Procurement Pricing comparison & Proposal for a Procurement Information Exchange platform

1. Procurement Pricing comparison &Proposal for a Procurement Information Exchange platform Marianne Schurmann Wilbert Bannenberg WBI consultants wilbert@hera.eu

2. EAC 2007 pool procurement study • Price comparison of 11 products in 5 states • IF each country could use lowest EAC price: • Burundi and Rwanda could have saved 35% • Tanzania 34% • Kenya 15% • Uganda 11% • EAC could have saved $2.4m (average 22%) • Recommendation: regional group contracting WBI pricing comparison, info exchange proposal

3. WBI survey 2010 • 26 comparable products (Ke, Tz, Uga) • NMPAs buy at competitive levels • Ke 64%, Tz 67%, Uga 70% (median price ratio compared to median prices in Intl Price Indicator) • But there is a big range: 19% to 245% • IF the lowest EAC price could have been used: • Tanzania could have saved $1.8m (14,0%) • Uganda could have saved $476.092 (9,6%) • Kenya ? (no turnover figures made available) WBI pricing comparison, info exchange proposal

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7. Interpretation of price differences • take into account additional information • pack size, packaging specifications, registration requirements, procurement volumes, INCOTERMs, domestic preference, exchange rate fluctuations • consider 'intangible' factors • supplier / buyer relationship; payments made on time • establish NMPA discussion group on e-NePP for identifying challenges & opportunities for making procurement more affordable WBI pricing comparison, info exchange proposal

8. Information exchange platform Rationale: • Increased market intelligence & transparency supports improvement of procurement efficiency Objectives: • Provide pharmaceutical procurement agencies and other stakeholders with information on: • regional level prices for priority products • existing suppliers • regional and international benchmarking of procurement outcomes WBI pricing comparison, info exchange proposal

9. Possible information exchange contents • Information on essential medicines: • Product name & registration status; • Pack size and package specifications; • Unit price & INCOTERMs; • Contracted procurement volume; • Procurement method & period; • Quality information (registration status) • Supplier (performance) & manufacturer details WBI pricing comparison, info exchange proposal

10. Contextual information • Details of relevant institutions; • NMPA status; • Annual public sector procurement budget; • Average tender lead times (per stages); • Local (domestic) preferences; • Import duties & taxes; • Average cost for freight & insurance WBI pricing comparison, info exchange proposal

11. Data submission & processing • Data collection forms for documentation of information by NMPA • Electronic submission to e-NePP • dedicated e-mail address or upload procedure • NMPA responsible for ensuring that data is correct, but screening will be performed before information is being processed • Request for updating information annually WBI pricing comparison, info exchange proposal

12. Presentation of product information WBI pricing comparison, info exchange proposal

13. Potential user groups • National Medicines Procurement Agencies • Procurement agencies’ oversight bodies (Procurement Authority, MOH, Parliament, NMPA Board, etc.) • Civil Society (Organisations) to assess whether the procurement agency is performing well • Private sector (manufacturers, wholesalers) to assess their competitiveness and opportunities in the regional market • International organisations working in the field of procurement or benchmarking prices (MSH Price Indicator) • Researchers WBI pricing comparison, info exchange proposal

14. Options • Expand on information • list of pre-qualified suppliers; results of supplier monitoring; products with identified quality issues; add 'problem' priority medicines • Share documents & tools • standard tender documents; specifications; supplier monitoring tools • Include not-for-profit procurement agencies • Include Burundi & Rwanda to cover all EAC countries • Establish link with EAC Secretariat pharmaceutical programme, regional research institutions, etc. WBI pricing comparison, info exchange proposal

15. Points for discussion • Is the suggested platform useful? • Who should have access to procurement & price information? • Are you willing to participate (annually)? • To be answered later in the week: • Are the data collection tools unambiguous and practical? • Who is willing to coordinate this? WBI pricing comparison, info exchange proposal

16. Acknowledgements • Procurement staff KEMSA, MSD and NMS • National consultants (Tina, Joseph, James) • Marianne Schurmann (main author) • WBI for financing the study • www.piemeds.org for the idea of slides • Methodology, datasheets, analysis and 26 price comparison slides on www.enepp.net • Comments and corrections welcome at Marianne@hera.eu or wilbert@hera.eu WBI pricing comparison, info exchange proposal