PFSCM Bill and Melinda Gates Foundation II



Bill and Melinda Gates Foundation (BMGF)



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To address the limitations identified with procurement and distribution of MNCH devices, this project will establish a prime vendor system (PVS) that targets distributors (prime vendors) in Zambia and Uganda with a select list of maternal and newborn devices that would improve access at guaranteed pricing.

This model allows for strategic market shaping by supporting the aggregation of demand and setting a standard price with a predefined total cost of ownership (TCO). It will improve the transparency and service offerings of distributors of medical devices, address supply inefficiencies, and improve distributor capabilities to support the device lifecycle.

To increase the availability of medical devices, we aggregate demand for these devices, conduct global supplier selection, establish framework agreements with global suppliers, and create a catalogue for devices, services, and consumables that enables local distributors to benefit from regional scale. We will develop materials to facilitate marketing including TCO worksheets, warranty explanations, implementation packages, consumable bundles, and recommended service schedules.

After the global supplier selection, we will prequalify local distributors in target countries by reviewing their quality standards, business maturity, and ability to provide warranty and after sale services, and agree to a standardized mark-up of the international framework prices. We will build their capabilities by orienting them to the use of the framework agreements and associated options, provide them with reference materials, and connect them with suppliers for education on the devices themselves. We will also help them promote their relevant products and services with local purchasers. These purchasers could be public or private and include networks of facilities (hospitals and clinics) or individual facilities. These distributors would become part of the prime vendor system. 

We will also work with all stakeholders to define and agree on key specifications and performance standards for devices, stratified along the levels of care within the country’s health system. These specifications will guide the selection of equipment that is suited for use at each level of the health care system and reduce the inefficiencies that occur when highly sophisticated equipment is placed at a location where the full capabilities are grossly underutilized. PFSCM has already successfully managed a prime vendor model in Tanzania, and there is currently another successful prime vendor arrangement in Tanzania indicating market and procurer openness to this approach.

As a result of these interventions, local public and private procurers should have greater access to reasonably priced medical devices, a more complete understanding of how to implement, operate and maintain those devices, greater access to quality warranties and after sales services, and improved availability of consumables and spare parts. As the local market grows, distributors will be able to sell those devices to more remote areas and guarantee maintenance and support. Our approach builds and invests in local organizations while promoting competition, cost competitiveness, quality competitiveness, and market diversity.

Our approach will focus on testing, learning, and building a scalable model for future success. We anticipate documenting what was successful and where we encountered challenges, unanticipated results, unintended consequences, and assessing potential applicability to other settings or product categories. These findings will be shared with the Foundation at regular intervals over the course of the project and we also plan to document our learnings and opportunities for implementation of similar models in an article suitable for publication in a peer-reviewed journal and presentations at relevant meetings or conferences.    

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