Document number

ARM 16-Doc 11/14 Federal Ministry of Health 16th National Annual Review
Meeting Group Discussion

Auditable Pharmaceutical Transaction and Service

(APTS) Scaling up and making it functional , status ways
forward

Medical Service Directorate

Oct, 2014

CONTENTS

INTRODUCTION /BACKGROUND

PROJECT IMPLEMENTATION UPDATE

CHALLENGE
 Auditable Pharmaceutical Transaction and Service
(APTS)

Introduction and background

An important component of the health system building block is ensuring availability of

medicines and improving transparency and accountability in the practice of medicines
transactions and provision of pharmaceutical services. It is also very crucial to reduce wastage,
product diversion from facility and increase revenues of health facilities from sales of medicines.

The HSDP-IV has clearly outlined the improvement of maternal and child health and prevention
and control of major infectious problems such as tuberculosis, HIV/AIDS and malaria as priority
service areas. Besides, non-communicable disease conditions are becoming important public
health problems. Ensuring the continuous availability of safe, affordable pharmaceuticals
(medicines, vaccines, diagnostics, and other medical supplies) of assured quality is very
important to achieve the health system goals.

Therefore, the Federal Ministry of Health has prioritized the provision of essential hospital
specific medications as well as specialty drugs. Essential medicines are those that satisfy the
priority health-care needs of the population whereas specialty medicines are those drugs used to
treat disease of specialty cases. Examples include medicines used to treat cancer; ophthalmology
diseases, heart diseases, dermatology, and orthopedics, etc.

Essential and specialty medicines have to be selected with due consideration to disease
prevalence, consumption pattern, availability of laboratory and diagnostic facilities and
personnel to prescribe, dispense and manage medicine as well as financial resources availability
and comparative cost-effectiveness.
Proper pharmacy service provision involves a complex and interdependent process of selection,
procurement, storage, distribution and pharmaceutical transaction management with rational use
of medicines. So, ensuring availability of essential and specialty medicines at all times in
adequate amounts, in the appropriate dosage forms, with assured quality, and at a price that
individual and the community can afford requires sustained and collaborated effort

To this end, the Federal Ministry of Health in collaboration with RHBs and partners has
launched the APTS initiative. The initiative which is planned to be implemented nationally in all
hospitals will prioritize hospitals with high volumes and federal hospitals. Subsequently, all
public health facilities including health centers are required to implement the APTS initiative.
The initiative, although implemented at the facility level will be governed by a high level
executive committee chaired by HE the Minister of Health and a command post of technical
experts has been established under the Medical Services Directorate.

The initiative has three pronged approach where on one hand efforts are made to avail hospital
specific essential and specialty drugs, at the same time improving the national capacity for long
term quantification as well as creating accountability and transparency in pharmaceutical and
financial transactions.

Objective of the APTS initiative:

Ensuring the availability of hospital specific essential drugs by 100% and specialty drugs
by 70%
Introducing transparency, and accountability in the pharmaceutical services by
implementing APTS

Why APTS?

In addition to medicines supply chain management related problems, execution of

pharmaceutical transactions and services in our health facilities lack efficiency, transparency and
accountability in monitoring the financial, human resource, information and service delivery
system. These inefficiencies have highly compromised access to essential medicines and health
services.
Although estimating the exact magnitude of the problems related to health facilities pharmacy
services is difficult due to poor documentation practice and un-auditability of pharmacy
transactions; a recent baseline assessment done by FMOH in collaboration with relevant partners
to start APTS implementation revealed that:
Hospitals procurement refill rate from PFSA is only 45.2% (Number of Medicine Items
Requested to number of Medicine Items received from PFSA) while it is 38.1% from
private suppliers
Average counseling time was merely 43 second and exit interview on patient knowledge
measured by assessing client knowledge of prescribed medicine concerning dose, route
of administration, frequency and duration showed that only 50.5% clients properly know
all parameters. Other studies have also shown problems related to long stock out of
essential drugs, drug diversions, drug wastages, theft and accumulation of expired drugs.
It is assumed that pharmaceutical management and supply system problems originate
from the following root causes:-
o Poor pharmacy infrastructure, pharmaceutical management and chaotic work
flow
o Improper evaluation of level of effort and human resource deployment
o Lack of efficient utilization of medicines budgets
o Poor evidence based selection and quantification
o Non transparent transactions and traditional irrational dispensing practice
o Absence of specific legal instruments (to enforce and give mandate for managers
to execute duties)

What is APTS?

APTS is a service delivery arrangement that enables to establish a transparent and accountable
medicines transaction and service provision system at health facilities that can be audited at any
time.
APTS has five pillars: Efficient budget utilization, transparent and accountable transactions,
reliable information, effective performance measurement and workforce deployment and
improved customer satisfactions.
Brief description of APTS Pillars:
1. Efficient Budget utilization: requires proper performance of the following methodologies
a. VEN/ABC reconciliation: needs preparation of facility specific drug list prioritized by
VEN as lifesaving-Vital (V), essential (E) and nonessential (N). Then, classification
of the 70%-80% budget consuming medicines (class A), 15%-20% budget consuming
(class B) and 5%-10% budget consuming medicines as class C. Finally, ABC/VEN
matrix reconciliation analysis to identify the most needed medicines used to treat 20
top diseases in relation to budget consumption (80% of budget) to address priority
health problems of the catchment population by the limited budget and minimize
irrelevant medicines which are vulnerable to expiry.
b. Establishing effective medicines sales management system: taking physical
inventory, establishing beginning stock and recording received stocks, estimating
cost, price setting, summarizing the daily sales medicines as cash, credit and free and
auditing by reconciling the calculated value with the physical count. This contributes
to efficient utilizations of medicines budget.
c. Bin management:in all dispensaries to ensure accountability of each dispenser,
accessibility of medicines, identifying of the slow moving items and increase work
efficiency requires proper bin management.
d. Various analysis: Undertaking consumption to stock, stock turnover and stock status
analysis to identify the usable stocks from obsolete stocks and to get reliable financial
and product information, to use the stock effectively and increase sales. This method
 helps to early identify unwanted medicines from the most valuable medicines that are
used to treat key disease morbidity of the catchment population.
2. Transparent and accountable Transactions: to bring transparency and accountability, the
following tools and methods are applied.
a. Tools: - receiving and issuing vouchers, sales tickets, registers, daily summary and
monthly reporting forms are customized and new ones designed in a way that can
easily ensure transparency of transaction,
b. Legal framework: implement specific legal framework that is related to pharmacy
service to enforce accountability and equip managers the power to execute their
duties.
c. Coding of medicines: is a system which enables one to identify medicines using
unique identifiers (codes) so it would be easy for anyone to identify medicines and
audit, make transactions and services transparent.
3. Pharmacy Organization: Dispensaries are organized as Outpatient, Inpatient and Emergency
Pharmacies to promote one-stop shopping service and effective medicines sales and patient
convenience. In a dispensary, there is prescription evaluator, biller, cashier & medicines use
counselor; all in a sequence.
4. Reliable information: generate timely, reliable and consistent information on products,
finance and services using daily summary and monthly reports formats.
5. Patient satisfaction: is the combination of the aforementioned activities.

Benefits of APTS implementation:

APTS institutes pharmaceutical good governance at health facilities by ensuring
transparency and accountability in the way medicines are managed at hospitals and health
centers.
Enhances efficiency and effectiveness in the delivery of pharmacy services by improving
the overall performance of the pharmacy unit at health facilities
By so doing, it contributes to efficient resource utilization, improved client satisfaction
and better health outcome
Strategies for Interventions:
1. Improving medicine supply
a. Bottom up and top down evidence-based medicine quantification and categorization.
b. Procurement of medicine through PFSA and other options
c. Medicine Distributions to facilities
d. Performance monitoring and evaluation
2. APTS system implementation
a. Developing and supporting enactment of policy and legal framework related to
pharmaceutical transaction and service.
b. Customizing and printing of pharmaceutical financial vouchers
c. Assisting workflow arrangement and renovation of premises
d. Assisting proper workload analysis and human resource deployment
e. Capacity building and site level practical support
f. Performance monitoring through review meeting, site level supportive supervision,
KPI/HMIS etc.

Project implementation update

Medicine supply:

Estimation of six month medicine consumption for all hospitals included in the project with close
consultation of service providers was completed. The current medicine quantification had 967
medicine items while the previous RDF medicine procurement practice only had less than 400
items.

Accordingly, medicines available in PFSA stores are being distributed to hospitals (Jimma,
Felegehiwot, Ghandi, Yekatit 12 hospitals took the medicines) while the distribution is going on
for other hospitals. Simultaneously, procurement of medicines not available in PFSA stores have
been started with due attention to specialty and hospital specific essential drugs.

As the quality of medicine quantification highly determines efficient budget utilization effort and
degree of medicine availability and medicine wastage; the ongoing three year medicine
quantification exercise for those hospitals included in the project had engagement of all
governmental and non-governmental partners working on medicine supply issues with special
consultation with physicians and other healthcare providers of health facilities.

APTS progress update for Regional Hospitals:-

Amhara, Dire Dawa and the Federal Ministry of Health (for Federal hospitals) have prepared and
approved legislations for their respective hospitals. Similarly, they also customized and printed
financial vouchers to be used while implementing APTS. Regional health bureaus are also
assisting their hospitals in workload analysis and additional human resource deployment process.

Other regions like Addis Ababa, Oromia, SNNPR, Harari and Tigray drafted legal framework
and customized financial vouchers to start APTS implementation.

The prerequisites for APTS implementation start up like workflow adjustment, human resource
deployment and other materials arrangement are expected to be fulfilled by hospital management
themselves in collaboration with FMOH and regional health bureaus if needed. So far, by
fulfilling the above requirements, 31 hospitals have started APTS nationally.(See Annex 1)

Among the recently included federal hospitals, hospitals that have fulfilled the prerequisite
requirements are undergoing trainings to start APTS implementation.

Examples of APTS implementing hospitals:-

1. DebreMarkos Hospital
a. The hospital has renovated the pharmacy premises so that it would be very convenient for
patients and improve quality services

b. The hospital is able to identify the sales of medicines on cash, on credit and for free.

c. Revenue from medicines sales increased by 35% within two quarters (52,968.88 to 71,894.48)

d. Every month, the hospital follows affordability by checking whether the medicines supplied
are affordable for patients or not by calculating price per patient and compares to the salary of
the lowest government employee.

e. The hospital is able to measure performance of each pharmacy professional, the number of
patients served and determine the number of human power needed to serve patients
f. The hospital follows whether there is poly pharmacy (number of drugs per prescription)
compared to world health organization.

g. By doing stock status analysis and performing consecutive 6 years of ABC and VEN
reconciliation analysis, the hospital is able to identify 45 medicines with a total value of birr
659,773.61 which were unusable and liable for expiry. By taking these prompt actions, the
hospital saved such amount from expiry.

h. Medicines expiry was 4.6% compared to stock available for sale. After few months of APTS
implementation in 2010, the expiry rate of medicines progressively declined to less than 2%
within a year and after 3 years -this time rate of expiry becomes less than 0.27%

2. FelegeHiwot Referral Hospital

a. The hospital was able to renovate the pharmacy premises so that it would be very convenient
for patients and improve quality services

b.The hospital could easily identify the sales of medicines on cash, on credit and for free as well
as the revenue from medicines sales.

c.Revenue from sales of medicines increased from by 26.7% during few years of APTS
implementation.

d. Every month, the hospital monitors affordability by checking whether the medicines
supplied are affordable for patients or not by calculating price per patient and compare to the
salary of the lowest government employee.

e. The hospital is able to measure performance of each pharmacy professionals, the number
of patients served and determine the number of human power needed to serve patients

f. The hospital monitors whether there is poly pharmacy (number of drugs per prescription)
compared to world health organization recommendations.

g. By doing stock status analysis and performing ABC and VEN analysis, the hospital saved
medicines with a total value of birr 155,699.65 which were at risk of expiry. By doing so, the
rate of medicines expiry which was 10 % of the stock available for sale before implementation of
APTS, comes down to less than 2% after implementation of APTS.
3. Axum St Mary Hospital
a.The hospital was able to renovate the pharmacy premises so that it would be very convenient
for patients and improve quality services

b.Every month, the hospital monitors affordability by checking whether the medicines supplied
are affordable for patients or not by calculating price per patient and compare against the salary
of the lowest government employee.

c.The hospital is able to measure performance of each pharmacy professionals, the number of
patients served and determine the number of human power needed to serve patients

d.The hospital monitors whether there is poly pharmacy (number of drugs per prescription)
compared to world health organization recommendation.

4. Arba Minch Hospital

a. The hospital was able to renovate the pharmacy premises so that it would be very convenient
for patients and improve quality services

b. The hospital could easily identify the sales of medicines on cash, on credit and for free as well
as the revenue from medicines sales. Revenue increased by 32% within few months.

c. Every month, the hospital monitors affordability by checking whether the medicines supplied
are affordable for patients or not by calculating price per patient against the salary of the lowest
government employee.

d. The hospital is able to measure performance of each pharmacy professionals, the number of
patients served and determine the number of human power needed to serve patients

e. The hospital monitors whether there is poly pharmacy (number of drugs per prescription)
compared to world health organization recommendations.

f. Medicines expiry was 24% compared to stock available for sale. After few months of APTS
implementation, the expiry rate of medicines comes down to less than 2%.
Challenges:-
Shortage of medicines and supplies
Some professionals resist to the change due to various reasons
Delay in some regions in implementing the APTS
Delay in automating the system
Additional Human resource requirements forcing regions to revise BPR
Unsuitable hospitals design and infrsastructure for APTS