Chapter Four: Selection of

pharmaceuticals

By; Fitsum.T( [Link], MSc in PSCM)

Outline;
 Introduction to selection of pharmaceuticals
 Selection criteria's for pharmaceutical products
 Basic steps in pharmaceutical selections
 Selections of pharmaceuticals by the different
levels of analysis
 Contributions of supply chain personnel's in
pharmaceutical selections
 Sources of drug information
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Learning Objectives;
 At the end of this chapter, the students
will be able to;
 Define the term pharmaceuticals selection
 Identify selection criteria's for pharmaceutical
products
 Describe the basic steps in pharmaceutical
selections
 Identify the selections of pharmaceuticals by the

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 4.1. Introduction to selection of
pharmaceuticals
• Selection: is a process of deciding the type of
needed pharmaceutical products.
• It is the process of establishing and using a
limited list of essential medicines.
 Drug selection can lead to:
 Better supply
 More rational prescribing and dispensing
 Lower cost
 More rational patient use
Con’t…
• Selection answers the question "Which
products are needed to be used?" and it
involves:
 Reviewing prevalent health problems,
 Identifying the best clinical treatments,
 Choosing medicines, dosages, dosage forms,
and special packaging needs,

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Con’t…
 Evaluating the training and experience of
available personnel, funding, demographic
and environmental factors and genetics, &
 Deciding which medicines will be available
at each level of health cares.

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 Why do we be selective?
 Indications of some of the medicines are irrelevant
to the basic needs of the population,
 New medicines are nearly always more expensive
than existing medicines,
 Difficulty to up-date and compare alternatives, if
there is large number of drugs &
 Varieties of available drugs lead to irrational
medicines use.
 Advantage of selection
 For Suppliers;
 Easier procurement ,storage, and distribution
 Effective stocks
 Better quality assurance
 Easier dispensing
Con’t…
 For Prescribers;
 Training more focused and therefore easier to
prescribe
 More experience with those drugs
 No irrational alternative treatment available
 Focused on drug information
 Better recognition of adverse drug reaction

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Con’t…
 For Patient use;  For Cost;
 Focused education  Lower prices ,
efforts  More competition
 Reduce confusion
and increased
compliance to the
treatment
 Improve drug
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 4.2. Selection criteria's
 Selection criteria; essential medicines are selected
with due regard to disease prevalence, evidence on
efficacy and safety, and comparative cost-effectiveness.
 WHO drug selection criteria;
 Medicines with sound and adequate data on efficacy
and safety,
 Stable under the anticipated conditions of storage
(should be stable in adequate quality for longer period),

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Con’t…
 When two or more medicines appear to be similar
in the above respects, the choice between them
should be made on the basis of a careful
evaluation of their relative price and availability.
 In cost comparison; the cost of the total
treatment must be considered, where drugs are
not entirely similar, selection should be made on
the basis of a cost-effectiveness analysis.

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Con’t…
 Other factors, such as PK properties,
availability of facilities for storage or
manufacturers can affect selection.
 Drugs are selected by the international
nonproprietary name (INN) or generic name
without reference to brand names or specific
manufacturers.

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Other criteria's for drug selections
 Relevance to the pattern of prevalent diseases,
 Facilities status (diagnostic facilities, treatment
facilities, physical facilities for distribution),
 Training and experience of available personnel,
 Drug products with an adequate scientific data on
efficacy, safety, quality, bioavailability and
stability,

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Con’t…
 Possibilities of easy and prompt
procurement and local manufacture,
 Drug products with widest possible
coverage for the prevailing diseases,
 Drugs with affordable cost by considering
total cost of treatment not only the unit cost
of drug(s),
 Donor/supplier requirements,
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 Advantages of appropriate
selection of pharmaceuticals based
on essential drug list
1. Improved drug availability at lower costs
 Procuring fewer items in larger quantities results in
more price competition and economies of scale with
regard to quality assurance, procurement, storage
and distribution.

2. Improved quality of care

 Quality of care will be further improved, if medicine
selection is based on evidence-based treatment
guidelines.
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 4.3. Basic steps in
pharmaceuticals selection
 Establish drug selection committee,
 Determine the prevalent health problems and
patient characteristics,
 Decide which health problems may be treated
at the level of drug selection,
 Choose the drugs to be used for the health
problems,

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Con’t…
 Structure the lists,
 Introducing the list of drugs to health
professionals of institution and other
concerned bodies &
 Updating the list of drugs.

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4.4. Selections of pharmaceuticals
by the different levels of analysis
a)VEN analysis of pharmaceuticals;
• VEN (Vital, Essential and Non essential) analysis
is a system of setting priorities, in which
pharmaceuticals are classified according to their
health impact (importance) and decisiveness
(crucial) to the service.
• If funds are limited, VEN analysis is a method to
prioritize for pharmaceuticals to purchase.
VEN stands for:
V= Vital
 Potentially life saving, the best tool to curl the
morbidity of the area, & in the absence of
these pharmaceuticals, the patient may die or
may be hurt.
 Crucial to provide the basic health services,
without which it is impossible to deliver the
basic service in the specific area.
 It is mandatory to be available for 24 hours
Con’t…
 NB: There are several vital items in the inventory
of a health facilities, which could make the
difference between life and death.
• There can be serious functional dislocation of
patient care, when such items are not available
even for short period, adversely affecting the image
of the health facilities.
• Such items, should always be stocked in sufficient
quantity to ensure their constant availability.
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Con’t…
• This group of items should be controlled by
top management.

E= Essential
 Effective against less severe, but significant
illness.
 In the absence of this items, it may be
difficult to deliver to deliver the health
services; some how one may deliver the
services by using alternatives.
Con’t…
 NB: The shortage of such items, can be tolerated
for a short period. If these items are not
available for a few days or a week, functioning of
the health facilities can be adversely affected.
• These items should preferably be controlled by
top/middle level management.

N= None essential/Less essential

 Effective for minor illness.

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Con’t…
 But it may have high cost compared to its
therapeutic advantage.
 The service will not be stopped in the absence of this
items.
 NB: The shortage of these items will not adversely
affect the patient care or health facilities functioning,
even if the shortage is for a prolonged times.
• Desirable items should be controlled by middle/
lower level management.
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 When VEN analysis applied?
1. VEN classification should be done at regular
basis as medicine list is updated regularly
and public health priorities also change.

2. Drugs ordering and stock monitoring should

be directed at vital and essential drugs.

3. Safety stock should be higher for vital and

essential drugs.

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b)ABC analysis of pharmaceuticals;
 Used to identify the vital few from insignificant many.
 ABC needs reconciliation with VEN of the health
facility
 If once reconciled with the VEN of the facility and
proved to be consumed according to the standard
treatment guidelines, the vital few 20% in
pharmaceutical order will be the real 80%
consumption in value as follows.
 This analysis classify the pharmaceuticals with regard
to budget consumptions.
Con’t…

Category Percent of Percentage of

Budget pharmaceuticals
orders

“A” 70-80% 10-20%

Pharmaceuticals
“B” 15-20% 10-20%
Pharmaceuticals
“C” 5-10% 60-80%
Pharmaceuticals
Con’t…
A; (Highest annual budget usage) around 10 –
20% of the drugs would cost for 70 - 80 % of
the resources.

B; (Moderate annual budget usage) 10 - 20 %

of the drugs generally consume 15 - 20% of the
resources.

C; (Low annual budget usage) remaining 60 -

80% of drugs would consume just about 5 -
10%
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Con’t…
“A” Pharmaceuticals:
• High percentage of funds spent on large
volume of high cost items.
• Greatest potential for savings.
• Greatest potential for identifying expensive
pharmaceuticals that are over used.
“B” pharmaceuticals:
• Moderate cost and moderate number of
items; important items.
“C” Pharmaceuticals:
• Small amount of funds spent on the majority
of items.
 When ABC analysis applied?
 To measure the degree to which actual
consumption reflects public health needs and
morbidity when reconciled with VEN and
hence improve rational use of
pharmaceuticals.
 To provide information for choosing the most
cost effective alternatives and finding
opportunities for therapeutic substitution.
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c)FSN analysis of pharmaceuticals;
 Classification of products based on
movement ..i.e..
 F - Fast moving
 S - Slow moving
 N - Non moving
• By doing FSN analysis products can be classified
based on their movement from store for a
specified period.
• Items are classified based on consumption and
average stay in the inventory.
• Higher the stay of items in the store, the slower
would be the movement of the products.
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4.5. Contributions of supply chain
personnel in selection
 A supply chain officer oversees and optimizes the
flow of goods and services from suppliers to
customers, ensuring efficiency and cost-
effectiveness in the supply chain process.
 A supply chain employee's job description includes
tasks such as inventory management, demand
forecasting, coordinating logistics, analyzing data
for process improvement, and collaborating with
suppliers and internal teams.
Con’t…
 The supply chain personnel's having the following
roles in pharmaceutical selections;
 Assessing the prevalent disease conditions,
 Recognizing the best clinical treatments options,
 Choosing pharmaceuticals special conditions,
 Considering varieties of available
pharmaceuticals for different levels of health
facilities etc.

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 4.6. Sources of drug information
• Drug information sources categorized in to
three classes;

1. Primary sources: is the foundation on

which all other information is based.

E.g; Reports of clinical drug trails, case

reports, pharmacological research.

2. Secondary sources: function as a guide,

and review of the primary literature.
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Con’t…
E.g; Review articles, abstracts (international
pharmaceutical abstracts).

3. Tertiary / general sources: present

documented information or (condensed
format).

E.g; Formulary manuals, text books, general

referent books, drug bulletin, drug compendia.

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 Thank you!

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