Potential Solutions for a Timely, Sufficient Supply of Medicines

In several articles, we have talked about the incidences that have caused a systematic and dire shortage of medicines and health supplies in general in our health system.

As the pharmaceutical industry established in Mexico participates in the fourth attempt by the government to solve this serious problem, we still do not have a clear picture of what the supply will be like in the two years remaining for the current administration, but the outlook  certainly is not very encouraging.

Since the procurement of medicines and health supplies was transferred to the Office of the Chief of Staff of the Ministry of Finance in June 2019, the results to date have been far from the supply levels of previous years, when the tried and tested procurement system — even if imperfect and with areas of opportunity — regularly achieved levels that exceeded 90% of timely supply.

Currently, although the percentages of acquisitions through the bids carried out by INSABI (Instituto de Salud para el Bienestar) have increased in these four years, the results are still far from optimal. The tenders carried out in December 2022 and January 2023 for the supply for  this year and next (2023 - 2024) present deficiencies that will surely impact the timely and sufficient supply in these years.

What conditions are required to ensure a timely and sufficient supply of health supplies in Mexico?

There are a series of conditions that from my particular point of view would significantly help to achieve a timely supply of medicines in the health sector in our country. In this article, I will try to outline some of them, without this being an exhaustive exercise of everything that is required because, as I mentioned, there will always be areas for improvement and the changing conditions of the drug market worldwide generate contingencies that may affect the performance of the sector.

1. Governance.

As a first element, there must be a governing body that guarantees the unity of policies and criteria and coordinates  the actions of all the entities that make up the health system: health institutes, commissions, state health services, ministries  and state hospitals.  

2. Organizational, managerial and operational suitability of the purchasing areas.

The operation of a purchase of the magnitude of the procurement of medicines for a public health system requires expertise, organizational and managerial capacity, and experienced personnel.  A highly trained team must be available to analyze the proposals, in terms of technical and economic compliance, to allow for expeditious results.

3.  Consolidation of demand.

Planning is a fundamental element to ensure the availability of medicines in due time and quantity. To achieve this, an early and timely consolidation of the demand is required in the first quarter of the year, based on the actual average consumption of the different therapies, from all the actors in the sector. Again, precise organization and careful steering are fundamental conditions to achieve the consolidation of such demand within a meticulously planned operation.

4.  Timely information to suppliers.

Once the consolidation of the demand has been accomplished, it is essential to inform suppliers of the probable quantities to be acquired in the second quarter of the year. These indeed may still undergo adjustments, but since the magnitude has been established, manufacturers are allowed to establish contact and negotiate contracts with their suppliers for the necessary inputs for production.

5.  Bidding times.

The bidding should be carried out no later than the third quarter of the year to allow providers sufficient time to ensure a timely supply, considering the different steps in the process. The production of raw materials and other inputs, imports, customs procedures, quality controls, product manufacturing, quality assurance and packaging, among others, make up a process that as a whole takes from three to four months.

6.  Transparency.

Since the public tender ideally would be held by the end of September, bids should be submitted for technical inspection prior to the actual day of the bidding, so that the evaluation of the economic proposals can be carried out expeditiously, considering those that have met the technical requirements. The opening of bids should be public and with the participation of observers from society, which will contribute to the transparency of the process, guaranteeing the best conditions for the purchasing entities. The decision in favor of the supplier companies should be made on the same day of the public tender.

7.  Legal certainty.

Once the act of adjudication has been carried out, the contracts must be formalized as soon as possible, so that the process of acquiring the necessary inputs for manufacturing can begin, providing certainty to suppliers and thus guaranteeing the timely supply of inputs.

8.  Logistics operation.

The distribution of medicines is a highly specialized function and should be carried out solely by companies dedicated to it. Even though these companies are not a part of the pharmaceutical industry, their function becomes fundamental to achieve a timely supply. In the particular case of our country, in addition to this function, and in order to deal with the enormous volume of medicines required for the consolidation of the purchase of the different agencies and entities of the health sector, this link in the value chain should have the capacity to merge the products of several companies, thus reducing the risk both for the health sector itself in the event of a failure of a single manufacturer, and for the industry, by diversifying the supply to face a demand that could hardly be met by a single company.

Mexico has the most important pharmaceutical facilities in Latin America, capable of supplying not only the domestic market with prime, quality products in a timely manner and with the greatest efficiency, but also foreign markets in the region and beyond. This has been its mission for decades and has recently become evident as a result of the medicines and health supplies for the Mexican population. However, it is fundamental to be able to count on an appropriate purchasing scheme to deliver all the required medicines with quality and on time, and so put an end, once and for all, to the deficient supply of pharmaceutical goods that the population has suffered in recent years.