Ecuador: The Public Integral Health Network and the National Public Procurement Service implement the Corporate Reverse Drugs Bidding 2015

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1 Ecuador: The Public Integral Health Network and the National Public Procurement Service implement the Corporate Reverse Drugs Bidding 2015 This document is a guide for domestic and foreign suppliers of medicines for human consumption, interested in participating in the Corporate Reverse Drugs Bidding (SICM - acronym in Spanish) The Ecuadorian government needs to acquire good quality, safe and efficient drugs at low cost, with the principle that health and health care is not a commodity but a fundamental human right that must be guaranteed. All information on SICM 2015 is published at: Spanish version: subastademedicamentos.compraspublicas.gob.ec English version: medbid.sercop.gob.ec LEGAL QUESTIONS 1. What it is the Corporate Reverse Drugs Bidding (SICM- acronym in Spanish) 2015? It is the process by which are identified and selected domestic and foreign bidders for the supply of drugs for human use and consumption for the Public Integral Health Network (RPIS - acronym in Spanish), formed by the Ecuadorian Social Security Institute (IESS - acronym in Spanish) the Social Security Institute of the Armed Forces (ISSFA- acronym in Spanish), the Social Security Institute of the Police (ISSPOL- acronym in Spanish) and the Ministry of Public Health of Ecuador (MSP- acronym in Spanish). Under this method the Ecuadorian government plans to acquire 427 types of drugs that are part of the National Table of Basic Drugs (the 9th. Revision). They represent a purchase of approximately $ 500 million in two years. 2. How can providers that wish to participate register in the SICM 2015? To participate in the Reverse Corporate Reverse Drugs Bidding 2015 domestic and foreign companies must register at the National Registry of Suppliers (RUP - acronym in Spanish). This is a procedure that is done online and is free, at: National bidders: Foreign bidders: The entry of the company information can be done quickly and easily through five steps. 1

2 In the first step, the foreign supplier of drugs adheres to the terms and conditions for the use of the Official National Public Procurement System of Ecuador and declares that all documents that will be loaded on this platform are legitimate, true and valid. In the second step there is a form that needs to be filled in each of the required fields which are related to the company, country of location data of legal representative domiciled in Ecuador. In step 3 medications that the foreign supplier is able to offer to the Ecuadorian Government are chosen. In the fourth step it is requested information on the exact location of the bidder, main and side street, postal code, telephone numbers. In the fifth and final step, it is required a digital image in PDF format of the documentation that proves the existence of the pharmaceutical laboratory: Document certified by the competent authority attesting the legal existence of the company in the country. Certified Document recognizing the legal representative of the company in the country. Document recognizing the certified agent or legal representative of the company in Ecuador. Other documents deemed necessary to attest the legal existence and activities undertaken by the company. On the website of the SICM and in its English version, those interested will find a tutorial video to enroll in the Registry of Suppliers (RUP). 3. Foreign companies are required to be domiciled in Ecuador to participate in the SICM 2015? In order to participate in the SICM 2015 foreign suppliers must have a legal proxy or legal representative domiciled in Ecuador or, in turn, be domiciled in Ecuador. This is a prerequisite for the award and signing of the General Agreement with the Ecuadorian government. The website of the SICM 2015 has information about logistics operators and customs agents in Ecuador. 4. What determines a supplier of drugs to be awarded? To be awarded a provider needs to prove that is the winning bidder or has gone through a successful negotiation and that meets all the qualifying documentation, as set out in the tender specifications (terms of reference) for each contractual procedure SICM Which are the enabling documents to be submitted by suppliers to be awarded? The essential documents to be submitted by suppliers or winners of the tender or after a successful negotiation are: - Health Registration issued by the National Agency for Regulation, Control and Health Surveillance (ARCSA - acronym in Spanish). - Certificate of Good Manufacturing Practices or WHO Certificate of Pharmaceutical Product type. 2

3 - License issued by the National Council for Control of Narcotic and Psychotropic Substances (CONSEP - acronym in Spanish) for the marketing of drugs with content of narcotic and psychotropic substances. - Among others. 6. How to get the Health Registration in Ecuador? The process for obtaining the Health Registration in Ecuador issued by the ARCSA is performed through the Ecuadorian one stop shop, which allows the process to be done online. The requirements and details of this process are published at the following links: Additionally, take into account that, according to Ministerial Decree No. 586/4711 of the Ministry of Public Health of Ecuador, when companies already have health records issued by foreign health authorities likely to be validated in Ecuador, the process of obtaining health registration will undergo an approval process for the certification previously submitted in the following countries: Colombia, Brazil, Argentina, Mexico, Cuba, United States, Canada, Australia, Japan, Republic of Korea (South). For European countries, only certificates issued by the European Medicines Agency (EMA) will be accepted. 7. Why is it signed a general agreement with the awarded bidders? Article 43 of Organic Law of the National Public Procurement System provides that the SERCOP subscribes general agreements with suppliers of goods and / or standardized services that have been selected in accordance with the law, so that such goods are offered in the Electronic Catalogue of the public procurement website. The execution of these general agreements grant the awarded suppliers exclusive right to provide drugs to the health facilities in the RPIS, for a period of 2 years from the execution of this legal instrument. The public procurement system in Ecuador is decentralized, so that each facility can stock up on drugs through the use of an electronic catalog and according to scheduled needs. To do this, each facility has financial resources to fund such purchases, and the same establishment is responsible for making payments. 8. For how long will the contractual relationship with the winner bidders last? The general agreement has a term of two years from the date of its execution, without prejudice that it may be extended until the SERCOP publishes a new code of Drugs or until the Public Integral Health Network (RPIS - acronym in Spanish) deems necessary, as provided in the Regulation of the Organic Law of the National Public Procurement System. 3

4 During the term of the General Agreement, national and international suppliers receive from the Ecuadorian Government the exclusive right to sell the drugs and Ecuador shall purchase from awarded supplier during the term of the General Agreement. Thus, Ecuador provides legal certainty and transparency in this business relationship that encourages foreign investment in the country. 9. Can a supplier of drugs be disqualified during the process? The bidder should ensure the accuracy of the information delivered to SERCOP through the electronic system. The Technical Commission is able to make inquiries to check or get clarification and additional information on the technical, economic and legal conditions of the bidder. If it is found administratively, that the bidder or contractor altered or missed the truth about the documentation or information that makes up the offer, that falsity shall constitute sufficient grounds for disqualification of the procurement procedure, and to declare the bidder as an unsuccessful bidder or defaulted contractor, as appropriate and without prejudice to any further legal actions. In the event that the supplier winner of the tender is disqualified due to failure to deliver the enabling documentation, the Technical Committee will call the bidder who came second in the ranking of the bid, who shall comply with the requirements to be awarded, including the obligation to maintain the financial offer of the winning bidder to sign the General Agreement. If the bidder called as second choice does not comply immediately with the requirements set forth in the specifications, the highest authority of SERCOP or his / her delegate shall declare as void the contracting process, and the second unsuccessful bidder shall be subject to administrative sanction. 10. Can one drug provider offer the full portfolio of drugs? This is not possible in accordance with the provisions of the Organic Law for the Regulation and Control of Market Power and the Manual of Good Practices in Public Procurement. 11. How is it that through the Corporate Reverse Drugs Bidding SERCOP and the Integral Public Health Network contribute to secure the right to health and access to medicines of the population? SICM is intended to cover, in a agile and timely manner, the needs of Medicare health facilities belonging to the Integral Public Health Network. Thus, ensures the public access to a public and social good such as medicine, setting it clear that the interests of public health are over economic and commercial interests. 12. Will Ecuador's national industry have some sort of preference in 2015 SICM? The domestic pharmaceutical industry enjoys a margin of preference in SICM This aims to promoting local production of drugs and allow the domestic industry to be competitive in the SICM To this end, the Ministry of Industry and Productivity (MIPRO - acronym in Spanish) and the Ministry of Public Health (MSP) are developing the methodology to be applied for this effect. 4

5 This methodology will ensure and guarantee technical measures and fair conditions for suppliers in general; and will preserve two key elements: employment generation and good management of external accounts. 13. How are conformed citizen oversight groups and what is the role of the Council of Citizen Participation and Social Control (CPCCS) in the Corporate Reverse Drugs Bidding 2015? A citizen oversight group is the formed under various circumstances; in this case, at the request of the authority that is carrying out a particular public process. And, at the request of citizens to accompany and monitor processes that are of public interest. For the Corporate Reverse Drugs Bidding 2015, SERCOP has filed a request for the formation of an oversight group, which will participate with the consultative councils, observatories and academic health committees. Additionally there will be an open call to citizens to be incorporated into this space for social participation and control. The role of the Council of Citizen Participation and Social Control in the SICM 2015 is primarily to provide support, technical assistance, education and training to citizens who are part of the oversight. On the other hand, it is responsible for securing access to the information required for the exercise of participation so that it is performed efficiently. The invitation to participate in this oversight is open to all citizens who have no particular interest with the object being observed; but rather a concern for the common good of health and efficiency in the contracting and use of public resources. OPERATIONAL QUESTIONS 14. What are the steps and the schedule of the Corporate Reverse Drugs Bidding 2015? SICM 2015 is structured around 4 stages: 1) Preparatory; 2) Pre-contractual; 3) Contractual and 4) Evaluative or post-contractual. It is currently running the preparatory stage, in which the activities performed are: preparation of tender specifications or terms of reference, the socialization process at national and international level, registration of domestic and foreign suppliers, updating registered information of providers, development of spaces for participatory dialogue and social control, reception of comments on the technical specifications of medicines, among other activities. It should be noted that the registration of suppliers is enabled now and the reception of comments on the technical specifications of medicines will be held until the call publication of the reverse bid for each purchase procedure. Drugs that are acquired through the SICM 2015 shall arrive in the country from the first semester of

6 15. When will be ready the tender specifications and the reference drug prices? Currently, they are taking the final definitions from the Ministry of Public Health and the institutions involved in this process. So, the information will be available prior to the publication of the SICM 2015 procedures in the public procurement website. 16. Why is it that not all drugs required by the Public Integral Health Network are acquired through SICM 2015? The mechanisms for drug procurement are defined by the Public Integral Health Network (RPIS - acronym in Spanish). It was decided that will be acquired 427 kinds of essential medicines that are part of the National Table of Basic Drugs (the 9th. Revision) through the SICM 2015, which are published on the website of the auction. Other mechanisms to be defined for the purchase of drugs are the sole responsibility of the RPIS. 17. How do the Integral Public Health Network and SERCOP ensure that the drugs that have been purchased meet the required quality? The tender specifications of the procedure describes verification mechanisms ex-ante and ex-post to the execution of the general agreements. Thus, ex-ante to be awarded, the provider must have the Health Registration issued by the National Agency for Regulation, Control and Health Surveillance (ARCSA - acronym in Spanish). Also, the vigilance of the drug and subsequent control of drugs are the responsibility of the ARCSA, on three levels, according to the technical parameters issued. 18. What information should be considered by drug suppliers to develop the financial offer? The drug prices will be quoted in US dollars. The offer should include the logistics of the drugs, which shall be delivered to the health facilities of the Public Integral Health Network, which are located along the Ecuadorian territory in the requested amounts determined in the purchase order and according to a schedule of specific delivery. As information, is has been published a document with the purchase orders of medicines: in the website of the SICM 2015, where there is the history of purchase orders of drugs made by the health establishments of the RPIS through the Drugs e-inventory (electronic catalog), resulting from the Corporate Reverse Bid Should awarded companies submit capital guarantees? To request a percentage of the capital as guarantee is not considered in the tender specifications of SICM Instead, a financial guarantee such as a performance bond will be requested, which will be 5% of the reference amount stipulated in General Agreement. 20. Tenders must be submitted with documentation in physical or electronically? The Corporate Reverse Drugs Bidding will be implemented through an information system to ensure the transparency of the process and to allow that each stage can be carried out electronically. Therefore, the information providers will be entered virtually through the aforementioned system. 6

7 Registered providers will have a period of time to make the necessary simulations in the system, to become familiar with it. 21. Can multiple drug suppliers have the same legal representative? This is possible to the extent that the suppliers that have the same legal representative, shall not participate in the same procurement procedure in the SICM That is, do not compete for the same type of drug. Also, take note that, in the case of breaching the above, suppliers with similar legal representative shall be disqualified. 22. Are the technical specifications of the drugs going to be published? The technical specifications of the drugs that are part of the SICM 2015 are available at the website of the bid process. These records are being updated according to the observations that are received in the spaces of participatory dialogue, and through the s established for this purpose: medicamentos@sercop.gob.ec and medbid@sercop.gob.ec The final technical specification records with which the tender specifications or terms of reference will be published, will be the result of the consolidation and incorporation of the comments received during the preparatory phase of the SICM What are the labeling requirements to be imposed for the drugs awarded? Labeling requirements to be met by the drugs in the Corporate Reverse Drugs Bidding 2015 are set out in the technical specifications of drugs published at subastademedicamentos.compraspublicas.gob.ec / medbid.sercop.gob.ec 7