E-DRUG: Alternative procurement method for tendering?
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Dear e-Druggers,
I was asked by Farhad (see his full name and address below) to explore the possibilities of the following idea on medicines procurement. I think it is a good idea that we give it some thought. In case there are people with some experience with implementing this idea, we would like to know. Same for when this idea has been explored before.
Alternative procurement method for tendering
The search for the best way of procurement of pharmaceuticals was instigated by the desire for making the process as fair and transparent as possible.
The introduction of tendering or competitive bidding has been accepted as being positive; however, there are some negative aspects as well, such as the following:
1. Though competitive bidding reduced the possibilities of collusion, fraud and corruption practices, it has not completely prevented these to occur.
2. The competitive bidding (especially in case of high volume and price contracts) is time-consuming process which may take at least 6 often more than 12 months.
Alternative mechanisms need to be explored and one of them has been formulated as follows:
1. Create an international website for purchasing deals for pharmaceuticals. The site should be established under the patronage of one or more of authorized and competent international organizations and representatives of various countries should be included in the management board of the website (rotation of board members is possible);
2. Management Board of the website establishes tough conditions for inclusion of pharmaceutical suppliers with established worldwide reputation in the list of potential suppliers at the website. All Suppliers/Bidders shall meet the established qualification requirements and norms;
3. Those pharmaceutical Suppliers who wish to participate in online tendering process after obtaining license/permission from a relevant institution shall provide the list of pharmaceuticals indicating the price for each medicine, eligible volume and terms of supply, prices for delivering goods into various regions (countries) of the World, etc. (adding of other parameters to this list is possible) once a month (every quarter, six months, etc.). This kind of information from all possible suppliers is kept on the website under database and this information is being disclosed to the website visitors/potential purchasers;
4. Potential Purchasers (regardless of geographic location of the country) send a request to the website indicating the list of needed pharmaceuticals, possible quantities and desirable delivery terms;
5. After receipt of the request from the Purchaser this request is processed by Software support of the website and the Purchaser is provided with the name of the company/Supplier which meets the requirements best, taking into consideration the lowest price for goods among other suppliers, possibility to supply required quantities within required delivery terms, geographical proximity (and other relevant parameters);
6. Management Board of the Website checks the received information and connects the purchaser and supplier. Correspondingly, the contract is signed and all further required steps are done (warranty, insurance, etc.). These procedures are done straight between the purchaser and supplier. After contract is signed the Purchaser is given the right to check the fairness of information provided by the website through retrieving relevant information about other potential/competing suppliers. By implementing all these steps it will be possible to avoid all negative aspects of ordinary bidding process and this will significantly reduce the bidding time-frame, provide preliminary anonymity of participants and will completely exclude collusion and corruption.
Technical implementation of this method will not be complicated and at the same time the advantages of introducing this method are quite obvious. All participants i.e. potential suppliers as well as purchasers of pharmaceuticals will be required to pay minimum service fee for financial support of the website.
Farhad Mehdiyev
Director
Project Implementation Unit
Health Sector Reform Project
Ministry of Health
96, H.Zardabi str.
Baku, Azerbaijan, AZ1122
Tel: +994-12-431-1968
Fax: +994-12-431-1937
E-mail: f.mehdiyev@hsrp.az
Rob Verhage
HERA pharmaceutical consultant
PO Box 4002
Tawajakoerastraat 4
Paramaribo
Suriname
+597 438966
verhager@gmail.com