After more than three years of its proposal, the Union health ministry will soon set up a Central Procurement Agency (CPA) which will be an autonomous procurement agency for purchasing all medicines, vaccines, contraceptives and medical equipments for all the government's disease control programmes. The CPA will have an estimated annual budget of Rs.2000 crore.

The ministry is targeting to get the Society registered in two-three months' time, a senior health ministry official said.

He said that a professional, autonomous and efficient organization like CPA is being established by the government to eliminate the existing deficiencies and streamline the drug procurement and distribution system in the country. At present, the health ministry is procuring drugs, vaccines, contraceptives and medical equipments departmentally and through procurement agents for its various disease control programmes. However, certain deficiencies, such as inadequate professional procurement expertise, absence of supply chain management system, manual collection of data and absence of any credible Management Information System (MIS) have been adversely affecting the procurement system.

Earlier, on October 3 this year, the union cabinet had approved the health ministry's proposal to create a fully autonomous CPA under the ministry of health as a Society under the Societies Registration Act, 1860 for efficient procurement and distribution of drugs for the health sector in the country. The cabinet had also approved a one-time budgetary support of Rs.50 crore to establish the CPA.

The cabinet had approved the creation of one post of the chief executive officer (CEO) for CPA of the rank of the Joint Secretary to government of India. The cabinet's approval in this regard will enable the union health ministry to efficiently procure and properly distribute quality medicines, vaccines, contraceptives and medical equipments to the state/Union Territory governments and also eliminate shortages and wastages, resulting in considerable savings to the government, officials said.

The CPA will be functioning on the same lines of Tamil Nadu Medical Supplies Corporation (TNMSC) which procures drugs for all government hospitals in Tamil Nadu. It will be an IT-enabled supply chain and procurement will be driven by actual demand from states as opposed to the present mode of procurement where approximate calculations about requirement are made from population statistics. In the TNMSC model, drugs and vaccines are purchased through tenders and as a bulk procurer it gets rates better than market rates.