Originally published in Interfax-Україна on March 22, 2019.
Exclusive interview with Blerta Cela, UNDP Deputy Country Director in Ukraine
How do you assess the current procurement of medicines for the state, especially in the area of oncology?
From 2016, when the Ministry of Health of Ukraine asked us to step in, UNDP started procuring medicines for oncology programmes. While before there were some challenges, we can now see the situation getting better with medicine procurement, and particularly with drugs to treat cancer.
The engagement of our organization has played a big role – it brought more transparency and openness to the procurement process. According to the Aid Transparency Index, UNDP is one of the most transparent and open organizations. Due to these characteristics, we managed to engage the international market and break a corruption cycle. It’s important to understand that the international markets, where most of the medicines for the treatment of cancer were procured, were closed to Ukraine before this due to unscrupulous intermediaries. However, we managed to change the situation and to conduct the procurement of medicines on the international markets.
Moreover, it was done with a lot of savings. Thanks to our ability to work directly with international and local manufacturers, in just three years (2016-2018) we saved around $66 million, of which $33 million was saved on oncology medicines. In 2018 alone, the savings came to $25 million. These are not just some figures – this is money that had gone into the pockets of intermediaries and corrupt people, which can now be used to procure more medicines. For instance, we’re providing some oncology medicines five-times cheaper than they’re being sold on the European market.
How was such a price reduction achieved?
There are a couple of reasons. First of all, we entered the international market, and because we did it transparently, more and more companies are applying for tenders, which means that prices are falling.
Also, we’re able to reach out directly to international drugs manufacturers. All our procedures are always open, transparent and can be checked online. Any company that has a right to produce medicines and to sell them on the market can participate in the tenders.
We’ve been conducting training for our suppliers and shown them how we go about procuring medicines, so more and more companies are expressing a willingness to take part in the tenders.
Furthermore, there’s another crucial factor that allows to cut prices: we sign long-term agreements when procuring medicines.
How many long-term agreements for medicines have you signed?
Over two years, UNDP Ukraine has signed long-term agreements for about 230 medicines under 27 programmes. That includes other programmes, not only oncology. Here, we’re talking about getting the best prices only. We look into how competitive a price is, not only in Ukraine but also at the international level.
The average term of the contracts is up to three years. To be more precise, we sign a contract for one year, with the possibility of extending it up to three years – but it depends on the trend analysis of the market environment. The use of long-term agreements gives us a chance to procure and deliver medicines effectively and faster.
How is the price established in long-term agreements?
Quite a low price is indicated in the agreement at the moment of its signing. We’re constantly doing market research, and we have the option to re-announce procurement if the market situation changes. UNDP has experience of working in 170 countries and territories all over the world, so we’re quite aware of how to conduct such monitoring effectively.
Prior to the start of UNDP’s procurement for oncology programmes, it was run by Crown Agents, a British company. How do you assess the work of your forerunners?
I have to say that Crown Agents faced some obstacles, which they had to overcome. Then procurement was transferred to UNDP, and now we’re coping with this task, in my opinion. The sum of savings, amounting to $33 million, speaks for itself. Our success is down to our experience and our reputation of being a transparent organization. We are, as a part of UN structure, different from companies – we’re not doing business, our relations with the government, civil society organizations and other institutions are built on the basis of partnership. UNDP doesn’t just assist in the procurement of medicines, but supports the reforms that are placed on the agenda. We work actively with patients’ organizations and representatives of civil society, we help them to develop and strengthen all the required skills by conducting training, during which we share knowledge and empower them with tools and techniques.
Let’s go back to the procurement of medicines under the oncology programmes. Have all the programmes under the 2018 state budget finished, and when will procurement under the 2019 state budget start?
The programmes under the 2017 state budget were 92 percent completed, and for the 2018 budget we have delivered 50 percent, with almost everything going according to schedule.
Talking about procurement under the 2019 state budget, we’ve sent the Health Ministry our proposals, and we’re waiting to sign an agreement with them.
When will the remaining eight percent under the 2017 state program be delivered? Or will these funds will be transferred to other programmes?
Firstly, I want to clarify that the initial request by Health Ministry was fully completed, and now we’re talking about deliveries that we have gained due to savings, where the amount remaining for delivery is eight percent. According to our agreement with the Health Ministry, pharmaceuticals bought with these saved funds will be delivered by the end of June. The delay is due to a global shortage of some active pharmaceutical ingredients (API) for the production of these medicines.
So, you will wait until API appears?
Contracts with producers have been signed. So we’re waiting for delivery within the agreed terms, as indicated in the agreements.
When will all the medicines and medical products for the 2018 state budget be delivered?
As per the agreement with the Health Ministry, the procurement process is expected to be conducted in two stages. In terms of the first part of the agreement, the deliveries are all done. The additional agreements are to be implemented soon. I believe the medicines under these agreements will be delivered by the end of the year.
There is often an issue with tracking medicine stocks during procurement under the state budget. How do you track the stocks of medicines in health centres and at storehouses?
UNDP procures medicines rapidly and effectively. Since our efforts are directed at covering as many of the patients’ needs as possible, we also implement various additional initiatives. In particular, we’ve been monitoring the delivery, availability and use of medicines on the ground, and helped to develop the “E Liky” platform, with which patients can see whether medicines are in stock at health centres. Moreover, we’re supporting the developing of a digital stock management system for medicines and medical products that will allow us to see what’s happening at storehouses. We’ve already announced a tender for the respective software, and we’re waiting for a contract to be signed soon. UNDP has conducted a serious of consultations with potential participants, with the participation of international companies and experts. We want this software to be the best and the most modern, able to resolve issues with the stocking of medicines procured under the state budget.
Currently, a national procurement agency – SOE “Medical Procurement of Ukraine” – has already been established. How do you assess the process of its establishment?
We were involved in the process of establishing this institution. “Medical Procurement of Ukraine” has already started to conduct procurement using funds from the Global Fund. It’s difficult to say how long it will take to fully establish this agency, but I want to confirm that our groundwork on medicine procurement and our solid experience are always available to them. We will support the Health Ministry and “Medical Procurement of Ukraine” until we see that the Ukrainian national procurement agency can work on its own. Then we will understand that our mission has been completed.
Today, a lot of processes are stalled because of political risks. Are there any risks that something will change within international procurement due to the upcoming elections?
I know that a lot of reforms are standing still because of various political events, but when we’re talking about medicine procurement, this process has to go on continuously, because we’re talking about people’s lives and health. I don’t think that Ukrainians and the Ukrainian government will let international procurement collapse. I believe that no matter who comes to power, they will consider this an important area, and will do everything to ensure that the needs of Ukrainians for medicines are met.