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Health products procurement and supply chain management

Enhancing capacity. Guaranteeing quality. Improving performance.

UNDP is taking a lead globally to support countries in the procurement of health products and to strengthen national supply chains in some of the most challenging operating environments in close collaboration with other partners. The expertise built through 15 years of supporting the PSM implementation of donor grants in such contexts is being used to support ongoing reforms in national procurement systems and to strengthen national supply chain systems.

UNDP health procurement volumes

Total health procurement volume 2017

$310 Million USD

In collaboration with UNICEF, UNFPA, GDF/UNOPS

Key Cctegories of dedicines


PSM capacity development

UNDP supports countries in the procurement of health products in some of the most challenging operating environments. The expertise used for supporting donor grants for health procurement is also used to deliver value-for-money, quality assurance and reliability for domestically funded health products procurement.
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Health procurement has been used as an entry point to build resilience in procurement and supply chain management (PSM) in countries. While supporting the timely procurement of quality-assured medicines and other health products, UNDP works with governments, in coordination with WHO and other partners, to help enhance national capacities and systems for adequate management of PSM through transparent and accountable mechanisms. Another point of entry for PSM strengthening is supporting the development, review and implementation of supply chain strategies and plans.

UNDP’s strategic support includes providing technical expertise to strengthen policy and regulatory frameworks, manage intellectual property rights, improving procurement strategies and regulations, and removing potential barriers to equitable access to affordable medicines. The UNDP approach to capacity development contributes to a resilient and sustainable PSM cycle by:

  • defining appropriate quality requirements for selected products
  • quantifying needs
  • sourcing, planning and conducting procurement processes
  • storing and distributing medicines and other health products while controlling their quality
  • establishing information systems for the monitoring of stocks, and consumption
  • designing solutions for “last-mile” delivery to the most hard-to-reach populations
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UNDP’s approach to PSM strengthening

UNDP’s approach to PSM capacity development is built on a participatory process and always responds to the needs and challenges identified in national supply chains.
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The approach ensures that capacity gaps are identified and analysed, and UNDP can assist countries to assess national supply chains, as well as the development of national procurement and supply chain strategies and implementation plans. The development of these documents is essential to; i) make sure the contributions of partners will support the development of resilient and sustainable national supply chain systems; ii) increase the alignment of partners to national priorities; and iii) reduce the creation of parallel supply systems.

UNDP is also encouraging the establishment of national coordination platforms under the leadership of ministries of health to ensure regular monitoring of the implementation of supply chain strategies and plans and to monitor the performance of the system. All national and international actors involved in PSM activities in the country should be part of this coordination mechanism.

Based on these strategies and plans, UNDP, in consultation with other partners and donors, will support the implementation of specific activities in close collaboration with national counterparts to strengthen national leadership and management. Activities will be identified to strengthen the PSM cycle, as well as addressing the main enablers of a functional national PSM system such as the availability of financial and human resources.

Support will be also provided to measure progress, overcome challenges and to monitor the performance of the national systems through key performance indicators.

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Human capacity for PSM

UNDP recognizes that a knowledgeable, skilled, motivated health workforce is crucial for implementing PSM strategies and plans. Human Resources (HR) strategies are a fundamental part of developing resilient PSM systems and should find sustainable solutions to the education, recruitment and retention of HR for PSM.
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In several countries, UNDP has strengthened human resources through a scaling-up of on-the-job and formal trainings and provided access to professional qualifications for health workers in PSM-related areas including obtaining accreditation from the internationally recognized Chartered Institute of Purchasing and Supply (CIPS).

UNDP has also developed online introductory training courses accessible in four UN languages on PSM aimed at supporting capacity development in countries and increasing understanding of the importance of PSM to ensure the uninterrupted supply of life-saving medicines and other health products.

To develop resilient and sustainable systems for health UNDP can mobilize international technical assistance (TA) through the UNDP Health PSM expert roster.

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Innovations in PSM

UNDP seeks out and uses the latest innovation and technology for health, which is central to supporting resilient and sustainable systems for health. UNDP is involved in piloting and implementing several innovations in the supply chain.
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These include;

  • upstream innovation for sustainable procurement such as engaging manufacturers through its long-term agreements to optimize medicines packaging to reduce waste
  • innovation implemented in the supply chain includes mobile phone-based logistic management information systems (LMIS), which allows tracking of inventory, consumption data and monitor cold chain temperature for vaccines at the most peripheral level
  • the Solar for Health initiative ensures sustainable provision of electricity to pharmaceutical warehouses and health facilities guaranteeing not only the functioning of cold chain equipment but also storage of health products at controlled temperature and electricity for computer-based warehouse management system (WMS) and LMIS
  • UNDP, jointly with other agencies of the Interagency Supply Chain Group (ISG), is promoting the adoption of the Global Data Standards (GS1) to improve traceability of medicines along national supply chains. This could also improve the security in national supply chains and reduce the risk of distributing falsified health products

All these innovations are aimed to build national resilient and sustainable supply chain systems.

UNDP is also participating with other agencies in coordinating mechanisms such as the Interagency Supply Chain Group (ISG) and Sustainable Procurement in the Health Sector (SPHS) to coordinate the introduction of innovations and use of technologies in procurement and supply chain management.

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Value for Money

UNDP’s principles for guiding health procurement include: i) provide the best value for money; ii) embody fairness, integrity, and transparency; and iii) engage in effective international competition.
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UNDP has developed and continues to manage a procurement architecture designed to facilitate the timely supply of affordable quality assured pharmaceutical and other health products to meet the needs of national programmes using donor grants and domestic funds for health procurement supported by UNDP through a value for money service proposition. The UNDP health procurement architecture comprises several partnerships and sourcing agreements with other UN agencies, manufacturers and other commercial entities to provide the most cost-efficient procurement system for each health product category.

As a result, UNDP health procurement has achieved very competitive prices for health products. These savings are reinvested to support increased health service coverage or to strengthen national supply chain systems. Similarly, UNDP’s capacity building for in-country procurement processes and operations aims to achieve efficiencies to be re-invested to strengthen other areas of the PSM cycle.

UNDP is also working to reduce monetary and environmental costs related to transportation and “waste of medicines” packaging assuring additional value for money in health procurement for recipient countries. In the future, this type of approach is meant to be transferred and applied in country-led procurement processes supported by UNDP.

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Case Study Strengthening the national procurement and supply chain for health in Zimbabwe
UNDP has worked with partners to strengthen the national Procurement and supply chain management (PSM) System in Zimbabwe, for the complete PSM cycle.
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This has included; i) carrying out a comprehensive assessment of the Pharmaceutical Supply Chain System in 2013 and using the findings to develop a costed action plan; ii) working with the Ministry of Health and Child Care (MoHCC), the Country Coordination Mechanism (CCM) and key partners to mobilize funding to implement the costed action plan; iii) working with the Ministry of Health and Child Care (MOHCC) and partners in developing strong quantification processes for health products; iv) strengthening quality assurance of health products by the Medicines Control Authority of Zimbabwe (MCAZ); iii) working with the National Pharmaceutical Company (NatPharm)—the central medical store—to develop its capacity since 2011; and v) carrying out a comprehensive assessment of the laboratory supply chain system in 2016. It has also involved developing a costed action plan for implementation during 2018-2020 and developing a Viral Load reagent rental agreement for HIV Viral Load testing. This has all led to increased access to essential medicines and other health products beyond malaria, HIV and TB.

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Strengthen global and in-country procurement and supply chain systems

Improved access to essential medicines and health products is critical to reaching universal health coverage and is recognized as a key building block of a strong system for health. Weak procurement and ineffective supply chains reduce the overall health system’s ability to respond to the health-care needs of the population. As part of its new strategy, “The Global Fund Strategy 2017-2022: Investing to End Epidemics”, the Global Fund is prioritizing investments in building Resilient and Sustainable Systems for Health (RSSH).

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The Global Fund is identifying specific funding opportunities for countries to focus on developing capacity in systems that not only affect the three diseases but the full national health programme as well. PSM capacity development should focus on

  1. Effective operationalization of procurement and supply chain systems: Developing the capacity of supply chain systems to ensure appropriate and uninterrupted supply of medicines, health products and technologies all along the supply chain. Countries are encouraged to design cross-cutting interventions to ensure that the national procurement and supply chain system is strengthened, not just disease-specific supply chains
  2. Improvement and development of procurement and supply chain systems infrastructure and tools: Strengthening the storage and distribution of medicines and other health products, such as reliable warehousing, distribution and logistics management information systems (LMIS), and investing in innovative information technologies and capacity to manage national forecasting and supply planning
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