3.2.

Estimating drug
requirements
(Quantification)
by: Yohannes Sh.

11/23/2022 1
 Objectives
After completing this session, students will be able to:
– Define drug quantification
– Describe the common indicators of poor quantification
– Discuss methods of drug quantification
– list the advantage and disadvantages of each method

11/23/2022 2
 Drug Supply Management Cycle
Selection &
quantification

Use Management Procurement

Support

Distribution

Policy and Legal Framework

11/23/2022 3
 INTRODUCTION
• Drug quantification is the process of determining the amount of
selected drug products required.

• The objective of quantification is to determine the right amount of

drug products required.

• Carrying out the routine activities, quantification is the responsibility

of the pharmacy section of an institution.

 However, certain activities, such as preparation of standard

treatment schedules, budget reconciliation etc, which requires the
agreement of other heath professionals, need to be done by DTC.

11/23/2022 4
 INTRODUCTION………..
Importance of drug quantification
To prepare and justify a drug budget.

To plan for new & expanding program.

To optimize drug budgets & cost effective treatment approaches.

To calculate emergent needs for disaster relief & epidemics,

To resupply an existing supply network that has become

depleted of products

To compare current drug consumption with public health

priorities & usage in other health systems.

To prevent shortage, surpluses, inequity of supplies

11/23/2022 5
 INTRODUCTION………..
 Poor quantification problems
Frequent shortage of drugs

Excess stock due to overestimation

 Inappropriate and ineffective prescribing

Prescribers shorten course of treatments to stretch
the inefficient supply ( in extreme cases to the point
of ineffectiveness)

Substitute with inappropriate alternative drugs

11/23/2022 6
 Factors which requires special consideration in
quantification of drugs
Catchment Population of the Health institution

Disease prevalence/burden of the community, Seasonal variation

Delivery (Lead time: Time lag b/n placing orders & receiving) –
Poor road/Vehicle, Work load of Procurement officers,
Unavailability of needed drugs.

Lead-time is the time period between the date the drug

requisition is initiated and the date the drugs
purchased/procured are received.

Staff involved in this activity.

11/23/2022 7
 Methods of quantification

There are four methods of quantification

i. Consumption method

ii. Morbidity method

iii. Adjusted consumption method

iv. Service-Level projection of budget

requirements

11/23/2022 8
 Methods of quantification………
There is no single method best available

Each method has its own advant. and disadv.

The method used should be chosen according to:

the purpose for which the results are to be used.

actual and potential availability of data.

the organization of the drug supply system

11/23/2022 9
Key terms related to Inventory Control system

• Maximum stock level (Max) = The level of stock above which

inventory levels should not rise under normal conditions.

• Minimum stock level (Min) = The level of stock at which

actions to replenish inventory should occur under normal
circumstances.

• Order Interval (Review Period) = The routine interval of time

between assessments of stock levels to determine if an order
should be placed.
 Key terms related…
• Rate of Consumption = The average quantity of stock
dispensed to users during a particular time period.

• Emergency Order Point = The level of stock that

triggers an emergency order, regardless of the timing
within the review period. It is always lower than the min.

• Safety stock is the amount of stock that is kept in reserve

in case an item is unavailable from the supplier or for a
sudden increase in demand.
 I. Consumption method
 A list is prepared of all drugs eligible for procurement

 Uses records of past consumption of individual drugs (adjusted for

stock outs and projected changes in drug utilization)

Consumption method is useful when :

 Historical data on drug consumption exists. (Accurate consumption

data are available or easily obtainable)

 Drug supply at facility has been consistent (stock out for not more
than 3 months).

 Stock management is reasonably good.

 There is low level of wastage and loss through expiry, damage and
theft.
11/23/2022 12
 Consumption method…
Sources of information

Stock records and reports from regional or district

warehouses

Stock records and distribution reports from a central

distribution point

Suppliers invoice

Dispensing records from health facilities

11/23/2022 13
 Steps in quantification using consumption method
Step 1. Prepare a List of Drugs to be Quantified

 Should be sorted into the order that will facilitate data

collection.

Step 2. Determine the period of time to be reviewed for

consumption

simplest and practical one is 12 months-if a full year

useful data are available.

 Ensures the morbidity variations of all seasons.

Improves the reliability of the data

11/23/2022 14
Step 3. Enter consumption data for each drug and determine:

– the total quantity used during the review period in basic

units (BUs)

– the number of days in the review period in which the drug

was out of stock

– the lead time for the last procurement (or Average from last
several procurements)

11/23/2022 15
Step 4. Calculate the Adjusted average monthly consumption

CA = CT/RM – (Dos/30.5) (preferred). . .. . . . . . . . . .(1)

CA = CT ÷ (Rm – Mos ) (alternative) Where:

CA = Average monthly consumption, adjusted for stock outs

CT = Total consumption during the review period, in basic units

RM = Review period in month

Dos = Number of days an item was out of stock during the review
period

• Mos = Estimated number of months an item was out of stock

during the review period
11/23/2022 16
Step 5. Calculate projected average monthly consumption
for expected changes in consumption pattern.

• if use is expected to increase for eg. by 5 percent in the

coming year, adjusting the average monthly consumption by
5 percent would be reasonable.
• .

11/23/2022 17
Some changes in consumption may be independent of trends in
overall patient use.

• One example is predictable seasonal variation in the consumption of

cough and cold remedies.

• If a new formulary medicine is known to be replacing an older

medicine in the formulary, the estimate for the older medicine should
be reduced.

• If an initiative is being launched to alter prescribing patterns,

• When a turnover occurs in prescribing staff members,

 If such changes can be anticipated, adjusting the forecasts would be

wise to avoid spending resources on medicines that will not be as
popular as in the past
11/23/2022 18
 Step 6. Calculate the safety(buffer) stock needed for each
drug

SS = CA x LT . . . . . . . . . . (2)

Where:
SS = Safety Stock

CA = Average monthly consumption

LT = Average Lead Time

Lead-time is the time period between the date the drug requisition is
initiated and the date the drugs purchased/procured are received.

11/23/2022 19
 Step 7. Calculate the quantity of each drug required in
the next procurement period.

Q0=CA x (LT + PP) + SS–(Si + So) . . .. . . .. .(3)

Where:
Q0=Quantity to order before adjustment for losses or program
change

PP = Procurement period

Si = Stock now in inventory, in BU

S0 = Stock now on order, in BU

11/23/2022 20
Step 8. Adjust for Losses

Step 9. Compile Decentralized Quantification (if applicable)

Step 10. Estimate Costs for Each Drug and Total Costs

• In order to estimate procurement costs, multiply the quantities

estimated for each medicine by the most accurate prediction of
the expected next purchase price.

Step 11. Compare Total costs with Budget and Make Adjustments:
either obtaining more funds or reduce the No/Qty of drugs using
VEN and/or ABC Analysis.

11/23/2022 21
Example:
• In a certain hospital, the total consumption of ampicillin 250 mg
capsule for six months review period was 89,000 capsules. The
drug was out of stock for thirty four days in the six months
period. The utilization of ampicillin 250 mg capsule is expected to
change by 5% in the coming year. Moreover a 10% losses per
year is expected, calculate the total purchase quantity. the lead
time is three months and the procurement period is 6 months. The
hospital has in the store 81,000 ampicillin capsules and has
already ordered 58,000 ampicillin capsules. Calculate the
quantity of ampicillin to be ordered.
11/23/2022 22
Answer:
• CA = CT/RM – (Dos/30.5)

• CA = 89,000 ÷ [6 – (34 ÷ 30.5)]=89,000 ÷ 4.8852= 18,218.

• CA = 89,000 ÷ (6 – 1) = 89,000 ÷ 5 = 17,800

• PCA=O.O5X 18,218=911

If use is expected to increase by 5% in the coming year, CA would

raise the expected monthly need by 911 capsules, bringing the total to
19,129 capsules.

• SS = CA x LT= 19,129 × 3months = 57,387.

• Q0=CA x (LT + PP) + SS–(Si + So)

• 11/23/2022
QO = 19,129 × (3 + 6) + 57,387 –(81,000 + 58,000) = 90,548 23
• 10% losses->10% X90,548=9055

• 90,548 + 9055

• Total purchase quantity=99,603, or 100 bottles of 1,000

capsules.

100 bottles of 1000 capsules

11/23/2022 24
 Advantages of Consumption Method
Does not require detailed morbidity data or standard
treatment protocol.

Requires less detailed calculations.

Useful for facilities in which their health problems are

numerous and drug treatments are complex.

Identifies stock management problems and encourages

improvements.

Reliable if consumption is well-recorded and stable.

11/23/2022 25
 Disadvantages of Consumption method
Does not encourage good morbidity recording

Unreliable if there had been long stock-outs (over 3 months) and

high drug wastage or losses.

Doesn’t address appropriateness & may not correspond to priorities

and needs

Does not provide a detailed and systematic basis for reviewing

drug use by improving prescribing patterns. (May perpetuate
irrational Drug use)

May be difficult to obtain reliable drug consumption data

especially in new or rapidly changing services
11/23/2022 26
 II. Morbidity method
Estimates the need for specific drugs based on:

 The expected number of attendances in HFs,

 The incidence of common diseases, and

 Standard treatment patterns for diseases considered.

 This method uses morbidity data and average

standard treatment schedule to calculate the
amounts of drug products required.

11/23/2022 27
 Morbidity method…
 Morbidity method is more appropriate when:

 Available consumption data are incomplete or unreliable

 Prescribing patterns are not cost-effective

 The budget is unlikely to be sufficient to meet estimated

requirements

 The health facility or services concerned are expanding

rapidly

 Quality and reliability of morbidity data are very important.

 If data are incomplete, then the drug estimate may be

dangerously inadequate or inappropriate.
11/23/2022 28
Steps in quantification using morbidity method:
Estimating quantities of drugs required using morbidity
method includes the following steps:

Step 1. Specify the list of Problems:

List the major specific health problems encountered.

If an existing information system reports on diseases,

those disease codes should be used; if no coding system
exists, the International Classification of Diseases (ICD)
system can be used.

Step 2. Establish the list of medicines to be quantified

11/23/2022 29
 Steps in quantification using morbidity method…
Step 3: Prepare average standard treatment schedules
• Average standard treatment schedule is the average quantity
of drug per course of treatment.

• Average treatment schedules are valid if they represent the

average treatment which shall actually be used clinically.

• The average treatment schedule to be prepared should

include the following information:

11/23/2022 30
Steps in quantification using morbidity method….
 The name of the health problem and severity of the disease

 The patient’s age, sex

 The generic name, strength, dosage form of each drug to be

used for the treatment

 The average dose, number of doses per day, number of

days these doses are to be given(duration).

 The total average quantity of each drug used for a standard

course of treatment.

11/23/2022 31
 Steps in quantifn using morbidity method…..
 Establish standard or average treatments.

QE = DBU x ND x LD

Where:

QE = quantity needed for each treatment episode in

each standard treatment regimen

DBU = Basic Unit per Dose

ND = Number of doses per Day

LD = Length of Treatment per Dose

• Metronidazole 250 mg capsule adult dose for Amoebiasis.

3 caps x 3 x 5 =45 caps

11/23/2022 32
 Steps in quantifn using morbidity method…..
Amount per
No. of doses No. of
course of
Diagnosis Drug Dose per day days
treatment

Metronidazole
Amoebiasi 250 mg capsule
s

 Adult Metronidazole
3 caps 3 5 45 caps
250 mg capsule

Or

 Child Metronidazole
1 cap Or 2 3 6 caps Or
125 mg/5 ml
10 ml
suspension
11/23/2022 60 ml 33
 Steps in quantifn using morbidity method…..

Step 4. Calculate (Estimate) the number of treatment

episodes for each health problem

ET = NC x F

Where:

ET= treatment episodes*

NC = expected total number of episodes

F = frequency of health problems

*A treatment episode is a patient contact for which a standard course of drug treatment is
required.
11/23/2022 34
 Steps in quantifn using morbidity method…..
• Step 5. calculate the quantity of medicine needed for each
health problem.
a) Calculate the total quantity of each drug for each health problem

QT = ET x QE x PT

Where:

• QT = Quantity of drugs needed

• ET = Number of treatment episodes

• QE = Quantity of drugs for each treatment episode, BU

• PT = Percentage of cases that are treated with that specific

11/23/2022 35
regimen
 Steps in quantifn using morbidity method…..

Example:

If the number of treatment episodes for amebiasis treated

annually by a given health center was 1000, of which
60% were adults and all cases were treated with
metronidazole oral preparation,

then, calculate the quantity of metronidazole that can be

quantified?
11/23/2022 36
 Steps in quantifn using morbidity method…..
Diagnosis No. of treatment Quantity per average Total quantity of
episodes standard treatment the drug

Amebiasis
Adults 0.6x1000= 600 Metronidazole 250 45x600 =27000
mg capsule 3x3x5 = capsules
45 capsules

Children 0.4x1000 = 400 Metronidazole 250 6x400 = 2400

mg capsule 1x2x3 = capsules
6 capsules

Total 29400 capsules

11/23/2022 37
 Steps in quantifn using morbidity method…..
b) Calculate the total quantity of each drug

• When a drug is indicated for the treatment of more

than one disease,
– add the quantities required for each one to obtain the
total quantity of the drug.

11/23/2022 38
 Steps in quantifn using morbidity method…..
• Step 6. combine the estimates for each medicine from the
various health interventions into a master procurement list.

• Step 7. Adjust quantities to cover other health problems.

• Step 8. Adjust for filling the pipeline and current stock out
position.

If applicable make adjustments for stock on hand, stock

on order, and lead time

11/23/2022 39
 Steps in quantifn using morbidity method…..

Step 9. Adjust quantities for expected losses

Step 10. Estimate costs for each drug and total

costs.

Step 11. Compare total costs with budget and make

adjustments.

11/23/2022 40
 III. Steps in Quantification using Adjusted
Consumption Method.

• When Neither Consumption nor morbidity Methods are

feasible, the best option is extrapolating from consumption
data from another region or health system.

• Uses known data on disease incidence, drug consumption

or utilization, and/or expenditures from one system
‘standard’ to estimate the drug needs in a similar or
expanded system ‘target’.

11/23/2022 41
 Adjusted Consumption Method…..

• Can be population based,

– defining drug use per 1,000 population or

• service based,

– defining drug use per specified patient

case/inpatient admission or rural health center.

Both methods can be used to quantify different

products at the same time.

11/23/2022 42
 Adjusted Consumption Method…...
Steps in the Quantification:

Step 1. Select the standard system for comparison and

extrapolation.

The standard facilities should:

Closely resemble the region or country for which the

estimate is made in terms of geography and climate,
morbidity patterns, prescribing practices and drug supply
status.

Have an adequate and uninterrupted drug supply, fairly

rational prescribing practices, complete & accurate records43.
11/23/2022
 Adjusted Consumption Method…...
Step 2. Develop the Drug List

Step 3. Establish the time period to be covered in the review

Step 4. Review records from the standard system to compile

contact or population data.

Step 5. Establish denominator for extrapolation:

the denominator used to extrapolate consumption could

either be thousands of patient contacts or thousands of
inhabitants in the region

11/23/2022 44
 Adjusted Consumption Method…...
• Step 6. Determine the consumption rate in the standard
system: the adjusted annual consumption divided by either
number of thousands of contacts or inhabitants

• Step7. Extrapolate the standard system’s consumption rate

(SCR) to the target system:

SCR (for each drug) x estimated number of thousands of

contacts or inhabitants for the target facility.

• Step 8. Adjust for expected losses

• Step 9. Estimate costs for each drug and total costs and make
adjustment against the available budget.
11/23/2022 45
 IV. Service–Level Projection of Budget
Requirements
• Used to estimate financial requirements for drug
procurement based on costs per patient treated.

• Uses the average drug procurement cost per attendance or

bed-day in different types of health facilities in a standard
system to project drug costs in a similar types of facilities
in target systems.

• This method does not estimate quantities of individual

drugs.
11/23/2022 46
 Service–Level Projection……….
Steps in quantification:

– Establish the categories of facilities and determine the number in

each category (Standard).

– Determine the patient contact denominator for each type of

facility and compile or estimate the average number of patient
contacts of each type at each category of facility.

– Calculate the average cost per contact: average cost per

attendance and/ or bed day could be derived by dividing the total
drug purchases for the facility or facilities in class by the
attendance or bed days.

– Calculate the total projected drug costs

11/23/2022 47
 Comparison of the different
Quantification Methods:

11/23/2022 48
Method Uses Essential Date Limitations
Consumption  First choice for procurement and Reliable inventory records, Must have accurate consumption
future consumption forecasts, given Records of supplier lead time, data
reliable data Projected drug costs  can perpetuate irrational use

Morbidity Estimating need in new programs or Data on population and patient attendance; Morbidity data not available for
disaster assistance,  Actual or projected incidence of health all diseases;
 Comparing use with theoretical problems;  Standard treatments may not
needs, Standard treatment; really be used
Developing and justifying budgets  Projected drug costs

Adjusted Procurement forecasting when other Comparison area or system with good per Questionable comparability of
consumption methods unreliable; capita data on consumption, patient patient populations, morbidity and
 comparing use with other supply attendance, service levels and morbidity; treatment practies .
system Number of local health facilities by
category;
Estimation of local user population broken
down by age

Service Level Estimating budget needs ( eg when the Utilization by service levels and facility Variable facility use, attendance,
projection of health facility is new hence there is no type; treatment patterns, supply system
budget reliable drug consumption and  Average drug cost per attendance efficiency
requirements
11/23/2022 morbidity data) 49
Monitoring and evaluation of the methods of quantification

• Each method of quantification should be monitored and

evaluated against its objectives using appropriate indicators.

• Sample indicators:

Use of appropriate method of quantification

Availability of overstock of drugs

Occurrence of shortage of drugs

Availability of consumption/or morbidity data

• On the basis of the results of monitoring and evaluation, the

necessary adjustments should be made on time
11/23/2022 50
 Estimating costs for required drug quantities
(Reading Assignment)

11/23/2022 51
 3.2 Techniques for analyzing costs

11/23/2022 52
 3..2.1 VEN Analysis
 The VEN system categorizes pharmaceuticals by their relative public
health value.

 It is useful in setting purchasing priorities, determining safety stock

levels and pharmaceutical sales prices, and directing staff activities.

 VEN analysis is a system of setting priorities,

 Method of classifying pharmaceuticals by their clinical importance/ their

health impact into Vital (V), Essential (E) or Less essential (N)

 A method used to prioritize medicines for purchase and stock.

 Unique to the disease patterns of a specific area

 Important in ABC Analysis of pharmaceutical consumption

11/23/2022 53
 VEN Analysis………………...
• The VEN system sets priorities for selection, procurement,
and use according to the potential health impact of individual
medicines.

• VEN assigns each pharmaceutical product on the formulary

or essential medicines list to one of the following three
categories—

11/23/2022 54
Criteria for Vitals (V):
• Potentially life-saving - without which it is impossible to alive the
patient /patient may die/disabled due to lack of this drug/ reagent

• Crucial to provide basic health services - without which it is

impossible to deliver the service

• It is mandatory to be available 24 hours of a day, 7 days of a week

and 12 months of a year

• Are top priority pharmaceuticals (to be adjusted last and least in

reconciling requirement with available budget/fund during
purchase).

11/23/2022 55
Criteria for Essentials (E)
• Effective against less severe but significant illness, not vital; it is
between Vital and Less Essential.

• Life-saving, without which patient may be in difficulty/ problem /

may be substituted.

• Essential to the service without which it is difficult to give

service.

• It is mandatory at least once a day, or at least once in a week, or at

least once in a month or once in a quarter of the year, but not as
highly mandatory as vitals.

• 11/23/2022
2nd priority pharmaceuticals. 56
Criteria for Less Essentials (N)
 Effective for minor illnesses and have low therapeutic advantage.

 Important to patients; however, patients will not die in the absence

of these pharmaceuticals

 Necessary to give the health service; however , health service

delivery will not stop by absence of these pharmaceuticals

 Last priority pharmaceuticals (to be adjusted 1st and most in

reconciling requirement and budget/fund).

11/23/2022 57
Applications of VEN analysis

• The major uses of VEN analysis are assigning

priorities for medicine selection, procurement,
and use in a supply system; guiding inventory
management activities; and determining
appropriate medicine prices.

11/23/2022 58
 VEN Criteria summary
Characteristic of Drug or Target Condition (V) Vital (E) Essential (N) Nonessential

Occurrence of target Condition

Persons affected (% of population) Over 5% 1 – 5% Less than 1%

Persons treated (number per day at Over 5% 1 – 5% Less than 1%

Average health center)
Severity of target condition
Life-threatening Yes Occasionally Rarely
Disabling Yes Occasionally Rarely
Therapeutic effect of drug
Prevents serious disease Yes No No

Cures serious disease Yes Yes No

Treats minor, self-limited symptoms No Possibly Yes
and conditions

11/23/2022 59
 Example
Drugs V E N Remark

Vitamin E capsules X Not life saving and not crucial

Amoxicillin capsules X Life saving and may not be crucial

can be substituted

Co-trimoxazole 480mg X Life saving (Co-trimoxazole

tablet prophylaxis service will be
interrupted)

11/23/2022 60
 Conducting VEN Analysis
Purpose: for proper budget utilization
 Step 1. Classify all medicine on the facilities medicines list as V, E, or N.

 Step 2. Analyze the “N” items.

Where possible, reduce quantities to purchase or eliminate them.

 Step 3. Identify and limit therapeutic duplications.

 If the list of V and E items (or V items in a VN system) contains more

than one medicine with a similar therapeutic effect, some tendering by
therapeutic subcategory may be possible.

 If certain medicines are usually purchased in more than one strength, it

may be possible to limit such duplication and reduce total quantities for
the medicines in question.
11/23/2022 61
Conducting VEN Analysis………………

 Step 4. Reconsider proposed purchase

quantities.
 Step 5. Find additional fund if needed or
possible.

11/23/2022 62
VEN Applications for DTC
 Identifies high-priority medicines for
procurement

 Utilize VEN category in interpreting ABC

analysis data

 Identifies low-priority medicines that the DTC

should analyze carefully for deletion from the
drug purchase order.

11/23/2022  Efficient budget utilization 63

 3.2.2 ABC Analysis
 Method for determining and comparing
pharmaceutical consumption and costs within the
health facility.

 is a powerful tool by which items are compared

according to their annual usage, allowing the planner
to prioritize the management of class A items (10-
20% of items that account for 70-80% of funds spent)
in selection and procurement decisions.
11/23/2022 64
 ABC Analysis……….
 “Separating the vital few from the trivial many”-
Pareto principle.

 Tool for identifying many medicine use problems.

 Utilizes computer and appropriate software to run

analysis.

11/23/2022 65
ABC Analysis: A, B, and C Medicines……

Percentage of Percentage of
Category Budget Medicines Ordered

A medicines 70–80% 10–20%

B medicines 15–20% 10–20%

C medicines 5–10% 60–80%

11/23/2022 66
 ABC Analysis: A, B, and C Medicines……….
 A medicines—High percentage of funds spent on
large-volume or high-cost items.
 Greatest potential for savings.
 Greatest potential for identifying expensive medicines
that are overused.

 B medicines—Moderate cost and moderate number

of items; important items.

 C medicines—Small amount of funds spent on the

majority of the inventory.
11/23/2022 67
Sources of Data for ABC Analysis

 Purchase records (periodical, annual)

- Model 19, purchase invoice, stock card, PFSA
sales invoice and bin card.

 Consumption records (periodical, annual)

- Model 22, stock card, bin card, dispensing
records.

11/23/2022 68
11/23/2022 69
 Comparison table for each class of drugs
S/N Class “A” items Class “B” items Class “C” items
(High consumption value) (Moderate consumption (Low consumption
value) value)

1 Very strict control Moderate control Loose control

2 No or very low safety stock Low safety stock High safety stock

3 Maximum follow-up and Periodic follow-up Follow-up and

expediting expediting in
exceptional cases
4 Rigorous value analysis Moderate value analysis Low value analysis

5 Carefully handled Can be handled by middle Can be fully delegated

management
6 Frequent ordering or weekly Once in three months Bulk ordering once in 6
delivery months
7 Weekly control statements Monthly control reports Quarterly control
reports
8 Accurate forecasts in material Estimates based on past date Rough estimate for
planning on present planning

11/23/2022 70
Applications of ABC Analysis for a DTC
 Measures the degree to which actual consumption reflects
public health needs and morbidity
 Reduces inventory levels and costs by arranging for more
frequent purchase or delivery of smaller quantities of class A
items
 Seeks major cost reductions by finding lower prices on class A
items
 Reduces inventory of items that have limited use in the system,
but costs the system large amounts of money
 Provides information for choosing the most cost-effective
alternatives and finding opportunities for therapeutic
substitution
 Gathers information for pharmacoeconomic analysis
11/23/2022 71
Steps in ABC analysis
Step 1
• Take note that ABC analysis will be advantageous if
the analysis is done on not less than three years
consumption data.

Step 2
• List all items (drug, medical supplies, lab. reagents)
purchased during the year at which the analysis being
done and enter the unit cost and quantity for each
item in the list (data source:- PFSA sales invoice,
receiving models and bin card…..)
11/23/2022 72
Step 3
• Crosscheck the price of each items purchased that is
found in model 19 (at pharmacy) does exactly
correlate with that of the finance section file.

Step 4
• Add items that might be purchased through petty
cash, and money paid for loading and unloading from
the drug budget.

11/23/2022 73
 Step 5

• Calculate the total value of consumption (consumed

quantities) for each item (Total value = Consumed
quantities x unit price).

Step 6
• Sort the list in alphabetic order.

11/23/2022 74
Step 7
• Aggregate drugs, (of the same active ingredient, same
dosage form and same strength but with different unit of
measure and packing size), purchased at different times with
different price to one. After doing so for every item
purchased,

Step 8
• Sort the list in descending order by total value.

11/23/2022 75
Step 9
• Calculate the percentage of total value for each aggregated
item (Percentage = Total value of each item divided by the
total budget spent for procurement during the analysis period
multiplied by 100).
◦ This value tells us the amount of each items that took
from total budget.

Step 10
 Calculate the cumulative percentage of total value for each item

11/23/2022 76
Step 11
• Choose cutoff points for A (70-80%), B (15-20%), and C (5-
10%) class medicines based on the drug category table.
100%
Cumulative Items Value (%)

90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Cumulative No. of Items (%)

11/23/2022 77
 Step 12. Compare ABC and VEN analysis results

 Analyse A class drugs

- Are there N drugs in this category
- are the pharmaceuticals in this category really
important
 What about B class drugs?
 Is there inappropriate budget utilization/consumption
 Evaluate each class critically and forward
recommendations

11/23/2022 78
 Interventions for A class drugs
 Are they in a good condition in the stock: perform stock analysis
for selected A class drugs,
 Transfer, sale, or return and give recommendation for the next
quantification;
◦ If they are over stock in the stock analysis ;
 Are all procured drugs emanated from the facility drug list? If not
consider to revise the drug list.
 Give recommendation for selection;
◦ If they are not drug of choice for any one of the ten top disease
in the catchment area
◦ Perform DUE for selected class A drugs which are not treatment
of choice to treat at least one of the top ten disease.

11/23/2022 79
 Thank You!!!

11/23/2022 80