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Routine, efficient procurement for health programmes requires specialised knowledge of and expertise in essential medicines and consumables, and the markets where quality products can be obtained. This paper by USAID describes and provides analysis to programme managers, technical assistance providers, donors, and policymakers of the key elements of a procurement management system for health commodities. The authors examine the system from product selection through the bid management process to the receipt of goods, and the type of human and organisational capacities needed to carry out these functions. The paper also examines the range of available purchasing and financing strategies and options to support and strengthen health commodity supply chains. Examples from several countries are used to highlight current practices, recurring challenges, and the array of choices faced by public sector programmes and procurement agencies.

The paper shows how effective procurement is an important step in any health commodity logistics system. It is dependent on the routine availability of logistics data and the capacity to select products and to forecast and quantify needs. It also links manufacturers and suppliers to in-country supply chains and, ultimately, to clients. The authors highlight how the wide range of health commodities that governments must procure to address essential health services results in the use of multiple procurement options. The World Bank, other lending institutions, and donors have found that, in most cases, programme needs and interests, including lower prices, can be best realised through international competitive bidding. An ideal procurement model does not exist. The document argues that a combination of purchasing options, financing sources, and procurement management mechanisms is usually required. These are largely dependent on country circumstances.

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