Introduction
	HIV/AIDS Procurement: Definitions
	Glossary
	Cost, insurance, and freight (CIF)	The seller covers all costs for a freight of goods to be shipped to a named destination port. Once the goods leave the ship, the risks and costs become the responsibility of the buyer. The seller pays for insurance against loss or damage to goods on behalf of the buyer. This cost is passed on to the buyer.
	Efficacy	Efficacy is the ability of a drug or pharmaceutical product to produce a particular effect as determined by scientific methods.
	Ex-works (EXW)	The seller’s only obligation is to provide goods at his/her premises for collection by the buyer. It is the buyer’s responsibility and obligation to load the goods and transport them to the buyer’s destination.
	FDA approval	FDA approval means that the product has met the standards of the U.S. Food and Drug Administration for safety, efficacy, and quality for the proposed application.
	Free carrier (FCA)	The seller delivers the goods into the custody of the first carrier, and this is where the risk passes from the seller to the buyer. The buyer pays for transportation.
	Free on board (FOB)	The carriage of goods is arranged by the buyer, and the risks and costs transfer from the seller to the buyer at final port of entry.
	Incoterms	This is short for "International Commercial Terms." They are standard trade definitions (devised and published by the International Chamber of Commerce) commonly used in international sales contracts (1). Examples are ex-works (EXW); free on board (FOB); and cost, insurance, and freight (CIF).
	Origin	The origin of a pharmaceutical product is the country in which it was produced.
	Pharmaceutical products	For the purposes of USAID procurement regulations, pharmaceutical products are defined as drugs, vitamins, oral rehydration salts, biologicals, and some in vitro diagnostic reagents/test kits (including HIV test kits and antibiotic susceptibilty test kits).
	Quality	The quality of a pharmaceutical product is determined by its identity, purity, potency, uniformity of dosage form, bioavailability, and stability.
	Safe medical product	The FDA defines a safe medical product as one that poses reasonable risks given the magnitude of the benefit expected and the alternatives available.
	Sensitivity	The sensitivity of a test is the probability of testing positive if infection is truly present. As the sensitivity of a test increases, the number of false negatives decreases.
	Source	The source of a commodity is the country it is shipped from and does not include free ports or bonded warehouses. The source can be the cooperating country, if that is where the commodity is located at the time of purchase.
	Specificity	The specificity of a test is the probability of testing negative if infection/disease is truly absent. As the specificity of a test increases, the number of false positives decreases.
	Product Information
	Number of tests per kit	Number of test kits that are available in one kit; all order quantities must be in multiples of this number.
	Items included in kit	Information specifying what is included and packed as part of the kit. Test kit components cannot be ordered separately. The level of complexity of the tests may be determined by the items included in the kit.
	Additional items required but not included	Usually standard laboratory equipment is sufficient, but some test kits have special requirements (e.g., reagents, gloves, centrifuges).
	FDA approved	This section lists whether the test kit has been approved by the U.S. Food and Drug Administration. This information is needed when preparing a request for USAID approval to procure HIV test kits.
	Approved by other regulatory agency	This section lists whether the HIV test kit has been approved by any other regulatory body such as the European Agency for the Evaluation of Medicinal Products (EMEA) or the Japanese Ministry of Health, Labor and Welfare.
	Shelf life of the HIV test kit	This is the length of time before the HIV test kit reaches its expiry date. After expiry, a product can no longer be safely used and accurate results cannot be expected. Shelf life is measured from the date of manufacture and must reflect the expiration date of the first component in the kit to reach expiry (for rapid test kits, usually months). Shelf life assumes that the storage conditions specified by the manufacturer are met.
	Language of package insert	This lists the languages in which the standard package insert is written. Special language requirements must be negotiated and included in the procurement contract.
	Recommended storage conditions	Manufacturer-recommended storage conditions need to be adhered to during shipping, delivery, and storage to ensure that the quality and performance of the product are not compromised.
	Weight/dimensions/volume of kits or tests	This information will help programs ensure proper storage and vehicle conditions during distribution. Planning is particularly important when refrigeration is required.
	Procurement Information
	Average price for one test/price for one kit	Prices are given as an indication only and may vary according to quantities ordered and with fluctuations on the international market or in currency exchange rates. Additional handling and shipping charges may apply. The applicable incoterm used by the supplier should be included in all price quotes. Also, because changes may have been made since the publication of this document, the manufacturer should be contacted to verify the information before an order is placed or a request for USAID approval to procure HIV test kits is prepared.
	Additional pricing information	This section gives information on special prices offered to developing countries and nonprofit organizations working in resource-constrained settings.
	Donation Programs	Over the past few years, some manufacturers have set up donation programs to provide HIV test kits for relevant programs in resource-constrained settings. Information on available donation programs and how to access them is included in this section.
	Available from U.S. sources	This section lists sources in the United States from which the kit can be procured, if any. This information is needed when preparing a request for USAID approval to procure HIV test kits.
	Minimum order from manufacturer	The minimum order is usually one kit, but some manufacturers require that more than one kit be ordered at a time.
	Minimum average shelf life on delivery	The remaining time (usually months) for which a product can be safely used and accurate results can be expected after purchase from the manufacturer. Assuring that the shelf life can be maintained as stated on the product packaging is dependent on the product’s being stored and handled according to the conditions specified by the manufacturer. These instructions must be included in every package, carton, and/or shipping unit. The minimum accepted shelf life on delivery must be negotiated and included in the procurement contract.
	Stock on hand	This section specifies whether kits are stocked or manufactured on demand. If stock is kept on hand, the order lead time is generally less. However, manufacturing kits upon receipt of an order has the advantage of giving the longest shelf life.
	Average time to fill order	This information helps programs ensure that orders are placed in sufficient time to prevent stock-outs.
	Quality issues	This section describes the company policy if the customer experiences problems with the quality of the test kits.
	Payment method to manufacturer	Any general requirements for method of payment; these requirements are often country-, program-, or quantity-specific. The manufacturer may need to be contacted for additional information.
	Available from	This indicates the international procurement agencies or suppliers who have stated that they either stock or can supply the product.
	Agency / Supplier Information
	HIV Test Kit(s) supplied	Names of the test kits listed in the Source and Origin Waiver that the international procurement agency or supplier stocks or supplies.
	Listed price (range) and terms and suggested retail price	Prices are given as an indication only. The supplier or agency should be contacted to verify the information. Additional procurement information is listed here, such as whether the manufacturer provides special discounts for nonprofits or other organizations working on certain programs.
	Minimum order quantity	This lists the minimum order quantity required, if any.
	Minimum average shelf life on delivery	The remaining time (usually months) for which a product can be safely used and accurate results can be expected after purchase from the manufacturer. Assuring that the shelf life can be maintained as stated on the product packaging is dependent on the product being stored and handled according to the conditions specified by the manufacturer. These instructions must be included in every package, carton, and/or shipping unit. The minimum accepted shelf life on delivery must be negotiated and included in the procurement contract.
	Stock on hand	This specifies whether stock is maintained or if the kit is manufactured on demand. If stock is held, the lead time is generally shorter. However, having the kits manufactured on receipt of the order has the advantage of a longer shelf life.
	Average time to fill an order	This information assists programs in planning for procurement to ensure that orders are placed in sufficient time to avoid product unavailability.
	Delivery information	This section details the delivery locations the company serves, if applicable.
	Payment method	Any general requirements for method of payment are given. These requirements are often country-, program-, or quantity-specific. The international procurement agency or supplier may need to be contacted for additional information.
	Quality issues	Information on the company’s policy if the customer experiences problems with the quality of the test kits.
	Additional information	Other information that might be useful in the procurement of HIV test kits is given here, if any.
MSH Quicklinks ERC INRUD Jobs at MSH MSH Home MSH Publications SEAM		Welcome | Contact Us | Site Map | MSH Home    Copyright © 2005 Management Sciences for Health, Inc. All rights reserved. Please address your comments to webmaster@msh.org