Project Proposal (Foundations in Management)

Context -
The Project report is to present an innovation in the Indian Public Healthcare sector related
to procuring, storage and distribution of essential drugs in the state run hospitals and
polyclinics. This innovation started in the state of Tamil Nadu by the setting up of Tamil
Nadu Medical Services Corporation Ltd. (TNMSC) in July 1994 as a Government of Tamil
Nadu undertaking. The simple goal of this foundation is to make essential and quality drugs
and medical equipment available to all at an affordable cost i.e. to manage the supply chain
of essential drugs efficiently and effectively. After the year 2000, TNMSC became the role
model for other State Public Healthcare systems.

Model
TNMSC follows the basic characteristics of an autonomous procurement agency which
include
Independent Management for Supervision and Audit
Competent Pharmacy Managers
Sufficient Funding
Essential Drug List fundamentals
Implementation of Quality Assurance
Public Accountability

Following are some innovation highlights that TNMSC has implemented as a procurement
agency (Source -Tamil Nadu Medical Services Corporation A Critical Study on its Functioning During the Period 1995- 2012)
Procurement and timely availability of cost effective medicines.
Benefit to the poor sections of the society within their available budget.
Effective procedure to identify efficient suppliers.
Transparent procurement and distribution system that relies on effective use of IT
Enabled Services.
Maintaining a balance between cost effectiveness and quality of health care.
By removing intermediaries, control over the issue of counterfeit and inferior drugs.
Awareness amongst the public healthcare administration with regards to
unnecessary margins and profits for procuring medicines.
Total revamp of the procurement process making it more effective and efficient.
Publishing of small pocket size books like pass book, pharmacy handbook, EDL
leading to optimal use of medicines.

Impact
This innovation has drastically reduced the price of drugs and medicines in Tamil Nadu and
also made them readily available to the poor and needy. As per the National Sample Survey
Organizations (NSSO) sixtieth round survey in 2004, the average cost of drugs for inpatients
in the public hospitals in Tamil Nadu is INR 102 which is much lower than states like Haryana
(INR 3268), Himachal Pradesh (INR 2166) and Rajasthan (INR 3187). This significant
achievement has urged the Central Government to use the TNMSC model as a benchmark
and apply the same across other states for effective procurement and distribution of
essential drugs and medicines in the Public Health Sector.