procurement of Drugs and Pan American health organization(Paho)/ WHO Technical Assistance.

WORLD HEALTH ORGANIZATION REGIONAL OFFICE FOR SOUTH-EAST ASIA 20 th Meeting of Ministers of Health Jakarta, Indonesia, 9-10 September 2002 SEA/HMM/Meet.20/4.1 27 August 2002 PROCUREMENT OF DRUGS AND PAN AMERICAN HEALTH ORGANIZATION (PAHO)/ WHO TECHNICAL ASSISTANCE CONTENTS Page 1. ACCESS TO AND PROCUREMENT OF DRUGS......................................................... 1 2. DRUG PROCUREMENT THROUGH PAHO/WHO ....................................................... 3 3. PRE-QUALIFICATION OF SUPPLIERS/ QUALITY IN DRUG PROCUREMENT.......................................................................................... 5 3.1 Quality of the Suppliers ........................................................................................... 5 3.2 Quality of the product .............................................................................................. 6 3.3 Quality Control Support Activities............................................................................ 7 4. TECHNICAL ASSISTANCE ON DRUG SUPPLY QUALITY IN ITS COMPONENTS ............................................................................................ 9 4.1 Drug selection ....................................................................................................... 10 4.2 Estimate of Needs................................................................................................. 11 4.3 Procurement of Drugs ........................................................................................... 11 4.4 Storage, Distribution, and Dispensing................................................................... 12 4.5 Rational Use of Drugs ........................................................................................... 13 4.6 Financing the Drug Supply.................................................................................... 13 5. RESOURCES .............................................................................................................. 14 6. FINAL CONCLUSIONS................................................................................................ 15 Annex − Regional Revolving Fund For Strategic Public Health Supplies Operating Procedures............................................................................................................. 17 FOREWORD Finally, in view of the technical and other considerations that must be taken into account when drugs are purchased, the Regional Program on Essential Drugs is reviewing the scope and responsibility as the Organization becomes involved in the procurement of drugs. This is even more relevant when purchases are made on a large scale, increasing the volume and complexity of the work involved as well as the possibility of quality problems. This document does not attempt to be a conceptual guide on the supply of drugs, as the Organization already has several publications in which this concept has been broadly and sufficiently explained. Thus, this paper “reviews” technical assistance activities related to drug supply in light of the additional responsibilities assumed by the Organization with the establishment of the Strategic Fund. However it must be emphasised that PAHO/WHO is a technical rather than a procurement organization. The objective of this document is to first illustrate that procurement of drugs cannot be regarded as an end in itself, but as a part of a system that will allow the full potential of drugs to be realised. Secondly, the document aims to demonstrate that procurement of drugs through PAHO/WHO requires the Organization to assume responsibilities that are beyond procurement and to extend and strengthen its technical assistance to cover other aspects of drugs. The establishment of the revolving fund for strategic supplies has led to the involved technical programs reviewing their work with the drug procurement unit. It has also led to a delineation of the technical processes, activities, and tasks of each program in the development of the Fund. This has strengthened coordination between different technical programs, and with administrative units within the Organization, in particular with the procurement unit. N.B: This document is the English translation of the original which was in Spanish. SEA/HMM/Meet.20/4.1 Page 2 1. ACCESS TO AND PROCUREMENT OF DRUGS Drugs are not always within the reach of the population. It has been estimated that half the total population in the developing world lack access to drugs at some time, thus representing a greater public health problem. Some examples are the lack of access to priority drugs for the treatment of malaria, tuberculosis and AIDS, which continue to cause too many deaths worldwide. Furthermore, mental illnesses, tropical diseases, diabetes, epilepsy, and other chronic diseases are also at the core of national health policies in which the access to drugs of choice for their treatment constitutes part of those policies. The access to drugs is, moreover, directly related to the leadership of the Ministries of Health in the health sector and is seen as a fundamental part of the responsibilities of that ministry in the field of public health. Hence the strategic importance of the design of pharmaceutical policies that have an impact on the reduction of inequities and expand the opportunities for greater coverage and equal access to drugs. The true dimension in quantitative terms of access to drugs is being analyzed by projects of a global nature with the participation of WHO. From the conceptual standpoint, access to drugs, as promoted by WHO through its Program of Essential Drugs (EDM), emphasizes that “access to drugs” is not only obtaining the necessary drugs, but that access is at the core of a pharmaceutical policy that includes selection strategies and rational use, affordable prices, sustainable financing and reliable drug supply through health services. 1. Rational on selecti 4. Reliable health and supply systems 2. Affordable prices ACCESS 3. Sustainable financing 1. Rational Selection PAHO/WHO promotes access to drugs through the development of technical assistance strategies for each of the aforementioned aspects: Rational selection: This is the most significant area of technical assistance and refers to the support provided to countries in the preparation of their essential drugs list (EDL). Today, the majority of the countries of the Region of the Americas have EDLs. In many cases these lists are prepared for the national level, in others for the local levels and, in some cases, for institutional levels. In the development of the EDLs, PAHO/WHO technical programs assist member countries in identifying standardized treatments and the products of choice to treat the most common pathologies. These lists subsequently become a basic tool in the development of the national drug supply system. Affordable prices: The price of drugs continues to be a challenge for the majority of the countries. PAHO is assisting countries in their negotiations with providers of brand name and generic drugs for lower priced priority products. In the Americas, this assistance began with antiretroviral drugs and might be expanded to other categories of products. The strategy is focused on groups of countries. It began with the CARICOM group, and the experience is being SEA/HMM/Meet.20/4.1 Page 3 replicated in Central America and most recently in the Andean Area. This strategy led countries to negotiate with pharmaceutical companies for better drug prices. The activity encompasses various programs since the products are selected jointly with the technical programs, in this first case with the AIDS Program. PAHO is also promoting the exchange of information on drug prices to facilitate direct negotiation processes among countries and between them and drug suppliers. Currently there are different information sources on drugs’ prices available. One such source is the average price of the last purchases made by the Organization. The Strategic Fund and drug procurement through PAHO/WHO facilitate comparison of international procurement prices. This information is made available to Member States through PAHO’s Web site or through the Pharmaceutical Clearinghouse of the Americas 1 , offering valuable information albeit if it is only for comparison purposes. Sustainable financing: Continuous economic accessibility to drugs is of utmost importance in national pharmaceutical policies. The lack of a periodic access to drugs can increase the cost of health care, thus various technical assistance strategies promote sustainable financing for drug access. Some of these are referred to the implementation of generic drug policies including prescription and substitution; coverage of medical prescriptions in basic health insurance plans, and enforcement of legal provisions contained in Intellectual Property Agreements (TRIPS). Furthermore, there is support for drafting specific drug-financing policies and strategies such as the review of the classification of medicinal products and their distribution, sale, and marketing. Reliable Drug Supply: The development of efficient drug supply systems is based on the concept that drug supply is the fundamental pillar of pharmaceutical policies and, therefore, of PAHO’s technical assistance. It is essential that drug supply be understood as a whole, encompassing all its components: selection, programming, procurement, storage, distribution, dispensing, and use, in order to achieve the desired impact in terms of coverage, quality, and impact. The action plan of the Regional Program on Essential Drugs includes technical assistance in each of these areas and the supply of drugs is the main component of many projects and drug programs, either at the subregional or national levels. From the foregoing it follows that the procurement of drugs is only one of the logistical components of the drug supply system and is not considered separately from the other components. However, the establishment of revolving funds, joint negotiations and cooperatives, comprise some of the strategies that Member States are implementing to improve access to drugs focusing directly on the drug procurement component. 2. DRUG PROCUREMENT THROUGH PAHO/WHO PAHO/WHO uses three different modalities for drug procurement. The most used modality is the one whereby drug purchases are reimbursed. This method was developed to respond to specific requests from Member States. Box 1 provides more information on this modality. Recently, there has been an increase in the use of this modality. The two countries that have used this type of drug procurement are Haiti (for PROMESS) and Bolivia (for CEAS). Through this procurement modality, the countries make an advance deposit in PAHO/WHO covering the value of the purchases before the Organization proceeds with the purchase. There is a 3% overhead charge to drug procurement of this type. 1 Project currently under development aimed at offering up-to-date and analyzed information on the pharmaceutical status of the countries of the Region. SEA/HMM/Meet.20/4.1 Page 4 The Vaccines Revolving Fund, which has been around for more than 25 years, represents a second modality of drug procurement and has proven responsive to requests from Member States. This Fund also charges a 3% overhead on total purchases, which PAHO/WHO earmarks to capitalize the Fund. Under this modality, big countries pay in advance for the vaccines because in view of the large volume of the purchases involved, the Fund is unable to finance them. In turn, purchases from medium or small countries can be financed by the Fund and the countries can pay their purchase invoice up to two months later. This is possible given the capitalization of the Fund over the years. The third modality of drug procurement is the recently created Revolving Fund for Strategic Public Health Supplies (known as the Strategic Fund, SF). This type of drug procurement allows PAHO not only to assist Member Countries in obtaining more favorable prices on some products but it also has an impact on other components of the drug supply systems. The operational procedures of the SF are described in the attached Annex. Box 1. Reimbursable Procurement Through its procurement unit (AGS/P), PAHO/WHO acquires a large selection of products and services for its health technical assistance activities and provides administrative support to Headquarters and Field Offices. AGS/P also procures on behalf of WHO and its offices and the Member Governments in accordance with the REIMBURSABLE SYSTEM procedures. The characteristics of this procurement modality are: • Reimbursable purchases are purchases made on behalf of a Member Government that finances them in order to acquire items for health programs that are otherwise difficult to procure on its own. • The country requesting the purchase finances it and must pay the cost of the acquisition in advance plus the corresponding freight and insurance charges. In addition, a service charge is added to the net value of the products. Basic products acquired through this modality include a broad range of products, including pharmaceutical products. The dollar amount for purchases of drugs carried out by the Organization (Headquarters) on behalf of Member States in the last six years has been continually increasing. In this SF modality, the 3% overhead charge is distributed as follows: 0.5% to the technical assistance programs and the remaining 2.5% is set aside to cover administrative costs. This distribution is for purchases up to US$500,000. After that amount (US$500,000), the 2.5% is earmarked for capitalization of the Fund itself per country in proportion to its own contribution. Even though the RF has yet to be implemented in its entirety, it is already having an impact. This is reflected in the increase of requests for purchases of drugs through the reimbursable purchase modality, which have significantly increased over the last year (after the establishment of the RF). On the other hand, the acceptance of the RF by the countries has had an impact on the reduction in the price of drugs purchased by the governments, although this aspect has yet to be documented. Years 1996 1997 1998 1999 2000 2001 PRODUCTS (US$) 4,096,569 2,454,201 7,961,598 5,060,341 5,420,907 10,055,778 SEA/HMM/Meet.20/4.1 Page 5 Box 2. Strategic Fund (Revolving) PAHO’s Director established the Strategic Fund during the 42nd Meeting of the Directing Council (25- 29 September 2000). The Fund constitutes an agreement between PAHO/WHO with Member States that join voluntarily. To date (August 8, 2002), 13 countries have signed the agreement and several more are in the process of doing so. In its first phase, the SF includes retroviral drugs, drugs against malaria, tuberculosis and Leishmaniasis. The objectives of the SF are: • Facilitate the procurement of drugs and other strategic public health supplies at a reduced cost to Member States, taking advantage of the potential savings in economies of scale; • Promote the continuous availability of strategic supplies in the Member States; • Assist Member States in improving the programming of strategic supplies; • Promote the application of appropriate quality control procedures in the acquisition of strategic supplies; • Promote the procurement of strategic supplies by Member States through PAHO/WHO; • Strengthen public health programs in Member States and the enforcement of PAHO/WHO mandates. 3. PRE-QUALIFICATION OF SUPPLIERS/ QUALITY IN DRUG PROCUREMENT The establishment of the Strategic Fund required the strengthening of the activities carried out by PAHO to ensure the quality of pharmaceutical products acquired through PAHO/WHO. Several strategies were designed to, first of all, guarantee the quality of the suppliers and of the products purchased. However, to achieve the expected impact from the availability of drugs, the Regional Program on Essential Drugs (RPED) must necessarily strengthen, in a comprehensive manner, its technical assistance activities covering all the areas of the drug supply system. 3.1 Quality of the Suppliers: The plan implemented in-house by the RPED to guarantee the quality of the suppliers is through a pre-qualification system, understood as an evaluation and selection process of suppliers (manufacturers and distributors) based on their ability to meet procurement requirements, including quality requirements. 2 The satisfactory results of this evaluation enable the selected suppliers to participate in the calls for bids made by PAHO. Only those that have been pre-qualified and approved as suppliers can participate in the procurement carried out by the Organization. This process applies to all suppliers regardless of the procurement modality used by the Organization or of the place in which the procurement is performed (PAHO/WHO Country Office or Headquarters). This evaluation has two components: (1) Pre-qualification of drug suppliers: the first step is the review of the documentation requested in a specific PAHO/WHO form. The aspects reviewed are detailed in Box 3. This requirement is applicable to all suppliers, manufacturers and distributors. In the case of distributors, all their manufacturers are also subject to pre-qualification by PAHO/WHO. The Regional Program, through a full-time expert consultant, carries out the evaluation. (2) Site inspection of drug suppliers to verify their compliance with Good Manufacturing Practices (GMP), as recommended by WHO. The EDP has prepared a checklist or inspection guide for this purpose. In order to implement this requirement, several criteria were selected to determine when to carry out the site inspection, which are 2 WHO and Pre-Qualification of ED Suppliers. SEA/HMM/Meet.20/4.1 Page 6 listed in Box 3. The site inspection is carried out by a team of three experts, under the supervision of the EDP, and unrelated to the industry. The experts are selected from regulatory agencies, academia, and independent consultants, thus strengthening Good Manufacturing Practices within the regulatory agencies and the education sector. Box 3. Pre-qualification of Suppliers Suppliers are require to submit the following documentation for pre-qualification purposes: (1) Company Profile Form (CPF): Name, address, contact person, type of supplier (manufacturer/distributor), previous contracts with other United Nations organizations, destination of previous exports, list of available products. (2) Information on the Manufacturer: General data, number of manufacturing plants and locations, evidence of compliance with Good Manufacturing Practices as recommended by WHO (report of the last GMP inspection), site master file, variety of products offered and contracts with third parties, if any. (3) Information on the Distributor (non-manufacturer supplier): General data, number of production plants and location of the same, evidence of compliance with Good Practices of Manufacture as recommended by WHO (report of the last GMP inspection) and site master file from each of the manufacturing plants. (4) WHO-type certificate for pharmaceutical products subject to international trade required from suppliers participating in competitive bids. This certificate serves to prove that the product for which the supplier is bidding, is registered in the country of origin, otherwise the supplier must indicate the reason(s) why the regulatory authority has not registered the product. Furthermore, upon issuance of the certificate by the national regulatory authority of the manufacturing country, the latter assumes responsibility by certifying that the company is regularly inspected and that it complies with GMP. The Regional Program on Essential Drugs will maintain a database on the historical performance of pre-qualified suppliers, the results of site inspections, compliance with GMP, and quality problems related to their products. Analysis of the database may lead to penalties such as cancellation, suspension, or warnings that will negatively affect participation of the company in future procurement bids. Box 4. Criteria for GMP Inspection • The manufacturer has not been previously inspected by any UN agencies or other internationally recognized agency; • If the manufacturer has already been inspected by an UN agency, the supplier will be requested to submit the report of such inspection. Otherwise, it will be considered as not having been inspected and cannot be exempted from such inspection; • Each manufacturer is pre-qualified based on its manufacturing areas (segregated areas) for dosage forms. A new inspection would be considered if the manufacturer (already pre- qualified) wishes to incorporate new dosage forms or requires services from third parties; • The inspection is carried out at the request of the country. 3.2 Quality of the product There are two requirement categories: those requested in all cases (always), and those requested on occasion. (1) Pharmacopoeia specifications of the product: Dosage, concentration, and pharmacopoeia to which its quality tests should always respond; (2) Certificate of Quality of products subject to international trade (WHO type). Requested at the time the bidding takes place (always); SEA/HMM/Meet.20/4.1 Page 7 (3) Certificate of Analysis (quality control) of batches. Requested with the shipment of the goods (always); (4) Product labeling requirements (always); (5) Product packaging requirements (always); (6) Stability tests (occasionally required); (7) Tests of dissolution and/or of bioequivalence (occasionally required); (8) Quality control tests of selected lots before or after shipment (occasionally required). Box 5 indicates the criteria applied in the performance of these tests. (9) Certification (WHO type) of pharmaceutical active ingredients subject to international trade (to be implemented). (10) Packaging of the product. Whenever dosage forms allow it, all products must be in ampoules (single doses). Purchase of products in containers such as bottles of 100, 500, or 1000 units, is limited to those requested as such by Member States. In such cases, the country assumes the responsibility of guaranteeing the quality, including pharmaceutical stability, of the product during the re-packing, distribution, and dispensing. Box 5. Criteria for Batch Analysis and Quality Control • Quality control tests are carried out only for documentation purposes; • The manufacturer does not have background information as supplier of an agency of the United Nations common system; • The manufacturer has had quality control problems in the past; • The recipient country has requested quality control tests (to be developed only by the country); • The recipient country requires inspection of the batches before their shipment (to be developed by the country); • Quality control of pharmaceutical active ingredients (PAI) is desired. This is based on the increasingly frequent use of different sources for PAI. Enforcement of WHO guidelines will be considered in the context of technical assistance in the near future. Supplier pre-qualification and product quality control activities are carried out under the supervision of the RPED, which is independent from the procurement unit, as required by internationally accepted quality standards. For these specific functions an expert in quality assurance has been hired by the RPED (see section V. Human Resources). 3.3 Quality Control Support Activities: There are two main technical assistance initiatives that have an impact on the quality assurance system: (1) External Quality Control Program (EQCP): This is a technical assistance program carried out jointly with U. S. Pharmacopoeia (USP). Its objective is to strengthen the quality control of public health laboratories participating in the EQCP. The methodology applied is the performance of laboratory tests of selected products that require the use of basic equipment and instruments for a large number of tests. This ensures that participating laboratories are correctly using the equipment and interpreting correctly the results, thus guaranteeing the application of pharmacopoeia tests for the quality control of pharmaceutical products. This program strengthens the national capacity to control the quality of the domestic pharmaceutical market and, therefore, is expected to strengthen the surveillance of the quality of the products in the pharmaceutical market, the identification of drugs not up to standard and the misrepresentation of raw materials and finished products. This will result in the clean up and purification of the pharmaceutical SEA/HMM/Meet.20/4.1 Page 8 markets. The quality control system implemented by the Organization will also benefit since the countries may, at their discretion, perform their own quality tests on the products they purchase through PAHO/WHO, becoming allies in the surveillance of the quality of those drugs. Finally, the PCCE facilitates the identification of weak points in the quality control operations of public health laboratories thus guiding the approach of PAHO/WHO technical assistance to the countries. Box 6 provides more details on this program. (2) Strengthening national capabilities in the implementation and inspection of Good Manufacturing Practices. This initiative is part of the Work Plan of the Pan American Network on Drug Regulatory Harmonization and consists in the dissemination in all the countries of the Region of courses or educational workshops on GMP aimed at the public sector (GMP inspectors), private sector (pharmaceutical industry), and education sector (Schools of Pharmacy). Box 7 provides a summary of EDP activities. Box 6. External Quality Control Program Objectives: • optimize and standardize the work methodology to achieve the reliability of the analytical results; • improve the performance of public health laboratories in drug quality control in Latin American countries; • increase communication and exchange of information among the laboratories; • develop a quality control system of drugs purchased through PAHO for the countries of the Americas; • promote the surveillance of the quality of pharmaceutical products. Expected results: • A diagnosis study of public health laboratories performing drug quality control in the Americas, based on an evaluation visit of the same and the completion of a questionnaire developed for such purpose; • Implementation of an external quality program of public health laboratories performing drug quality control; • standardize specific analytical controls in accordance with international requirements; • establishment of communication and collaboration mechanisms among the laboratories; • training of human resources on quality control management systems (good laboratory practices) and implementation of the same; • respond to PAHO needs related to quality control of pharmaceutical products. Timeline : Two years (four semi-annual cycles). Strategies: a) External Quality Control (WHO/Headquarters) Five public health laboratories, from previously only one, are participating in this program of a global nature (Panama, Costa Rica, Chile, Venezuela, and Jamaica). The Quality and Safety of Drugs Unit at WHO Headquarters coordinates the program. b) External Quality Control (PAHO/WHO-USP) At least one public health laboratory in each Latin American country is participating and the program is being carried out jointly with USP, which provides the drugs to be analyzed by the laboratories, analyzes the results and determines the required training needs. The program is divided in three stages. The first stage aims at evaluating the use of high-performance liquid chromatography equipment and dissolution tests that guarantees bioequivalence/bioavailability of tablets (currently in process). In the second and following stages, the type and complexity of tests will be expanded to selected samples from the local pharmaceutical market. SEA/HMM/Meet.20/4.1 Page 9 Box 7. Assistance in Good Manufacturing Practices (GMP) Within the framework of the Pan American Network for Drug Regulatory Harmonization (PANDRH), the following strategies are under implementation: • In collaboration with the FDA of the USA and the University of Puerto Rico, regional seminars on GMP are held at the School of Pharmacy of the UPR; • Jointly with the Central University of Venezuela, the National University of Colombia, and the University of Costa Rica national courses on GMP are offered in all countries in the Americas. The courses are based on educational modules developed by WHO. • PANDRH’s Technical Group on GMP analyzes problems and seeks solutions to GMP implementation in the Region. 4. TECHNICAL ASSISTANCE ON DRUG SUPPLY QUALITY AND OTHER COMPONENTS The Regional Drug Program, traditionally includes in its technical assistance activities support to the countries in the design, implementation, and evaluation of drug supply systems. However, this assistance is not given on a continuous basis and to all the countries. In most cases, support activities originate in response to specific requests from Member States that, in general, are seeking solution to a problem or wish to implement certain policy components. Nevertheless, each cooperation activity in the area of drug supply, no matter the component, is always approached in a comprehensive manner. The importance of technical assistance activities on PAHO/WHO drug purchases are summarized below: DRUG SUPPLY SYSTEM Programming Follow-up Selection QUALITY Information Financing Logistics Dispensation Procurement Distri- bution Storage Inventories Financing Prescription Mercado Pharmaceutical Education Information HealthServices Prices Information / Education SEA/HMM/Meet.20/4.1 Page 10 4.1 Drug selection Determining WHAT to purchase is vital for the system in terms of efficiency, quality, and use. The concepts promoted by PAHO respond to a selection criteria based on therapeutic effectiveness, risk-benefit evaluation of the product, and cost-benefit. Various standardized selection and therapeutic treatment instruments are produced by the technical programs and are easily accessible in all the countries. 3 Selection is the core component of every supply system and it constitutes the focal point of drug policies. The supply system should be based on strategically selected drugs. This allows the improvement of the quality of care, the administrative management of supplies, and the rational use of available resources. PAHO promotes these concepts due to their global nature that can be applied in both public and private systems and at any level of care. Based on the above, drug purchases made through PAHO/WHO should be limited to pharmaceutical products that respond to: (i) standardized treatments approved by PAHO programs on the pathologies subject to coverage by the purchases such as malaria, tuberculosis, AIDS, Leishmaniasis, diabetes, hypertension, etc.; (ii) are included in the country’s list of basic drugs; and (iii) respond to a need according to the epidemiological profile and are considered a priority in the public health programs of the purchasing country. The above implies that the countries should make efforts to maintain, prepare or frequently update their Lists of Essential Drugs. Often, once the LEDs are prepared they are not reviewed with the desired frequency and health institutions are increasingly purchasing drugs NOT included in their respective LEDs. Thus, there is an obvious need for greater cooperation with Member States and at the same time to focus on the review and standardization of treatments in accordance with the recommendations promoted by the Organization through its specific programs (Malaria, AIDS, TB, Hypertension, etc.). Requests for the procurement of drugs that do not meet the requirements mentioned above (standardized treatments or national LED), should be treated exceptionally, but in no case should they be referred to products questioned by the programs responsible for technical assistance. In no case should PAHO be involved in purchases of drugs on which questions have been raised or that call into question their validity for the treatment of specific pathologies. Another important aspect to keep in mind is that although each country should prepare its own list of ED, the purchase of drugs through the Organization should be based on a list of drugs selected specifically to this end. This would secure better prices and simplify the administrative process while having an impact on the quality of care. It is important to prevent the PAHO/WHO drug purchasing process from being diluted in administrative procedures for the purchase of non-essential drugs or those of little therapeutic value or that simply do not have an impact on public health. Another consideration in the selection of drugs to be procured through the Organization, is their monographic description. The selected products should respond to internationally recognized monographs and in cases where there are monographs accepted or prepared by WHO, these have priority. Finally, the therapeutic value of the product should be taken into account. The interchangeability of products is a relevant factor in their selection. This consideration should be strengthened as the countries themselves begin implementing generic drug policies. The PRME also supports the countries with the required technical assistance in this area. 3 The Essential Drugs List, WHO Guidelines for Therapeutic Treatments, and the Drug Formulary are examples of tools for drug selection. The selection of Essential Medicines, WHO Policy Perspectives on Medicines N°4, June 2002. SEA/HMM/Meet.20/4.1 Page 11 4.2 Estimate of Needs Defining HOW MUCH needs to be procured constitutes the second stage of the supply process and is fundamental for the efficiency of the system. It has two basic objectives: a) identify the coverage level desired to treat the pathologies for which the supplies are targeted, thus requiring that the country provide estimates based on its capacity to support the supply; and, b) avoid purchasing more than what is required (over and above its optimal or desirable levels). This prevents overfilling in the distribution chain warehouses that may lack sufficient storage space; drug accumulation with high probabilities of reaching their expiration dates due to low inventory rotation and consequent deterioration; use of economic resources that could be assigned to cover other priorities; etc. PAHO should make efforts to prevent that products purchased through its Offices run the risk (insurance) of being involved in situations such as these. Thus, technical assistance in this area should help the countries estimate their drug needs especially if these will be subject to purchase requests to the Organization. Technical assistance in this area is provided through the PRM at Headquarters and in the countries and should go hand-in-hand with the technical programs for specific pathologies. The estimate of needs based on methodologies recognized for their effectiveness constitutes part of the technical support provided by PAHO to the countries, but at present it is not provided on a continuous basis. 4 The quantities to be procured either through the Strategic Fund or through the reimbursable procurement method should respond to estimates determined over identified periods. Strategically, PAHO should avoid procuring drugs that may build up (and deteriorate) in warehouses due to poorly made estimates. The image of the Organization may suffer if this should occur. 4.3 Procurement of Drugs The procurement and quality of the products should be considered both within and outside the Organization on the merits of its technical assistance aspects. Internal considerations refer to what the Organization does to guarantee the quality of the products it purchases and externally because the steps followed internally constitute aspects of technical assistance that strengthen national capacities in the procurement of drugs. The countries of the Region have expressed their constant interest in implementing methodologies that would allow them to secure the benefits of economies of scale. Among the experiences are the Revolving Fund for Drugs (FORMED) 5 for joint purchases by Central American countries; the development of a Joint Negotiation proposal for the same group of countries, 6 and the Organization of Eastern Caribbean States (OECS) that has maintained over the years a system of consolidated purchases. One of the factors to be considered at the time of making the purchase is the sanitary registry of the products. The majority of national policies provide (as promoted by PAHO/WHO) for every product distributed in the country to be licensed by the corresponding health authority. This requires the review of the dossier of requirements for the sanitary registration of imported drugs, processes and exceptions to be considered. The objective is to achieve a harmonized policy at the regional level on the requirements and processes of drug imports through international procurement. Currently each country has its own requirements and processes. 4 Estimate of Needs, WHO. 5 FORMED was established in the 1980s within the framework of subregional drug projects. It obtained initial procurement financing from The Netherlands. Although it was demonstrated that substantially lower prices on drugs could be obtained, the unavailability of hard currency in the countries made it impossible for them to recycle the Fund, resulting in the cancellation of the project after three years. 6 The Joint Negotiation Project has been approved by RESSCA and DEC is currently considering it as a candidate for financing. SEA/HMM/Meet.20/4.1 Page 12 The WHO-type Certificate for Products Subject to International Trade solves this problem when the Certificate has been issued by an internationally recognized regulatory agency. Technical assistance in the procurement of drugs includes advisory services in the implementation of public and private tenders as procurement modalities of the same governments. Although the EDP does not currently cover this aspect, the Organization’s Procurement Unit could certainly provide it. 4.4 Storage, Distribution, and Dispensing The distribution includes assistance to the countries from the time of reception of the product when the organoleptic characteristics of the products need to be verified and the selection of those that need to undergo analytical tests for quality control purposes. In addition, in the procurement of drugs, the responsibility of the Organization does not end once the product reaches the port of entry. In this stage, the assistance includes the maintenance of fluid distribution channels between the ports of entry and the warehouses, between the central warehouses and the points of local distribution and from these to the health care centers. Technical assistance encompasses institutional distribution since the distribution system covers dispensing the product itself. Throughout these steps, maintenance of the quality of the product is fundamental to make rational use of the drug. During the process, efforts are made to preserve the physical characteristics of the warehouses and the information that must be given to patients at the time of dispensing the drugs. Communication channels hold special importance since many countries have transportation problems and lack monitoring mechanisms to guarantee the timely and continuous availability of the treatments wherever they are needed. Procurement of drugs by PAHO/WHO should guarantee the preservation of the quality of the products through quality control of the shipments (through drug quality control by public health laboratories) and evaluation of their conservation since their entry into the country. Although admission into the country (customs clearance) is the responsibility of the governments, technical assistance should not be absent at that time and the country should be helped in this process. Speed at entry is key for quality and timelines of the access. Avoid inadequate and prolonged storage of drugs in warehouses at the ports of entry; their distribution to central warehouses as well as to peripheral warehouses without the minimum conditions required to guarantee conservation of the quality of the products should be avoided; and all cases should be documented. The Organization cannot be involved in cases where its procurement products are stored over long periods in customhouses or in intermediate warehouses. Ensuring product quality during storage involves compliance with WHO practical guides on the shelf life of drugs and information on labeling and packaging, Good Practices in the Distribution of Raw Materials, Good Storage Practices, and Guide for Inspection Report of Good Manufacturing Practices. One of the most important aspects concerns the information on the labeling of the products as well as the information needed by the patient to ensure appropriate taking of the medication. In this regard it is necessary to introduce the labeling of products in the regional harmonization initiatives. The drugs procured through the Organization should have a single labeling for all countries (except the language), defining the necessary information on the products subject to procurement, especially those drugs that are part of border programs (e.g. malaria), those that are freely traded between countries, or simply to cover the lack of information on the labels with educational pamphlets or inserts. SEA/HMM/Meet.20/4.1 Page 13 One aspect of technical assistance in the dispensing of drugs is the implementation of Pharmaceutical Care projects through the Pharmaceutical Forum of the Americas, in which both the public and private sectors participate. This project refers to the integration of pharmacies as dissemination instruments of public health policies in which the patient is the main recipient of information and education to promote the rational use of drugs. 4.5 Rational Use of Drugs This is the objective-component of the supply system, since it would be useless to have quality products on a timely basis if these are not properly used by the patients. The rational use of drugs is in many cases the main component of specific technical programs whose objective is the eradication or reduction in the incidence of specific pathologies. The EDP is based on the activities of these specific programs and promotes the rational use of drugs through activities that range from the promotion of prescriptions based on evidence 7 up to the dispensing of drugs. 8 On the other hand, there are several strategies promoted in the countries and the instruments produced. Among these the implementation of courses on prescriptions based on evidence should be highlighted. This is a cooperation strategy aimed at modifying the teaching strategy of pharmacotherapy at medical and pharmacy schools. These programs or cooperation activities will have to incorporate the study of the treatment of diseases declared a priority with respect to public health and whose treatment is targeted in the procurement of drugs through PAHO/WHO. With this, specific BPP of common and important pathologies in public health will facilitate the update of knowledge on the same and promote the quality of care. The rational use of drugs is also related to pharmaceutical products surveillance programs and monitoring of product marketing programs. This aspect continues to receive little attention in technical assistance programs, but is of growing interest in the countries. The products procured through the Organization should be highly valued in public health and, accordingly, their therapeutic value should be controlled until its use by the patient. Box 8. Technical Assistance Activities that Promote the Rational Use of Drugs • Preparation and approval of the List of Basic Drugs • Establishment of Independent Sources of Information on Drugs (Information Centers) • Production, updating of the National Drug Formulary • Regional and National Courses on Reasoned Pharmacotherapy • Preparation of the article on Pharmacological Information and dissemination of other WHO and EDP scientific and technical publications • Technical support to national drug surveillance programs through PANDRH’s technical group on the subject. 4.6 Financing the Drug Supply The financing of the drug supply is an aspect of technical assistance that has not been fully developed. However, the implementation and development of computerized statistical and financial information systems in various countries are the result of the technical assistance provided, although a standardized regional promotion system is not available. 7 Courses on Reasoned Pharmacotherapy and Good Prescription Practices. 8 Pharmaceutical Care Projects through the Pharmaceutical Forum of the Americas. SEA/HMM/Meet.20/4.1 Page 14 problems with the products. PAHO’s participation in the procurement of strategic inputs (drugs) of public health interest, makes it relevant to devote technical assistance efforts to this component so that such purchases do not become an isolated activity but rather represent part of a health program in which access to selected drugs make it possible to achieve the impact desired in that particular program. 5. RESOURCES Different aspects should be considered both within the Organization and in the countries, especially in the requesting institution. In this regard, each country requesting the procurement of drugs through PAHO/WHO should designate a FOCAL POINT from among its technical staff to serve as counterpart on everything related to the procurement of drugs. This staff member would be responsible for coordinating within the purchasing institution (ministry, social security, etc.), all the procedures and communication with the person responsible at the PAHO/WHO country office level. PAHO/WHO offers the following resources: (1) PAHO/WHO has offices in all the countries of the Region thus providing an installed capacity to manage the administrative and documentary aspects of the procurement processes in general, including the procurement of drugs. In addition, ten of those country offices have national consultants or professionals who provide and coordinate the technical assistance on drugs. 9 All drug advisers, some of whom also cover other areas of technical assistance, cover to a certain degree, aspects of drug supply. The establishment of the Revolving Fund requires a review of the responsibilities of these staff to include assistance on the supply components in their work plans. The consultants at the country level undertook a review of these responsibilities and the proposal submitted appears in the attached annex. It will be necessary to review the situation in countries where there are no drug consultants and to seek solutions through alternatives that may include cross-country cooperation and a closer relationship with the Country Focal Point for the procurement of drugs. (2) At headquarters, the EDP has: • A Regional Adviser, who supervises the process • An Economic Adviser (vacant), who covers financing, prices and other related aspects • The Secretary of the pharmaceutical forum (STC) who covers the area of rational drug use (dispensing) • The Quality Control Consultant (STC), who is devotes 100% of his/her time to quality control activities • PAHO/World Bank Liaison Officer (Vacant) • A position for a Strategic Fund Coordinator who would act as Advisor on Drugs Supply Even though all staff members have, among their functions, different degrees of responsibility to cooperate in the drug supply, the Quality Control Consultant is responsible for the pre-qualification of suppliers and is the focal point to analyze 9 Bolivia, Brazil, Colombia, Dominican Republic, Guatemala, Haiti, Honduras, Nicaragua, Peru, and Venezuela SEA/HMM/Meet.20/4.1 Page 15 (3) Ther Drug ve of Antioquía (COHAN) in Colombia. In addition, (4) (5) • ent activities. However, the development s, in collaboration with the Program on Drugs, to 6. FINAL C • Access to drugs continues to be one of the serious health problems and the to essential and strategic drugs represents a challenge to • • idemiological needs, impact on public health, e are two Collaborating Centers on drug supply in the region: the Barbados Services and the Cooperati there is a Collaborating Center on pharmaceutical policies in Rio de Janeiro (School of Public Health). It is expected that the EDP will strengthen these centers and will identify others in the same technical area to provide assistance on drug supply components. It is important to point out the collaboration and inter-program work among the different programs in the Organization (Communicable and Non-communicable Diseases). These inter and intra-programmatic efforts should have be supported and promoted at the highest levels of the Organization. Likewise, the implementation of the described program requires working closely with the procurement unit, which has the following personnel: • Two pharmacists, including the Chief of the Procurement of Drugs Services Unit, with experience in drug procurement. • A Procurement Official (professional) An administrative assistant This unit is mainly involved in procurem of technical assistance activitie develop Procurement capabilities in the countries is considered essential. This should help the countries optimize their procedures and strategies in the procurement of drugs. ONCLUSIONS expansion of access pharmaceutical policies. • The supply of drugs is one of the four basic strategies to improve the access to drugs and the procurement of drugs is a component of the supply of drugs. • Quality is a dimension that crisscrosses all the components in the supply system. It acts on each of those components and quality refers not only to the product but also to the service provided upon the implementation of the drug supply system. • Access, supply, and quality are covered under PAHO/WHO technical assistance activities. Even though this technical assistance has been provided under current technical program activities, the establishment of the Strategic Fund has prompted the review of technical assistance in this area as well as its strengthening both within the Organization and in the countries. The procurement of drugs through PAHO/WHO provides an opportunity to apply internally the principles promoted in the technical assistance on the subject of supply. The opposite, or simply not taking it into account, would be contradictory to the technical assistance work provided by the Organization in the area of drug supply. As mentioned in previous chapters, considerations on quality retain an integrated approach that is apparent in the: – Selection: Efficiency, effectiveness, comparative cost; – Programming: Based on ep therapeutic value (interchangeability); SEA/HMM/Meet.20/4.1 Page 16 • • • • • – Procurement: Pre-qualification of suppliers, prices, performance of suppliers; compliance with GMP, monographs; – Storage and Distribution: Application of Good Distribution Practices and Good Storage Practices; – Rational Use: Rational prescription, dispensing, and follow-up, information to patients and information to the general public. PAHO/WHO, as a cooperation agency, has an unique opportunity to influence the countries on the quality requirements both in the supply and in the procurement of drugs as well as to standardize those requirements among the countries of the Region. Work among the units involved in the procurement of drugs and those responsible for technical assistance on drug supply or on specific pathologies, require greater coordination both within the Organization (Headquarters and country offices), and with the ministries of health or other institutions that make purchases through PAHO/WHO. Although the procurement of drugs carried out by the Organization involves several Cooperation Programs, the responsibility of integrating the technical assistance falls on the Essential Drugs Program (EDP) of the Health Systems and Services Division. The participation of the EDP in PAHO’s drug procurement process implies the establishment of measures of quality assurance of the products procured and should encompass the quality of the supply process. Only in this way would PAHO be providing the technical assistance the countries deserve. EDP is fully committed to this process, both at headquarters and in the countries. Any agency or institution that procures drugs should establish a quality assurance system that covers the risks that may be encountered in the process. Such system includes the pre-qualification of suppliers and surveillance of the quality of the products that it procures. Purchases from non-qualified suppliers are considered to be an act of imprudence. In order to meet this responsibility, the Organization should have human and financial resources that should be included in the regular budget of the EDP. SEA/HMM/Meet.20/4.1 Page 17 Annex REGIONAL REVOLVING FUND FOR STRATEGIC PUBLIC HEALTH SUPPLIES OPERATING PROCEDURES 1. Establishment and Purposes of the Fund 1.1 The Regional Revolving Fund for Strategic Public Health Supplies (“the Fund”), has been established by the Director of the Pan American Health Organization (PAHO), pursuant to article 6.7 of the Financial Regulations of PAHO, following the request of PAHO Member States. 1.2 The primary objectives of the Fund are: 1.2.1 To facilitate the acquisition of strategic public health supplies (hereinafter, “Supplies”) by PAHO Member States at reduced cost by taking advantage of the potential savings offered by economies of scale; 1.2.2 To further the continuous availability of Supplies within PAHO Member States, particularly those produced by a single-source manufacturer; 1.2.3 To encourage Member States to improve their planning capabilities for use of Supplies; 1.2.4 To promote the implementation of appropriate quality control procedures in ordering Supplies; 1.2.5 To stimulate the acquisition of Supplies by PAHO Member States; and 1.2.6 To strengthen Member States’ public health programs and the application of pertinent PAHO/WHO normative mandates. 2. Participation 2.1 All PAHO Member States may participate in the Fund once they have entered into a Participation Agreement with PAHO (Annex 1). 3. Capitalization Accounts 3.1 A capitalization ledger account will be established by PAHO for each Fund Participant to record all financial transactions related to all purchases made by PAHO on behalf of the Fund Participant. 3.2 At the request of a Fund Participant, PAHO shall place purchase orders with pre- approved suppliers, for Supplies in amounts not to exceed the funds on deposit in the Participant’s capitalization account. 3.3 Each purchase order will include the cost of Supplies, freight, insurance, any required testing and a 3% “service charge” applied to the cost of goods purchased. 4. Central Reserve Account 4.1 A central reserve account will be established by PAHO to receive the proceeds of the 3% service charge generated by each purchase. 4.2 From the service charge, PAHO shall set aside 0.50% of the cost of the goods purchased to fund public health programs for the benefit of PAHO Member States. SEA/HMM/Meet.20/4.1 Page 18 4.3 The balance of the service charge (2.5% of the cost of goods purchased) will remain in the central reserve account to cover PAHO’s administrative costs and any other expense related to the operation of the Fund. 4.4 If at the end of each calendar year, the central reserve account exceeds US$500,000, the balance will be credited to the respective capitalization accounts of the Fund Participants in proportion to the supplies purchased by each Fund Participants for that period. 4.5 All funds in a Participant’s capitalization account will be available for purchases in accordance with Section 5 below. 5. Strategic Public Health Supplies 5.1 The following categories of Supplies have been identified by PAHO as falling within the stated purposes of the Fund, in accordance with the respective WHO technical specifications and/or international standards: 5.1.1 Insecticides for Public Health Use (“WHO Specifications for Pesticides used in Public Health,” WHO/CTD/WHOPES 97.1). 5.1.2 Pharmaceuticals: 5.1.2.1 Anti-retroviral drugs 5.1.2.2 Anti-malarial drugs 5.1.2.3 Anti-leishmanial drugs 5.1.2.4 Anti-tuberculosis drugs 5.2 The list of the Supplies currently included in the above categories and eligible for procurement under the Fund is attached as Annex 2. All pharmaceutical supplies must comply with technical specifications and quality control systems established in accordance with PAHO/WHO norms as specified in: 5.2.1 “WHO Expert Committee on Specifications for Pharmaceutical Preparations,” WHO Technical Report series, No. 823, 5.2.2 “WHO Expert Committee on Specifications for Pharmaceutical Preparations,” WHO Technical Report series, No. 863, and 5.2.3 “WHO Expert Committee on Leishmaniasis,” WHO Technical Report series No.793. 5.3 Pharmaceutical products must also comply with international standards as specified in the latest editions of one of the following: International Pharmacopoeia (IP), the United States Pharmacopoeia (USP), the British Pharmacopoeia (BP), the European Pharmacopoeia (EP), or other specifications as determined by PAHO. 5.4 The list of Supplies may be modified periodically at PAHO’s discretion, taking into account the following criteria: 5.4.1 The product must address an important public health problem. 5.4.2 Fund Participants have difficulty obtaining the product at a reasonable price. 5.4.3 PAHO recommends using the product to address a particular public health problem. 5.4.4 Fund Participants can effectively monitor the distribution and use of the product. SEA/HMM/Meet.20/4.1 Page 19 6. Annual Requirements Planning 6.1 PAHO Headquarters, in coordination with the PAHO/WHO Offices in each country, will request a list of anticipated annual requirements for each Supply from the Fund Participants, to be submitted no later than 30 September of each year. 6.2 The lists of annual requirements should include the generic names, presentations, quantities and required delivery dates. 6.3 Individual country requirements will form the basis of annual global quantity estimates used by PAHO in bid solicitation documents. 6.4 Fund Participants must confirm their quantity requirements prior to placement of country specific orders by the PAHO Procurement Services Unit (AGS/P). 6.5 Purchase Orders issued by AGS/P under the Fund shall be limited to the Supplies listed in Annex 2. 6.6 The purchase of Supplies not listed in Annex 2 may be requested through PAHO’s mechanism, “Reimbursable Procurement on Behalf of Member States.” 7. Procurement 7.1 Based on annual estimates of requirements submitted by Fund Participants, PAHO, in accordance with its procurement policies and procedures, will establish either annual understandings or contracts with suppliers, as appropriate. 7.2 To the maximum extent possible, the prices of Supplies purchased through the Fund will be established on an annual basis. 7.3 PAHO will notify Fund Participants of the established annual prices. 7.4 Whenever it is not possible to negotiate an annual price, PAHO will solicit price quotations from pre-qualified suppliers and provide Fund Participants with price estimates for each purchase (pro-forma invoices). 7.5 A sample copy of a PAHO bid solicitation document is attached as Annex 3. 7.6 Pharmaceutical products will be purchased only from suppliers that have been pre-qualified by PAHO. 7.7 Copies of pre-qualification questionnaires for pharmaceutical manufacturers and distributors are attached as Annex 4. 7.8 To initiate a purchase, a Fund Participant must request the local PAHO/WHO Office to issue a Purchase Authorization (PA), based on a PAHO pro-forma price estimate. 7.9 The PA must include specifications, quantities, delivery dates, registration requirements, testing requirements and any other pertinent information. 7.10 The amount of the PA cannot exceed the dollar amount of un-obligated balance in the Fund Participant’s capitalization account. 7.11 PAHO shall only place Purchase Orders for amounts not to exceed the un- obligated balance in each Fund Participant’s capitalization account. 7.12 Any Purchase Order exceeding the balance in a Fund Participant’s account will require an advance US Dollar deposit (check or wire transfer) of an amount equivalent to the shortfall between the amount in the account and the estimated total cost of the Supplies purchased on a CIF basis, a 3% service charge and, when applicable, testing costs. 7.13 PAHO will normally place individual Purchase Orders during the first month of each quarter for delivery to Fund Participants. SEA/HMM/Meet.20/4.1 Page 20 7.14 If a Fund Participant wishes to cancel an order after a Purchase Order has been issued, it must notify PAHO immediately. 7.15 Any cost related to a cancellation or reduction of quantity in the Purchase Order will be the full responsibility of the Fund Participant. 7.16 A copy of each Purchase Order will be sent to the Fund Participant (consignee), which will serve as notice that the order has been placed. 7.17 The supplier will communicate shipping details to the consignee as soon as they are known. 8. Billing and Financial Reports 8.1 The total cost of each procurement action, i.e., the price of the Supplies, quality control when applicable (sampling and testing), freight, insurance, and the service charge, will be invoiced by PAHO to the Fund Participant, in U.S. dollars. 8.2 Because final shipping and other delivery related costs may vary from initial pro- forma estimates, PAHO’s invoice will reflect any difference between the Purchase Order amount and the final total costs for each procurement action. In the event that PAHO’s invoice reflects a deficit, the Fund Participant must pay the invoice in full within 45 days. 8.3 Any advance or payment to the Fund should be made either by check or wire transfer in US dollars as follows: 8.3.1 Payment by check. The check should be made payable to the Pan American Sanitary Bureau in US dollars, drawn on a U.S. branch of any banking institution, and sent to: Pan American Health Organization 525 23 rd Street, N.W. Washington, D.C. 20037 Attn: ABF/AFI/TSY Ref: Strategic Fund 8.3.2 Payment by wire transfer. Wire transfers should be made to PAHO as follows: Riggs National Bank ABA Routing Code: 054-000-030 Washington, D.C. In favor of: Pan American Sanitary Bureau Account 07-080-437 Swift: RGGS US 33 Ref: Strategic Fund 8.4 PAHO will provide each Fund Participant with a quarterly report on the status of their country specific capitalization account. 8.5 A sample quarterly financial report is attached as Annex 4. 9. Shipment, Delivery and Testing 9.1 All shipments of Supplies must include a supplier’s certificate of analysis (CA) for each lot from which the product is supplied, including manufacture and expiry dates. 9.2 The CA should comply with international standards as specified in the latest editions of one of the following: International Pharmacopoeia (IP), the United SEA/HMM/Meet.20/4.1 Page 21 States Pharmacopoeia (USP), the British Pharmacopoeia (BP), the European Pharmacopoeia (EP), or other specifications as indicated by PAHO. 9.3 PAHO reserves the right to have a laboratory of its choice perform tests on any lot prior to or after the shipment of the Supplies, and to obtain representative samples of the product and/or active ingredients to be provided by the manufacturer free of charge. 9.4 Quality control tests for insecticides should comply with the Pesticide Evaluation Schema, as included in the document referred to in paragraph 5.1.1 above. 9.5 Quality control tests for insecticides will normally be performed at a PAHO/WHO Collaborating Center selected by PAHO/WHO after the product has been delivered to the consignee’s warehouse. 9.6 Either PAHO or the respective Fund Participant may conduct quality control analysis of insecticides within 120 days after the product has been delivered to the consignee’s warehouse/storage facilities. 9.7 Fund Participants may conduct their own quality control analysis of pharmaceutical products within a reasonable period of time after receipt of each shipment, normally within 60 days after the time of their arrival at the consignee’s warehouse or as previously agreed. 9.8 In case of non-satisfactory test results, the Fund Participant must inform PAHO immediately. 9.9 Whenever non-satisfactory quality control test results have been obtained PAHO will designate a reference laboratory for final adjudication. 9.10 The supplier shall be responsible for the removal and replacement of the rejected lots/Supplies within 60 days after notification by PAHO, and will be responsible for all costs related to this process. 9.11 Insecticides that are rejected pursuant the above mentioned process will remain the property and responsibility of the supplier for disposal, in accordance with the “United Nations Environment Program Convention on the Control of Transboundary Movements of Hazardous Wastes,” Basel, 1989 9.12 Supplies will not be consigned to PAHO. 9.13 All Supplies will be consigned to the agency designated by the respective Fund Participant (consignee), marked for the attention of the individual responsible for arranging customs clearance and for taking custody of the Supplies immediately upon arrival. 9.14 Customs clearance, storage charges, fines and/or fees related thereto will be the complete responsibility of the Fund Participant, unless otherwise agreed to in writing by PAHO and each Fund Participant, on a case by case basis. 9.15 If any evidence of improper handling of the Supplies is detected at the time of delivery, the consignee must immediately notify both the shipper and PAHO, and initiate a claim with the insurance company. 9.16 The Fund Participant shall be responsible for the process of filing all insurance claims. 9.17 The Fund Participant (consignee) shall preserve all evidence of improper handling, such as damaged Supplies and packing material until the insurance claim has been settled. 9.18 Fund Participants shall assume responsibility and shall hold PAHO harmless from any liability arising from any suit or action filed by third parties against PAHO, its experts, agents, or employees with respect to any purchase undertaken by PAHO on behalf of the respective Fund Participant.