Procurement process comparison across the sample states
| Parameter | Kerala | Odisha | Tamil Nadu | Punjab | Maharashtra |
|---|---|---|---|---|---|
| Legal status of procurement organisation | Autonomous (KMSCL) | Government owned (part of DHS) | Autonomous (TNMSC) | Government owned (PHSC) | Government owned |
| Drug procurement budget (USD) | 36.3 million (2011–2012) | 8.1 million (2010–2011) | 39.8 million (2010–2011) | 3.4 million (0.4 million state budget+3 million user fees) | 87.5 million (2010–2011) |
| Per capita drug procurement budget (USD) | 51 | 8.8 | 22.5 | 5.8 | 35.6 |
| Essential drug list | |||||
| Customised state EDL | Yes | Yes | Yes | Yes | No, but it has a drug list comprising 1850 drugs |
| Composition of EDL committee | Multistakeholder committee | Multistakeholder committee | Multistakeholder committee | Multistakeholder committee | Multistakeholder committee |
| Frequency of EDL revision (years) | 1 | 2 | 1 | 1 | N/A |
| Time for EDL preparation/revision (months) | 2–3 | 7–8 | 2–3 | 4 | N/A |
| EDL categorisation | Yes (8 product-based categories) | Yes (2 demography-based lists) | Yes (product-based categories) | Yes | N/A |
| Third party review of EDL | No | Yes (by WHO experts) | No | No | N/A |
| Demand estimation and forecast | |||||
| Demand estimation process | Aggregation of facility indents | Aggregation of facility indents | Aggregation of facility indents | Aggregation of facility indents | Facility-level indenting |
| Frequency of demand estimation (years) | 1 | 1 | 1 | 1 | 1 |
| Methodology for estimation (facility level) | 10–15% over previous year's indent; performed by pharmacist | No scientific method; usually performed by computer operator/clerk | 10% of the previous year consumption | N/A | 10% of previous year consumption |
| Procurement process | |||||
| Procurement mechanism in the state | Centralised | 80% centralised; 20% decentralised | 90% centralised; 10% decentralised | 12.5% centralised; 87.5% decentralised | Centralised rate contracting; decentralised purchasing |
| Financing of drug procurement | State budget allocation | State budget allocation | State budget allocation | State budget allocation and user charges | State budget allocation |
| Emergency drug budget allocation | Yes (additional funds released) | No (purchased from existing budget) | Yes (additional funds released) | No | Yes (additional funds released) |
| Tendering process | |||||
| Bidding process | Two-bid system | Two-bid system | Two-bid system | Two-bid system | Two-bid system |
| Prequalification criteria | |||||
| Minimum turnover criteria (INR/USD) | 10 crore/2.1 million | 10 crore/2.1 million | 3 crore/0.7 million | 50 crore/10.7 million | 10 crores/2.1 million |
| GMP/WHO-GMP/US-FDA | Required | Required | Required | Required | WHO-GMP required |
| ISI/BIS/ISO/CE | Required | Required | N/A | N/A | N/A |
| Assurance of available production capacity | Required (MPMASS) | None | Production capacity certificate | N/A | Production Capacity Certificate |
| Market standing (years) | 2 | 3 | 3 | 3 | 3 |
| Exclusion criteria for factory inspections | Supply to premier institutions | None | None | None | N/A |
| Price relaxation for SSIs/PSUs | Yes (SSI—10%; PSU—15%) | Yes (SSI—10%; additional 3% for ISO certification) | Yes (SSI—15%) | PSU produced antibiotics | None (20% quantity reserved if SSI matches L1 rate) |
| Product reservation for SSIs/PSUs | None | 31 items (from SSIs) | None | None | None |
| EMD | 1% of tender value | 1–5% of tender value | 1% of tender value (maximum upto 50000 INR), exempted for SSI | Differs for each drug | INR 25000 |
| Process for tenders with no bidders (in order of priority) | Retender (revised prequalifications); limited tender; short tender; direct purchase | Retender (same prequalifications)—open until bids are received | Retender (limited and short-tender process is used) | Pharmacy-based purchasing | Retendering, limited tendering or direct purchase |
| Supply schedule | 60 days—40% of PO quantity; 90 days—70%; 120 days—100% | 60 days—50% of PO quantity; rest before specified date | Starting from 30 days and has to end by 60 days, otherwise specified | 30 days to 3 months from the time of issue of PO | Within 3 months from the issue of PO |
| Quality control | |||||
| External quality testing of every consignment | Empanelled private labs | No external quality testing (supplier's internal quality certificate) | Empanelled private and government labs | Empanelled government labs | No external quality testing (supplier's internal quality certificate) |
| Testing before distribution | Mandatory | Not mandatory | Mandatory | Mandatory | Not mandatory |
| Lead time for quality testing | ∼15 days | Within 8 weeks | 15 days for tablets and capsules; 1 month for suspensions | 1 month | N/A |
| Payment mechanism | |||||
| Payment department status | Autonomous (managed by contractual staff) | Government (Account General's Office) | Autonomous (managed by contractual staff)-IT enabled | Government | Government (Directorate of Accounts and Treasuries) |
| Lead time for payment (days) | ∼30 | ∼90 | 30 | Minimum 30 | ∼90 |
| Pre-requisites for payment disbursement | Warehouse material receipt, external quality certificate | Warehouse material receipt, supplier's internal quality certificate | Warehouse material receipt, external quality certificate | Warehouse material receipt, quality certificates from labs | Facility material receipt, internal quality certificate |
| Inventory management and distribution | |||||
| Facilities (All) catered to per warehouse (average) | ∼290 | ∼235 | ∼411 | N/A | N/A |
| Scientific warehousing practices | Yes | No | Yes | No | No |
| In-house/outsourced supply chain management | Outsourced | In-house | In-house | In-house | In-house (facility level) |
| Inventory management | Dynamic (flexibility of second PO) | Static (only single PO is issued) | Dynamic (flexibility of second PO) | Static | 25% flexibility for quantity maintained |
| Scientific consumption/inventory forecasting | Yes (inventory management software) | No | Yes (inventory management software) | No | No |
| Flexibility for facilities to alter indent | Yes (just before dispatch) | No | Yes | Yes | No |
| Tracking dispatched/delivered drugs | Currently passbook (volume based; online in future) | No tracking | Passbook (value based) | N/A | No |
| (Scientific) Inventory management at facility | No (online in future) | No | Use first in first out (FIFO) principle | No | No |
| Penalty | |||||
| Penalty for supply schedule default | 10% of the unexecuted supply; unexecuted supply purchased at the cost of supplier in case of inability to supply | N/A | 0.5% per day to maximum of 15% of the tender amount | N/A | 0.5% of the value of unsupplied goods per week up to 5 weeks, after which unexecuted supply purchased at the cost of supplier |
| Penalty for quality failure | Supplier blacklisted with forfeiture of security deposit | Suppliers have to replace the entire PO quantity or risk blacklisting | Supplier blacklisted with forfeiture of security deposit | Forfeiture of EMD | Supplier blacklisted with forfeiture of security deposit |
| Blacklisting criteria | Defaulting on 3 POs or more with less than 50% supply; blacklisted by any other procurement agency on quality grounds | Quality failure after material supply | Defaulting continuously on 3 POs with less than 50% supply, quality failure, blacklisted by national or other state level agencies | Defaulting continuously on 3 POs with less than 50% supply, quality failure, blacklisted by national or other state level agencies | Supply default after extension period; quality failure |
| IT enablement processes | |||||
| Demand estimation & forecasting | Yes | No | Yes | No | No |
| Tendering process | Yes | No | Yes | No | Yes |
| Quality control | No | Yes | No | No | |
| Payment disbursement | Yes | No | Yes | No | No |
| Inventory management (warehouse) | Yes | Yes | Yes | No | No |
| Inventory management (facility) | No | No | Yes | No | No |
PO,purchase order; PSU,Public Sector Undertaking; SSI,Small Scale Industries.