UNOPS and Medicine Acquisition in Mexico: A Failed Project

On July 31, 2019, INSABI signed a Collaboration Agreement with UNOPS for the procurement of medicines. UNOPS identified some challenges in the implementation of a consolidated procurement process for medicines and therapeutic goods, including:

- Timely supply; 

- Cost of drugs, particularly those under patent protection; 

- Fragmentation of purchases among federal public entities and the states; 

- Quantification and integration of the demand; 

- The process of timely planning for consolidated purchasing, including market research and construction of reference prices; 

- The limitations of the national regulatory framework

In that document, UNOPS stated that the "objective of the Implementation Project is to support the Government of Mexico, through INSABI, in its effort to guarantee the right to health to the greatest number of citizens through the planning and management of the consolidated purchase of medicines and medical supplies (for the period 2021-2024), as well as to assist in the profiling of the system and model of the consolidated purchase of medicines and medical supplies for the health sector." In addition, UNOPS proposed actions that would ensure transparency, efficiency, effectiveness and best value for money in the aforementioned acquisitions.

The UNOPS project was integrated as follows:

COMPONENT 1 - Management of a Multi-year Consolidated Purchase of Medicines and Therapeutic Goods (supply of needs for the period 2021-2024). 

1. Execution of the international bidding process for the consolidated purchase of medicines and therapeutic goods for the period 2021-2024. 

2. Administration of supply contracts and supervision of deliveries.

COMPONENT 2 - Institutional strengthening and capacity building in the area of procurement of goods and services. 

1. Evaluation of the efficiency of the procurement and supply chain of medicines and medical devices. 

2. Proposal for the optimization of the logistics management model for distribution and warehouse management for hospital units.

Under these premises, goals and objectives, it is clear that the participation of UNOPS was yet another failed attempt by the government to achieve a timely and sufficient supply. 

There are several facts that support this view; for instance, the consolidated purchases for the year 2021 and the second half of 2022 were processes that lacked proper planning, since there were significant delays in the dates proposed by UNOPS itself. The processes did not meet the awarding and key supply objectives projected by the agency, due to delays in their implementation and uncertainty in several of the contracting conditions established. 

By the same token, since the processes were carried out under the rules established by UNOPS, the transparency, publicizing, and accountability mechanisms established in the Mexican legislation were not applicable. 

On the other hand, the coordination between UNOPS, INSABI and the health institutions with logistics operators was completely inefficient, which resulted in supplies that could not be shipped from warehouses, and consequently in shortages in the health institutions.

In November of this year, INSABI announced the cessation of the agreement with UNOPS as of January 2023, which is in fact a tacit recognition of the failure of the project, originally planned to last to the end of 2024. The poor results of the two bidding processes carried out by the agency are most likely the cause of this decision.

However, it must be pointed out that not all the blame is to be placed upon UNOPS. Even though it did not have the expertise, knowledge and capacity to handle a project of the magnitude that the health sector represents in Mexico, it was also misled by a faulty diagnosis, since the agency took as an initial reference the failed bidding process carried out by the Oficialía Mayor de la Secretaría de Hacienda, the process that has had the worst results since the system that had prevailed for 10 years with proven results was changed. At the time, the reference should have been precisely the public bids carried out by IMSS, which had been continuously improved in terms of consolidation of demand, presentation of offers, contract formalization, and delivery and distribution of medicines to yield results that exceeded 90 percent effectiveness in terms of timeliness and percentage of supply, a figure that today is far from being reached.

Although UNOPS’ payment processes improved significantly in the second half of this year, there were serious delays during 2021 and the first half of 2022, perhaps not entirely attributable to the agency but more to the lack of coordination between INSABI and the contracted logistics operators, who frequently did not have capacity even for the reception of the goods.

Lastly, the total amount and destination of the resources that were delivered to UNOPS by the government is yet to be known. These were initially announced to be over US$6 billion for the acquisition of the medicines and therapeutic goods until 2024, plus a fee for the execution of the project of about US$125 million. This significant quantity of financial resources evidently cannot be overlooked and will surely have an impact on future acquisitions.

To sum up, if we abide by the objectives set out in the agreement and the results obtained, UNOPS’ performance in the acquisition of medical supplies in Mexico was extremely poor and generated a very serious shortage of therapeutic goods to the detriment of the health of the Mexican population.