GROUP PURCHASING PROGRAM

A.   The Establishment of Group Purchasing   (Origin of the Concept)

 The unified purchase of drugs and medical equipments is also considered one of the most important achievements of the Council. It has ensured the purchasing of high quality products from the best national and international companies. In addition, the program has saved millions of dollars for the Council States. This concept originated since the first Ministers’ Council for the GCC states in 1976 with the objective of securing supply of some drugs which were hard to secure either because they were wanted in small amounts or due to their high prices.  Hence, the idea came of presenting this group of drugs in a common  tender since 1978 undertaken by the Permanent Drugs Committee.  This tender, amounting to over one million US dollars, involved 32 purchased items awarded to 9 companies.

Due to the success of the idea, the first hospital supplies tender was presented in 1982, then the sera and vaccines tender in 1985, followed by the first pharmaceutical chemical tender in 1992, the medical rehabilitation supplies tender in 1996 and the Laboratory Apparatus in 2001.  

B.   The Achievement  of Group Purchasing

 1.   Achieving a financial saving through purchasing large quantities with less prices  “ Cost reduction”.

2.   Direct calling of the companies registered according to the rules and regulations set by The Executive Board thus ensuring high quality of the purchased items “Standardization”.

3.   Ensuring use of the same drugs by all member states made by the same manufacturing company “Information sharing”.

4.   Ensuring rapid processing of presenting tenders and their award “Enhancement of purchase operations”.

5.   Ensuring continuous supply of drugs, hospital supplies and equipment all the year round through successive deliveries by minimizing routine administrative and financial procedures.

6.   Improve the application of Quality Assurance, control procedures and bio-equivalence.

7.   Allowing other health sectors such as specialized hospitals to secure their needs through group purchasing.

 C-   Mechanism  of Group Purchasing

 Eight tenders are presented annually (Drugs - Sera and Vaccines - Medical Rehabilitation Supplies - Hospital Supplies and Equipment - Pharmaceutical Chemicals)  Laboratory supplies  for each of which three permanent committees are formed; namely 

1.   Permanent  Committee for Pharmaceutical Preparations

      (Drugs - Sera and Vaccines – Chemicals, Insecticides).

2.   Permanent Committee for Pharmaceutical Preparations.

3.   Permanent Committee for Medical Rehabilitation Supplies.

4.   Permanent Committee for Laboratory supplies.

According to suggested dates by the concerned committee, three meetings are held for each of the above mentioned committees.

 a)    Tender Preparation Committee

It was agreed that this committee is comprises of 3 members from each of the Council states in addition to a representative from the Executive Board.  The committee undertakes the following:

* Studying resolutions issued by the Council that regulate the operation of  Group Purchasing  Programme.

*   Discussing the member states feedback about the previous tender.

*   Reviewing item specifications for the previous tender.

* Suggesting the including of new items or the deletion of old ones.

*   Examining conditions of the tender and performing  whatever necessary amendments.

*   Screening of the list of companies going to be invited for participation in the new tender.

*   Agreeing upon dates of presenting the tender for selling.

 At the end of each meeting, all recommendations issued by the committee are carried out till the preliminary quantity are received from the member states.  These are presented in the tender bidding the registered companies to purchase copies of the tender and these companies are given one and half months to submit their quotations according to the following rules:

1.  Delegating a  local agent to follow up the tender procedures with the      Executive Board.

2.  After the closing date, no quotations (offers) are received.

3.  An initial bank guarantee (bid bonds) with the quotation documents should be submitted  (before opening the envelopes)  equaling about 1.5% of the quotation sum.  This bank guarantee should be valid for 120 days renewable.

4.  Companies bid for the tender have the right to submit a principal quotation and two alternatives for each item.

5.  Companies have the right to write down their remarks and reservations about item specifications or conditions of the tender on the quotation papers and the technical committee has the right to accept or reject these remarks.

6.  The company has to commit itself to all the specifications and conditions      of the tender.

7.  Each company has to submit a number of samples for each item for examination on award.

 b)    Committee of  Envelopes Opening

 This is held after receiving quotations (offers) at the specified time, and it     is formed, two, of 3 members from each of the Council states.  It is entitled to perform the following:

·   reviewing lists of quotations and bank guarantees with envelopes submitted.

·   reviewing covering letters submitted with quotations and preparing a list of companies to be contacted for procedural or technical reasons. Tabulation of prices given in the quotations submitted for each item separately on the forms prepared which include data such as name of the item, its number, name of the company and its nationality, price offered for both the store and port of delivery to the smallest unit in the item; in addition to examine remarks made by the company or the committee member about the quote.

·   Quotations not complying (bank guarantee not enclosed, papers are not   sealed and signed, quotations are submitted on copies not original or quotations submitted by companies not invited for the tender through invited ones).

·   Preparing a list of prices put in an ascending order after deduction of the specified percentage allocated for support of the Gulf factories as per the resolution.  Then,  all papers are delivered to the Group Purchasing Department for accurate review and  then, a list of remarks is prepared to be submitted to the awardation committee, which is usually held two weeks after the end of the works of the Committee of Envelopes Opening.

 c)    Awardation Committee

 This committee is entitled to perform the following:

·   examining quotations submitted and comparing its prices with those registered in the Council states and with prices of the previous tender.

·   examining simples submitted with the quotations to make sure they are complying with the specifications set by  the Executive Board.

·   To be sure that companies taking part in the tender are registered as well as their products and rejecting  those not complying.

·   Awarding the complying registered item, then the cheapest.

·   Preparing a list of items not complying for different reasons.

·   Consultation of some technical experts for some specialized and certain items.

d)    Stabilizing Quantities

 After the end of the works of the awardation committee, copies of all papers are sent to countries participating in the tender to review the amounts required by each. Then, the final amounts for each country in the tender are set and the companies are informed accordingly.

 e)    Notification of Awardation

Forms for awardation are prepared by the Computer Department including the amount for each country, unite price and the total for each item, name of the company, nationality and full data about the item (name, specifications, number).  Sealed forms are then delivered to companies together with a copy of the company, accepted quotation and the letter of award notification.

f)     Delivery

 Items are delivered as of the date of notification of the award according to the number of delivery, times required by the country as illustrated in the conditions of the tender. Contracts and delivery orders are signed by the company and each country through local agent in that country after submission of Performa invoice, final bank guarantee which represents 5% of the total amount of items awarded in favour of that country.

 g)    How Companies Take Part in the Group Purchasing Tender ?

 1)  Pharmaceutical Manufacturers:

    These companies are invited to take part in the pharmaceutical preparations tenders if they were registered in three out of the three countries with reference laboratories, namely Saudi Arabia, Kuwait   and the United Arab Emirates.

 2)  Hospital Supplies and Equipment Companies:

      Upon request of any new company to take part in the tenders then they must fulfill the Pre-qualification of Medical Disposable Companies and Factories form.

*     Assigning a local agent in Saudi Arabia.

*     Filling a registration form (provided by the Executive Board).

 In case of acceptance, the company representative is informed through local agent to pay registration fees amounting to 1000/- US dollars and the company’s name is then listed among the companies that are invited for the next tender.

 h)    Countries and Agencies Taking Part in the Group Purchasing Tenders

 Saudi Arabia, Kuwait, United Arab Emirates, Qatar, Bahrain, Oman Sultanate,   King Faisal Specialist Hospitals and Research Center Riyadh and Jeddah, King Saud University Hospital, Medical Services in the National Guard Riyadh and Jeddah,  Ministry of Interior – Medical Services,  K.K.E.S.H,  AND R.K.H,   Security Forces Hospital, R.C.M.C Yenbo And Jubail King Abdel Aziz Unv   in Saudi Arabia.

i)     Complementary Programmes for Group Purchasing

 1)  Bio-equivalence studies for items purchased through Group Purchasing tenders are performed upon the request of any of the member states. These studies have been extended to include other items not purchased through group purchasing.

2)  Drug formulary, which includes full data about drugs that are used in the Council States. 

3)  Central registration of drug companies and their products.  Work is currently underway to prepare the unified guidelines for registration in addition to the formulation of the Central Registration Committee.

4)  Information exchange among the member states through the Executive Board about what had been experienced, in any of the member states, of adverse reactions or side effects to any of the items.

I)  Increase purchasing volume through the group purchase.

II) Post marking surveillance system for the drug action.

Work Proposal Plan

 1.        To collect, tabulate and analyses all information about the group purchasing for the last the five years.

2.        To formalize the work procedure of the group purchasing according to available information and the practicable way of purchasing.

3.    To write the procedure of the qualification of the companies in the   Executive Board.

4.    Mechanism of preparing the unified guidelines of the technical specification and it's improvement. 

5.    Discussion and approval of the proposed plan for developing the work and starting the actual steps for implementation.

 Future of Group Purchasing 

 a)    To include larger number of other health sector  agencies to take part in Group Purchasing tenders.

b)    Continuous development of the process of Group Purchasing and its execution through the international communication network  (Internet).

 ·   A New tender for Orthopedic items has been raised and combined with the Rehabilitation tender.

·   Formulary of each of the following was prepared. 

·   The unified purchase group procedure.

·   The specification  of the Rehabilitation.

·   (Draft) of the specification of the hospital sundries.

·   (Draft) of the Lab. And Blood bank transfusion.