Building a transparent and cost-effective national procurement system

UNDP’s capacity building project for procurement in Ukraine was prompted by new anti-corruption strategy and policy, legislative and institutional reforms enacted by the government of Ukraine following the revolution of Dignity of 2013-2014. This also targeted the Ministry of Health’s public procurement and supply programme. After the country faced a shortage of medicines at times of crisis, the legislation was amended to transfer temporarily health procurement to international organizations and companies, while initiating and developing the health procurement reform process.

In 2015, the Ministry of Health of Ukraine addressed international organizations, including UNDP, requesting support in medicines procurement. Starting from 2015, UNDP has been annually procuring a range of medicines and other health products for the state budget funds as an emergency and interim measure. The type of procured products includes diagnostics and medicines for infectious diseases such as tuberculosis and hepatitis C, but also for non-communicable diseases such as cancer, haemophilia, orphan diseases. In 2017, UNDP procured health products accounted for 26 public health programs with over USD 140 million state allocated funds.

Procurement of medicines has been coupled with 4 years plan to build and support a transparent and cost-effective procurement system for the Ministry of Health. As a result, a national procurement agency- the Central Procurement Agency (CPA)- will be established building the structural and human resource capacity for selecting quality assured products, forecasting needs, defining processes for transparent and cost effective procurement, including planning, monitoring and evaluation of procurement operations. Procurement operations will be progressively handed over by UNDP to the newly established agency. The development work has targeted capacity building of the institutional partners, but it has also involved civil society through support of their anti-corruption initiatives. Extensive training on anti-corruption measures in procurement has been provided as part of the project. UNDP has provided support, in coordination with WHO and other partners, to build capacity for the in-country supply chain management in the context of the wider initiative aimed at strengthening the Ukrainian healthcare system. Hence, UNDP with partners has provided support in other PSM areas.

  • UNDP is supporting MoH to review existing Logistic Management Information System (LMIS) tools and to identify, adopt or develop new electronic LMIS for health products management in the supply chain
  • UNDP has provided support with other partners to pilot and expand the roll out an online public monitoring system called E-Liky, developed by civil society to oversee health product access at dispensation level in the public health system as an anticorruption measure
  • UNDP is also supporting the introduction of sustainable procurement in the health sector through training.

Establishment of the national procurement system in healthcare

The support provided by UNDP to the Ministry of Health is also aimed to help reform healthcare sector procurement for the period beyond 2019 and build an efficient national procurement system. One of the elements of the system will be a Central Procurement Agency (CPA). The agency will be an independent organization and will be responsible to procure medicines for the Ukrainian people using modern IT tools.
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National procurement system operation will be based on the principles of transparency, accountability and effectiveness and apply integrated, issue-based and innovative approach. To support its development, the UNDP is helping with different activities, such as:

  • Support to policy and legal developments,
  • Support to capacity building events and advocacy,
  • Provision of anti-corruption analysis/evidence and action plan,
  • Support to the advisory unit under the Ministry of Health,
  • Support to the revision of the list of medicines ordered by the Ministry of Health.

Building capacity of civil servants and civil society to monitor procurement and supply functions

Seminars and workshops on anti-corruption, sustainable procurement and human rights took place at the ministerial and regional level. Joint activities with patient groups and civil society, such as the development of the medicines stock monitoring platform E-Liky and public monitoring support, help to build a system of checks and balances which will ensure public oversight on the future activities of the Central Procurement Agency.
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UNDP has supported financially local NGOs to monitor the supply and access to medicines for patients with cancer and hepatitis. The obtained practical experience, along with the best practice shared by UNDP, allowed strengthening the capacity of NGOs in conducting efficient public procurement monitoring, as well as identifying the gaps in the medicines distribution system.

UNDP has conducted a training on the best practices of public procurement for regional civil servants. This improved the expertise of staff responsible for hospital procurement, which is another channel of ensuring access to medicines for patients across the country.

Results related to procurement of health products with state funds in Ukraine

International tendering for procurement of allocated public health programs resulted in reduced prices for a majority of medicines and other health products. The amount of funds that were saved thanks to lower prices was re-invested in additional treatment coverage. With more accurate quantification and budgeting exercises to drive procurement, savings on the allocated budget for health procurement annually generated are expected to reduce over time as budgeting will be based on more accurate product prices.
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In 2015, UNDP was allocated procurement for 8 health programs for a total amount of USD 39 million, savings accounted for USD 4 million USD, which were reinvested in additional treatment for TB, hepatitis and orphan diseases.

In 2016, UNDP was allocated procurement for 23 health programs for a total amount of USD 78 million. Savings accounted for more than USD 12.5 million, which were reinvested in additional treatment coverage for patients with cancer, TB, autism, dwarfism and other diseases.

In 2017, UNDP was allocated procurement for 26 health programs for a total amount of USD 143 million. Savings accounted for more than USD 18 million.

Additional information on Ukraine results on health procurement

Value proposition of the UNDP capacity building services for health procurement in Eastern Europe and Central Asia

UNDP has developed a document that explains with practical examples the value proposition for health procurement offered to governments and partners. The document presents health procurement experience in the Eastern European and central Asian region. It documents the context as well as the achievements, good practices and lessons learned from building capacity of national partners for health procurement programmes in selected countries.

Value Proposition in Health Procurement, UNDP-Regional Bureau for Europe and the CIS, 2018

For more information

Additional information on UNDP’ support on health procurement in Ukraine can be sourced at:

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