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1. Drug supply management
(Phar3144)
Dawit Kumilachew (Bpharm, MSc) 1
UNIVERSITY OF GONDAR
COLLEGE OF MEDICINE AND HEALTH SCIENCES
SCHOOL OF PHARMACY
Department of pharmaceutics and social pharmacy

2. 3.1 The procurement process
2

3. Objectives
 Define procurement
 Explain operational principles of good
pharmaceutical procurement
 Explain procurement mechanisms
 Describe procurement methods
 Identify purchasing models
3

4. The logistics cycle
4

5. Procurement
Definition
 Procurement is the process of acquiring drug
product through purchase, manufacture or
donation.
 Pharmaceutical procurement is a specialized
professional activity that requires a combination of
knowledge, skills and experience.
 It is a major determinant of drug availability and the
total health cost.
5

6. Cont…
 Procurement encompasses all the steps
needed to obtain goods and services from an
external source.
 This include;
 Identification and specification of needs
 Market scan and supplier identification
 Supplier communication, maintenance and
warranty
 Negotiation/ warranty
 Logistics management
 Performance monitoring
 Follow up actions in case of default complaint
6

7. Cont…
 Pharmaceutical procurement is a complex process
which involves many steps, agencies, ministries
and manufacturers.
 No matter what model is used to manage the
procurement and distribution system, efficient
procedures should be in place: to select the most
cost-effective essential drugs to treat commonly
encountered diseases; to quantify the needs; to
pre-select potential suppliers; to manage
procurement and delivery; to ensure good product
quality; and to monitor the performance of
suppliers and the procurement system.
7

8. Cont…
 Failure in any of these areas leads to lack of
access to appropriate drugs and to waste.
 An effective procurement process should:
 procure the right drug in the right time
 obtain the lowest possible purchase price
 ensures that all drugs procured meet
recognized standard quality
 arrange timely delivery to avoid shortage and
stock out
 ensure supplier reliability with respect to
service and quality
8

9. Cont…
 set the purchasing schedule, formulas for order
quantities and safety stock levels to achieve
the lowest total cost of each level of the system
 achieve these objectives in the most efficient
manner possible.
9

10. Points to remember in the procurement of
pharmaceuticals
1. Procure the most cost-effective drugs in the
right quantities
 The first strategic objective is to develop an
essential drugs list to make sure that only the most
cost-effective drugs are purchased.
 Procedures must also be in place that accurately
estimate procurement quantities in order to ensure
continuous access to the products selected without
accumulating excess stock.
10

11. Cont…
2. Select reliable suppliers of high-quality
products
 The second objective is that reliable suppliers of
high-quality products must be (pre-) selected, and
that active quality assurance programs involving
both surveillance and testing must be implemented
wherever possible.
11

12. Cont…
3. Ensure timely delivery
 The third strategic objective is that the procurement
and distribution systems must ensure timely
delivery of appropriate quantities to central stores
and adequate distribution to health facilities where
the products are needed.
12

13. Cont…
4. Achieve the lowest possible total cost
 The fourth objective is that the procurement and
distribution systems must achieve the lowest
possible total cost.
 Every program can minimize the total purchasing
costs by choosing the optimal purchasing model for
their particular situation (e.g. annual or quarterly),
taking into consideration order interval, safety stock
and the re-order formula used.
13

14. Cont…
 The quality of the drugs purchased should not be
compromised under any circumstances.
 Unlike other commodities, drugs must always be
purchased using VFM (Value For Money) criteria
instead of Low Bid criteria.
14

15. Cont…
 Drugs that are ordered for use in the health centre
must be approved for use in the centre.
 Drugs in the health centre should be relevant to the
pattern of endemic diseases as well as the type of
services being provided in the health centre.
 It is advisable to request drugs on a regular basis
to prevent shortages.
15

16. Cont…
 If drugs are not always available, patients may lose
confidence in the health centre and will be
discouraged from visiting it.
 It is important to make requests on a regular basis,
as drugs will only be delivered when requested.
 The delivery time should be taken into
consideration in ensuring that drugs are not in
short supply.
16

17. 17
Figure: Drug procurement cycle
Collect
Consumption Data
Choose
Procurement Method
Locate and
Select Suppliers
Specify Contract
Terms
Receive and
Check drugs
Make Payment
Distribute Drugs
Monitor
Order Status
Reconcile
Needs and Funds
Review
Drug Selection
Determine
Quantities Needed

18. Operational Principles of Good
Pharmaceutical Procurement
 There are twelve operational principles for good
pharmaceutical procurement clustered in to four:
◦ Efficient and transparent management
◦ Financing and competition
◦ Drug selection and quantification
◦ Supplier selection and quality assurance
18

19. Efficient and transparent
management
 Separation of key procurement functions and
responsibilities that require different expertise.
 Transparency, written procedures and using explicit
criteria to award contracts.
 Procurement should be planned properly and
procurement performance should be monitored
regularly; monitoring should include an annual
external audit.
19

20. Drug Selection and Quantification
 Public sector procurement should be limited to an
essential drugs list or national/local formulary list.
 Procurement and tender documents should list
drugs by their International Nonproprietary Name
(INN), or generic name.
 Order quantities should be based on a reliable
estimate of actual need.
20

21. Financing and Competition
 Mechanisms should be put in place to ensure
reliable financing for procurement.
 Procurement in bulk.
 Competitive procurement methods, except for very
small or emergency orders.
 Purchasing groups should purchase all contracted
items from the supplier(s) which hold(s) the
contract (sole-source commitment).
21

22. Supplier Selection and Quality
Assurance
 Prospective suppliers should be pre-qualified, and
selected suppliers should be monitored
Criteria:
 Price and quality of products
 Delivery times
 Regulations
 Reliability
 Reputation
 Guaranties
 Product quality assurance program
22

23. Procurement Mechanisms
A. Based on the responsible body for
procurement and distribution:
◦ Central store system
◦ Autonomous supply agency system
◦ Direct delivery system
◦ Prime vendor system
◦ Fully private supply
23

24. Cont…
1. Central stores system
 It is conventional central medical stores (CMS)
approach
 Drugs are procured and distributed by a centralized
government unit
 One of the main drawbacks of the CMS model is the
potential for political interference and the lack of
accountability and performance resulting from high staff
turnover.
 The following are some of the functions and services of
this model:
 procurement, warehousing, and distribution of
medicines and medical supplies;
 quality assurance of medicines;
 drug information services; and
 training in materials management.
24

25. Cont…
2. Autonomous supply agency system (ASA)
 Bulk procurement, storage and distribution
managed by an autonomous or semi-autonomous
supply agency not directly managed by the
government.
 An ASA is a central store managed by an
autonomous agency that reports to the government
or is managed by a private firm under government
contract.
 The ASA model is similar to the CMS model but
usually operates with different financing
mechanisms, such as a revolving drug fund (RDF)
and different governance structures. 25

26. Cont…
3. Direct delivery system
 non CMS approach
 Tenders establish prices and suppliers for each
essential drugs
 Suppliers are delivering to individual districts and
major facilities
4. Prime vendor system
 Contracts for drug pricing negotiated with
suppliers, and separate contract negotiated with a
single prime vendor to warehouse and distribute
drugs for districts and major health facilities
26

27. Cont…
5. Fully private supply
 Public sector patients obtain pharmaceuticals from
private drug retail outlets
 Government may or may not reimburse the cost of
those services
27

28. B. Based on the level demand is
determined
1. Push system (allocation/ration system)
 Supply sources at some level determine what
type and quantities of drugs will be delivered to
the lower levels.
 Conditions:
◦ Lower staff-not competent
◦ Demand greatly exceeds supply (ration
necessary)
◦ Limited number of products are being handled
◦ Disaster relief is needed
28

29. Cont…
2. Pull system (independent demand/ requisition
system)
 Each level of the system determines what types
and quantities are needed and place orders with
the supply source.
 Conditions:
◦ Lower level staff-competent
◦ Sufficient supply is available
◦ Large range of products are managed
◦ There is regular supervision and performance
monitoring
29

30. Procurement Methods
 All pharmaceutical procurement methods
fall into one of the following four basic
categories:
◦ Open tender
◦ Restricted tender
◦ Competitive negotiation
◦ Direct procurement
30

31. Cont…
1. Open tender
 Open tendering is a formal procedure by which
quotations are invited from any supplier’s
representative on a local or worldwide basis,
subject to the terms and conditions specified in the
tender invitation.
 Commonly contrary to expectations,
◦ suppliers respond to tenders even for relatively
small quantities.
31

32. Cont…
2. Restricted tender
 This method of bidding is well suited to situations
when lead times must be kept to a minimum, and
for specific categories of commodities, such as
pharmaceuticals or products with short shelf lives,
or those with specific quality or quantity
requirements.
 Because potential suppliers are prequalified,
purchasers know that the supplier can meet the
specific requirements in the tender documents.
32

33. Cont…
 Also termed as a closed bid or selective tender
 Open only to prequalified suppliers
 Product quality may be more easily assure through
a restricted tender
 Drug Suppliers prequalification process can
consider the following
◦ Adherence to good manufacturing practices
◦ Past supply performance
◦ Financial viability and related factors
33

34. Cont…
 E-procurement and reverse auction:
 E-procurement is Internet-based tendering.
 In the reverse auction approach (which is a
variation of restricted tenders), qualified bidders
submit an initial offer; the lowest offer received is
posted publicly without naming the bidder after the
first round; and then qualified bidders are invited to
offer lower prices than that posted low price.
 The process continues round-by-round until no
more prices are submitted; then the lowest posted
bid wins the contract.
34

35. Cont…
 This approach has rarely been used for
pharmaceutical procurement; however, it may gain
attraction as global Internet capacity and use
increase.
 Pharmaceutical quality assurance requirements
and related factors may limit the use of this model,
at least in its current form.
3. Competitive negotiations
 Also termed as negotiated procurement
 The buyer approaches a limited number of
selected suppliers (typically at least three) for price
quotations. 35

36. Cont…
 Buyers may also bargain with these suppliers
to achieve specific price or service
arrangements.
 This procurement method is used primarily in
the private sector, because public-sector
procurement organizations are generally
forbidden from negotiating or bargaining with
suppliers.
International or local shopping:
 As with competitive negotiation, in
international or local shopping, the buyer
obtains at least three quotes from suppliers;
however, bargaining or negotiation of any kind 36

37. Cont…
4. Direct procurement
 The simplest but perhaps the most expensive
procurement method of all
 It involves direct purchase from a single supplier
either at quoted prices or negotiated prices
 Well suited for emergency situations
37

38. Table: Advantages and disadvantages of
different procurement methods
38
Method Advantages Disadvantages
Open tender ♦ Many bids, some with
low prices
♦ New suppliers can be
identified
♦ High workload is
required in evaluation
of bids and selection of
suppliers
Restricted tender ♦ Fewer bids (less
workload than open
tender
♦ Quality easier to ensure
♦ More limited options
♦ System for
prequalification must
be set
Competitive negotiation ♦ Suppliers are generally
well known
♦ Less evaluation work
♦ Higher price
Direct procurement ♦ Easy and quick ♦ Higher price

39. Purchasing Models
Procurement may proceed under different models:
1.Annual purchasing
 A one level periodic review model, with the interval
set at once a year
2. Scheduled purchasing
 A periodic review model in which orders are placed
at prescribed intervals, such as monthly, quarterly,
biannually.
39

40. Cont…
3. Perpetual purchasing
 A two level model in which stock levels are
reviewed each time stock is issued (or at least
weekly) and orders are placed whenever stock falls
below a minimum level.
40

41. Selection of suppliers
 The selection of suppliers have a profound effect
on the quality and cost of pharmaceuticals
acquired.
 Inadequate safeguards in supplier selection may
result in purchase of medicines that are ineffective,
unsafe or even deadly.
 Common problems with unreliable suppliers such
as; hidden costs resulting from late deliveries,
complete default on confirmed orders, losses
caused by poor packaging, or short expiration
dates may raise the actual medicine cost to several
times the original contract cost.
41

42. Types of potential suppliers
 Government pharmaceutical factories, local private
manufacturers, and foreign manufacturers are
primary sources of pharmaceuticals, because
these companies do the manufacturing by
themselves.
 Donors, international procurement services,
independent foreign exporters, and local importers
and distributors are secondary sources; they obtain
pharmaceuticals from manufacturers for resale.
42

43. Cont…
 Potential suppliers include
1. Wholesalers and retailers,
2. Manufacturers,
3. Central medical stores, and
4. Non-profit supply organizations,
 for example: European suppliers such as
Action Medeor, ECHO International Health
Services, and IDA.
43

44. Cont…
 Criteria for selecting a supplier include:
◦ Price
◦ Quality
◦ Delivery times
◦ Guarantees and warranties
 Guaranty- a collateral agreement to answer for the
debt of another in case that person defaults
 Warrant- a written assurance that some product or
service will be provided or will meet certain
specifications
◦ Reputation
◦ Reliability
44

45. Cont…
1. Pharmaceutical manufacturers
 Classified as:
A. research based producers
- their profitability depend on new pharmaceu-
ticals developed through research
- are patented and vigorously promoted by
brand name
- also produce line of pharmaceuticals which
they sell by generic name
B. Non-research based producers
- market pharmaceuticals only by their INN
names 45

46. Cont…
2. International procurement services
 Are sometimes non-profit companies or arms of
international agencies, and Sometimes these
services operate as private, for-profit entities.
 They provide services from one or more
warehouses, and they vary with regard to selection
of medicines, prices, means of quality assurance,
payment terms, restrictions placed on the buyer,
and nature and timeliness of service provided.
46

47. Cont…
 These agencies can play a valuable role in
international tenders, providing competitive
international prices for a range of products and
access to small quantities of pharmaceuticals-sales
that may not interest primary manufacturers.
 Their proposals should be evaluated by the same
criteria used for other sources of supply, and they
should specify the name of the manufacturer and
the mechanism for quality assurance, like any
commercial distributor.
47

48. Cont…
3. Independent international wholesale exporters
 Sometimes known as “jobbers”.
 Purchase pharmaceuticals from a variety of
manufactu-rer’s for resale.
 Many of these companies around the world
specialize in exports to developing countries.
48

49. Cont…
 It is essential to get the name of the primary
manufacturer and make sure that the distributor
provides bona fide quality assurance documents
and certifications from the exporting-country
regulatory agency with each registration request,
tender offer and shipment.
 WHO has developed prequalification procedures
related specifically to wholesalers.
 Procurement offices should consider adapting the
WHO procedures when qualifying wholesalers as
suppliers.
49

50. Cont…
4. Local importers and distributors
 Also known as “wholesalers”.
 Are often major forces in the local pharmaceutical
market, both financially and politically.
 Like foreign distributors, these companies may not
closely examine the quality of the products
supplied by the manufacturers with which they
work.
50

51. Cont…
 In may countries, these companies have exclusive
rights to represent certain manufacturers, and
tender offers for these manufacturers’ products
come to the local distributor.
 Again, the procurement office may wish to adapt
and apply the WHO wholesaler prequalification
criteria when qualifying these type of supplier.
51

52. Supply of drugs from medical stores
1. Stores requisition/delivery (issue) form
 A stores requisition/delivery (issue) form should
accompany any supply made from the medical
stores.
 Health center's normally receive their drug supplies
from central, regional or health services area
medical stores.
 In very rare cases they may obtain drugs from
other sources.
52

53. Cont…
 The records of requisition and receipt of drugs from
the medical store are kept in the health center in an
approved manner.
 The delivery note from the central medical store
should indicate what has been supplied as
indicated in the stores requisition/delivery (issue)
form.
53

63. Cont…
2. Receipt of drugs at dispensary
 The consignment must come with two copies of the
stores requisition/delivery (issue) form.
 Check that the quantity issued actually
corresponds to the quantity indicated on the stores
requisition/delivery (issue) form.
 Check off each drug after receiving.
 Take note of the unit price of each drug and
compare it to the previous unit price.
63

64. Cont…
 Check that all original boxes, tins or bottles are
unopened and are in good condition.
 Check the labels and ensure that there are no
expired drugs being received.
 Any drugs already expired or soon to expire that
cannot be consumed before expiration or drugs not
in good condition should be returned for
destruction or redistribution to other center's.
 Sign two copies of the stores requisition/delivery
(issue) forms if the above procedure have been
completed.
64

65. Cont…
 Return one copy of the signed stores
requisition/delivery (issue) form to the medical
stores, and place another copy in the “drug order”
file.
 Place drugs with shorter expiration dates in front of
the shelf so that they can be reached and used first
(FEFO).
 Remember to record the new stock on the
respective stock (bin) cards and appropriate forms.
65

66. Cont…
3. Discrepancies when receiving drugs
 Where there is a difference in the quantities of
drugs issued and the quantities actually received,
request the delivery team to give an immediate
explanation and make the necessary correction on
the stores requisition/delivery (issue) form.
 If there are broken bottles or leaking packages,
hand these over to the delivery team along with an
internal drug return (IDR) form.
 Discrepancies should always be recorded in the
Remarks column on the stores requisition/delivery
(issue) form.
66

67. Cont…
4. Transfer voucher or internal drug return (IDR)
form
 The transfer voucher effects the movement of the
following items to the medical store:
■ Expiring drugs,
■ Damaged or spoiled drugs,
■ Drugs soon to expire,
■ Excess stock resulting from low consumption or
other reasons
 The following rules should be kept in mind:
67

68. Cont…
 It is important that drugs are not allowed to expire
in the health center because of changes in disease
pattern or for any other reasons.
 Items that can be used elsewhere should be
transferred immediately using an IDR form to the
medical stores for subsequent redistribution.
 Expired or spoiled items should be transferred
immediately using the IDR form to the medical
stores for destruction.
68

69. Cont…
 Excess stock should normally be transferred at
least 3 months before expiration to the medical
store using the IDR form.
 An internal transfer directly from one dispensary to
another without involving the central store is not
permitted for accounting purposes.
 The IDR form should be filled in triplicate. The
triplicate copy is retained in the health center while
the original and duplicate copies accompany the
returned drugs.
69

70. Cont…
5. Procedure for supplying drugs to health center
store
 Some health centers have lying in-wards and
outpatient clinics to which drugs are supplied.
 The health center store will supply the drugs in
accordance with the following:
 A request is made from the ward/clinic in an
approved manner.
 Supplies are made on the basis of the request, and
quantities of drugs supplied are recorded in an
approved manner.
70

71. Cont…
 Entries of quantities of drugs supplied are made on
bin cards as well as the drug register maintained
(in the store) for drugs received and supplied.
 Normally, drugs are supplied from the health centre
(dispensary) store to the dispensing area.
 Entries of such entries are also made on bin cards
or the drug register maintained in the store bin an
approved manner.
71

72. Cont…
6. Drug donations
 Donated drugs should be screened and separated
into expired or poor-quality drugs, those approved
for use at the health centre and those not
approved.
 Those approved for use at the health centre should
be retained and entered into the stock. The rest
must be sent to the central store with an IDR form.
72

73. Receiving and inspecting health commodities
When you receive health commodities:
1. Ensure there is sufficient storage space (before
the shipment arrives).
2. Prepare and clean the areas used for receiving
and storing the products.
3. Count the number of boxes received and
separate damaged and unsealed boxes from intact
and sealed boxes.
4. Inspect all boxes for damaged or expired
products. Damaged and unsealed boxes should be
checked immediately and in the presence of the
transporter.
73

74. Cont…
5. Complete and sign the Delivery Note and release
the
transporter.
6. Send all necessary documents to Finance for
prompt payment.
7. If appropriately trained personnel are available,
take product samples to check for labeling,
packaging and product appearance using the
checklist below.
8. Arrange all products on shelves or pallets and
record entries in stock records.
74

75. Inspection Checklist for Drugs Received in
the Warehouse
Labeling:
1. Labeling should be in English and preferably one
other official language of WHO.
2. All labels should display at least the following
information:
 International Nonproprietary Name (INN) of the
active ingredients
 Dosage form
 Quantity of active ingredient(s) in the dosage form
(e.g. tablet, ampoule) and the number of units per
package
 Batch number
75

76.  Date of manufacture
 Expiry date (in clear language, not in code)
 Pharmacopoeia standard (e.g. BP, USP,)
 Instructions for storage
 Name and address of the manufacturer
3. A printed label on each ampoule should
contain the following:
 INN of the active ingredient(s)
 Quantity of the active ingredient
 Batch number
 Name of the manufacturer
 Expiry date
The full label should again appear on the collective
package.
76

77. Cont…
4. Directions for use, warnings and precautions may
be given in leaflets (package inserts). However,
such leaflets should be considered as a supplement
to labeling and not as an alternative.
5. For articles requiring reconstitution prior to use
(e.g. powders for injection) a suitable beyond-use
time for the constituted product should be indicated.
77

78. Packaging:
1. Tablets and capsules should be packed in
sealed waterproof containers with replaceable
lid, protecting the contents against light and
humidity.
2. Liquids should be packed in unbreakable
leak-proof bottles or containers.
3. Containers for all pharmaceutical
preparations must conform to the latest edition
of internationally recognized pharmacopoeia
standards.
4. Ampoules must have either break-off necks,
or sufficient files must be provided.
78

79. Cont…
Expiry date:
 At time of shipment the product shall have at least
75% of its shelf life.
 Write expiry date on the box in large letters and
numbers, also on single containers put on the
shelf.
 In case that the expiry date is unsatisfactory
(calculate consumption until expiry date), return to
supplier.
79

80. Appearance of the product:
All shipments:
 Compare the goods with the supplier’s
invoice and original purchase order or
contract. Note discrepancies on the Delivery
Report.
Check that:
 Number of containers delivered is correct
 Number of packages in each container is correct
 Quantity in each package is correct
 Drug is correct
 Dosage form is correct (tablet, liquid, other form)
 Strength is correct (milligrams, percentage
concentration,)
 There is no visible evidence of damage (describe) 80

81. Cont…
Tablets:
 For each shipment, tablets of the same drug and dose
should be consistent.
Check that:
 Tablets are identical in size
 Tablets are identical in shape
 Tablets are identical in color (shade of color may vary
from batch to batch)
 Tablet markings are identical (scoring, lettering,
numbering)
 There are no defects (check for spots, pits, chips,
breaks, uneven edges, cracks, embedded or adherent
foreign matter, stickiness)
 There is no abnormal odor when a sealed bottle is
opened
81

82. Cont…
Capsules:
 For each shipment, capsules of the same drug and
dose should be consistent.
Check that:
 Capsules are identical in size
 Capsules are identical in shape
 Capsules are identical in color (shade of color may vary
from batch to batch)
 Capsule markings are identical
 There are no defects (check for holes, pits, chips,
breaks, uneven edges, cracks, embedded or adherent
foreign matter, stickiness)
 There are no empty capsules
 There are no open or broken capsules
82

83. Cont…
Parenterals:
 Parenterals are all products for injection (IV
liquids, ampoules, dry solids, suspensions
for injection).
Check that:
 Solutions are clear (solutions should be free from
undissolved particles, within permitted limits)
 Dry solids for use in injections are entirely free from
visible foreign particles
 There are no leaking containers (bottles,
ampoules)
83

84. Common Procurement Challenges
 Absence of a comprehensive procurement policy
 Inadequate rules, regulations, and structures
 Public sector staff with little experience and training
to respond to market situations
 Government funding that is insufficient and/or
released at irregular intervals
 Donor agencies with conflicting procurement
regulations
84

85. Cont…
 Fragmented drug procurement at provincial or
district level
 Lack of unbiased market information
 Corruption and lack of transparency
85

86. 3.4 DRUG DISTRIBUTION
86

87. Objectives
 Explain drug distribution cycle
 Discuss the concept and principles of
stock management
87

88.  Drug distribution is a continuous process of
receiving drugs from the supplier and
moving them safely/securely, expeditiously
to the many point in the health care system
at which the drugs will be dispensed to
patients.
 The primary goal of distribution system is to
maintain a steady supply of drugs and
supplies to facilities where they are needed.
88

89. Cont…
 A well-run distribution system should:
◦ Maintain a constant supply of drugs
◦ Keep drugs in good condition
◦ Minimize drug loses due to spoilage and expiry
◦ Rationalize drug storage costs
◦ Use available transport as efficiently as possible
◦ Reduce theft and fraud
◦ Provide information for forecasting drug needs
89

90. The distribution cycle
 It begins when drugs are dispatched by the
manufacturer or supplier and
 It ends when drug consumption information
is reported back to the procurement unit.
90

91. 91

92. 3.5.3. Drug Distribution System Design
 Designing a distribution system requires
systematic cost effectiveness analysis and
operational planning.
 Drug supply systems can be operated
under a push or a pull system
 There are four major elements into
consideration in order to have an efficient
drug supply system
92

93. 93

94. Table: The Four major elements of a distribution system
Elements of a distribution
system
Points to consider
1. System design • Geographical or population coverage
• Degree of centralization
• Number of storage levels in the system
• Push versus pull system
2. Storage • Selection of sites
• Facility design
• Materials handling systems
• Stock selection
3. Delivery • Collection vs. delivery
• Maintenance of vehicles
• Routing of deliveries
• Scheduling of deliveries
• Selection/acquisition of conveyances
4. Information system • Inventory control
• Requisition forms and procedures
• Consumptions reporting
• Information flow 94

95. Some guiding principles in designing drug distribution
system
◦ Managing and evaluating distribution and logistics as
an integrated activity
◦ Ensuring distribution system operations are linked to
the overall objectives of the medical stores and the
broader public health system
◦ Ensuring customer service needs are understood and
accommodated
◦ Balancing the trade-offs between costs and service
◦ Keeping stock moving
◦ Minimizing lead times, inventory and costs
◦ Analyzing ways to improve effectiveness as well as
efficiency
◦ Minimizing the steps in storage and handling, which
decreases the opportunity for damage and loss 95

96. Distribution channel types
Physical distribution channel
Trading/ transaction channel

97. Cont…
• Physical distribution channel -the method
and means by which a product or a group
of products are physically transferred, or
distributed, from their point of production to
the point at which they are made available
to the final customer.
• In general, this end point is a retail outlet,
shop or factory, but it may also be the
customer’s house, because some channels
bypass the shop and go direct to the
consumer.

98. Cont…
• The trading channel is also concerned with
the product, and with the fact that it is being
transferred from the point of production to
the point of consumption.
• The trading channel, however, is concerned
with the non-physical aspects of this
transfer. These aspects concern the
sequence of negotiation, the buying and
selling of the product, and the ownership of
the goods as they are transferred through
the various distribution systems.

99. Cont…
• One of the more fundamental issues of distribution
planning is regarding the choice and selection of
these channels.
• The question that arises, for both physical and
trading channels, is whether the producer should
transfer the product directly to the consumer, or
whether intermediaries should be used.
• These intermediaries are, at the final stage, very
likely to be retailers, but for some of the other links
in the supply chain it is now very usual to
outsource to a third-party operator to undertake the
operation.

100. Physical distribution channel types
and structures
Channel alternatives: manufacturer-to-
retail
 There are several alternative physical
channels of distribution that can be used,
and a combination of these may be
incorporated within a channel structure.
 The following diagram illustrates the main
alternative channels for a single consumer
product being transferred from a
manufacturer’s production point to a retail
store.

101. Physical distribution channel types and
structures
• Channel alternative for a single product

102. Cont…d
• Manufacturer direct to retail store. The manufacturer or
supplier delivers direct from the production point to the retail
store, using its own vehicles. As a general rule, this channel is
only used when full vehicle loads are being delivered, thus it
is quite unusual in today’s logistics environment.
• Manufacturer via manufacturer’s distribution operation to
retail store. This used to be one of the classic physical
distribution channels and was the most common channel for
many years. Here, the manufacturer or supplier holds its
products in a finished goods warehouse, a central distribution
centre (CDC) or a series of regional distribution centres
(RDCs). The products are trunked (line-hauled) in large
vehicles to the sites, where they are stored and then broken
down into individual orders that are delivered to retail stores
on the supplier’s retail delivery vehicles. All of the logistics
resources are owned by the manufacturer.

103. Cont…d
• Manufacturer via retailer distribution centre to retail
store. This channel consists of manufacturers either
supplying their products to national distribution centres
(NDCs) or RDCs for final delivery to stores, or supplying
them to consolidation centres, where goods from the
various manufacturers and suppliers are consolidated
and then transported to either an NDC or RDC for final
delivery. These centres are run by the retail
organizations or, as is often the case, by their third-
party contractors. The retailers then use their own or
third-party delivery vehicles to deliver full vehicle loads
to their stores.
• This type of distribution channel grew in importance
during the 1980s as a direct result of the growth of the
large multiple retail organizations

104. Cont…d
• Manufacturer to wholesaler to retail shop.
Wholesalers have acted as the intermediaries in
distribution chains for many years, providing the
link between the manufacturer and the small
retailers’ shops.
• Manufacturer to cash-and-carry wholesaler to retail
shop. Another important development in
wholesaling has been the introduction of cash-and-
carry businesses. These are usually built around a
wholesale organization and consist of small
independent shops collecting their orders from
regional wholesalers, rather than having them
delivered. The increase in cash-and-carry facilities
has arisen as many suppliers will not deliver direct
to small shops because the order quantities are
very small.

105. Cont…d
 Manufacturer via third-party distribution service to
retail store. Third-party distribution, or the
distribution service industry, has grown very rapidly
indeed in recent years, mainly due to the extensive
rise in distribution costs and the constantly
changing and more restrictive distribution
legislation that has occurred. Thus, a number of
companies have developed a particular expertise
in logistics operations. These companies can be
general distribution services but may also provide a
‘specialist’ service for one type of product or for
one client company.

106. Cont…d
 Manufacturer via small parcels carrier to retail
shop. This channel is very similar to the previous
physical distribution channel, as these companies
provide a ‘specialist’ distribution service where the
‘product’ is any small parcel. There was an
explosion in the 1980s and 1990s of small parcels
companies, specializing particularly in next-day
delivery. The competition generated by these
companies has been quite fierce. Small parcels
carriers also undertake many home deliveries,

107. Cont…d
 Manufacturer via broker to retail store. This is a
relatively rare type of channel, and may sometimes
be a trading channel and not a physical distribution
channel. A broker is similar to a wholesaler in that it
acts as intermediary between manufacturer and
retailer. Its role is different, however, because it is
often more concerned with the marketing of a
series of products, and not necessarily with their
physical distribution. Thus, a broker may use third-
party distributors, or it may have its own warehouse
and delivery system.

108. 3.5.4. Drug Storage and Stock
Management
A. Medical Storage
 The goals of medical stores management
are:
◦ To protect stored items from loss, damage, theft
or wastage and
◦ To ensure that the potency is maintained
◦ To ensure/maintain physical integrity
◦ To ascertain that the quality and safety is
maintained throughout their shelf life
◦ To manage the reliable movements of supplies
from sources to user in the least expensive way
108

109. Cont…
 Characteristics of a well managed
stores operation:
◦ Store should be divided into zones
◦ Stocks should be arranged with in each
zone in some order system
◦ Stocks should be stored on pallets on the
floor or pallet racks or on shelves
◦ Good housekeeping- cleaning and
inspection
◦ Clearly defined management structure
◦ Staff should be appropriately qualified,
trained, disciplined and rewarded
109

110. Cont…
B. Location and design of the store
 Location
◦ In area where trees can be planted around the
store
◦ On raised foundation
◦ In a place where supplies are easily carried and
distributed
◦ In a place with adequate security from thieves,
fire and other accidents/hazards
 Design
◦ Size- adequate size to house the anticipated
drug supplies and free movement
110

111. Cont…
◦ Height of the wall- high enough to allow good
ventilation, walls with perforated or bored bricks
◦ Roofs- should be constructed in such away that
sunlight can not reach the floor area or
foundation; double ceiling; slanting roofs.
Storage conditions
 There are two main types of storage
conditions:
◦ Normal storage condition
◦ Special storage condition
 Cold storage condition
 Separate storage
111

112. Storage temperature and environment
◦ Dry place
◦ Protect from heat
◦ At room
temperature
◦ Cool place
◦ Cold place
(refrigeration)
◦ In deep freezer
◦ A. 15oC – 30oC
◦ B. -20oC – 0oC
◦ C. not >30oC
◦ D. <5% relative
humidity
◦ E. 8oC – 15oC
◦ F. not >8oC
(usually 2-8 oC)
112

113. Storage temperature and environment
◦ Dry place ……………………. <5% relative humidity
◦ Protect from heat ……………. not >30oC
◦ At room temperature ………… 15oC – 30oC
◦ Cool place …………………… 8oC – 15oC
◦ Cold place (refrigeration)-not >8oC (usually 2-8 oC)
◦ In deep freezer ………………. -20oC – 0oC
113

114. SN Description
1 Products that are ready for distribution are arranged so that identification labels and
expiry dates and/or manufacturing dates are visible.
2 Products are stored and organized in a manner accessible for first-to-expire, first-out
(FEFO) counting and general management.
3 Cartons and products are in good condition, not crushed due to mishandling. If
cartons are open, determine if products are wet or cracked due to heat/radiation
(fluorescent lights in the case of condoms, cartons right-side up for Depo-Provera®).
4 The facility makes it a practice to separate damaged and/or expired products from
usable products and removes them from inventory.
5 Products are protected from direct sunlight at all times of the day and during all
seasons.
6 Cartons and products are protected from water and humidity during all seasons.
7 Storage area is visually free from harmful insects and rodents. (Check the storage

115. 10 Roof is always maintained in good condition to avoid sunlight and water penetration.
11 Storeroom is maintained in good condition (clean, all trash removed, sturdy shelves,
organized boxes).
12 The current space and organization is sufficient for existing products and reasonable
expansion (i.e., receipt of expected product deliveries for foreseeable future).
13 Products are stacked at least 10 cm off the floor.
14 Products are stacked at least 30 cm away from the walls and other stacks.
15 Products are stacked no more than 2.5 meters high.
16 Fire safety equipment is available and accessible (any item identified as being used
to promote fire safety should be considered).
8 Storage area is secured with a lock and key, but is accessible during normal working
hours; access is limited to authorized personnel.
9 Products are stored at the appropriate temperature during all seasons according to
product temperature specifications.

116. Cont…
C. Organization of drug stocks in store
 Medical stores must have a system for
classifying or organizing medicines, and
must ensure that all employees know the
system being used.
 Arranging drugs properly enables to control
shelf life and simplify accessibility.
 Most commonly used arrangements are:
◦ Pharmaco-therapeutic order
◦ Alphabetical order by generic name
◦ Pharmaceutical order (dosage form)
116

117. Cont…
◦ System level (level of use)
◦ Frequency of use
◦ Random bin -is a unique storage space
identified by code.
◦ Commodity coding-is an abstract
organizational system. It offers maximum
flexibility. This system is based on a
unique article code combined with a
unique location code
117

118. Cont…
D. Stock rotation
 Stock rotation means arranging stocks in a
way that ensures drugs which expiry early
are issued first.
 Those that expire later should be placed at
the back.
 Stocks can be rotated in two ways:
◦ FIFO System
◦ LIFO/FEFO System
118

119. E. Inventory control
What is inventory?
 Inventory is the stock on hand at any given
time.
 It is like money in the bank.
 Inventory control is the process of
maintaining of stock properly at all times.
 It is a process of assuring that the right
volume and movement are secured in order
to ensure that the obtained drugs have
reached to the final consumer correctly.
119

120. Cont…
Why do we hold stock?
 To ensure availability (reduce the risk of
stock outs)
 To maintain confidence in the system
 To reduce the unit cost of drugs (bulk
purchase)
 To avoid shortage costs (avoid expensive
emergency orders)
 To minimize ordering costs
 To minimize transport costs
 To allow for fluctuations in demand
120

121. Purpose of an inventory control process
I. To determine when stock should be
ordered/issued
II. To determine how much stock should be
ordered/issued
III. To maintain an appropriate stock level of
all products, avoiding shortages, expiry
and oversupply.
121

122. Cont…
 Inventory control helps to:
◦ Maintain appropriate stock
◦ Avoid over stocking
◦ Monitor shortage of drugs
◦ Check the movement of stocks
◦ Prevent expiry of drug before being used
◦ Balance the merits and demerits of
inventory keeping
122

123. Assessing stock status
 The purpose of assessing stock status is to
determine how long supplies will last.
123
This Is the same as…
Amount we have Stock on hand
Amount we use Rate of consumption/ average
monthly consumption
How long it lasts Months of stock

124. Cont…
 Stock on hand and average monthly
consumption, therefore, are the data items
we need to assess stock status.
124

125. Cont…
Stock on hand
 Stock on hand data can be found on stock
keeping records (inventory control card, bin
card, stores ledger; or, perhaps, in a
computerized system).
 The most accurate source is a physical
inventory.
 A physical inventory is the process of
counting, by hand, the total number of units
of each commodity in the store or a health
facility, at any given time.
125

126. Cont…
Average monthly consumption
 AMC is the average of the quantities of
product dispensed to users or patients in
the most recent three months, as
appropriate.
126

127. Key inventory control terms
 Max stock level/max quantity: The max
stock level is the level of stock above which
inventory levels should not rise, under
normal conditions.
 The max stock level is set as a number of
months of stock (for example, the max level
may be set at four months of stock). It
indicates how long supplies will last.
 The max stock level can be converted to
the max quantity (for example, the max
quantity could be 120,000 units).
127

128. Cont…
 The max stock level is fixed, whereas the
max stock quantity varies as consumption
changes!?
 The max quantity is calculated by
multiplying the average monthly
consumption (which can change) by the
max level (number of months). For
example, 100 bed nets (AMC) × 6 months =
600 bed nets—the max quantity.
128

129. Cont…
 Min stock level/min quantity: This is the
level of stock at which actions to replenish
inventory should occur under normal
conditions.
 As with the max, the min stock level should
be expressed in months of stock (for
example, the min level is one month of
stock); it can then be converted to a
quantity (for example, the min quantity is
30,000 units).
 The min stock level is fixed, whereas the
quantity varies as consumption changes. 129

130. Cont…
 Depending on the design of the max-min
system, reaching the min may be the trigger
for placing an order (often called the
reorder level or reorder point).
 In some systems, reaching the min may be
an indicator to monitor stocks carefully until
the next order is placed, or the emergency
order point is reached
130

131. Cont…
 Review period/review period stock: This
is the routine interval of time between
assessments of stock levels to determine if
additional stock is needed.
 This term is also called the order interval or
resupply interval, but review period is
preferred because in some max-min
systems, a review does not always result in
an order being placed.
 Review period stock is the quantity of stock
dispensed during the review period.
131

132. Cont…
 Safety stock level. This is the additional
buffer, cushion, or reserve stock kept on
hand to protect against stock outs caused
by delayed deliveries, markedly increased
demand, or other unexpected events.
 The safety stock is expressed in number of
months of supply, which can also be
converted into a quantity.
 Lead time stock level. This is the level of
stock used between the time new stock is
ordered and when it is received and
available for use. 132

133. Cont…
 The lead time stock level is expressed in
number of months of supply, or as a
quantity.
 Emergency order point (EOP). This is the
level of stock that triggers an emergency
order; it can be reached at any point during
the review period. The EOP must be lower
than the min.
133

134. Maximum-minimum inventory
control systems
 A max-min inventory control system is
designed to ensure that the quantities in
stock fall within an established range.
 Most successful inventory control systems
used for managing health commodities are
max-min systems of one type or another.
 Three types of a max-min inventory control
system are applicable to health commodity
logistics systems: forced-ordering,
continuous review, and standard.
134

135. Cont…
 For each of the systems, the same formula is
used to determine how much to order or issue.
 The basic difference between the systems is
the trigger for ordering or issuing, i.e., when the
order should be placed or an issue made.
1. In a Forced-ordering system, the trigger for
ordering is the end of the review period.
2. In a Continuous review system, the trigger for
ordering is when the facility reaches the
minimum level.
3. In a Standard system, the trigger for ordering
is the end of the review period for the
commodities that are at the minimum level.
135

136. Cont…
 No matter which inventory control system is
used, the formula for calculating the order,
or issue quantity, is the same. This is true
whether the system is an allocation (push)
system or a requisition (pull) system.
 In an allocation (push) system, the quantity
to issue is calculated; in a requisition (pull)
system, the quantity to order is calculated.
136

137. Cont…
Where…
Max stock quantity = average monthly
consumption × max stock level
 Average monthly consumption = average of
the quantities of product dispensed to users
or patients in the most recent three months,
as appropriate.
Q. Should quantities on order be included
when calculating order quantities?
137

138. Cont…
 With a well-designed and well-functioning
system, the facility should receive resupply
before placing the next order, or before the
next stock is issued.
 However, if a facility, for some reason, has
not received the previous order or issue, but
is positive that stock will arrive, they should
subtract the quantities expected from the next
resupply quantity.
 In this case, the formula for ordering should
be:
Max stock quantity − stock on hand −
quantity on order = order quantity
138

139. Determining when to place an order or issue
 The difference between the three inventory
control systems is the trigger for placing an
order or issuing resupply.
1. Forced-ordering max-min system
 This type of max-min system can be used in
either a pull (requisition) or a push (allocation)
system.
 In either a system, the forced-ordering max-min
system action is done at the end of each and
every review period either a requisition is made
by the facility, or a facility sends a report with
data to help their supply source determine how
much to allocate to that facility. 139

140. Cont…
Store keeper decision rule
 At the end of each review period, review all
stock levels and order or issue enough
stock to bring the levels up to the max.
 Place an emergency order if the stock level
for any item falls below the emergency
order point before the end of the review
period.
140

141. Advantages and disadvantages of
forced-ordering max-min system
 The storekeeper’s decision rule is simple:
order/issue every item at the end of the
period.
 Because orders are placed at regular
intervals (i.e., the end of each review
period), transportation can be scheduled for
specific times, making it easier to ensure
the availability of transport resources.
 Every facility orders or is resupplied at the
end of every review period.
141

142. Cont…
 Because all items are ordered/issued at the
end of every review period, storekeepers do
not need to constantly assess stock status,
unless they think a potential stock out is
possible.
 One disadvantage of a forced-ordering system
is that orders for some items may be for small
quantities; because all items are ordered,
regardless of the stock on hand.
 N.B: The inventory control system for the IPLS
is a Forced Ordering Maximum/Minimum
inventory control system.
142

143. 1.1 Forced-ordering variation:
delivery truck system
 One variation of a forced-ordering max-min
system is the delivery truck system,
sometimes called a topping up or bread
truck system.
 It can also be called Vendor Managed
Inventory (VMI) system.
 The rules for the storekeeper and the
considerations for the designer are the
same as for a regular forced-ordering
system.
 The difference between a regular forced-
ordering system and a delivery truck system
143

144. Cont…
 In a delivery truck system, a truck is loaded
with supplies at the end of the review
period.
 The truck and a delivery team travel to each
facility, assess the stock, and leave (top up)
an amount of each product that is sufficient
to bring stock levels up to the max at that
location.
 Delivery truck systems can be either pull or
push system.
 In the former, the truck arrives, and the
storekeeper completes the
report/transaction record and orders from
144

145. Cont…
 In the latter, the supervisor on the truck
calculates the quantity to be issued and
issues it from the truck.
 The supervisor may or may not complete
the facility’s report. In some cases, the
supervisor and storekeeper complete the
order form together.
145

146. Advantages and disadvantages of the
forced-ordering delivery truck system
 The order is filled on the spot, so the facility does
not have to hold quantities of stock while waiting
for the next delivery. The lead time is zero, which
lowers the lead time stock to zero. This lowers the
min and, consequently, the max stock levels.
 Damaged or expired products can be put back on
the truck for disposal (if this is the procedure for
handling these products), taking advantage of
space on the truck.
 The truck can be sent out with a full load of
supplies, eliminating multiple small orders.
146

147. Cont…
 The LMIS report can be completed and collected at
the time of delivery. This is especially
advantageous when reporting is delayed because
of poor mail service, or when reporting is spotty
because facilities lack postage funds.
 The training requirements are significantly less;
only delivery team leaders need training, rather
than all the facility staff.
 If a supervisor goes on the truck for deliveries, he
or she can provide on-the-job training and
supervision at the various stops. This is helpful
when transport for supervision alone is difficult and
higher-level managers want to ensure routine
supervision.
147

148. Cont…
Disadvantages:
 All types of max-min systems rely on their delivery
trucks. However, the delivery truck system is
particularly vulnerable to breakdowns. If the truck
breaks down, the whole system breaks down.
Alternate transport for emergency orders must be
available.
 A sufficient number of staff must be available in the
office to complete logistics management and other
duties while team leaders are away making
deliveries.
 The system may require larger trucks, as trucks
always carry more stock then they will actually
deliver. 148

149. Cont…
2. Continuous review max-min system
 Of the three types of inventory control,
continuous review max-min inventory
control is probably the least appropriate for
most health programs; but when it is
appropriate, it can be very effective.
 Comparing continuous review with forced-
ordering max-min systems shows how
small variations in design can change the
way an entire system functions.
149

150. Cont…
Store keeper decision rule
 Review the stock level of each item every
time you make an issue. If the stock level is
at the min, or has fallen below the min,
order enough stock to bring the level up to
the max.
In a continuous review system:
 The review period is not fixed; a decision about
whether to order is made each time a product is
issued.
 The storekeeper must know both the max and min
stock levels.
 The storekeeper does not need an emergency
order point, because an order can be placed any 150

151. Cont…
 The storekeeper must assess stock status each
time an issue is made. In a system with many
items, this means that the storekeeper’s workload
increases; in a forced-ordering system, the
storekeeper needs to assess stock status only
when levels appear low enough to warrant an
emergency order.
 The storekeeper must be able to order (pull) stock
from the higher level, because the storekeeper is
the only one who can determine whether the min
stock level has been reached. A continuous
review system must be a pull system.
151

152. Advantages and disadvantages of
continuous review max-min system
 Advantages:
 The storekeeper’s decision rule is simple.
 The system is more responsive and flexible
because orders can be placed at any time.
 Small orders are eliminated because stock levels
are at the min when an order is placed.
 Disadvantages:
 Transportation resources are harder to schedule
because orders can be placed at any time; a single
facility can order pills one day, condoms the next,
and HIV test kits the following week.
152

153. Cont…
 In facilities with a large number of products, or a
great deal of activity, the storekeeper’s job is
harder because the stock status must be assessed
every time stock is issued.
2.1 Continuous review system variation:
two bin
 One variation of continuous review max-min
systems is the two bin system. In this case, the
rules for the storekeeper and considerations for the
designer are the same as for any other continuous
review system.
153

154. Cont…
 The difference between a regular continuous
review system and a two bin system is the way the
storekeeper determines when the min has been
reached.
 In the two bin system, the storekeeper has two
equal-sized bins (containers, boxes, cartons,
sacks, or other receptacles) of each individual
product (i.e., not a kit of products).
 When the first bin is empty, the min has been
reached.
 An order is placed for another bin (i.e., a bin’s
worth of stock), and the storekeeper begins issuing
from the remaining bin.
 The arrival of a new bin brings the stock level up to
the max.
154

155. Advantages and disadvantages of
continuous review two bin max-min
system
Advantages:
 A two bin-system require less training than
a normal pull systems because the only
trigger to order is an empty bin. No
calculations are required and paperwork is
minimal.
Disadvantages:
 If consumption for products is not stable,
the bin size must be continually reviewed to
ensure that CBDs are not overstocked or
under stocked on commodities.
155

156. Cont…
3. Standard max-min system
 Theoretically, the standard version of the
max-min system is the most effective
because it combines the decision rules of
both forced-ordering and continuous review
and, therefore, shares the advantages of
both.
 However, it also has disadvantages.
156

157. Cont…
Store keeper decision rule
 Review all stock levels at the end of each review
period. for products that are at or have fallen below
the min, order/issue stock quantities up to their
max levels.
In a standard system:
 When to make an order or issue new stock is
based on the min stock level and the review period.
This means that the storekeeper must know the
min, max, and review period.
 The storekeeper will need an emergency order
point to ensure that a stock out does not occur
157

158. Cont…
 The storekeeper must assess the stock
status at the end of each review period and
at any time levels appear to be low enough
to warrant an emergency order.
Advantages and disadvantages of
standard max-min system:
Advantages:
 Small orders are eliminated because an
order is placed only when stock levels are
at or below the min.
158

159. Cont…
 In programs with many products, standard systems
eliminate the need to assess stock status
continually (as in continuous review) and to reduce
the number of calculations that must be made
because fewer products will be ordered or issued
than in forced-ordering.
 Because orders are placed at regular intervals (i.e.,
at the end of each review period), transportation
can be scheduled for specific times, making it
easier to ensure the availability of transport
resources.
159

160. Cont…
Disadvantages:
 The primary disadvantage of a standard system is
that the min stock level is higher, increasing the
likelihood of expiry and requiring more storage
capacity, both of which mean increased costs.
 Storekeepers must learn the max, min, and EOP;
know how to assess stock status; and be able to
calculate the order or issue quantity. More training
for the storekeepers may be required because their
decision rules are more complex.
160

161. Setting max-min levels
Step.1..Determine the lead time
 Lead time: is the time between when stock
is ordered or issued and when it is
delivered and available for use.
 The lead time stock level, therefore, is the
number of months of stock used after an
order is placed, or an issue determined,
and before you receive the new order.
161

162. Cont…
Step 2. Set the review period
 A review period is the routine interval of
time between assessments of stock levels
to determine if an order should be placed or
an issue of resupply made.
 In designing a max-min system, it is
recommended to use reporting periods as
the review periods.
 N.B: Always set the lead time as shorter
than the review period. Why?
162

163. Cont…
Step 3. Set the safety stock
 Safety stock is the buffer, cushion, or
reserve stock kept on hand to protect
against stock outs that are caused by delay
in deliveries, increased consumption, or
product losses.
Safety stock ≥ ½ review period
Step 4. Set the minimum
Min level formula (forced ordering and
continuous review) Min stock level
= lead time stock level + safety stock level
163

164. Cont…
 In the standard system, orders are placed at
the end of the review period, but only for
products that have reached the min.
 If a store is just above min, you would not
place an order at the end of the review period,
and you would not have another chance to
order until the end of the following review
period.
 Consequently, the min must be set higher.
Min level formula (standard) Min stock level
= lead time stock level + safety stock level +
review period stock level
164

165. Cont…
Step 5. Set the maximum
Max Level Formula Max stock level ≥ min stock
level + review period stock level
Step 5. Set the emergency order point
 Emergency order points for all three max-min
systems should be greater than or equal to the
longest emergency lead time, but should not be
equal to the min.
Emergency order point > longest emergency lead
time
165

166. II - Fixed Order Quantity System
 Group assignment/ reading
assignment
166

167. IPLS max-min levels
167

168. Benefits of successful inventory control
system at facility level
 Patients receive drugs promptly and
stock outs can be prevented even when
deliveries are delayed;
 Supplies can be replenished at
scheduled intervals, saving on
administrative cost and transport time;
 Patient have confidence in the facility
and seek help when they are ill.
 In many countries, poor inventory
management in the public drug supply
system leads to waste of financial
resources, shortage of essential drugs and
a decrease in the quality of patient care.
168

169. Problems of poor inventory
control
 A patient’s condition may worsen
because of a delay in treatment; a
patient may even die if a life saving drug
is out of stock;
 If drug are not available in rural facilities,
patients may have to make long and
expensive journeys to obtain treatment;
 When a drug is out of stock, a less
suitable alternative may be prescribed;
 Frequent stock outs may establish or
reinforce poor prescribing habits
169

170. Cont…
 Emergency orders which are expensive for
the purchaser and inconvenient for the
supplier may be required.
 Staff commonly resist the implementation
of inventory control systems,
Common reasons for resistance are
A perceived lack of time for record-
keeping
Feeling that “this is not my job”
Lack of appropriate training on inventory
control
170

171. Cont…
Inventory control stock records
• The minimal information that should be
collected on stock records for medicines and
other health products includes:
 product name/description including the form
and strength
 stock on hand/beginning stock balance
 receipts
 issues
 losses/adjustments
 closing/ending balance
 transaction reference (e.g., issue voucher
number or name of supplier or recipient).
171

172. Cont…
 Depending on the system, stock records might
also include additional product information such
as:
◦ special storage conditions (e.g., 2°–8°C)
◦ unit prices
◦ lot numbers/bin locations
◦ item codes
◦ expiry dates.
 Stock records might also include certain
calculated data items. Calculated data items
include:
 consumption data, such as average monthly
consumption (AMC)
 lead times for ordering/requisition
 maximum and minimum stock levels
 emergency order point. 172

173. Cont…
 Standard forms used for inventory
control include:
◦ stock cards
◦ bin cards
◦ requisition/issue vouchers
◦ receiving forms (packing slip/freight bill)
◦ delivery/issue vouchers
◦ expired stock disposal forms
◦ physical inventory forms
◦ list of approved medicines and prices.
173

174. Cont…
Physical Inventory
 A physical inventory is the process of
counting by hand the number of each type
of product in your store at any given time.
 A physical inventory helps ensure that the
stock on hand balances recorded on stock
keeping records match the quantities of
products actually in the store.
174

175. Physical Inventory
 There are two kinds of physical
inventory:
1. Complete physical inventory:
 All products are counted at the same time.
 A complete inventory should be taken at least
once a year.
 More frequent inventory (quarterly or monthly)
is recommended.
 For large warehouses, this may require
closing the storage facility for a day or longer.
 It is easier to conduct regularly at facilities that
manage smaller quantities of products.
175

176. Cont…
2. Cyclic or random physical inventory:
 Selected products are counted and
checked against the stock keeping
records on a rotating or regular basis
throughout the year.
 It is usually appropriate at facilities that
manage larger quantities of products.
176

177. Cost of maintaining stock
 Efficient inventory control system saves
money
 Poor inventory control leads to wastage or
increased costs
Overstocking of certain items tie up a
substantial portion of the drug budget,
leaving insufficient funds for other
lifesaving drugs;
Overstocked drugs often expire;
Poor storage condition may result in
spoiled stock;
Poor stock records and poor security
make theft easier; 177

178. Inventory costs
1. Capital cost
2. Storage space cost
3. Inventory service cost
4. Inventory risk cost
5. Order costs
178

179. 3.5.2. Drug Financing
 Drug financing is among key components
of national drug policy
 Financing mechanisms include
◦ Public financing,
◦ Health insurance,
◦ User fees,
◦ Donor financing
◦ Development loans
179

180. *Source: WHO/DAP (1997). Public-Private Roles in the
Pharmaceutical Sector - Implications for Equitable
Access and Rational Drug Use
Figure: Consumers, payers and health care
providers relationships*
180

181. Cont…
 A separation between financing and distribution
functions is illuminating in the pharmaceutical
sector
181
Public Private
Drug
financing
• Government budgets (central,
regional and local) and
• Compulsory social health
insurance programs
• out-of-pocket payments by
individuals and
households,
• private health insurance,
• community drug schemes,
cooperative schemes,
employers' schemes, and
• financing through other
nongovernmental entities
Drug
distribution
• Wholesale distribution and
retail dispensing by
government-managed drug
supply and health services
• Distribution through state-
owned enterprises (state
corporations).
• Private for-profit
wholesalers and retailers,
and
• Not-for-profit essential
drugs supply services.

182. Cont…
182
Table : Systems for financing and distributing
drugs**
** Source: WHO/DAP (1997). Public-Private Roles in the Pharmaceutical Sector
- Implications for Equitable Access and Rational Drug Use
Financin
g
Distribution
Public Private
Public (Model 1)
Government CMS to
government providers
(Model 2)
Many social health
insurance reimbursement
systems and contracted-out
drug supply systems
Private (Model 3)
User fees at government
health services
(Model 4)
Fully private systems

183. Cont…
Fully public centralized system (model 1)
 Drugs are financed, procured and distributed by a
centralized government unit.
 This has been the standard approach in many
countries in Africa, Asia, Europe and Latin America.
Advantages
◦ Government involvement in both financing and
distribution fully public systems can potentially be
very equitable ones and
◦ Monopsony (“single buyer”) power in purchasing
helps procure drugs at low cost.
183

184. Cont…
Disadvantages
◦ This approach may offer insufficient incentives
for technically efficient behavior by the distributor
◦ The total amount spent on drugs is constrained
by the government budget
Social health insurance reimbursement
system (model 2)
 Public funding from central budgets and social
health insurance premiums is used to reimburse
pharmacies or patients themselves for drugs
provided through private pharmacies.
184

185. Cont…
 Publicly funded drug supply systems which are
largely contracted-out to the private sector also fit
into this quadrant.
Advantages
◦ better efficiency in drug distribution of the private
sector,
Disadvantages
◦ higher administrative expenditures.
◦ Limited finance
185

186. Cont…
User fees at government health services
(model 3)
 Drugs are supplied by government medical stores
or state-owned wholesalers and dispensed by
government health facilities, but paid for (in whole
or in part) by patient fees.
Disadvantages
◦ Adverse implications for equity
◦ Special concern on the impact of rational drug
use
 If providers have a direct financial incentive to
prescribe more drugs, or to prescribe more
expensive drugs 186

187. Cont…
Fully private (model 4)
 Patients pay the entire cost of drugs,
purchasing from private retail pharmacies
 It probably accounts for the majority of non-
prescription drug sales.
 In outside market economies (higher levels
health insurance), it probably represents
the major source of payment for
prescription drugs
 It may be technically efficient, but it is
therapeutically inefficient.
187

188. Cont…
Mixed systems
 Most countries have a combination of two or more
models in operation.
 With the current pluralistic approach that many
countries are taking in the provision and financing of
health care, different models may be found for
different groups in the population.
 For example,
◦ Fully public financing and supply may be used for
the poor and for the treatment of communicable
diseases, social health insurance for civil servants
and those in formal employment, and 188

189. Cont…
◦ The fully private model for populations
and categories of drugs not covered by
the other systems.
Reading assignment
◦ Drug revolving fund
◦ Health insurance system
189

190. 3.6. Rational Drug Use
190

191. 3.6.1. Introduction
WHO Definition:
Rational use of drugs requires that patients
receive medicines appropriate to their clinical
needs, in doses that meet their own individual
requirements, for an adequate period of time,
and at the lowest cost to them and their
community.
191

192. Cont…
 Rational use of drugs requires that a
particular patient with a specific health
problem receives drugs with:
◦ Appropriate dose,
◦ Appropriate dosage form,
◦ Appropriate route of administration,
◦ Appropriate frequency of administration,
◦ Appropriate duration of treatment,
◦ Appropriate information to the patient,
◦ Adequate follow up
192

193. 193

194. 3.6.2. Criteria for rational drug use
An effective use of drugs in a health care
system depends on:
1. Rational prescribing:
◦ Appropriate indication
◦ Appropriate drug
◦ Appropriate patient
2. Correct dispensing
◦ Provide appropriation drug information to
patient
◦ Drugs are dispensed in a safe and hygienic
manner
3. Adherence to treatment by the patients
194

195. a. Rational Prescribing
 Requires:
◦ Making accurate diagnosis
◦ Deciding whether or not the diagnosis requires
drug treatment
◦ Selecting the best drug among available
◦ Prescribing in accordance with the standard
course of treatment
◦ Following correct prescription writing
◦ Counseling the patient
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Drug use

196. What roles can you play as a pharmacist
to promote rational prescribing?
5/9/2024 196
Drug use

197. b. Rational dispensing
 Dispensing: refers to the process of
preparing drugs and distributing them to
their users with provision of appropriate
information.
 It may be based on a prescription or an
oral request of users (patients or care
providers) depending on the type of drugs
to be dispensed
5/9/2024 197
Drug use

198. Cont…
 The dispensing of prescriptions involves
both interpretation of the prescriber’s
instructions and the technical knowledge
required to carry out these instructions with
accuracy and safety to the patient.
 There are a considerable variety of factors
that require close attention in dispensing,
and proficiency requires the establishment
of a routine system which can be followed
safely even under stress.

199. Cont…
 In general there are four major steps
to be performed in the dispensing
cycle during the dispensing process:
◦ Receiving and validating a prescription
◦ Interpreting a prescription
◦ Preparing medication/s to be dispensed
◦ Issue medication/s with the provision of
appropriate and complete instruction

200. Steps/tasks Cases
Welcome the patient and Validate the prescription
1. Greet the patient respectfully and receive the prescription
1. Introduce self
1. Identify the patient and check with the name on the prescription
1. Check the sex, age, address, card number, diagnosis on the
prescription
1. Check drug name, strength, dose, frequency/dosing interval,
dosage form, course of treatment on the prescription
1. Check the prescriber name, qualification, signature address on the
prescription
1. Check date of the prescription
1. Check whether appropriate prescription form is issued or not (e.g.
for controlled drugs)
1. Check seal of the health institution, if available.

201. Interpret the prescription and patient information
1. Correctly interpret any abbreviations used by the prescriber
1. Ask the pregnancy and/or lactation status of the patient, if female
1. Ask the patient for any history of allergic reaction to the
medication/s prescribed.
1. Ask the patient whether he/she is currently taking other
medications including OTC drugs and past medication historyS
1. Ask the patient whether he/she has co-morbidity
1. Identify common drug- drug interaction(s) within the prescription
as well as with any other OTC medications, and drug-disease
interactions
1. Confirm whether the medication/s, dosage regimens and dosage
forms are appropriate for that patient
1. With the prescriber’s consent (by consulting the prescriber) make
necessary corrections, if there is any problem

202. 1. Ask patient if he or she will have a problem taking the medication
as prescribed
1. Tailor medication regimen to patient’s daily routine
1. Emphasize benefits of the medication and supports its use before
talking about side effects and barriers
1. Discuss major side effects of the drug and how to manage them
(whether they will go away in time and what to do if side effect
does not go away and becomes intolerable)
1. Discuss common drug-drug interaction and/or tell the patient not
to take another medication without consulting the nearby
pharmacist/physician
1. Discuss drug-food interactions and/or tell the patient any
food/beverage that should be avoided during the course of
treatment
1. Explain to patient in precise terms what to do if he/she misses a
dose
1. Tell the patient to take the drug throughout the course of treatment
(e.g. not to stop taking if the symptoms persist or go away without

203. Prepare the medication/s to be dispensed
1. Correctly perform any calculations of dose and the quantity to be
issued
1. Select the stock container (bottle, strip, tin etc…) of the drug/s to be
dispensed, read the label/s, cross match the drug name and strength
against the prescription at least two times
1. Check whether the medication/s is/are fit for use (check expiry date)
1. Use clean and appropriate dispensing aids for counting or measuring
the medication/s , if needed
1. Prepare a clear and legible label for the drug/s to be dispensed
Issue drug/s to the patient with clear instructions/ information
1. Ask patient what he/she knows or the prescriber told him/her about
medication and disease
1. Ask patient if he/she has any concerns prior to information provision
1. Show the medication/s to be dispensed to the patient while counseling
1. Tell the patient the name, strength, route of administration, dose,
frequency of administration/dosing interval, course of treatment, and
indication of the drug
1. Tell the patient other auxiliary instructions (e.g. before or after meal,
chew before swallowing, shake before use, refrigerate) and activities to

204. 1. Check for understanding by asking patient to repeat back key
information (e.g. how to take, how much to take, how often to take,
how long to take, side effects, what to do about missed doses) and
clarify any misunderstanding
1. Tell the patient to consult for any problem/concern
1. Pack the drug/s
1. Issue the drug/s with the respective label
1. Use appropriate communication skills throughout the session
(questioning skill, empathic responding, active listening, use non-
verbal communications appropriately (good eye contact, good
facial expression, open posture, use gesture appropriately), use
good tone of voice, use the language that the patient understands)

205. Dispensing over the counter (OTC)
medications (responding to symptoms)
 Prescription only medicines are increasingly
being re-regulated and becoming available as
over the counter (OTC) drug. Hence the role of
the pharmacist to ensure that these are
dispensed for appropriate indications and used
safely is becoming increasingly important.
 General steps to be followed in responding to
symptoms and hence dispensing OTC drugs
are:
 Identifying the patient and observation
 Questioning on symptoms
 Questioning on current medical conditions
and medication

206. Cont…
 Further questions to confirm diagnosis
◦ E.g. possible triggers for the symptom
 Decision making
◦ The most important task is to distinguish
between symptoms of minor illness that can be
reasonably treated and those that may indicate
more serious illness.
◦ Then the pharmacist will choose between non-
drug treatment, treatment using a suitable non-
prescription medicine or advice to visit a
physician (referring)
 If the decision is to treat with OTC, then
dispense an appropriate medication with the
provision of drug information.

207. Step / task Cases
Patient information/history and decision making
1. Greet the patient respectfully
1. Introduce self
1. Ask what can you help him/her
1. Ask whether he/she need help for self or for someone else
1. Ask information like age, sex, pregnancy status if female, history of
allergic reaction, history of renal or hepatic disease and any history
of other disease
1. Ask the exact nature, site and severity of symptom/s
1. Ask for how long the symptom/s persist
1. Ask if the patient is taking any medication to relief from the existing
complication or for any other purpose
1. Based on the above information decide whether the symptom/s are
minor or are indication of major illness
1. Decide whether the patient need non-drug management, OTC drug
or referring
1. If the decision is to give OTC drug/s select an appropriate OTC drug
considering the above relevant information

208. Issue drug/s to the patient with clear instructions/ information
1. Ask patient what he/she knows about the OTC medication/s
1. Ask patient if he or she has any concerns prior to information
provision
1. Show the medication/s to be dispensed to the patient while
counseling
1. Discuss all important information concerning the medication/s
1. Ask patient if he or she will have a problem taking the
medication as instructed
1. Tailor medication regimen to patient’s daily routine
1. Check for understanding by asking patient to repeat back key
information (e.g. how to take, how much to take, how often to
take, how long to take, side effects, what to do about missed
doses) and clarify any misunderstanding
1. Tell the patient to consult for any problem/concern
1. Prepare label for the drug/s

209. 1. Pack the drug/s
1. Issue the drug/s with the respective label
1. Use appropriate communication skills throughout the session
(questioning skill, empathic responding, active listening, use
non-verbal communications appropriately (good eye contact,
good facial expression, open posture, use gesture
appropriately), use good tone of voice, use the language that the
patient understands)

210. c. Appropriate patient use
 Proper handling of medications
 Adherence to treatment
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Drug use

211. Irrational drug use
 Is the use of medicines in a way that is not
compliant with rational use
Common types:
 Use of drug when not needed
 Use of too many drugs (polypharmacy)
 Inappropriate use of antibiotics
 Over-use of injections
 Under dosing/over dosing
 Overuse of relatively safe medicines
 Use of non-essential combination drugs

212. Cont…
 Use of needlessly expensive medicines
 Medicine use not in the way intended by
prescriber/dispenser
 Self-medication with prescription only
medicines
 Unsafe use of herbal medicines
Impact of irrational drug use
 Decrease in quality of health care
 Impact on cost
 Psychosocial impact

213. Factors underlying irrational drug
use
a. Health care provider (prescriber and
dispenser)
◦ Inadequate pre-service training
◦ Lack of continuing education
◦ Financial interest
◦ Lack of role models who practice
rationally
◦ Patient load and pressure on treatment
choice
◦ Unethical promotional activities by
pharmaceutical companies
5/9/2024 213
Drug use

214. b. Health system
◦ Pharmaceutical supply system and availability
of facilities
 Poor quantification and forecasting
 Inadequate inventory management
 Unreliable supplies
 Inadequate distribution system
 Inefficient management of procurement process
 Lack of adequate laboratory facilities
 Lack of facilities for dispensing
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Drug use

215. ◦ Legal and regulatory framework
 Non-formal prescribers/dispensers
 Out of date or no-existent standard treatment
guideline (STG), drug list, formulary…
 No drug and therapeutics committee (DTC)
encouragement
 No pharmacovigilance program
 Inadequate medicine registration and quality
assurance system
5/9/2024 215
Drug use

216.  Lack of system for continuing medical education
 Lack of financing and reimbursement mechanisms
 Lack of regulation on drug promotion
 Even in the presence of regulations, there may be
lack of enforcement
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Drug use

217. c. Patient/client and community
◦ Perceived need for medicines
◦ Perceived need for consulting health workers
◦ Ideas about efficacy and safety
◦ Uncertainty resulting in polytherapy
◦ Cost of medicines
◦ Absence of social support
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Drug use

218. ◦ Inability to take time off work
◦ Low literacy level
◦ Medicine use culture
◦ Medicine supply system
◦ Quality of prescribing and dispensing
◦ Therapy related factors
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Drug use

219. Impact of Inappropriate Use of
Drugs
 Reduction in the quality of drug therapy and
overall quality of health care
◦ leading to increased morbidity and mortality.
 Waste of resources
◦ leading to reduced availability of other vital
drugs and increased costs.
 Increased risk of unwanted effects
◦ such as adverse drug reactions and the
emergence of drug resistance, e.g., malaria or
multi-drug resistant tuberculosis.
 Psychosocial impacts,
◦ such as when patients come to believe that
there is “a pill for every ill.” This may cause an
apparent increased demand for drugs.
219

220. Stepwise approach for promotion of
rational drug use
 Assess current patterns of drug use,
identify any problem and recognize the
need for action
 Identify underlying causes and
motivating factors
 List possible interventions
 Assess resources available for action
 Choose and carryout interventions
 Monitor the impact and restructure the
intervention
5/9/2024 220
Drug use

221. Diagnosis (identify
problems and
causes
Treat (design and
implement
intervention)
Follow up (measure
outcomes)
Examine
(measure
existing practice)
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222. 3.6.3. Strategies to improve drug use
 There are four strategies to improve drug
use
1. Educational strategies: TO PERSUADE
2. Managerial strategies: TO GUIDE
3. Economic strategies
4. Regulatory strategies: TO ENFORCE
222

223. Educational strategies: TO PERSUADE
 Training of Prescribers
◦ Continuing education (in-service)
◦ Supervisory visits
◦ Group lectures, seminars and workshops
 Printed Materials
◦ Clinical literature and newsletters
◦ Treatment guidelines and drug formularies
◦ Illustrated materials (flyers, leaflets)
 Approaches Based on Face-to-Face Contact
◦ Educational outreach
◦ Patient education
◦ Influencing opinion leaders 223

224. Managerial Strategies: TO GUIDE
 Monitoring, supervision and feedback
◦ Hospital drug and therapeutic committees
◦ District health teams
◦ Government inspectorate
◦ Professional organizations
◦ Self-assessment
 Selection, Procurement and Distribution
◦ Limited procurement lists
◦ Drug utilization review and feedback
◦ Drug committees
◦ Providing cost information on order forms
224

225. Cont…
 Prescribing and Dispensing Approaches
◦ Structured drug order forms
◦ Standard diagnostic and treatment guidelines
◦ Course-of-therapy packaging
225

226. Economic Strategies
 Price setting
 Capitation-based budgeting
 Reimbursement and user fees
 Insurance
226
Capitation- A tax levied on the basis of a fixed amount per
person

227. Regulatory Strategies: TO
ENFORCE
 Drug selection
◦ Banning unsafe or ineffective drugs
 Prescribing and Dispensing Controls
◦ Level-of-use prescribing restrictions (health
post, health center, hospital)
◦ Restrictions on who can prescribe or dispense
◦ Limits on number of different drugs per patient
(e.g., “3-drug rule”)
◦ Limit on quantities of each drug (e.g., “3-Day
Rule”)
◦ Requirements for generic prescribing
227

228. Characteristics of effective interventions:
 Identify key influence factors
 Target individuals or groups with the worst
practice
 Use credible information sources
 Use credible communication channels
 Use personal contact whenever possible
 Limit the number of messages using
different media
 Provide better alternatives
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229. Chapter 4. Tools to investigate the
use of medicines
229

230. Presentation Outline
4.1.Introduction to investigate the use of
medicines and identifying problems
4.2.Stepwise approach to investigate the use
of medicines
4.3. WHO/INRUD Drug Use Indicators
Reference
4.4. Methods for assessing drug use
◦ Quantitative methods
◦ Qualitative methods
230

231. 4.1. Introduction to investigate the use of
medicines and identifying problems
 Inappropriate drug use results in
◦ poor patient outcomes and
◦ wastes significant amounts of money and
resources.
 The impact on the health care system of
inappropriate drug use is dramatic
◦ Reduction in the quality of drug therapy
 leading to increased morbidity and mortality
◦ Increased cost
 as a result of using the wrong drug, dose, route, amount,
etc., and
 because of treatment failures
◦ Increased risk of unwanted effects
 such as adverse drug reactions and emergence of
antimicrobial resistance 231

232. Cont…
 Studies to measure drug use will vary from
setting to setting.
 The nature and design of such studies will
depend on many factors, which include:
◦ The specific information needs of health managers;
◦ The types of record-keeping systems available in
health facilities;
◦ The types of providers whose behavior is to be
characterized; and
◦ The resources available to carry out the work.
232

233. Cont…
 In general, however, drug use studies by
means of indicators will fall into four broad
categories:
1. Describing current treatment practices:
◦ Such a cross-sectional survey is done by taking
specific measures of treatment practices from
carefully selected groups of facilities and
patients.
2. Comparing the performance of individual
facilities or prescribers:
◦ Rather than being primarily concerned with
summarizing the treatment practices of the group
as a whole, such a study seeks to compare
practices between individual facilities or 233

234. Cont…
3. Periodic monitoring and supervision of
specific drug use behaviors:
◦ After the broad outlines of drug use behavior are
known, the indicators can be used to identify facilities
or providers whose performance falls below a specific
standard of quality, so that they can be targeted for
intensive supervision.
4. Assessing the impact of an intervention:
◦ Specific indicators can be used to evaluate the
effectiveness of an intervention designed to change
prescribing practices, by providing the capability for
reliably measuring practices both before and after the
intervention, and in both an intervention and a control
group.
234

235. 4.2. Stepwise approach to investigate the use
of medicines
 Performing an indicator study involves
planning, logistics, time, and funding. The
indicator study will involve—
1. Determining objectives, priorities of the study,
indicators, and indicator recording forms
2. Determine study design according to objectives
 Monitor over time, comparing facilities (cross
sectional survey, time series)
 Evaluation of interventions (randomized
controlled trial)
3. Define indicators and data collection
procedures
4. Pilot test procedures 235

236. Cont…
1. Training data collectors
2. Randomly selecting facilities in the region from
which to collect data
3. Analyzing data
4. Report results to the DTC for evaluation and
follow-up
236

237. 4.3. WHO/INRUD Drug Use Indicators Reference
Purpose of Drug use indicators
 Objective measures (indicators) that can describe the
drug use situation in a country/region/health facility.
 Will allow health planners, managers and researchers, to
make basic comparisons between situations in different
areas or at different times.
 Can be used to measure the impact of the interventions
undertaken.
 Can serve as simple supervisory tools to detect
problems in performance of individual providers or health
facilities.
 Can be used as "first line measures" to stimulate further237

238. 4.3. WHO/INRUD Drug Use Indicators
Reference
Type of Indicators:
Indicators are developed to be used as
measures of performance related to the
Rational Use of Drugs(RUDs) in Primary
care in three general areas:
1.Prescribing practices by Health providers
2.Patient care including both clinical consultation
and pharmaceutical dispensing.
3.Facility specific factors which support RUD
These indicators are broadly classified into
two:
238

239. Cont…
1. Core Indicators
• These are highly standardized which do not need
adaptation,
• These are recommended for inclusion in any drug
use study using indicators.
2. Complementary Indicators
• These are no /less important, often more difficult
to measure and cannot be collected reliably in
some settings.
• These are less standardized and may depend on
local variables.
239

240. Core Indicators • Average number of medicines per
encounter
• % of medicines prescribed by generic
name
• % of encounters with an antibiotic
prescribed
• % of encounters with an injection
prescribed
• % of medicines prescribed which are
from the essential medicines list or
formulary list
I. Prescribing
indicators
• Average consultation time
• Average dispensing times
• % of medicines actually dispensed
• % of medicines that are adequately
labeled
• % of patients who know how to take their
medicines
II. Patient care
Indicators
• Availability of essential medicine list or
formulary
• Availability of key set of indicator
medicines
• Availability of standard treatment
guideline (STG)
III. Facility
Indicators
240
4.3. WHO/INRUD Drug Use
Indicators

241. Cont…
 1. The average number of drugs prescribed per encounter is
calculated to measure the degree of poly pharmacy. It is calculated
by dividing the total number of different drug products prescribed
by the number of encounters surveyed.
 2. Percentage of drugs prescribed by generic name is calculated to
measure the tendency of prescribing by generic name. It is
calculated by dividing the number of drugs prescribed by generic
name by total number of drugs prescribed, multiplied by 100.
 3. Percentage of encounters in which an antibiotic was prescribed is
calculated to measure the overall use of commonly overused and
costly forms of drug therapy. It is calculated by dividing the
number of patient encounters in which an antibiotic was prescribed
by the total number of encounters surveyed, multiplied by 100.

242. Cont…
 4. Percentage of encounters with an injection prescribed is
calculated to measure the overall level use of commonly
overused and costly forms of drug therapy. It is calculated by
dividing the number of patient encounters in which an
injection was prescribed by the total number of encounters
surveyed, multiplied by 100.
 5. Percentage of drugs prescribed from an essential drug list
(EDL) is calculated to measure the degree to which practices
conform to a national drug policy as indicated in the Essential
drug list. Percentage is calculated by dividing number of
products prescribed which are in essential drug list by the
total number of drugs prescribed, multiplied by 100.