Prequalification would have prevented perpetual drug shortages

Guyana is now facing a crisis of sorts with drug shortages being registered across all the 10 Administrative Regions. This situation could have been avoided had the A Partnership for National Unity/Alliance For Change (APNU/AFC) Government maintained the internationally prescribed drug procurement practice of prequalification.
The Government had advanced new mechanisms that changed the way drugs were procured and supplied in the country, in essence decentralising the acquisition and dissemination of medical equipment and drugs to the various Regions, while dissolving the prequalification procedure to give companies that do not qualify to the international prescribed standard and consequent supply chain of prequalification an opportunity to supply drugs.
The consequences of such decisions have started to manifest themselves. The former Administration was criticised for its position of maintaining the prequalification criteria because critics felt favouritism was at play, when some local prequalified companies, received contracts in Guyana.
However, the former Administration had only put those mechanisms, which were modelled after international prequalified suppliers such as the World Health Organisation (WHO); United Nations Development Programme (UNDP); Pan-American Health Organisation (PAHO); United Nations Children’s Emergency Fund (UNICEF), etc, in place to ensure that quality drugs were steadily available for mass public consumption at competitive world market prices, the absence of which would invariably lead to shortages of drugs, since there were no direct established supply chains with companies that are prequalified to deliver the requisite drugs needed.
A valid case in point to reference is the Organisation of Eastern Caribbean States (OECS). In order to maintain the efficiency of procurement and purchasing process, “the OECS operates a restricted tendering system in which only suppliers who meet the pre-established quality standards qualify to bid. These suppliers are subject to rigid inspection processes…This system ensures that suppliers conform to international regulatory standards in the pharmaceutical industry, the most common of which are the Good Manufacturing Practices standards of the World Health Organisation. Pre-qualified suppliers are those which have been successfully evaluated against these requirements and are approved to participate in the bidding process.”
The OECS has established an agency, the Pharmaceutical Procurement Service (PPS), which is representative of nine eastern Caribbean countries with an average combined population of 550,000 in the procurement of pharmaceutical and medical supplies.“With each country in the Eastern Caribbean having such a small population, it is difficult to enjoy the savings offered through the placement of large orders without losing it back in…overstocking such as wastage or shelf-life exhaustion. The cost saving here was reflected in prices quoted for quantities required by the Region being 44 per cent lower than those quoted for individual countries during the 2001/02 tender cycle. So to benefit from this, pooling together was a critical cost-saving strategy, achieved quantity discounts as well as consolidation of bargaining power.”
Comparing the OECS population of 550,000 to Guyana’s 700,000 is a clear indication of the cost savings to be derived if larger volumes of drugs are pursued by the Government in the form of consolidated tenders rather than being done on a regional scale, and the benefits to be had if large contracts are awarded since good prices hinge heavily on professionalism and skill in negotiations as it does on volumes and payment track record.
In Guyana, under this current Government, each Region is to have their own budget. This scenario replicates the bargaining conditions of the individual OECS countries prior to the implementation of pooled procurement, and only sets the country back by abolishing well-established and internationally observed best practices in procurement with proven cost savings.
Aside from the cost savings, the prequalification procedure addresses the critical issue of drug shortages since one of its criterion deals extensively with the qualified suppliers having the warehouse capacity to store and supply drugs. The current Administration had argued to have a warehouse of a certain magnitude to store drugs was not necessary towards the acquisition and dissemination of drugs and hence they went the decentralising route.
However, had there been such a mechanism in place with the requisite supply chain intact then drug shortages would have been non-existent, since according to the OECS “a distinct advantage is presented when a supplier has a local warehouse that meets WHO requirements: the lead time is significantly low for stock transfer to Government warehouses so the buffer stock required to be maintained by Government facilities is relatively low”. This equates to greater expediency at which drugs could be delivered to the various hospitals and health centres across Guyana.