Ensuring quality supply of medicines in a transparent and efficient way

Procurement Process Warehousing System Distribution to Hospitals Ensuring Quality
Other procurements taken up by KMSCL KMSCL- Highlights Future plans  


In order to make available quality medicines, supplies, equipments and diagnostic services to the poorest of poor of the population in the state, Government of Kerala has constituted Kerala Medical Services Corporation, Ltd, (KMSCL) as a fully Government owned company with authorized share capital of Rs. ten crore with its headquarters in Thiruvananthapuram. The Newly formed corporation started functioning with effect from 1st April, 2008 by establishing District Drug Warehouses in all 14 districts in the State to cater to the needs of 1316 Health Care Institutions under the State Health Services Department and 16 institutions under six Government Medical Colleges in the State.

The corporation initiated the work of providing drugs and supplies from ‘1st April’ 2008’. The Corporation is diversifying its activities by providing Bio-Medical equipments, computers etc. As a part of a foolproof quality check of medicines, all batches received as a part of supply have been tested in accredited labs in the country. Through this, the Corporation ensures providing quality medicines at affordable rates. The process of procurement and distribution of medicines has been streamlined. Computerization, pass book system and essential drug list have been established.

The Board of Directors of the Corporation is as follows.

Secretary to Government (H & FW) Chairman
Addl. Secretary to Government (Finance) member
State Mission Director (NRHM) member
Director of Health Services member
Director of Medical Education member
Drug Controller member
Expert from Pharmaceutical Sciences member
Managing Director (KMSCL) member

The main objectives of the Corporation

  • To implement a transparent system for procurement, storage and distribution of quality Drugs, supplies, equipments etc. required for the hospitals at reasonable competitive price.
  • To ensure adequate savings in the Drug budget by scientific forecasting system based on the preparation of Essential Drug List and its actual consumption.
  • Monitoring the Budget and drug consumption pattern by introducing pass book system.
  • To avoid loss due to expiry of Drugs and medical items and to optimize accountability at all levels.
  • To achieve constant quality control monitoring of Drugs and medical items by establishing adequate quality assurance measures.
  • To adopt a streamlined procedure for procurement, storage and distribution through IT enabled services like e-tendering & e-procurement
  • To improve infrastructure of the existing Drug warehouse in District.
  • Suitable transport system for lifting drugs from drug warehouses to institutions.
  • To provide diagnostics and other miscellaneous services to Government healthcare institutions.
  • To enhance public healthcare services, delivery by providing excellent management control and constant vigil.
  • To introduce effective feedback system.

Procurement Process

Government have constituted a Technical Committee (Expert Committee) in the Corporation consisting of Director of Health Services, Director of Medical Education, State Mission Director (NRHM), Drugs Controller, Senior Doctors nominated by DHS & DME and an expert in Pharmaceutical Sciences to prepare the list of medicines to be procured by Corporation. On the basis of the recommendations of the Technical Committee, Corporation has finalized the List of Essential Drug which consists of 527 items of generic medicines, sutures, surgical and other items. Based on the annual requirement of medicines & supplies furnished by the DHS and DME, Corporation does the tender process. KMSCL floated its first tender on 30.01.2008 in which a record number of 173 reputed companies from all over the country participated.

The tender processing is done in a transparent manner by publishing all details in its official web site www.arogyakeralam.gov.in in due course giving no chance of complaints from the bidders as well as the general public.

Factory facilities of 20 new firms, who had participated in the tender for the first time in the state, were inspected by the team of inspectors appointed by the Corporation and six firms were rejected as they were not complying Good Manufacturing Practices (GMP) stipulated under the Drugs and Cosmetic Rules, 1945.

Procurement Cycle

Warehousing System

Main Functions of Warehouse are:

  • Receipts and Issues

Receipts From:

  • Supplier against Orders
  • Inter warehouse transfer
  • Institution for replacement
  • Supplier as replacement
  • Release from frozen items

And Issues to

  • Medical Institutions
  • Other warehouse
  • Quality Control as sample
  • Main stock to frozen area
  • Return of frozen item to QC

Activities of Drug Warehouse

Distribution to Hospitals

The medicines received from the suppliers are collected in the District Drug Warehouses of the Corporation for delivery to hospital as per their requirements. The delivery schedule for various categories of hospitals has been designed as follows.

Medical College Institutions Thrice in a month
District /General Hospital Twice in a month
Taluk Hospitals Once in a month
BPHC/ CHC/ PHC Once in 2 months
Mini PHC Once in 3 months

In addition to this emergency supplies are also given to hospitals as per necessity. For each hospital budget allotment is provided for purchase of medicines from the Corporation and a Pass book is also maintained to record the transactions.

All the District Drug Warehouses and Head Office of the Corporation are connected through online network by a data processing system named as Drug Distribution Management System (DDMS) for monitoring the stock position, details of samples collected for testing and to watch the performance of suppliers, etc.


Ensuring Quality

Each and every batch of Drug procured by the Corporation is being tested through Empanelled Analytical Laboratories to ensure the prescribed standards before release to hospitals. Corporation has empanelled Eleven (11) approved laboratories from all over India for testing the samples collected from the delivery received in the various District Drug Warehouses of the Corporation. Government Drug Testing Laboratory, Thiruvananthapuram is the appellate authority in the case of disputes regarding quality testing.

Samples of supplies in each batch are chosen at the point of supply or distribution/ storage points for testing. Payment to the suppliers is released only upon receipt of quality analysis report from laboratories. Samples which do not meet quality requirements are rejected, treating them as Not of Standard quality.

Quality Control Process

Other procurements taken up by KMSCL

  • ASHA Kits for NRHM
  • LSGD supply of medicines
  • ICDS kits for Social Welfare Department
  • Biomedical Equipments for NRHM
  • Desktops for NRHM
  • ALS ambulances for NRHM
  • Mobile Medical Units for NRHM
  • Biomedical Equipments for ICCONS
  • Emergency procurement for combating H1N1 fever
  • Biomedical Equipments for IDSP
  • Biomedical Equipments under Plan Scheme for Health Services
  • Biomedical Equipments under Plan Scheme for Ayurveda College, Trivandrum
  • Biomedical Equipments under Plan Scheme for ISM Department
  • Biomedical Equipments under Plan Scheme for Homoeopathy Department
  • Power Laundry for NRHM
  • School Health Kits for NRHM

KMSCL- Highlights

  • Ensures timely and uninterrupted supply of quality medicines, surgical, sutures etc. to hospitals.
  • Significant reductions in procurement cost of medicines and there by savings in budgetary allotment.
  • Better inventory control.
  • Pre-decided delivery schedule to hospitals ensures regular supply of medicines and reduces rush in District Drug Warehouses.
  • Computerized Drug Distribution Management System (DDMS) enables stock monitoring, re-ordering and order placing of items easier.
  • Batch wise quality testing of medicines at the point of delivery ensures quality assurance of medicines supplied to hospitals.
  • Suppliers’ bill passing and payments become prompt and regular.
Before After
  • Purchase by CPC through Tender
  • Supply by dealers
  • Supplies were made in bulk quantities in loose form in bottles.
  • Effective Quality Control was not possible as the quantity on every purchase is low.
  • Quality deterioration
  • Different rates for the hospitals Payment to the supplier was done from different sources.
  • Rates are higher.
  • Shortage of medicines due to unscientific procurement process
  • Purchase by KMSC through a very transparent process of Tender.
  • Supply by manufacturers / Direct importers
  • Supplies are made in Strips/Blisters which is easy to handle.
  • Rigorous Quality control is done. Each and every batch is tested.
  • No Quality deterioration
  • Payment from Single source.
  • Bulk Purchase – Rates are competitive and Cheaper.
  • Medicines are available round the clock through maintenance of buffer stock and pipeline stock
  • Quality assured drugs and supplies

Future plans

  • Scientific storage facilities of drugs to be provided by adequate warehousing system – Modern warehouses & racking system like TNMSC to be provided – Proposed for leasing.
  • Starting Warehouses at all Govt. Medical Colleges.
  • Computerized pharmacies in all health institutions.
  • Putting up systems of Counterfoils.
  • Obtaining ISO certification / WHO accreditation for KMSCL.
  • Running KMSCL Stores in major hospitals.
  • Starting a Public Health Engineering Division under KMSCL
  • Going for Full fledged e-procurement