NTA Level 5 • Semester 1 • PST05102

Medical Stores Department Act, 1993 Regulating Procurement of Medicines and Medical Supplies

Law and Policies in Pharmacy Practice • Source Session/Topic 3

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Session 3: Medical Stores Department Act, 1993 Regulating Procurement of Medicines and Medical Supplies.

Total Session Time: 120 minutes

Prerequisites

None

Learning Tasks

By the end of this session students are expected to be able to:

Give explanation about MSD

Give an overview on MSD Tender Board

List advantages of zones and facility level at MSD

Mention MSD Tendering methods

List Source of procurement at MSD

Mention Criteria Considered when awarding contracts

List Functions of MSD

Mention Sources of funds for procuring medicines at MSD

Explain Quality assurance process at MSD

Explain the Procurement challenges

Explain on how Vertical Programs are run in MSD

Resources Needed:

Flip charts, marker pens, and masking tape

Black/white board and chalk/whiteboard markers

SESSION OVERVIEW

Step

Time

Activity/

Method

Content

SESSION CONTENTS

STEP 1: Presentation of Session Title and Learning Tasks (5 minutes)

READ or ASK students to read the learning Tasks and clarify

ASK students if they have any questions before continuing.

STEP 2: Introduction to MSD (15 minutes)

Activity: Buzzing (5 minutes)

ASK students to pair up and buzz on the following question for 2 minutes

Why was MSD established?

ALLOW few pairs to respond and let other pairs to add on points not mentioned

WRITE their response on the flip chart/board

CLARIFY and SUMMARIZE by using the content below

Medical Stores Department (MSD) was established by the Act of Parliament No.13 of 1993 as an autonomous department under the Ministry of Health, Social Development, Gender, Elderly and Children responsible for developing, maintaining and managing an efficient and cost effective system of procurement, storage and distribution of approved medicines and medical supplies required for use by all public health facilities

The Board of Trustees is the highest decision-making body that governs and sets the direction of MSD on behalf of the Ministry of Health, Social Development, Gender, Elderly and Children. The Board is comprised of nine (9) members appointed after every three years. The President of the United Republic of Tanzania appoints the Chairman while the Minister responsible for health appoints the rest (8) members. The Director General serves as the Secretary to the Board but has no right to vote

Medical Store Department (MSD) mission is to make available at all times medicines, medical supplies and Laboratory reagents of acceptable quality at affordable price to all Tanzanians. We have served the nation for more than 20 years and continue to innovate by sharing ideas with all our stakeholders to ensure that their concerns are consistently understood and addressed with the objective of making our mission tangible, visible and felt among the Tanzanians who access our services.

STEP 3: Advantages of Zones and Facility Level at MSD (10 minutes)

The area managers are responsible for procurement at the zonal levels, while

At the health facility level, different people procure medicines; this could be the supplies officer, Nursing Officer, Head of Facility, Pharmacist or RCH coordinator depending on the facility in question.

Strategically MSD zones ware intended;

To distribute medicines, medical supplies and laboratory reagents to Health facilities.

Communicate with customers and provide information on the products availability.

Attend customer complaints.

Carry out market survey and advice on the rationality of MSD price catalogue for medicines and medical supplies.

Promote sales of dormant and obsolete items and communicate new arrivals to customers.

Provide Logistics and Support Services to customers.

Sourcing special orders and follow up after sales services.

Enhance compliance to delivery schedule and order fulfilment.

Improve lead-time and reduce order-processing time.

Ensure timely completion of transaction in the system to improve stock integrity.

To be accessible seller and distributor of Medicines and Medical Supplies of right quality, price, quantity and at right time offering superior services to the customers.

To improve services to our customers through shortens lead-time, increase stock availability, quality health commodities and stabilized working ERP System.

To expand market, retain existing customers, revive dormant customers and enhance customers /stakeholders

STEP 4: Source of Procurement at MSD (50 Minutes)

Source of procurement at MSD

International supplier e.g. procuring essential medicines, Antimalarial, Vaccines, and Contraceptives uses this source.

International manufacturer e.g. HIV/AIDS medicines, condoms, and Contraceptives uses this source to procure medicines.

Local Distributor e.g. essential medicines, HIV/AIDS medicines, Medicines for opportunistic infections and Medical supplies.

Local Manufacturer e.g. essential medicines and medical supplies.

MSD Procures Medicines, Medical Supplies and Laboratory Reagents on behalf of Public Health Facilities, Vertical Programs as well as Private Health Facilities approved by the Ministry of Health, Community Development, Gender, Elderly and Children. As core business fundamental, Procurement procedures as laid under the Public Procurement Act no.21 of 2004. MSD is the largest importer of which 80% of medicines, 90% of medical supplies and 100% laboratory supplies are imported from different countries across the world.

From 2017, MSD procures its medicines and medical supplies direct from manufacturers instead of suppliers to ensure the improvement of medicines availability as well as lowering the medicine prices by half and quarter to some medicines of which most prices were before.

MSD continues to collaborate with private sector to open local manufacturing industries as provided in Public Private Partnership Act, 2010. MSD envisages that this will enable the country at large to source essential medicines and medical supplies locally and therefore reduce importation costs and lead-time as well as storage costs.

In term of quality, MSD procures Medicines, Medical Supplies and Laboratory Reagent that have been approved or fully registered with Tanzania Food and Drug Authority (TFDA). Registration process involves evaluation of products for quality, safety and effectiveness. Each new product from the Manufacturer or supplier has to be approved and registered by the TFDA. Products evaluation looks into all parameters necessary to ensure product’s quality, safety, efficacy and stability to ascertain prescribed shelf life. Packaging and labelling is another area that is critically evaluated.

The MSD Tender Board is in place and is the legal entity under Tanzania Public Procurement Act 2004 and Regulations 2005 that is empowered to advertise, receive, evaluate and awards successful bidders.

Price and quality of product are given equal consideration when determining factor for awarding tender.

The tender board membership is comprised of people with different qualifications including, Pharmacists, Financial experts, Material Management staff and Logisticians.

Members of tender board as per section 16 of Medical Stores Department Act, 1993 are;-

Chief Assistant/Medical officer – Medical officer

Chief pharmacist

Director General

MSD procurement officer

Treasury registrar

Medical tender board shall be responsible for advertising, receiving and opening of all tenders for the purchase of pharmaceuticals

The following are the tender methods in MSD

International Competitive Bidding

International competitive bidding is the slowest procurement method as it has a lead time of 150 days.

National Competitive Bidding

It has lead time of about 45 days

Negotiated Tender

It has lead time of about 35 days

Selective Bidding

It has lead time of about 90 days

Direct Procurement

It has lead time of about 18 days

Shopping method

It has lead time of about 7 days

The results of the tender are publicly declared before participating bidders.

Results of the tender are only read out during the opening of bids, but are not published.

The frequency of procurement is once a year but there is in between emergency purchases that follow the same procedures.

Several challenges for procurement and supply chain management at national level have been identified in recent reviews, including;

Stakeholders do not fully understand what is within MSD’s control and what is not, so MSD is sometimes incorrectly blamed for problems related to commodity availability.

Active participation/ information sharing about procurement plans among MOHSW, MSD, donors and other sources of supply is insufficient.

There are no uniform charges for logistics services provided by MSD for the different programs, and GOT does not regularly pay its share of these costs.

There are frequent delays in procurement of commodities at central level.

Supply lead times are long, especially for non-framework international tenders (more than 40 weeks).

Zonal stores are not holding all the commodities that might be ordered by facilities, which may be one of the reasons for facility orders not being ready on time.

The physical storage capacity of MSD’s network (central and zones) is insufficient for the needs of the future.

Some facilities prefer direct deliveries from MSD, but it is unclear whether this initiative has actually improved product availability to date.

As per section 13 of Medical Stores Department Act, 1993, the sources are;

Sales of approved drugs and medical supplies.

Donation, gifts or grants from any source within or outside the country.

Government budget as approved by parliament

STEP 5: Criteria Considered when Awarding Contracts. (5 minutes)

Criteria Considered when awarding contracts are ;

Price

Performance of supplier

Quality of product

Stated delivery time

Supplier’s terms of payment

SOP documents for call of tenders were used in few facilities

STEP 6: Functions of MSD as per Section 4 of MSD Act, 1993. (10 minutes)

Functions of MSD as per section 4 of Medical Stores Department Act, 1993

Manage procurement, storage and distribution of approved drugs and medical supplies.

Apply technical and professional advice relating to management and control of pharmaceuticals.

Monitor distribution of approved drugs and medical supplies.

Disseminate any relevant information relating to drug and other medical supplies.

Apply commercial principle in procurement of approved drugs and medical supplies.

Ensure availability in time of approved drugs and medical supplies with the public health system

STEP 7: Quality Assurance. (5 minutes)

All procurement agents except MSD do not systematically take samples from batches procured and send for quality analysis.

Only few agents 30% include MSD keep track of batch records.

MSD send samples to appropriate quality control laboratory either TFDA 90% as per TFDA act 2003, Government Chemistry Agency (GCA) 5%, and sometimes Tanzania Bureau of Standards (TBS) 5% for analysis.

According to TFDA ACT 2003,

The quality assurance begins with product selection; procurement policy, and also the quality control of receivables.

Apart from visual inspection a regular analysis of the batch representative samples is a good practice to ensure bioequivalence, efficacy and effectiveness of the product.

According to TFDA ACT 2003,

In case the product is of donation, it should meet the following criteria;

Be on the country`s EML,

Not sent without prior consultation and consent from the country,

Have at least one year before expiry,

Be labelled in a language that is understood in the country,

Have all transport and customs costs met by the donor.

The systems and processes are subjected to continual assessment, audit and review. The details of our QMS are well documented in our Quality Management System which includes the measures of control over operational processes, change, non-conformance and review, management of risk and analysis of data. Our major clients have seen these systems develop and mature over the period of the business association with MSD. Our process management and QMS ensures requirements for facilities, resources, equipment, process control, IT, QA, Warehouse operations, Customer service, Key accounts, debtors, creditors and risk, security, HR and client requirements are managed and maintained to an international benchmark level. Scheduled self-audits and internal audits form the backbone of ensuring processes are compliant and act as a tool for continual review.

Risk management forms an integral process which ensures all known possibilities for failure are addressed and documented and corrective measures are put in place to minimize these potential risks. MSD has developed Quality Assurance Unit which ensures levels of quality deliveries are maintained all the times of operations. Contingency (and risk) around critical equipment has been implemented, back-up equipment is fail-over tested on a scheduled basis. Risk (Loss Control) assessments are conducted and findings are investigated, actioned and closed.

Continual improvement initiatives have improved on process efficiencies and controls, whilst our internal process training program has ensure process knowledge and operator understanding is evident throughout our facilities.

STEP 8: Vertical Programs in MSD. (15 minutes)

Activity: Buzzing (5 minutes)

ASK students to pair up and buzz on the following questions for 2 minutes

What do you understand by the term Vertical Program?

What are the functions of MSD in Vertical Programs?

ALLOW few pairs to respond and let other pairs to add on points not mentioned

WRITE their response on the flip chart/board

CLARIFY and SUMMARIZE by using the content below

Vertical Programs [VP] are initiatives, which focus on a particular disease or group of diseases. In early 1980's to 1990's different programs such as Reproductive Health Program, National Aids Control Program, National Immunization Program, National TB / Leprosy Program were under the Ministry of Health but each was operating individually in term of logistics. The research findings in Health sector revealed that, running each programs individually in terms of its logistics functions was expensive and hence duplication of resources. In 1996 to improve the efficiency of Health sector, the government integrated within MSD all Vertical Programs logistics functions within MSD operations, the integrated functions were;

Coordination of procurement, Storage and Distribution of program medicines, Medical Supplies and Laboratory Reagents.

Managing receipts of all Medicines, Medical Supplies and Laboratory Reagents supplied by different programs and development Partners (Global Fund, UNICEF, World Health Organization and USAID).

Give timely report to the programs on stock status to programs and development

The integration strengthened Vertical Programs services likewise lowered the operations costs of programs. This resulted into increase the availability of VP Medicines, Medical Supplies and Laboratory Reagents to the health facilities. Currently MSD operates with different Vertical Programs under the MoHCDGEC and Health development partners who support health initiatives in the Country. The programs are:- Reproductive Health Program, National Aids Control Program, National Immunization Program, National TB/Leprosy Program, Neglected Tropical Disease Program, National Malaria Program, Tanzania Food and Nutrition Program, Dental Program and Others.

On the other hand, MSD receives Health commodities under the support from various development partners such as: – Global Fund, UNICEF, WHO and USAID. All partners either bring in specific health commodities to supplement GOT commodities or direct support in terms of fund for procurement of items to be delivered to facilities. Vertical Program Medicines, Medical Supplies and Laboratory Reagents are delivered to all zones and facilities through different systems:-

Deliveries based on direct shipment to districts / Regions under push system as directed by the programs. (I.e. Immunizations and TB/Leprosy Program).

Deliveries based on special campaigns to address specific challenges. (Neglected Tropical Diseases and Tanzania Food and Nutrition Centre) vaccinations, dengue – Smart Push.

Zones consolidate facility orders and submit them monthly to head quarter for replenishment.

VP commodities are integrated as per MSD ordering and distribution calendar.

ARVs and related commodities are delivered on monthly basis to facilities based on Reports and Request forms submitted monthly to all zones by health facilities.

STEP 9: Key Points (5 minutes)

The Medical Stores Department is a parastatal agency wholly owned by the Government of Tanzania

Medical Stores Department (MSD) was established by the Act of Parliament No.13 of 1993 as an autonomous department under the Ministry of Health, Social Development, Gender, Elderly and Children

Medical Stores Department (MSD ) is responsible for developing, maintaining and managing an efficient and cost effective system of procurement, storage and distribution of approved medicines and medical supplies

STEP 10: Evaluation (5 minutes)

Which criteria are considered when awarding contract in Medical Store Department of Tanzania?

Is MSD important in Tanzania?

Which procurement and supply chain management challenges are faced at national level?

What are the functions of medical tender board?

References

MSH and WHO (2012) .Managing Access to Medicines and Health Technology, (3rd Edition). Kumarian Press

MoHSW (2003). Tanzania, Food, Drugs and Cosmetics Act, Government Printers Dar es Salaam

MoHSW (2011), Pharmacy Act, Government Printers Dar es Salaam

United Republic of Tanzania (1971). the drugs and prevention of illicit traffic in drugs act, Government Printers Dar es Salaam

United Republic of Tanzania (2011). Public Procurement Act, Dar es Salaam

MoHSW (2003). The National Health Policy, Government Printers Dar es Salaam

MoHSW (1991), The National Drug Policy, Government Printers Dar es Salaam

United Republic of Tanzania (1993).Medical Stores Department Act, Government Printers Dar-es-salaam

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