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Medicine Procurement Prices and Processesin the United Nations Relief

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Medicine Procurement Prices and Processesin the United Nations Relief medicine procurement prices and processes in the united nations relief and works agency for palestine refugees in the near east (UNRWA) december 2011 "© United Nations Relief and Works Agency for Palestine Refugees in the Near East, 2012. All rights reserved. The views expressed in this report are those of the author(s) and do not necessarily reflect the views of UNRWA. UNRWA does not endorse or recommend specific medicines, companies or products of manufacturers, whether or not mentioned in this report. UNRWA does not warrant that the information contained in this publication is complete and correct and shall not be liable for any damages incurred as a result of its use." 2 Table of Contents Abbreviations .............................................................................................................................. 5 Foreword .................................................................................................................................... 6 Executive Summary ..................................................................................................................... 7 1. Introduction ......................................................................................................................... 8 2. Objectives .......................................................................................................................... 10 3. Methodology ..................................................................................................................... 11 3.1 Data collection .................................................................................................................... 11 3.2 Medicine selection .............................................................................................................. 11 3.3 Price comparators ............................................................................................................... 12 3.4 Analysis ................................................................................................................................ 13 4. Findings ............................................................................................................................. 15 4.1 International price comparisons for centrally procured medicines .................................... 15 4.2 Potential savings when purchasing at IDA, JPD or GCC prices ........................................... 17 4.3 Price and quantity by supplier ............................................................................................ 23 4.4 Comparison of prices from local and central procurements ............................................. 25 4.5 Medicine procurement process .......................................................................................... 26 4.5.1 Responsibilities ..................................................................................................... 26 4.5.2 Key Issues .............................................................................................................. 27 5. Study Limitations ............................................................................................................... 33 6. Conclusions and Recommendations ................................................................................... 34 6.1 Medicine Prices .................................................................................................................. 34 6.2 Procurement process .......................................................................................................... 34 6.3 PLD recommendations ........................................................................................................ 36 Annexes Annex 1 Medicines selected for price comparisons (in descending order by expenditure .............. 37 Annex II UNRWA procurement prices as a ratio to MSH, IDA, JPD, and GCC prices.................... 39 Annex III Procurement prices (in US$) for UNRWA’s purchasing units ........................................... 41 Annex IV Annual savings by purchasing medicines from IDA .......................................................... 44 Annex V Annual savings by purchasing medicines at JPD prices ................................................... 46 Annex VI Annual savings by purchasing medicines at GCC prices .................................................. 49 Annex VII Suppliers of medicines to UNRWA, JPD and GCC for medicines where there are matches.......... 52 Annex VIII Ratios of prices and quantities of UNRWA local procurements to central procurements ............ 58 Annex IX Pre-qualified suppliers in 2007 and 2011 for the four medicine tender groups ................. 60 3 List of Tables 1. Top 10 medicines purchased in 2010 by expenditure (central and local procurements) ................. 12 2. Summary of ratios of UNRWA prices to MSH, IDA, JPD and GCC prices ...................................... 15 3. Five highest and lowest priced medicines compared to MSH .......................................................... 15 4. Five highest and lowest priced medicines compared to IDA (bulk packs) ....................................... 16 5. Five highest and lowest priced medicines compared to JPD ........................................................... 16 6. Five highest and lowest priced medicines compared to GCC .......................................................... 17 7. Annual savings if medicines procured at IDA, JPD or GCC prices .................................................. 17 8. Annual savings over US$ 100,000 for individual medicines procured at IDA (bulk), JPD, GCC prices ..................................................................................................................................................... 18 9. UNRWA and comparator prices for top 10 medicines by expenditure, for UNRWA purchasing units ............................................................................................................................................................... 19 10. Potential savings of UNRWA top 10 medicines at lowest comparator price ................................... 20 11. Potential savings for antidiabetic medicines at GCC prices ............................................................ 21 12. Current suppliers of medicines where savings show potential greatest ......................................... 22 13. Recommended medicines that offer greatest potential for savings ................................................ 22 14. Prices and quantities of medicines supplied to UNRWA, JPD and GCC by the same pharmaceutical company ....................................................................................................................... 24 15. Summary of ratios of prices for locally procured versus centrally procured medicines .................. 25 List of Figures 1. Price ratios, UNRWA prices to comparator prices, for UNRWA top 10 medicines by expenditure ........................................................................................................................... 19 2. Number of prequalified suppliers in 2007 and 2011 by medicine tender group ...................... 29 3. Number of prequalified suppliers in 2007 and 2011 by origin of company .............................. 29 4 Abbreviations CFR Cost and Freight to the named port of destination CPT Carriage Paid to the named place of destination CPLD Chief, Procurement and Logistics Department DDP Delivered Duty Paid to the named place of destination DDU Delivered Duty Unpaid to the named place of destination FPLO Field Procurement and Logistics Officer (Head of Procurement at field level) GCC Gulf Cooperation Council HAI Health Action International HD Health Department JFDA Jordan Food and Drug Administration JPD Joint Procurement Department in Jordan LMIC Low and Middle Income Countries ml Milliliter MSH Management Sciences for Health NCDs Non-communicable Diseases PIMS UNRWAs Procurement Inventory Management System PHC Primary Health Care Centers PLD Procurement and Logistics Division (HQ) RDL Rational Drug List UNICEF United Nations Children’s Fund UNFPA United Nations Population Fund UNRWA United Nations Relief and Works Agency for Palestine Refugees in the Near East WHO World Health Organization 5 !"#$%"#&' ! ! It is our great pleasure to present this report on the extensive analysis on how UNRWA procures medicines for approximately 5.1 million Palestine refugees dispersed in Gaza, Jordan, Syria, Lebanon, and the West Bank. With the growing number of refugees and the increasing demand for quality health care services, UNRWA faces immense challenges under the current financial constraints. This report is a fruitful result of extensive analysis condcuted by two distinguished international experts in the area of medicine procurement. We wish to extend sincere gratitude to Ms Margaret Ewen from HAI Global, and Dr Maisa Al Sakit ex-Director Joint Procurement Department in Jordan for their tireless effort to realizing the comprehensive analysis and providing UNRWA with recommendations for further efficiency. This report is of value for many reasons. Firstly, the report confirmed that UNRWA purchases medicines efficiently. In 2010, UNRWA spent almost US$18 million for medicine procurement, and the expenditure has been increasing. The international recognition on UNRWA’s efficiency on medicine procurement, therefore, is a great support and it motivates the Agency to consider better ways for improvements. Secondly, the
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