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Primary Drug distributor system
DDBA 8560 - Seminar in Healthcare Managerial Decision Making
Walden University
Primary drug distributor system
It is another non CMS system, in which the government drug procurement office establishes a
contract with a single primary distributor, as well as separate contracts with drug suppliers. The
primary distributor is contracted to manage drug distribution by receiving from the suppliers,
storing, and distributing all drugs to districts and major facilities. The primary distributor system
is a variation of direct delivery in which the public procurement agency tenders and establishes
two types of contracts. The public procurement agency contracts with any number of suppliers to
establish the source and price for each drug. But the drugs are not delivered by the suppliers
directly to health facilities; instead, a separate contract is negotiated (through tender if feasible)
with a single private sector distributor, the primary distributor.
The suppliers deliver tender drugs to the primary distributor, who is responsible for maintaining
sufficient stocks to fill orders from regional warehouses, district stores and/or health facilities.
Primary distributors may maintain their own vehicle fleet or subcontract transportation. Like
other direct delivery contracts, this system depends on sole-source commitment for the essential
drugs list, though districts and health facilities may be allowed to purchase non-tender drugs
from any source. The system also requires the same level of good information and monitoring.
The primary distributor is paid a fee or commission for storage and delivery services. The
primary distributor may appear to add an extra middleman and extra costs, but the expectation is
that the cost of the primary distributor will be less than the cost to the government of running the
warehouse and distribution system itself. Competitive bidding for the primary distributor
contract is important to achieve this efficiency.
5Fully private supply
In some countries, drugs are provided by private pharmacies in or near government health
. National policy, insufficient financing or management problems have led some countries to
avoid responsibility for providing hospitals and health centres with even essential drugs. Where
this is the case, retail pharmacies become the source of supply, especially in urban environments.
Often the pharmacies are located very close to the hospital, and may be located inside the
hospital. Such pharmacies may be part of a parastatal pharmaceutical enterprise (Sudan), or they
might be an institutional enterprise (Ghana), or they may be independent enterprises. In some
countries, patients receiving health care through the public sector are left to buy virtually all
drugs on their own from the private sector. This situation usually results from complete lack of
government funds, rather than as part of an official drug management plan. As with revolving
drug funds operated by the government, the greatest concern with fully 5private supply is equity
of access for the poor, children, patients with communicable 5diseases and other vulnerable
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