Module 7: Managing the Supply of Drugs and Commodities

• What drugs and health commodities are needed?
• Where will they come from?
• How will they be paid for?
• How will they be distributed and administered?

Ensuring an adequate and reliable supply of essential drugs and health commodities is a critical consideration when planning for an ECR, particularly for intervention packages that incorporate care and treatment.

Module 7, Managing the Supply of Drugs and Health Commodities:

• Outlines an approach to ECR drug and health commodity management
• Describes the drug and health commodity management cycle
• Discusses defining and developing an approach to ECR drug and health commodity management
• Lists key implementation questions for ECR drug and health commodity management for planners and program managers
• Provides references and resources for further reading

Defining an Approach to ECR Drug and Health Commodity Management

Defining ECR goals clearly before developing an approach for drug and commodity management ensures that the approach will support ECR appropriately. ECR goals can include:

• Expanding to provide the same services to more people;
• Expanding to provide new services to the same people;
• Expanding to provide new services to new target populations; or
• Improving the quality of services provided.

Collaboration among governments, NGOs, the private sector and international donor agencies can be effective in addressing barriers to improving access to essential drugs and health commodities for HIV/AIDS programs in developing countries. Experience has shown, however, that transparency is necessary – in both the process and details of the initiative – to avoid conflict and confrontation, particularly with regard to discounting drug prices. In addition, it is vital that partners and collaborators have clear, agreed-upon roles and responsibilities.

Note that the general principles outlined in this module apply to drugs and all of the commodities defined below. Special consideration is provided throughout the module for issues related to laboratory support for ECR. Laboratory support includes a wide range of testing for preventing HIV transmission and for surveillance, diagnosis and disease management. These laboratory services typically are integrated into blood bank, clinical, reference or public health laboratories and are not managed vertically. But with significant donor contributions and support for HIV, HIV testing sometimes has been singled out for strengthening and is managed outside of, or parallel to, existing laboratory management systems.

Defining Essential Drugs, HIV/AIDS-related Drugs, Health Commodities and Laboratory Equipment for ECR
Essential drugs are those drugs that satisfy the health care needs of the majority of the population, at a price both they and the community can afford. These drugs should be available at all times, in adequate amounts and in appropriate dosage forms.

HIV/AIDS-related drugs include:

• Drugs to prevent opportunistic infections
• Drugs for palliative and supportive care
• Treatment for sexually transmitted infections (STI) to reduce HIV transmission
• Drugs to treat opportunistic infections
• Drugs to treat HIV-related cancers
• Antiretrovirals (ARVs) for preventing mother-to-child transmission
• ARVs for needle stick prophylaxis
• ARVs for treatment of clinical AIDS
• ARVs for HIV patients to prevent or slow progression to AIDS

HIV/AIDS-related commodities include:

• Condoms
• HIV test kits
• Other diagnostic test kits, such as kits to diagnose STIs and opportunistic infections
• Reagents
• Gloves
• Bleach and other disinfectants
• Laboratory equipment and supplies
• Medical equipment and supplies, such as needles and syringes
• Sharps disposal bins

Laboratory equipment consists of tools and machines, both manual and automated, that are used to perform laboratory analyses, including:

• Microscopes
• Automated analyzers, such as enzyme linked immunoassay (ELISA) readers
• Precision pipettes
• Centrifuges
• Incubators
• Refrigerators
• Freezers

Some highly technical laboratory equipment requires unique commercial brands of testing reagents or kits. All equipment requires specialized preventive maintenance and repair.

The Drug and Health Commodity Management Cycle

The drug and health commodity management cycle has six major components:

• Management support systems
• Selection
• Procurement
• Distribution
• Use
• Policy and legal framework

The drug and health commodity management cycle is depicted visually below.

The four basic functions of the cycle are selection, procurement, distribution and use. At the center is a core of management support systems – organization, financing and sustainability, information management and human resources management – that hold the cycle together. The entire cycle rests on a policy and legal framework that establishes and supports the system, ensuring the availability and use of essential drugs and health commodities.

For each component of the cycle, planners need to outline specific issues for consideration. The relevance of each issue will vary according to many factors, including local context, the extent to which a drug and health commodity management system is decentralized, whether services are provided in the public or private sector, and the existing capacity of the drug and health commodity management system. The cycle can be applied to both public and private sectors or a combination of the two, and adapted to centralized and decentralized systems. Some activities, such as tendering, pooled procurement and quality assurance, may be accomplished more efficiently at centralized levels. More detailed descriptions of the six components of the cycle follow.

Drug and Health Commodity Management Cycle Component 1: Management Support Systems
Managing the drug and health commodity system for ECR is significantly more complex than managing drugs and health commodities for routine supply. Management support systems must be flexible because expansion may proceed faster or slower than planned. Quantification for HIV/AIDS programs can also be complex. To ensure that management and supply of drugs and health commodities are appropriate for ECR, it is important to:

• Include drug and health commodity management staff in the ECR planning process.
• Keep drug and health commodity management staff informed of changes in ECR timelines and goals to minimize shortages or waste.
• Focus on a core set of program activities to enable expansion when implementation capacity is limited.

Program managers can consider integrating the supply of drugs and health commodities for HIV/AIDS programs into an existing system, or establishing one or more vertical systems, where the steps of the drug and health commodity management cycle are carried out separately for each program. Integrating supply systems has the advantage of reducing duplication of staff and activities. Difficulties can occur if the donors who help finance the system require special accounting practices for their products with different preconditions, schedules and procedures. On the other hand, vertical systems can be costly to set up, and systems that are heavily subsidized by donors may be financially un-sustainable and difficult to administer. But when effective vertical systems already are in place, replacing them with an integrated system is not recommended until the new system is functional, particularly for drugs for which shortages have high impact, such as antituberculosis (TB) and ARVs.

Key aspects of management support systems – financing and sustainability, drug and health commodity information management and human resources management – are described next. A discussion of special issues for laboratory management is included.

Financing and Sustainability. It is essential to identify reliable sources for long-term funding for drugs and health commodities, including laboratory commodities, during ECR planning – particularly for anti-TB and ARV drugs. Developing a drug and health commodity financing strategy must be a high priority and include an advocacy plan focused on gaining support for ECR. The financing strategy also can include efforts to improve the use of existing funds by enhancing efficiency within the drug and health commodity management cycle (selection, procurement, distribution and use). Options for increasing funding include making a case for greater government funding, introducing or strengthening user fees (cost recovery), increasing or adding health insurance coverage for drugs and health commodities and/or obtaining donor assistance. Policy-level considerations regarding funding and financing mechanisms include access to drugs and health commodities, rational use, system efficiency, equity, long-term sustainability and administrative requirements. Financial sustainability is likely to require a combination of financing mechanisms to meet expanding needs. Planning also needs to consider the projected effects of inflation and currency fluctuations, because future procurements will be affected significantly by these economic factors.

Other long-term planning issues include increases in the demand for services and commodities and the reality that some drugs may be diverted to treat non-HIV-related diseases when drugs for other programs are limited. For example, antibiotics provided for STI programs can be used to treat other types of infections.

When significant amounts of drugs and commodities are being procured and distributed, corruption can become a significant problem. Improved financial management and anti-corruption systems may be required to ensure that resources committed by governments, donors and other partners are managed using international accounting standards. Separating key responsibilities, ensuring proper cash management, providing regular auditing of financial procedures and making audit reports public are some mechanisms that can improve accountability and transparency.

Drug and Health Commodity Information Management. A drug and health commodity information management system collects, reports and uses information for decision making, including tracking use, forecasting of needs and quantification for procurement. Improving accountability and creating an audit trail to track products that enter or leave the supply system are other important functions of an information management system.

Designing or changing the information management system can be based on the needs of the users at each level, building on existing forms, reports and procedures. When information management systems need to be strengthened, a low-cost strategy is to start with what already exists. Training and supervising staff to ensure that existing records are filled out correctly and submitted in a timely manner can significantly improve drug and health commodity supply and use. Examples include drug use and consumption data submitted by district staff to central procurement for quantification of requirements, and medical records used for prescription review for rational prescribing.

Human Resource Management. Human resource management is an extremely important part of management support systems. A long-term investment in increasing staff capacity to work effectively in a drug and health commodity management system will help produce an adequate and reliable supply of these much-needed drugs and health commodities.

Training activities need to be developed for staff working on medical issues, such as diagnostic criteria, standard treatment guidelines (STGs) and clinical guidelines. Likewise, staff who work on supply issues, such as quantification and inventory control, need training. It is critical to monitor and evaluate staff skill levels, particularly as the program expands to incorporate new interventions, is critical. Some activities, such as forecasting, quantification and procurement, can be extremely complex, and available local expertise should be used. But it may be necessary to obtain external technical assistance for these activities, particularly when planning for expansion.

Pre-service and in-service training of laboratory staff is also critical to ECR. Unlike most standardized laboratory tests, HIV testing relies on commercially produced test kits, each requiring unique procedures and specific training in its use. Training is required each time a new product is introduced and when staff are rotated in the HIV testing laboratory. Training requirements should be considered when laboratory managers switch suppliers or donors impose specific brands of test kits on countries.

Experience has shown that decentralization can have a negative effect on drug and health commodity management systems when responsibility for performing activities is given to local staff without adequate training, managerial support and financial resources. ECR planning in a decentralized system must recognize that it may be neither feasible nor desirable to decentralize all drug and health commodity management functions, particularly procurement and quality assurance.

Laboratory Management Issues. In most countries, laboratories are linked through a network managed at the national level. The national laboratory often provides standard operating procedures (SOPs), guidelines, training, supplies and quality assurance to laboratories at the periphery. The national laboratory also serves as a referral laboratory for the more complicated and less requested tests, and as a reference laboratory for confirmatory testing.

ECR requires strengthening the network and laboratories at all levels to provide expanded access to screening, diagnostic and support services, and to increase the range of services provided. In many cases, testing is being expanded beyond the traditional laboratory. At VCT centers, for example, where rapid results are needed for HIV screening, non-laboratory personnel must be trained and integrated into the national quality assurance programs as well as those of the VCT center.

With increased access to ARVs, clinicians must have access to a new cadre of tests, such as CD4 counts and viral loads, which are often not widely available in resource-poor settings. Initially, these tests will be available only at reference laboratories, teaching hospitals or laboratories linked with research studies. In addition to extensive training, referral networks must be established to facilitate transportation of specimens for testing. Cold chains need to be maintained, and timing requirements need to be adhered to during specimen transportation. National reference laboratories also need to develop new procedures monitor ARV drug resistance.

Drug and Health Commodity Management Cycle Component 2: Selection
Selection in the drug and health commodity management cycle involves:

• Reviewing prevalent health problems and priorities;
• Identifying interventions and treatments of choice;
• Selecting needed drugs and dosages;
• Selecting required health commodities, including laboratory tests and procedures; and
• Making decisions about which drugs and health commodities will be available at what service levels.

Program managers will have to prioritize choices during the selection process, particularly if resources are limited. The challenge will be to rank for maximum impact, choosing as many interrelated activities as possible to strengthen the choices. Consideration also needs to be given to important health commodities, such as gloves, bleach, needles and syringes.

Laboratory managers need to consider many factors in their test selection process. Tests and testing algorithms must be both sensitive and specific in the populations being tested, packaged appropriately for the expected volume of testing, appropriate to the skill level of staff (to minimize training), compatible with existing equipment and available consistently. It is also important to ensure proper storage for conducting the types of tests selected. The ELISA tests, for example, are packaged for bulk testing and are not appropriate for sites with a low volume of testing or where immediate results are required. "Rapid tests," because they are packaged individually, are more suitable for situations that need immediate results and sites that have low volume.

Tests and testing algorithms differ, based on their intended use. For example, screening requires different tests than does confirmation. Diagnosis also uses different algorithms, or combinations of tests, from surveillance. Testing algorithms for screening and confirmation need to be selected based on a careful evaluation of the populations to be tested. This evaluation should look at sensitivity, specificity, costs and the logistics of transporting specimens to referral laboratories for confirmatory testing.

Strategies for selection may vary when the supply system is limited. For example, a program may choose initially to strengthen its supply of a particular set of drugs, such as drugs to treat opportunistic infections. The program may elect to do this before including drugs that require a higher level of clinical management and for which stockouts will have great impact, such as ARVs.

National and local STGs have to be developed and/or updated in line with global best-practice guidelines. STGs are disease-oriented guidelines that reflect a consensus on treatments of choice for a range of medical conditions. Priority should be given to drugs on the national essential drugs list and included in the national and local formularies. A drug formulary is a list of drugs approved for use in a specific health care setting. The national AIDS coordinating body may need to work with the national drug committee to update the existing list and formulary to reflect the needs of HIV/AIDS programs. Health commodities must be included on lists of essential supplies and equipment where available.

Inconsistency among national essential drug lists, formularies and STGs – and the consequent lack of harmonization of product formulations – can impede establishing pooled procurement for two or more countries. (See lessons learned from essential drug bulk and pooled procurement programs, under Tendering and Procurement below.) A recent study on the potential for pooled procurement of anti-TB drugs in the Southern Africa Development Community region (International Procurement Agency 1999) found that the lack of such harmonization would be an obstacle to establishing a pooled system for anti-TB drugs in that region. The authors reported that of 20 product formulations in current use, only five were being shared by six or more countries.

Drug and Health Commodity Management Cycle Component 3: Procurement
Procurement in the drug and health commodity cycle management refers to:

• Quantifying requirements;
• Selecting procurement methods;
• Managing tenders;
• Establishing and monitoring contract terms; and
• Assuring quality of drugs and health commodities.

Each aspect of procurement is described in more detail below.

Quantification and Inventory Management. Quantification of drug and health commodity requirements for HIV/AIDS programs is complex, particularly when planning for expansion. Program managers may want to seek outside technical assistance in developing mechanisms and procedures for quantification. During the quantification planning process, managers face two challenges: 1) Taking into account the speed and scale of the planned expansion, and 2) Anticipating changes in needs of the populations being served. For example, an increase in the availability of HIV voluntary counseling and testing (VCT) services can lead to an increase in demand for other services, such as treatment for opportunistic infections.

When planning for a centralized procurement system, accurate and timely consumption data from districts and NGOs are important to guide effective estimates of quantification needs. Consumption data also can be used to monitor ECR progress so that adjustments can be made to quantification requirements and inventory holdings to avoid stockouts and waste. To be reliable, however, consumption data must come from a system with a relatively uninterrupted supply and a full supply pipeline. It is important to be aware that consumption data may not reflect rational prescribing and use of drugs and health commodities, and that total reliance on consumption methods can perpetuate irrational prescribing and use.

Quantification planning is critical for a broad range of testing needs. When HIV test kits are in short supply, they often are diverted from their intended purpose, leaving critical institutions – such as blood banks – without the ability to screen blood for transfusion, or leaving VCT sites unable to function.

HIV test kits and other related diagnostics vary widely in their storage requirements and shelf lives, and need to be managed properly to ensure quality testing and waste reduction. Inventory of test kits and reagents must be used on a first-in, first-out basis to ensure that products are not used beyond their expiration dates.

Tendering and Procurement. Experience has shown that there are significant savings to be made in tendering for essential drugs, particularly on the international market and when buying in bulk. Procurement capacity is essential for a procurement system to be successful. Necessary skills include being able to identify dependable, high-quality suppliers, manage the tender process, negotiate and manage international tenders and ensure product quality. Prequalification of drug and health commodity suppliers is especially useful, if not essential, for products with particular quality control requirements, such as the anti-TB drug rifampin, in fixed-dose combinations.

Lessons learned from bulk and pooled procurement programs for essential drugs include (Clark and Moore 2000; International Procurement Agency 1999):

• A credible, transparent system of procurement – one that guarantees payment and promotes international competition – is of equal, if not greater, importance in working with suppliers to obtain the best prices. While bulk purchasing helps to reduce prices, it is not enough in itself to guarantee access to the best prices.

• Guaranteed and timely payment to suppliers, thereby ensuring supplier confidence.

• Procurement capacity to identify suppliers, manage the tender process, manage and negotiate contracts, and ensure good quality. This is essential for the success of a pooled procurement system. Regional procurement may allow countries with limited supply systems to benefit from the experience and skill of other countries.

• Harmonization of STGs, drug formulations and packaging requirements, which contributes to the success of pooled procurement schemes. Different language requirements for labeling can add to their complexity.

• Prequalification of suppliers to simplify procurement management and facilitates quality control, service and price.

• Contracts that provide for forecasting, rather than guaranteeing purchase quantities, to spread risks between suppliers and purchasers. Contracts can include supplier storage of emergency quantities of products to meet sudden increases in use.

• Discrete registration requirements and country policies to protect their own local supplier base can hamper effective international competition.

The results of a comparative price study by UNICEF, UNAIDS, WHO/HTP and MSF, with information from 10 manufacturers, can provide an overview of different supply possibilities for HIV/AIDS-related drugs. UNICEF, UNFPA, WHO and UNAIDS also are preparing a list of manufacturers of HIV/AIDS-related drugs and health commodities that have satisfied a prequalification process. This list will be made available to member governments and NGOs, which can invite manufacturers to bid in response to tenders. As of the Dec. 1, 2000, deadline, 34 responses had been received (UNAIDS: Contact Group on Accelerating Access to HIV/AIDS-Related Care, 2000). But the drugs and health commodities still must be registered by each country's regulatory authority.

Procurement for laboratories presents special challenges. The wide availability of many different commercial HIV test kits can be a procurement issue when bidding is based solely on the lowest price or on incentives. This often can result in procurement of test kits that require additional (staff) training, may be incompatible with existing equipment and may reduce testing quality. This can be even more problematic when procurement cycles are short, resulting in frequent changes in test kits. To ensure continuity of standard testing algorithms, countries need to use strict criteria when standardizing tests and constructing procurement bids.

Assuring the Quality of Drugs and Health Commodities. It is important to incorporate quality assurance procedures into drug and health commodity supply systems to ensure that each product reaching an individual is safe, effective and meets quality standards. A comprehensive quality assurance program ensures that:

• Drugs and health commodities are selected on the basis of safety and efficacy.
• Suppliers meet acceptable quality standards.
• Drugs and health commodities meet specified quality standards at the time of delivery.
• The quality of drugs and health commodities is not compromised during storage, transportation or dispensing.
• Drug and health commodity recall procedures are implemented to remove defective products.

Quality assurance is critical for laboratory tests and reagents. Program managers need to develop a comprehensive laboratory quality assurance program that includes quality control and assessment. Quality control measures efficacy of an individual test or reagent as it enters the system and each time it is used. It includes measures such as evaluating all new test kits and reagents against standards and incorporating known positive and negative controls in each test batch. Regular monitoring of storage temperatures and expiration dates is also part of quality control, as is equipment maintenance.

Quality assessment programs monitor the entire testing environment, including testing reagents, technician performance and storage. These programs typically are managed by the national reference laboratory or through international programs. For example, a national reference laboratory develops a panel of specimens, including known negative, weak and strong positive sera, which are tested and well characterized on all commercial tests used in the country. This panel is coded, and samples are sent periodically to laboratories for blind testing using their own standard reagents and procedures. Results are analyzed by the national reference laboratory and used to detect and correct problems with test reagents, storage or technique.

Donations. The WHO guidelines for drug donations (revised 1999) can help program managers make decisions about drug donations. Drug donations alone do not assure access, and there may be significant costs as a result of accepting donations, including:

• Fee to the national drug regulatory authority to register the drug.
• Clearing the donation through customs, paying taxes and tariffs.
• Storage and distribution.
• Relabeling in the local language.
• Costs of setting up and implementing a program to use the donation.
• Disposal of expired, excess or unwanted stock.
• Opportunity costs of all the above.

Donations of test kits and equipment can also create unanticipated problems. As discussed earlier, standardization of tests, algorithms and equipment is important to ensure quality and reduce training costs and the need for additional equipment. Donated test kits and equipment may be incompatible with the standard systems in place, increasing training and equipment needs and compromising quality. When test kits or equipment are donated, it is important to determine whether the country approves them. It is equally important to make sure that training, maintenance, technical support and spare parts are readily available in the country.

Drug and Health Commodity Management Cycle Component 4: Distribution
Distribution in the drug and health commodity management cycle includes:

• Customs clearance
• Stock control
• Storage management
• Delivery to health facilities

When improved geographical access is a goal, distribution presents unique challenges to program managers, and success depends on an effective transportation system. The cost of transporting drugs and health commodities to remote areas can be considerable. Options to improve the distribution may include strengthening the existing distribution system or using private or parastatal companies to provide cost-effective alternatives for storage and distribution, especially at national or regional levels. Centralized procurement is not the only option, and some countries procure and distribute drugs and health commodities regionally, with collaboration between public and private systems.

Additional challenges, such as failure to comply with standard operating procedures and excessive losses due to theft, may require review and strengthening of supervision and administrative procedures. At times, it may be necessary to replace personnel and/or provide incentives to improve performance. Transportation problems, such as lack of fuel or vehicles in working order, may be solved locally by installing a fuel depot or providing more spare parts. But a solution to more widespread problems may be to contract out services to private or parastatal organizations. While it creates more work – including assessing the costs of existing systems, preparing tender documents specifying service requirements, assessing the tenderers, and monitoring the contractor performance – contracting out the services can improve efficiency.

National systems vary with respect to public and private roles in financing, distributing and dispensing drugs and health commodities, ranging from fully public to fully private systems. While traditional systems, such as Central Medical Stores, are important, alternative systems can also help support an ECR. Program planners, however, need to be aware that policy or legal restrictions may limit the use of other (alternative) strategies. Alternative systems include:

• Autonomous or semiautonomous health commodity supply agencies.
• Direct delivery systems. The government procurement office tenders to establish the supplier and price for each drug. The supplier then delivers directly to districts and major facilities.
• Prime vendor system. The government procurement office establishes a contract with a single prime vendor to manage the distribution of drugs and health commodities. Separate contracts are developed for the suppliers.
• Fully private supply, where services are provided by private pharmacies.
• Not-for-profit organizations, such as drug supply agencies operated by missions and charities for their own health services.

A secure drug and health commodity storage and distribution system is a requirement for distribution, particularly with drugs that may be more vulnerable to leakage such as ARV medications. Possible approaches to maximize security may include separating key functions of staff, increasing transparency and regular auditing.

The distribution system for laboratory testing involves distributing testing reagents and supplies and transporting specimens. Many tests cannot and should not be performed at the peripheral level. This requires that specimens or patients be transported to a central laboratory. In addition, test results need to be returned to health care providers in a timely manner. It is not necessary to establish separate distribution systems; existing systems should be used whenever possible. Another consideration for ensuring quality is the ability to maintain required storage temperatures for testing reagents and specimens (called the "cold chain") to ensure quality.

Drug and Health Commodity Management Cycle Component 5: Use
Access to drugs and health commodities alone does not assure access to quality care. Drugs must be prescribed and dispensed correctly, and staff, the public and patients must use drugs and health commodities correctly. Ongoing staff training in diagnosing, managing and treating HIV/AIDS-related diseases is crucial. Specialized staff training may be required for such interventions as ARV drugs, along with development of such necessary support services as laboratories. Training also needs to include the private sector because individuals may seek to obtain HIV/AIDS-related drugs there, particularly if there is stigmatization in the community or confidentiality is an issue. STGs, together with a national essential drugs list, can assist in standardizing and rationalizing prescribing patterns and can be used for in-service training, supervision and medical audit.

The importance of taking medications correctly is also related to use. Some patients may need support to take their medications correctly. It may also be necessary to investigate and understand specific drug-taking behaviors. Particular difficulties have been identified with anti-TB and ARV drugs. Counseling, providing information to the patient and using directly observed short course therapy (DOTS) for TB can be successful strategies. Some countries have involved community-based support groups in helping people to take medication correctly. Systems to monitor and report adverse drug reactions may also need to be established or strengthened.

Drug and Health Commodity Management Cycle Component 6: Policy and Legal Framework
The legal and policy framework, the platform on which the drug and health commodity management cycle rests, establishes and supports the public commitment to essential drug and health commodity supply. To identify any potential conflicts with ECR, one must understand the relevant policies and legislation, including national drug policy, drug and health commodity legislation and regulation and legal aspects of drug and health commodity procurement. Key questions for each of these areas are described below for program managers and planners. Another special section explores national policy on HIV testing.

National drug policy (NDP)

• What goals and priorities are identified in the NDP? Should the NDP be adapted to reflect needs for HIV/AIDS programs?
• Do professional codes need to be developed/adapted to ensure confidentiality and address disclosure policies and discrimination against PLHAs in health settings?

Drug and health commodity legislation and regulation

• What laws and regulations affect and regulate the importation, distribution, prescription and administration of narcotic (opiate) drugs? Do they need to be updated to reflect needs for palliative care?
• Is the brand of drug to be procured registered in the country for the therapeutic indication/use for which it will be dispensed? For example, is nevirapine registered for prevention of mother-to-child transmission of HIV?
• Is there a fast-track procedure for registration? Drug and health commodity registration can be a lengthy procedure in some countries and can lead to delay in program implementation.

Legal aspects of drug and health commodity procurement

• Is the drug patented in the country? Is the drug patented in the seller's country? Does the patent apply to the substance or to the production method?
• Has the country directly implemented patent protection for pharmaceuticals under the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement? (See "The TRIPS Agreement and Patent Protection" for an explanation of TRIPS.) If the answer is yes, can a compulsory license be issued to allow a patented drug to be either locally and legally manufactured or imported from a generic manufacturer?
• Is parallel importing of pharmaceuticals and health commodities permitted? (Parallel importation involves importing a product from one country for resale without the authorization of the patent holder in another, thereby allowing the buyer to search for the lowest world market price.)
• How do the policies or regulations on import duties, taxes or tariffs affect the affordability of HIV/AIDS-related drugs?
• How do the policies or regulations of bilateral donor countries affect donor financing of pharmaceutical products? For example, USAID-funded pharmaceutical products must be of U.S. source and origin and approved by the FDA, unless a source/origin waiver has been approved for the procurement.

National HIV testing policy

• A national HIV testing policy will help to standardize testing, ensure that laboratory services meet the needs throughout the country with appropriate technology and ensure quality. National HIV testing policies need to address issues such as standardized testing algorithms for blood screening, diagnosis, surveillance and confidentiality.

How to Begin

The drug and health commodity system is dynamic and complex, but is critical to ECR success. Substantive improvements in the supply and use of drugs and health commodities are possible – but where to begin?

Assessing the current drug and health commodity system and identifying its strengths and gaps is an important first step. It is useful to consider the system as a whole to identify areas for improvement, including major bottlenecks and origins of problems that can surface at different points in the cycle.

Once an assessment is conducted, next steps include identifying ways to address the areas that need improvement and targeting specific areas for the greatest impact. Periodic monitoring can be used to ensure positive intervention outcomes.

Key Implementation Questions for Managing the Supply of Drugs and Health Commodities for ECR

The following are key questions for planners and program managers to consider when implementing a system to manage the supply of drugs and health commodities for ECR.

For a complete overview of managing drug and health commodity supply systems, including step-by-step approaches on managing pharmaceutical systems effectively:

1. Management Sciences for Health and the World Health Organization. Managing Drug Supply. 2nd ed., revised and expanded. West Hartford, Conn.: Kumarian Press, 1997. ISBN: 1-56549-047-9. (Available at a reduced price for developing countries at Kumarian Online Press)

For information on lessons learned on essential drug pooled/bulk procurement programs:

1. Clark M, Moore T. WHO STOP TB: A Discussion Document on Supply Chain and Procurement Management for a Global Drug Facility. Arlington, Va.: Management Sciences for Health (for WHO), 2000.
2. International Procurement Agency. A Bulk Purchasing Study on the Procurement of Anti-TB Drugs amongst 11 SADC countries. Report prepared for the Southern Africa Development Community Secretariat. Irene, South Africa, 1999.

For information on international prices:

1. McFadyen JE, ed. International Drug Price Indicator Guide. Boston: Management Sciences for Health, 1999. (Updated annually; available in English, French and Spanish from www.msh.org.)

For considerations in the use of antiretroviral drugs:

1. UNAIDS/WHO. Guidance Modules on Antiretroviral Treatments. Geneva: NAIDS/WHO, 1998.
2. UNAIDS/WHO. Safe And Effective Use of Antiretrovirals in Adults with Particular Reference to Resource Limited Settings. Geneva: UNAIDS/WHO, 2000. (Available from http://whqlibdoc.who.int/hq/2000/WHO_HSI_2000.04.pdf.)

For more information on the TRIPS agreement and compulsory licenses:

1. Correa C. Integrating Public Health Concerns into Patent Legislation in Developing Countries. Geneva: South Center, Geneva, 2000. (Available from http://www.southcentre.org/publications/publichealth/toc.htm.)
2. WHO. Globalization, TRIPS and access to pharmaceuticals. WHO Policy Perspectives on Medicines No. 3. Geneva: WHO, 2001. (Available from http://www.who.int/medicines/organization/ood/trips_med.shtml.)

For more information on HIV testing:

1. Blood Safety and HIV. UNAIDS Technical Update, UNAIDS Best Practice Collection. Geneva: UNAIDS, 1997.
2. UNAIDS. Guidelines for Using HIV Testing Technologies in Surveillance: Selection, Evaluation and Implementation. Geneva: UNAIDS, 2001.
3. UNAIDS. HIV Testing Methods. UNAIDS Technical Update, UNAIDS Best Practice Collection. Geneva: UNAIDS, 1997.
4. UNAIDS. Operational Characteristics of Commercially Available Assays to Determine Antibodies to HIV-1 and/or HIV-2 in Human Sera. Geneva: UNAIDS, 1998.