PRICE SURVEY HIGHLIGHTS FOR STAKEHOLDERS MEETING 16-December, 2008

PRICE SURVEY

HIGHLIGHTS FOR STAKEHOLDERS

MEETING

16-December, 2008

Presentation Outline► Background and Problem statement;

► To describe the methodology adopted;

► To share preliminary findings, challenges

► Overall Recommendations;

► Way forward & possible interventions for MCA;

1. Background:

► A survey of medicine conducted by KEMSA in

FY 2005/06 reported that the public

procurement system was achieving very

competitive prices (Source: KEMSA

2005/2006 Price Survey Report)

Problem statement & Rationale of the Survey.

There is a possibility that medicines are accessed at different prices by different segments of the population along the public sector supply chain.

The study therefore seeks to explore trends in price variations for medicines accessed from different sources by various segments/points along the supply chain.

2. Survey Design & Methodology

Design: A non-experimental design was employed Survey methodology was used Cross-sectional approach was adopted because it

allows enormous information to be collected within a short period.

Methodology: Goal

The overall goal of the survey was to document and compare KEMSA’s prices with the International Reference Prices, MEDS, KNH and local manufacturers and distributors to determine whether KEMSA and Ministry of Medical Services are getting value for money in public procurement.

Methodology: Objectives

To undertake a comparison of KEMSA’s prices with

international price reference guide for selected health

commodities used in public health facilities.

To compare KEMSA prices with other procuring agents

To compare KEMSA prices with local manufacturers

and distributors of health commodities

To undertake price documentation for selected

commodities procured locally using Cost sharing

funds available at facility level.

Methodology: Sample & Sampling

Facility type Sampling Frame Sample Size

Provincial General Hospitals 7 7 (Census)

District Hospitals 166 17 (10.2%)

Teaching & Referral Hospitals 2 1 (50%)

Total 175 25

Selection Criteria: Regional representation; Facilities that undertake local procurement (with FIF)

Survey Sample

Variables and Measurements Dependent Variable: Prices of

Indicator items. Independent Variables:

a. Source (IDPIG-International suppliers,

Local suppliers, Local manufacturers,)

b. Supply Chain level (KEMSA, KNH-Referral

hospital, PGH, DH)

c. Region/Province

Measurement

Comparing tender prices of Indicator Items by supplier/source

Comparing prices by ordering point along the supply chain

Comparing KEMSA prices with PPOA prices

Comparing KEMSA prices with those of local manufacturers.

Comparing KEMSA prices with those of local distributors.

Comparing KEMSA price with local procurement at hospitals

( Tender/supplier prices of Indicator Items by source for FY2007/08.)

Tools Development and Pre-testing

TWG: MSH, MOMS, KEMSA

List of Indicator Items defined Multi-source price survey tool developed with

sections for KEMSA, Manufacturers, MEDS/KNH, Wholesalers, Health Facilities

Multi-disciplinary team of 20 data collectors

trained.

Pre-testing done in 6 facilities in Nairobi and

environs.

Data Collection

4 teams of 5 people each

4 supervisors, one per team Covered 24 facilities/ordering points

scattered in all provinces in Kenya

Took 4 weeks

4. Data Analysis

Data captured in Excel Spreadsheets Data analyzed using simple statistical

procedures.

Key Findings: Comparing tender prices of Indicator Items by supplier (source)--- Table1.

Indicator items KEMSA

price ratio

IDPIG

price ratio

Amoxicillin Cap 250mg

1.00 1.13

Amoxicillin Syr 1.00 1.37

Paracetamol Tab 500mg

1.00 1.30

Cotrimoxazole Tab 480mg

1.00 1.37

Key Findings: Comparing tender prices of Indicator Items by supplier (source)--- Table 2.

Indicator items KEMSAprice ratio

MEDSprice ratio

KNH Price Ratio

Amox Cap 250mg 1.00 1.01 1.51

Amoxicillin Syr 1.00 0.89 0.96

Paracetamol Tab 500mg

1.00 1.14 1.03

Cotrimox. Tab 480mg

1.00 1.05 0.99

Key Findings: Comparing Indicator Item prices by ordering point along the supply chain (Table 3)Indicator items KEMSA KNH

Price Ratio

Public Hospitals ( PGH, DH) Price ratio

Amoxicillin Cap 250mg

1.00 1.51 0.96

Amoxicillin Syr 1.00 0.96 0.96

Paracetamol Tab 500mg

1.00 1.03 1.04

Cotrimoxazole Tab 480mg

1.00 0.99 1.10

Key Findings: Comparing KEMSA Prices with PPOA Price Survey Report (Apr 2008)-- Table 4

Indicator items KEMSA KEMSA/ PPOA Price Ratio

Amoxicillin Cap 250mg

1.00 1.45

Amoxicillin Syr 1.00 1.96

Paracetamol Tab 500mg

1.00 1.99

Cotrimoxazole Tab 480mg

1.00 0.88

Key Findings: Comparing KEMSA Prices with those of local manufacturers and distributors (Table 5)Indicator items KEMSA

price ratio

Cosmos price ratio

Regal price ratio

Harley's price ratio

Omaera price ratio

Amoxicillin Cap 250mg

1.00 1.89 1.30 1.07 1.12

Amoxicillin Syr 1.00 2.42 1.62 1.31 1.35

Paracetamol Tab 500mg

1.00 2.40 1.76 1.70 1.31

Cotrimoxazole Tab 480mg

1.00 2.64 1.49 1.21 1.30

5. Summary and Recommendations: Summary of Key Findings

There is marked price variation by source

There exists price variations at different points of the supply chain;

KEMSA’S tender prices for 2007/2008 are more competitive than those obtained by the PPOA Survey;

In most cases, KEMSA prices are better than those of manufacturers and suppliers.

5. Summary and Recommendations

Overall recommendations

KEMSA appears to be a more efficient procurement agency

offering better value for money.

Facilities at different levels of care should procure from KEMSA.

For KEMSA to be the main source, it must improve its efficiency

in its overall service delivery.

This price information should be disseminated through the

MOMS/MOPHS and KEMSA websites to make it available to

sites.

Conclusion

For the most part, KEMSA prices are more competitive than for similar products purchased by health facilities from all the other entities surveyed.

KEMSA is thus achieving value for public funded procurement of medical commodities

Acknowledgements

MoMS/ MoPHS KEMSA USAID MCC MSH/SPS