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b. King Faisal Specialist Hospital & Research Center, Riyadh & Jeddah. ... This workshop were held in Riyadh under the general theme (Group Purchasing ... – PowerPoint PPT presentation

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  • Dr. Khaled AL Hussein
  • MBBch. MD .DCH (UK) CSBP.
  • Adjunct. Professor Oklahoma University (USA)
  • Director General of Medical Supplies
  • MOH - KSA

  • I. The Establishment of Group Purchasing Program
  • (GPP) (Origin of the Concept)
  • The group purchasing of drugs and medical
    supplies is considered one of the most important
    achievements of the council. It has ensured the
    purchasing of high quality products from the best
    national and international manufactures. In
    addition, the program has saved millions of
    dollars for the council states. This concept
    originated since the first Ministers' Council for
    GCC States in 1976, with the objective of
    procuring some of the drug items which were hard
    to obtain either because of the small quantity
    needed or due to their high prices. Hence, came
    the idea of presenting such items in a common
    tender since 1978 undertaken by the Permanent
    Drug Committee. So the cooperative will was an
    essential element for the success of this
    program. The first announced tender covered 32
    items awarded to nine companies with total amount
    exceeding one million US Dollars.

  • The core function of GPP is pooled procurement of
    pharmaceuticals and medical supplies for the
    Ministries of Health of the seven GCC countries.
  • The continuous annual cost-savings obtained after
    25 years of the joint purchasing arrangement have
    reinforced the Procurement Service as an
    excellent cost-benefit model of economic and
    functional cooperation among the member
  • The experience of the GPP after 25 years of
    successful centerlised tendering for
    pharmaceuticals and related medical supplies, has
    demonstrated that improved procurement can reduce
    costs and enhance the efficiency of health
  • The collective decision-making reduces the
    possible influence and high prices in case each
    country announces tender individually.

  • Efficient procurement provides the greatest
    opportunity for cost-savings.
  • Prior to establishment of GPP, the GCC States
    used to purchase drugs and other medical supplies
    from suppliers by local tenders and direct
    purchase systems. Thus, drug prices for similar
    products used to vary widely among GCC States.

  • Thus we can summarize some of the main
    functions, objectives and benefits of Group
    Purchasing Program in the following
  • Ensure continuous supply of drugs, hospital
    medical supplies all the year around through
    successive deliveries by minimizing routine
    administrative and financial procedures.
  • Ensure the use of the same drugs by all member
    states in terms of the manufacturing company and
  • Improve the application of Quality Assurance,
    control procedures and bio-equivalence.
  • Support of Gulf Drug Industries to achieve Gulf
    Drug Security.
  • Qualifying companies and verification of their
    follow of GMP as well as quality assurance of
    purchased goods.
  • Registering companies and encouraging purchasing
    from registered generic companies to achieve more
  • Allowing other health sectors such as specialized
    hospitals to procure their needs through group

  • Apart from pooled procurement, GPP provides the
    GCC States with a wide range of related services,
    which include training on the requirements of GMP
    and Quality Assurance Certificates, a common
    formulary manual for drug, hospital sundries,
    Lab. Blood Supplies, Rehabilitation supplies,
    orthopedic spinal are issued and they are
    updated every two years.
  • Ensure rapid processing of presenting tenders at
    various stages.
  • Reduce wastages due to over stocks and
    non-essential items.
  • Information exchange among the member states
    through the executive Board about what had been
    experienced, in any of the member states, of
    adverse reactions or side effects to any of the
  • i. Increase purchasing volume through the group
  • ii. Post marketing surveillance system for the
    drug action.

II. Mechanism of Group Purchasing
  • The Group Purchasing solicits bids in US Dollars
    to provide one standard monetary unit for easy
    price comparison. The use of the US Dollar price
    through the GPP procurement system allows GCC
    States to forecast drug costs without concern
    about fluctuation between other international
  • Recognizing the success with pooled procurement
    of pharmaceuticals, GPP has rapidly expanded its
    product portfolio to include other medical
    supplies. By the year 2003 the Group purchasing
    Division of the Executive Board announces ten
    tenders annually.

  • The following table illustrates the first date
    each tender had been issued
  • S. Tender Year of issue
  • 1 Drugs 1978
  • 2 Hospital Sundries 1982
  • 3 Vaccine Sera 1985
  • 4 Chemical 1992
  • 5 Rehabilitation Supplies 1996
  • 6 Insecticides 2000
  • 7 Medical Laboratory Blood Transfusion
    Supplies 2001
  • 8 Orthopedic Spinal 2002
  • 9 Radio-pharmaceuticals 2003
  • 10 Dental Mouth Care Supplies 2003

III. The participating MOH Health Sectors
  • Group Purchasing Program serves ministries
    of health in the Seven GCC members States
    United Arab Emirates, MOH-Kingdom of Bahrain
    Royal Medical Services, Saudi Arabia, Sultanate
    of Oman, State of Qatar, State of Kuwait and
    recently Yemen Republic which joined the member
    countries in addition to the following public
    sector hospitals
  • a. King Fahd Medical City.
  • b. King Faisal Specialist Hospital Research
    Center, Riyadh Jeddah.
  • c. King Khaled Specialist Eye Hospital.
  • d. Medical Service-Ministry of Interior.
  • e. Security Force Hospital Program.
  • f. National Guard Hospitals.
  • g. King Saud University Hospitals, Riyadh.
  • h. King Abdul Aziz University Hospital, Jeddah.
  • i. Medical Services, Royal Commission-Yanbu.
  • j. Qaseem University- College of Medicine.

IV. Tender Announcement
  • The Group Purchasing Program operates a
    centerlised restricted tendering system in which
    all approved suppliers are pre-qualified.
    Pre-qualification is necessary to assess the
    quality standards, technical competence and
    financial viability of competing suppliers. So
    the tenders are announced through direct
    invitation as follows
  • a. Pharmaceuticals Tenders
  • The companies to be invited for the
    pharmaceutical tenders (drugs and vaccine sera)
    must be either centrally registered at the EB, or
    being registered in the three GCC member
    countries with reference laboratories (Saudi
    Arabia, Kuwait United Arab Emirates).
  • b. Medical Supplies Tenders
  • Participation on the under mentioned tenders
    is restricted to the qualified companies.
  • (Hospital Sundries, Dental Mouth Care
    Supplies, Laboratory Blood transfusion
    Supplies, Rehabilitation, Orthopedic Spinal)

V. Tenders' Technical Committees
  • The procedural steps for each tender are
    performed by four technical committees which meet
    annually according to the time-table of the
    tenders. Each committee is formed of three
    persons from each of the GCC States, except
    MOH-Saudi Arabia, which is represented by 5
    persons in addition to the delegates of the
    government specialized and university hospitals
    as well as medical departments of the public
    sector that participate under the umbrella of the
    Saudi Ministry of Health. They are all, except
    Complaints' Vetting Committee, six-day period
    committee. The four committees who perform the
    procedural steps for each tender are
  • 1. Tender Preparation Committee.
  • 2. Envelopes Opening Committee.
  • 3. Bids' Vetting Committee.
  • 4. Complaints' Vetting Committee.

  • The meeting agenda of every committee should
    include the following
  • Review the resolutions and recommendations issued
    by the council that regulate the work mechanism
    of Group Purchasing Program.
  • Discuss the remarks of the GCC member countries
    and other participating health sectors over the
    previous tender in terms of item specification,
    addition and/or deletion of items.
  • Review the tender terms conditions in the light
    of the remarks made by the participants.
  • Review the predetermined criteria for items'
    selection and award to successful bidders.

  • a. Tender Preparation Committee (TPC)
  • In addition to the above sited fixed meeting
    agenda, the tender Preparation Committee (EOC)
    should perform the following
  • - Screening the list of companies which shall be
    invited for the new tender.
  • - Approve the annual schedule for executing the
    tender's phases, which include the following
  • a. Submission of the initial
    quantities needed by all participants.
  • b. Tender announcement date.
  • c. The dead-line for submission of bid offers,
    which is the same date for holding the meeting of
    the Enveloped Opening Committee.
  • d. Date of Bids' Vetting Committee.
  • e. Announcement of the selected bid
    offers, and fixing dead-line for submission of
    the bidders' remarks and complaints.
  • f. Date of Issuing the Letters of Award.

  • b. Envelopes Opening Committee (EOC)
  • In addition to the above mentioned fixed
    meeting agenda, the Envelopes Opening Committee
    (EOC) is entitled to perform the following
  • Review the original bid offers (the hard copy),
    submitted by the participating bidders.
  • Review the bid Bonds (Initial Bank Guarantees).
  • Review the covering letters attached to
    the original bid offers.
  • Enter all data of the bid offer (the soft copy)
    which include company name code number, item
    code and description, unit price and company
    remarks etc.. in the computer system which
    contains the pre-designed program for this
  • Rejection of the bid offers which are not in
    compliance with the tender's terms conditions.
  • Prepare a comparison statement printed out of the
    system, showing the quoted price made by the
    bidders for each specific item.
  • Provide the Group Purchasing Division with all
    original bids, bank guarantees, compact disks and
    the comparison statements to be presented, by the
    Group Purchasing Division, to the Bid Vetting
    Committee in the meeting which shall be held one
    week after.

  • c. Bid Vetting Committee (BVC)
  • Apart of the fixed meeting agenda, the
    duties of the Bid Vetting Committee (BVC)
    comprise the following
  • Examine the offer made by each bidder for every
    individual item in terms of price and
    specifications, compared to the price registered
    at the EB.
  • Examine the items' samples provided by the
    bidders so as to make sure that, they comply with
    and fulfill the required specifications.
  • To ensure that, all bidders as well as their
    products, are registered as per tenders'
    regulations. However, the BVC has the right to
    reject the bid offered by any company which does
    not fulfill such regulations.
  • The committee's decision regarding selection of
    items is entered directly in the computer system
    using the pre-designed program. Nonetheless, all
    members should sign on the comparison statement,
    made by the Envelopes Opening Committee, derived
    from the computer system.
  • Select the acceptable offer for each individual
    item following the predetermined criteria for
    items' selection and award.
  • The Bid Vetting Committee reviews bid offers and
    awards tendered items to the successful bidders.

  • d. Complaints' Vetting Committee (CVC)
  • It is a one-day period committee. The duty
    of this committee is to study the objections,
    complaints and remarks made by the bidders. CVC
    has the right, after a thorough study of the
    documents presented by the complainant against
    other available documents, to EMPHASIZE the
    decision made by the BVC OR to change the award
    for the benefit of the complainant.

VI. Preparation of Final Quantity
  • Based on the decision and the awards made by the
    BVC CVC, the Group Purchasing Division shall
    provide participants, ministries of health in all
    GCC States as well as other health sectors, with
    a compact disk which includes the accepted
    offers, so that they could make their final
    required quantity.

VII. Issuance of Letters of Award
  • According to the final decision made on the bid
    offers of the participating national and
    international vendors, the EB make the awards
    according to the final quantities provided by the
    participating GCC ministries of health and other
    health sectors. It also monitors delivery and
    suppliers performance. The final quantities
    forwarded to the EB by all MOH in the GCC member
    countries and other participating health sectors,
    are entered in the computer system so as to
    print-out the award sheets which include the
    total quantity of each item awarded to the
    bidder. Then Group Purchasing Division shall
    issue the letters of Award to successful bidders
    and provide them with the award sheets.

VII. Delivery Payment
  • Suppliers deliver the ordered items directly to
    MOH of the participating GCC countries and other
    governmental health sectors, which in turn
    reimburse the cost directly to suppliers.
    Suppliers should effect delivery as from date of
    award, following the delivery schedule for each

  • Tenders' Statistics
  • The following table illustrates statistical
    information about the tenders issued through
    Group Purchasing Program in 2004
  • Tender Tender Title Items
    Total Cost
  • No.
    (Million )
  • 26 Drugs 1308 333.7
  • 21 Hospital Sundries 1059 81.2
  • 19 Vaccine Sera 50 32.4
  • 12 Chemicals 32 0.8
  • 09 Rehabilitation Supplies 1668 3.4
  • 05 Insecticides 27 2.7
  • 04 Laboratory Blood Transfusion Supplies
    2756 48.9
  • 03 Orthopedic Spinal Surgery Supplies
    1976 18.3
  • 02 Dental Mouth Care Supplies
    1190 10.5
  • 02 Radiopharmaceuticals 41 1.5

The Significance of Group purchasing
  • Recent studies shows significant savings (35)
    Million US Dollar's in 1991 Tender distributed as

The Significance of Group purchasing
  • In 2001 Tender(23) The Savings where (11.5
    Million US Dollars) for Kuwait, Sultanate of Oman
    And Qatar .
  • Also for the same year Tender (18) Provide
    savings amounted (1.2 Million US Dollars) for
    Kuwait, Sultanate of Oman ,Qatar and UAE.
  • In 2002 the Group Purchasing has significant
    savings amounted (16.3 Million US Dollars) for
    Sultanate of Oman, UAE and Kuwait.

The Significance of Group purchasing
For Sultanate of Oman
The Significance of Group purchasing
For Kuwait
The Significance of Group purchasing
The second Gulf Symposium for Group purchasing
  • This workshop were held in Riyadh under the
    general theme (Group Purchasing Future Prospects)
    in the period from 20-21 Safar 1425H (10-11 April
    2004), in celebration of the 25th anniversary for
    this principal program in the Executive Board.
    In this workshop, working papers were presented
    by representatives from the member states and the
    head of the department of group purchasing in the
    Executive Board., as well as from the companies
    participating in the symposium. In addition, in
    the opening ceremony, a lecture was presented by
    HE The General Director of the EB/ HMC GCC
    states demonstrating the march of Group
    Purchasing Program in 25 years.

The second Gulf Symposium for Group purchasing
  • This workshop were held in Riyadh under the
    general theme (Group Purchasing Future Prospects)
    in the period from 20-21 Safar 1425H (10-11 April
    2004), in celebration of the 25th anniversary for
    this principal program in the Executive Board.
    In this workshop, working papers were presented
    by representatives from the member states and the
    head of the department of group purchasing in the
    Executive Board., as well as from the companies
    participating in the symposium. In addition, in
    the opening ceremony, a lecture was presented by
    HE The General Director of the EB/ HMC GCC
    states demonstrating the march of Group
    Purchasing Program in 25 years.

  • The Arab League representative Dr. Hussein
    Hammoudah gave an address which dealt with how
    the rest of the Arab countries can make use of
    such a successful program and take it as a model
    for fruitful cooperation.
  • Dr. Mohammed Shuhna, EMRO representative made a
    presentation on (operational principles for good
    pharmaceutical procurement).
  • Workshops were organized dealing with
    pharmaceutical supplies, medical sundries and
    supplies of medical laboratories and blood
    transfusion services. Recommendations were made
    in each of the workshops. The overall
    recommendations were summed up, the following is
    a brief account of the most prominent

  • I) Concerning Pharmaceuticals Tender
  • 1- Due to the differences in the expiry date of
    the registered drug in the reference countries,
    the member states have to mention the expiry date
    for each item on submission of the data of the
    registered drug OR unifying the expiry period.
  • 2- The member states have to send the new items
    to be added in the tender one month prior to the
    meeting date for preparation of the tender.
  • 3- Formulation of work team to study the
    possibility of submission of the tender every 2
  • 4- Performance of the companies should be
    evaluated (assessed) in terms of commitment to
    the conditions of tenders.

  • 5- In case of equal prices and technical
    characteristics between 2 companies, negotiation
    to select the cheapest one is done, and the terms
    of awardation are amended to omit the item of
    halfing the amount between the companies.
  • 6- Finding a mechanism for collection of 0.5
    from the companies to support development of
    group purchasing program, and financing training
    and educational activities for the members of the
    group purchasing committees in the member states
    (just like the case in the Health Research
  • 7- Appointing the Gulf Group
    Purchasing Committee members in the Sultanate
    of Oman and the Kingdom of Bahrain to study the
    high prices of drugs. The EB is to be provided
    with the results of this study.

  • II) Concerning the Medical Supplies Tender
  • The necessity of contribution on the part of the
    companies in supporting the rehabilitation
    program through offering training workshops for
    such purpose.
  • Discussion of any problems related to the tenders
    in a joint meeting between the countries and the
    local companies as well as foreign ones after the
    end of each tender.
  • Emphasis on commitment on the schedules of visits
    to the factories, and all arrangements of the
    visits are coordinated before a long time of
    conduction the visit.

  • III) Medical Laboratories Tender and Blood
    Transfusion Services
  • 1. Nomination of a specialized officer in the
    field of laboratories for the corresponding
  • 2. The member states have to provide the
    Executive Board with the evaluation forms adopted
    to be studied by the committee of rehabilitation
    and evaluation of samples to reach a unified
  • 3. In case a product is awarded to one of the
    companies, it has to provide the external
    reference quality control program on delivery.

  • IV) General Recommendations
  • 1. The companies that are notified of awardation
    have to support the member states and the
    participating agents in the field of training.
    This has to be one of the conditions cited in the
    technical specifications of the tender.
  • 2. Speeding up the application of e-commerce in
    all phases of the tenders.
  • 3. Investigating setting an appropriate mechanism
    for participation of all member states and other
    bodies in the evaluation process (companies will
    sponsor such activities, the costs are to be
    determined by the Executive Board).
  • 4. Formulation of companies, a pointing system
    is set to urge them to raise the quality of this

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