected by the war but security is poor and physical access is difficult as the main bridge on the road leading to the factory was damaged. The factory plans to resume activities in August 2003. The raw materials available are reportedly sufficient to cover only one month.

III. Emergency response and short term plan for the recovery to the prewar situation

Most of the Primary Health Centres are providing vaccinations.

Efforts are underway to reconcile prewar stock inventory records with actual physical stocks. The reinstallation of the computerized system for the stock management (Microdrug) in functional central warehouses will be extended to the governorate warehouses as part of the post-war reactivation.

SCR 1472 and 1476 authorized the UN Secretary-General to take over approved and funded contracts in the pipeline which were submitted by GOI and process them up to their early delivery. There are 1240 contracts valued at about $ 1250 million taken over by WHO that were classified according to their priority. Among these, 142 contracts worth $131 have been processed and $50 million worth of new contracts have been renegotiated since the war. SCR 1483 made provision for the determination of the relative utility and prioritize these contracts and arrange for their delivery. To date 280 contracts worth $400 have been approved for processing. The arrival of these items will provide sufficient stocks to cover utilization for three to six months.

III. Recommendations

1. Review the Kimadia system and take a strategic decision on its future Questions have been raised as to whether the Kimadia company should be maintained or not. Any response to such quest should be guided by in-depth study on how the system worked in the past.

3. Update and review the National Medicines policy (NMP)

3 The existing national medicines policy is based on universal access to drugs of good quality at affordable price should be reviewed and adjusted to the need for the community to share the burden of financing the health care delivery services. The policy should reaffirm the availability and easy access to drugs that address major public health conditions such as drugs for chronic diseases, drugs for communicable diseases (TB, HIV, STD, medicines for under 5 years of age and for elderly persons, etc). The policy should also clarify responsibilities, budget and timeline.

4. Rehabilitation and strengthen the quality control of pharmaceuticals The capacity of the National quality control laboratory has been dramatically. There is a danger of flooding the country with low standard drugs. The reactivation of the national quality control laboratory would assist in assuring that imported and locally produced items meet required standards.

5. Medicines supply system to focus on most essential drugs Iraq has a well-established system for procurement, storage and distribution of medicines. However the drug list from which selection is made is too long. A recent WHO study identified a list of 419 medicines, 46 medical supplies and 29 laboratory reagents as essential supplies to meet humanitarian needs. Similar list should be also prepared for specific chronic health conditions (hearth diseases, diabetes) and health programmes, including maternal and child protection

6. Support to local production capacity The country possesses a network of local manufacturing plants producing a wide range of essential drugs and supplies. Most of the plants, particularly the main drug factory in Samara and the factory for medical gasses, need rehabilitation. The level of investment required is not known yet. Importation of items such fluids should not occur in a country with an IV production plant.

IV. Issues requiring further information

2. Medicines financing, public versus private sectors and access to essential drugs The costs of drugs and other health supplies have been always heavily subsidised by the Government. While very little information is available regarding recurrent costs (i.e. household expenditures and public health expenditures), alternative scenarios for a “health financing system” need to be explored.

3. Local production capacity There are 20 private local drug-manufacturing plants in addition to the SDI and ACAI plants. At present, no information is available on their capacity, nor the support they would need.

4. Health Information System Information on the stock situation in the country as obtained from the existing computerized stock management system in Kimadia (Microdrug) has been always limited only to Oil for Food Programme and therefore does not provide information on drugs from other sources (i.e. local production, donations, smuggling/illegal importations). There might be a need to expand the scope of the system to provide an integrated inventory for all items regardless their sources. 5. Human Resources development and capacity building

The staffing should include people specialized in the following areas: - Hospital pharmacy. - Health economics. - Collaboration between Universities and quality assurance laboratories as well as pharmaceutical industries. - Computer engineering and Health information system.