Purchasing and Procurement in Pharmacy Management

Purchase and Procurement

• The main aim of purchasing is to maintain a continuous flow of material at the right price, quantity, and quality from the right source at the right time.
• Purchasing and inventory control are important aspects of managing pharmacy products.
• Centralized purchase by medical stores procures drugs on behalf of all departments, helping in getting quality drugs at cheaper rates.
• The process of purchasing starts with framing of buying policies and ends with receiving, stocking, and payment.

Components of a Good Drug Procurement Policy

• Effective and efficient agency to handle procurement, storage, and distribution.
• Adequate budgetary allocation.
• Essential drug list (EDL) or a priority drug list and its periodic review for addition and/or deletion.
• Effective and transparent tender/purchase system.
• Scientifically designed warehouses with facilities for proper storage.
• Effective logistics and management information system (MIS).
• Efficient quality assurance setup.
• Effective outsourcing-MIS, transport, communication, and information.
• Verification of business appropriateness of each transaction done for purchasing.
• Confirmation that all purchases were allowable and within budget and spending limits.
• Maximizing purchasing power by focusing on strategic sourcing and obtaining the best value.
• Ensuring proper reporting of payments to suppliers.
• Ensuring the use of appropriate buying methods.

The Five "R"s of Procurement

• Right Quality in terms of grades, brands, or trade names, physicochemical characteristics, as per national standards.
• Right Quantity ensured by following calculation techniques to avoid shortages.
• Right Price includes consistency of price with the quality of the drug.
• Right Source includes the capability of supplying material as per requirements from time to time.
• Right Time includes purchase after calculating lead time information for all products and considering emergencies.

Methods of Drug Purchases

• Direct purchase from the manufacturer or their regional centers.
• Direct purchase from wholesalers and stockiest.
• Purchase through bids.
• Purchase through competitive negotiation.
• Purchase through a contract.
• Local purchase.
• In-house manufacture of medicines in hospitals.

Direct Purchase from Manufacturers or Regional Centers

• The most fundamental type of purchase is a direct purchase.
• Purchases made directly from manufacturers are both cost-effective and secure.
• The quality, packaging, and so on of the same items from different manufacturers may change.
• Two or more parties should be selected to purchase each item to ensure supply during emergencies.
• Producers will either supply hospitals directly or through their depots, or their local distributors will handle the supply.