Supply Chain Management System Project

1. Supply Chain Management System Project The Partnership for Supply Chain Management March 2006

2. The President’s Emergency Plan for AIDS Relief (PEPFAR) • Targets • Prevent 7 million new HIV infections • Provide treatment for 2 million HIV-infected people • Provide care to 10 million people infected and affected by HIV/AIDS, including orphans and vulnerable children • Scope • 15 initial focus countries • 5 years • Up to $15 billion

3. Ethiopia Vietnam Haiti Nigeria Uganda Kenya Côte d’Ivoire Guyana Rwanda Tanzania Zambia Mozambique Around the world, but initially focused on: Namibia Botswana South Africa SCMS Project Purpose To establish and operate a safe, secure, reliable, and sustainable supply chain management system (SCMS) to procure pharmaceuticals and other products needed to provide care and treatment of persons with HIV/AIDS and related infections

4. Project Objective To create, enhance, and promote an uninterrupted supply of high-quality, low-cost products that flow through accountable systems which can: • Rapidly scale up to support HIV/AIDS prevention, treatment, and care • Ensure quality of drugs, test kits, and other supplies • Build capacity for long-term sustainable procurement and distribution of drugs and commodities • Respect intellectual property law at international and national levels

5. Procurement Perspective, Moscow • Procurement is not an isolated activity, part of PSM Cycle • Procurement should be embedded in local legislation, be transparent and accountable • For professional procurement one needs a proper support framework, covering vital functions (admin, budgeting, timely payments, development of procedures, available in the public domain. • Solutions should aim at capacity building, no duplication or programme or donor specific solutions. • Demand forecasting is bottom up, defined by in country programmes

6. Categories of HIV/AIDS Commodities • ARVs (including FDA tentatively approved generics) for adults and children • Drugs for opportunistic infections • Drugs for STIs • Drugs for home care and palliative care • Drugs for tuberculosis • Rapid HIV test kits • Laboratory equipment and supplies • Medical supplies • Miscellaneous (e.g., vehicles)

7. Project Components • In-country technical support • Competitive and transparent procurement capacity • Quality assurance program • Freight forwarding and warehousing services • Comprehensive logistics Management Information System • Comprehensive management system

8. In-Country Technical Support • Assessments and technical assistance (where requested) • Procurement assistance • Drug selection • Forecasting/quantification • Drug registration • Customs clearance and delivery • Theft/diversion – corrective actions • Human capacity for supply chain management • Quality assurance plans • Sustainability plans

9. Procurement • Volume purchasing leveraged to achieve best worldwide price • Drugs and commodities of assured quality • Compliance with all US Government (USG) laws and regulations • E-catalog • Manufacturing capacity constraints • Clients • Initially, USG PEPFAR participants • After year 2, others

10. Procurement, Moscow • Competitive (what is this and how to measure? • Transparency (what does this mean) • For ARV’s limited number of quality supplier, (innovators/generics, role of local industry?? • Qty API sources even more limited( parallel with TB) • Unknown capacity, eg shortages will occur in case short time horizon is used, or when no clear picture exists on where API/starting material is made. • Complicated market, Access prices, rerouting of products, commercial versus other packs, Voluntary licensing, unclear IP issues, unclear local registration status in case of replacement (see FDA replacement,or voluntary licensing) • Not only capacity is sufficient it is the quality is the Chain which should be ensured.

11. Quality Assurance • Vendor, donor, and commodity qualification • Quality assurance document maintenance • Compliance testing • Suspect commodity testing • Storage, handling, and monitoring standards

12. Freight Forwarding and Warehousing • Timely, accurate, and safe transport and warehousing • Delivery of drugs and commodities “door-to-door”, ensure the last mile • Appropriate cold/cool chain management • Regional warehousing for efficiency and cost • Shipment tracking from supplier to recipient • Physical security measures

13. Logistics Management Information Systems • Global supply chain visibility • Requirements estimates • Product registration status • Funds • Production capacity • Procurement status • Shipment and receipt status • Regional distribution center inventory management • Returns • Product pedigree • National/local supply chain visibility (on request)

14. Project Management System • Project Management Office (PMO) • Virginia, near JSI and MSH • ~ 70 central staff to start • Global supply chain monitoring • Requirements estimates • Production capacity for key products • Supply imbalances of key products • Exception reporting • Collaboration with USG, international donors, others

15. Cross-cutting Strategies • One-stop shopping for HIV/AIDS programs • Pooled procurement using framework contracts • Begin and end in country • Strengthen — don’t replace — in-country supply systems • Regional warehousing and distribution • Protect country infrastructure • Increase responsiveness • Collaboration, globally and locally

16. SCMS Implementation • Pick and choose: one size does not fit all • Additive to current supply chain management mechanisms • Based on demand and requests from the field • Public-private-NGO-FBO partnerships

17. The Partnership for Supply Chain Management (PSCM) • Non-profit partnership established for SCMS • JSI Research & Training Institute, Inc. (JSI) • Management Sciences for Health (MSH) • SCMS project team: 17 institutions • Nonprofit organizations • Commercial private sector corporations • Academic institutions • Faith-based organizations

18. SCMS Benefits Responsive Continuous availability Forward procurement Regional distribution SCMS Effective Cost-effective One-stop shopping Simpler ordering Lower prices Reduced inventory Assured quality Secure supply chains Capacity building Sustainability

19. Questions? Thanks! For more information: Website: scms.pfscm.org Email: scmsinfo@pfscm.org Main phone: +1.703.341.4999 Main fax: +1.703.310.5270