Proper Management Practices for Drugs and Other Health Commodities

Drugs, vaccines, and non-pharmaceutical commodities form a large percentage of most health organization's budgets, in most cases going up to half of the proposed annual expenditure. These costs usually go higher due to inadequate management practices of these commodities, leading to wastage. Wastage may result from poor handling of the health commodities, improper storage, improper usage, and fraudulent practices within the organization.

Quantification

The estimation of the annual demand for the commodities is the first point that determines the cost to be incurred. A careful analysis of the previous consumption data and morbidity patterns is important in developing estimates that are more accurate. Under or over estimation have their associated costs.

Procurement

In procuring these commodities, proper management starts with the proper choice of the supplier. There is a high tendency of selecting the lowest bidder in procurement, but this is not a sufficient basis of selection for a supplier. Other important variables to put into consideration are quality of product, reliability of a supplier, and volume of transactions the potential supplier can provide. Consideration of the offer price is key, but there also needs to be compliance checks on all the other variables since they affect the organization’s operations and costs.

Documentation

There needs to be adequate and accurate documentation of transactions.  These transactions include acquisition, acceptance, disposal, rejects, and dispensation of commodities. Proper documentation helps to avoid errors and fraudulent acts. The LPOs/LSOs, invoices, receipt notes, delivery notes, payments, CRIVs, bin cards, stock control ledgers, cash book, credit notes, debit notes, bank statements, and other records need to be reconciled to reflect the authenticity of the transactions done.

Transportation and delivery

Placement of orders is done well in advance, considering the lead-time and stock level. The ordered commodities need transportation under the right conditions with proper handling. Those that require cold chain maintenance need transport facilities that ensure maintenance of the cold chain. The delivered commodities are inspected in order to ensure they are in the right condition and quantity. The organization can return to the supplier, or accept damaged goods at a lower price depending on nature of the commodity under consideration. The relevant documents should accompany the goods on deliveries and returns.

Storage and dispensation

Right conditions are necessary in storage of health commodities based on their specific requirements on temperature, lighting, humidity, security, spacing among other conditions. This avoids further wastage because of damages, pilferage, and theft. The dispensation of commodities should consider demand of the user department. Application of the appropriate stocking system is also crucial in dispensation to avoid wastage as a result of expiries. The most commonly advocated stock management system is FIFO (First In First Out), although there also has been recent ideologies on FEFO (First to Expire First Out).

Careful consideration of these practices ensures cost saving strategies have been put in place to minimize wastage.