2.1. The structure of CMS

CMS is and will remain the most important source for the supply of drugs and medical supplies to the public sector. It will act as the central procurement, storage and distribution organisation for the whole country. It will undergo substantial improvements in its management, staffing, housing and service.

The most important step will be for CMS to become an independent organisation with financial and managerial autonomy. The MOH will safeguard its substantial interest in a proper functioning public sector drug supply through its representation in the Board of the organisation. An external executive management team will be recruited to take up all responsibilities for the operations of CMS. This team will recruit senior and mid-level Tanzanian staff and train them to take over all responsibilities after a period of 5 years, when CMS is expected to be fully operational under its new structure.

2.2. Regional Medical Stores (RMS)

The distribution function of CMS will be improved through the establishing of Regional Medical Stores. The already existing Zonal Medical Stores will be converted into RMS and new stores will be constructed in each of the other regions.

Public health facilities then will have to procure their requirements from the RMS in their respective regions as soon as they are established. The introduction of RMS will be done gradually over a period of 4 - 5 years. The overall set-up of CMS will therefore be a central unit in Dar es Salaam and RMS in each region. The RMS fully belong to CMS and refer only to the management of CMS, not to the regional authorities.

The central unit (CMS) will undergo rehabilitation and upgrading of its existing storage facilities and some additional buildings will be constructed.

2.3. Functions of CMS

2.3.1. Procurement function

A procurement unit at CMS will be responsible for the procurement of all Pharmaceuticals, supplies and equipment for the public health sector. This unit will be strengthened and trained to undertake professional and efficient procurement of adequate supplies for the public sector within the financial framework, created by the Government for its own health institutions. The Pharmaceuticals and Supplies Unit (PSU) in the MOH will inform CMS about estimated annual drug requirements - within the limits of available financial resources provided by Government and Donors - to be procured by CMS. CMS will then procure drugs of good quality at the lowest possible price in good condition and in good time. A variety of tenders will be floated each year, following well designed tendering procedures.

A Medical Tender Board (MTB) will be appointed by the Minister of Health to control the procurement decisions of the CMS Procurement Unit. Clear procedures for the functioning of the MTB will be drawn up to make it an instrument supportive to efficient and timely procurement, also in cases of special requirements and emergency situations.

The procurement unit will consider preferential treatment of Tanzanian manufacturers within the limits, specified in the Masterplan, if their offers and performances are acceptable (major measurements will be technical quality, presentation, GMP and delivery schedules).

2.3.2. Distribution function

The storekeeping procedures at CMS will be greatly improved. As soon as the manual system of storekeeping is functioning again, the administration system for the stocks will be computerised. CMS will introduce specific pre-planned reception and distribution schedules to ensure timely and equally distribution of the procured items to the various RMS. The distribution of drugs and medical supplies becomes more decentralised with the introduction of the RMS. Health facilities will be in a position to obtain their requirements from the RMS in their regions. Stock-outs at the RMS will not be allowed and are not likely to occur if all the planned systems can be implemented.

The supply to health facilities will be on a cash-and-carry basis. Two systems will be developed, tried out in 2 regions and evaluated by CMS and relevant ministries, to ensure the availability of funds for the health facilities to purchase their requirements from RMS:

1. one pilot region will use a system, whereby the budgets are placed with CMS and thus follows accounting systems which are not unknown in the country,

2. the second pilot region will physically have its own budgets for financing its drugs and medical supplies, using newly developed budgeting, financing and accounting procedures.

Supplies in excess of available funds or any emergency supplies not anticipated in the budget will only be made available, if their cost is fully covered by funds, released or irrevocably committed by the Treasury. For CMS to sustain its operations and to maintain its ability to provide the required drugs and medical supplies, financial autonomy and financial integrity are crucial factors. CMS has to maintain an adequate revolving fund to finance its procurement and distribution activities.

2.3.3. Expansion of the role of CMS with Vertical Programme needs

The Masterplan foresees that CMS will become the major supply and distribution channel for all health and health related activities. It will have sufficient qualified staff and a conducive working environment. When the physical structures are in place, with well established Central and Regional Medical Stores and with an administration and storage under the centralised responsibility of the CMS management, CMS is in a position to incorporate all procurement and/or distribution functions for drugs and medical supplies for the public sector. This means that an integration is envisaged of the supplies from Vertical Programmes into the operations of CMS.

2.4. Essential Drug Kits (EDP)

Rural health facilities have since 1984 received their drugs through a monthly provision of EDP kits. Two types of kits were established and distributed through the Zonal Medical Stores.

Every year the composition of the kits for Health Centres and Dispensaries is reviewed and when necessary adjusted within the limits of available donor contributions.

The kits are uniform for the whole of Tanzania because of their fixed contents. They are procured and packed in Europe without any Tanzanian involvement. Thus different morbidity patterns and attendance rates are not taken account of. There have always been complaints about undersupply or oversupply of certain EDP drugs in the kits.

For local Tanzanian drug manufacturers to participate in the supply of drugs to rural health facilities, for CMS to develop its distribution management capacity and to introduce more flexible supply systems, which take into account variations in requirements between facilities, it has been decided to gradually replace the present kit system on a region by region basis by an inventory system. This means that the health facilities will be supplied with drugs, packed in kits (securely closed and sealed) at the RMS. The contents of these kits are based on requisitions prepared by the individual facilities and within the limits of their drug budgets. The RMS will be responsible for the delivery of these kits at the district level, from which the District Council - as is the case with the present EDP kits - will take over the responsibility for the distribution to the individual facilities.

This inventory system will be tried out in two of the first regions, where RMS are established. These regions will be the same as those mentioned before for trying out the two financial systems. If the experiences with the new ordering and supply system are positive, it will be gradually introduced in other regions where RMS are established. If not, the present kit system will have to continue, but then the kits will be assembled in Tanzania.