Procurement is a process of selecting the drug, finding the source, agreeing terms and acquiring medicines. Procurement is defined as a process of acquiring medicines through purchases from the manufacturer, their agents like distributors or from private/ public suppliers. Purchasing starts with framing of buying policies & ends with receiving, stocking & payment.
An act of getting something by paying money. The basic purpose of the purchase is to ensure a continuous flow of raw materials of right quality, in right quantity, at right price, at right time, form right source, of the right item and it is the main objective. Purchasing procedure avoids duplication and wastage of drug products. In some hospitals, separate department called medical store manages all purchases of pharmaceuticals, medical supplies, equipment and surgical etc. The chief pharmacist prepares an annual budget request for pharmaceutical purchases and places orders for medicines through the medical stores.
1. Right Quality:
Right quality means the quality which is available at the supplier, according to the specifications mentioned in terms of grades, brands, trade names, physico-chemical characters, national standards etc.
2. Right Quantity:
The right quantity is the quantity that may be purchased at a time with the minimum total cost and which obviates shortage of materials and with a continuous supply of materials. “Economic Order Quantity” technique may be followed in order to avoid shortage.
3. Right Source:
Selecting the right source for the purchase of materials is an important consideration in the purchase procedure. The right source for the procurement of materials is that supplier who can supply the material of right quality and in right quantity as ordered, at a right time at which the materials were required to be supplied, at an agreed price with the supplier.
The supplier should be in a position to honour the commitment without much follow- up. He should have necessary financial resources and adequate man-power to handle the order and well established with higher reputation and integrity.
4. Right Price:
Right price is that price which brings the best ultimate value of money invested in purchasing the materials. Determining right price is very difficult task and it depends on various factors like quality delivery time, demand and supply curve, after sales services, discount offered, government restrictions, terms of purchase etc.
5. Right Time:
Right time means the time when stock reaches the minimum level. Purchasing department should have lead time information about all the drugs. Lead time is time taken between placing of order and receipt of drugs to the department.
6. Right Item:
It is all about purchasing of right item needed in the hospital, without alternative drug.
Purchase procedure involves different steps for procurement of goods.
STEPS IN PURCHASING
1. Determination of requirement
The materials to be purchased for particular period are selected and well planned for the purpose of their regular and continuous use. Purchase requisition is generally prepared by departmental heads and provides information of type of material to be purchased, time of requirement, quantity to be purchased, and submitted to chief pharmacist, who processes the purchase.
2. Source of supply:
The pharmacy and therapeutic committee sets adequate standards for the purchase of quality drugs. Procurement of stores is generally done by following sources.
1. Medical store depot
2. Directorate General Supplies and Disposals
3. Direct from wholesellers and Manufacturers
4. By inviting tenders
5. Emergency purchases from Local Market
a. Medical store depot (MSD):
This organisation has six medical store depots (MSD) at Mumbai, Chennai, Kolkata, Karnal, Hyderabad & Guwahati. The items purchased by these organisations are subjected to various in house tests at the testing units in Chennai and Mumbai. It runs on no-profit and no-loss basis.
b. Directorate General Supplies and Disposals:
Directorate General Supplies and Disposals calls for tender and places the order. The payment is made only after the verification of inspection report by the indentor.
c. Direct from wholesalers and Manufacturers:
Direct purchases from wholesalers, manufacturers are done following a proper purchase procedure. Materials are then received and stocked at their relevant places under proper storage conditions.
d. By inviting tenders:
Tenders are invited from various suppliers and generally the lowest bidder is choosen for supplying the order. However price and quality both are considered well.
e. Emergency purchases from Local Market:
Items that are not available at MSD, DGS & D and any emergency drug which is out of stock can be immediately purchased from local market. For this, purchase form is prepared in duplicate, one copy is sent to the department and other copy is retained in the pharmacy. This avoids the department concerned to re-order the same item.
3. Purchase order:
After selecting the supplier, chief Pharmacist or any other suitable authority prepares a purchase order giving detailed description, specification, packaging price and quantity needed etc., Of the items. This purchase order is in written form and it is the evidence of contract between the buyer and the supplier. Number of copies varies from hospital to hospital.
1. The original copy is sent to supplier
2.One copy for accounts section
3. One copy for Purchase department
4. Two copies for the concerned department
5. One copy as history copy
The purchase order should clearly indicate the terms and conditions, i.e., price quality and time of delivery. There should be a regular follow-up of purchase order so that drugs and supplies can be received timely.
4. Receipt of acknowledgment:
After placing the order to supplier by sending a copy of purchase order, the supplier in turn sends an acknowledgment of the order saying that he will be able to supply the goods with the terms and conditions which are mentioned in the purchase order.
5. Receipt of drugs:
On the receipt of drugs, there should be a system in the stores whereby the supply of drugs received in the medical stores from the manufacturer are properly checked by person specially assigned for this purpose. Preferably the same person is responsible for reviewing the stocks, date of expiry, description, quantity, batch number, as mentioned in the order form.
Random sampling can be done to make sure that products confirm to the tendered specifications like date of expiry and any visible sign of deterioration such as a change in color etc.
If any deterioration is observed, the matter should be reported to the medical superintendent and local drug inspector. These stocks should never be used until the drugs inspector’s permission is granted and the information should be sent to the manufacturer.
After the thorough examination of drugs, the above officer should give “ No objection to accept the supply” in writing on hospital copies of delivery challans, invoices by putting signature and date. The invoice received from the supplier is sent to accounts section for accuracy along with price and quantity. After verification, the accounts section certifies and passes, the invoice for payment and on this basis, cashier makes the payment either by cheque/draft.
6. Distribution of drugs to drug store and wards:
Drugs should be supplied in the original packing of manufacturers. However if it is not possible to do so, then that should be supplied in clean containers so that the integrity and original properties can be preserved. Name and quality of the drug should be properly labeled. It is always advisable that suitable precautions should be taken to dispose off “ original empty containers” in order to avoid misuse. The containers should be destroyed in the presence of a responsible person with a written statement signed by him.
The chief pharmacist should visit wards to check whether the drugs are properly stored under special storage conditions like cold storage, cool temperature & room temperature.