4 Strategy for Pooled Procurement of Essential Medicines and Health Commodities, 2013-2017 DEFINITION OF TERMS Group contracting A type of procurement whereby Member States jointly conduct and negotiate tender processes. They establish specifications, quantification, sourcing of suppliers, competitive bidding, technical and financial evaluations and adjudication, and contract awards. Member States agree to purchase from the selected suppliers, but they place purchase orders separately (in other words, the commitment is between the individual Member State and supplier). Harmonisation The name given to the efforts of Member States to replace the variety of national pharmaceutical policies, practices and standards currently adopted in favour of uniform regional policies, “good practices” and standards, which are at an internationally acceptable level. Information sharing Member States share information about products and suppliers (such as prices, quality, source and suppliers’ performances). Coordinated informed buying A type of procurement where Member States undertake joint market research, share suppliers’ performance information and monitor prices. Member States conduct procurement separately. Good practices The agreed description of the pharmaceutical organisation, procedures and standards that enable the required quality of service to be delivered, including criteria for organisational structures, personnel, facilities, equipment, materials, all kinds of operations, and quality control. Pooled procurement Pooled procurement (also know as joint procurement or procurement cooperation) is the overarching term for procurement where part or all of the procurement processes of different procurement entities (agencies or departments of bigger entities) are jointly executed by either one of those procurement entities or by a third party procurement entity. Prequalification An initial evaluation of the capabilities of suppliers (technical and financial) and of the quality of their products to allow them to participate in the procurement process. Public procurement prices Free-on-Board (FOB) prices contracted by National Medicines Procurement Agencies in Member States. It is recommended that the public procurement agency knows the FOB prices of the products that are being procured. Only FOB prices allow for analysis of logistics costs (freight, insurance, clearing, etc.), as well as for international benchmarking and comparison within the region. Actual supply contracts may still specify any other INCOTERM that includes freight and other costs, as long as FOB prices are also documented in the supplier’s tender submission and in the procurement agency’s information management system. Pharmaceutical procurement and supply management system The pharmaceutical procurement and supply management system is composed of all steps in the procurement and supply system: selection, quantification, shopping, tendering, negotiation, ordering, storing, selling, distributing and dispensing of essential medicines and medical supplies. Orphan drugs Medicines used for the diagnosis and/or treatment of rare diseases or conditions.