Innovation Details

Innovation Title :

Procurement Reforms and Capacity Development activities at Tamil Nadu Medical Services Corporation Limited

Innovation ID :


Relevant Focal Theme:

Use of ICT for Procurement Management and Useful Management InformationPerformance focused Procurement Reforms and Capacity Development

Proposer Details


Proposer Name:

Ms Apoorva IAS

Proposer Designation:

The Managing Director

Proposer Official Address:

Tamil Nadu Medical Services Corporation Limited, No. 417, 2nd Floor, Pantheon Road, Egmore, Chennai 600008, Tamil Nadu, India

Challenge Addressed:


The following were the challenges faced in Drugs Procurement in the State of Tamil Nadu prior to the establishment of TNMSC Limited: • Acute shortage of drugs and medicines at Government facilities. • More than 1000 drugs were procured, some of them even branded. There was no concept of essential drugs. • Drugs procured in bulk packing - unhygienic storage & distribution. • Post-delivery quality assurance was non-existent and pre-shipment inspection was perfunctory • Poor quantification led to excess procurement and wastage and also shortage. • Delays in procurement process also led to shortage. • These led to lack of faith in Government health services, resulting in decline in public participation in the health care delivery system.



• Tamil Nadu Medical Services Corporation Limited is a Tamil Nadu Government undertaking established in 1994-95 to procure Drugs, Medical Equipment and other healthcare related products and distribute them to the public health facilities throughout the State of Tamil Nadu having a population of 77.88 millions. • From its inception, in the last two decades, TNMSC has rendered valuable services for effective implementation of all the Healthcare-related Schemes in the State and to achieve its Goals and Targets of the Health Department. • TNMSC is ensuring the availability of Generic Drugs in the Government Health Facilities for Free in the State greatly reducing the Out of Pocket Expenditure on Drugs. The table at Annexure 2 is based on a detailed survey in 2015 by an independent agency of the Government of India namely the National Sample Survey Organization. The Out of Pocket expenditure was the lowest in Tamil Nadu among the major states, Rs. 145 per capita as against Rs. 2284 for the country. • The Organization has put in place a transparent procurement process that has become a model for other States in India, and it has been much appreciated by International organizations such as the World Bank and the WHO. • TNMSC is actively managing the Supply Chain of drugs in the State and ensures continuous availability of drugs at all Government health facilities. Upgrading skills of service providers in Drug Distribution Services, Human resource development, Efficient distribution through decentralization through the District level drug warehouses, Simplified indenting system (Including Online Indent), Usage of ICT system for monitoring of warehouse inventories, Training and sensitization of all stakeholders towards effective implementation of the Free Drugs Policy of the Tamil Nadu are some of the reasons for its success.

Lessons Learned:


• TNMSC facilitates a Rational Drug Distribution system, adhering to the applicable laws of the land and other regulatory requirements pertaining to the drugs and medicines. • TNMSC also established a continually improving Quality Management system and is certified with the ISO recognition (ISO 9001:2008). • It has the capacity to meet any Emergency situation arising out of disease outbreak such as Avian Influenza outbreak or other natural calamities such as floods and cyclone and had quickly procured the necessary goods to prevent an outbreak of disease. • TNMSC has learnt to manage the supply chain effectively even when there was failure of all modes of transportation due to natural calamities and various strikes. • Recently Tamil Nadu faced unpredicted rain fall during the North East Monsoon in the month of November and December 2015 and most parts of the North Tamil Nadu were inundated. To eradicate the spreading of mosquito’s and infectious disease due to the bacterial and viral proliferation, TNMSC procured and supplied the chemicals such as Bleaching Powder to use in the wet soil to control the bacterial growth, Chlorine tablets to control disease spread by the contaminated water, Lysol to clean the floors to control the bacteria and Sodium Hypochlorite solution to control the spreading of the bacterial diseases due to stagnated water. These chemicals were procured by TNMSC on war foot basis for the immediate requirements of the Corporations of Tamil Nadu and Municipalities and Panchayat Unions to control the infectious diseases • In addition the Health and Family Welfare department of Tamil Nadu conducted mobile dispensaries in the flood affected areas by carrying out the door to door diagnostic services and medical assistance to the flood affected patients, to cater the need of the medicines such as diagnostic kits, antibiotics, Intravenous fluids, analgesics etc. required for the mobile medical camps were arranged by TNMSC on war foot basis from the suppliers and nearby warehouse. The TNMSC warehouses were worked on round the clock basis to cater the need of the hospitals and patients. Thereby totally the contagious and infectious diseases were controlled by the Health Department effectively and in a time bound manner and TNMSC played a vital role in mobilising the quality drugs in time and to assist the mobile medical camps. Thus TNMSC is capable of adopting to the dynamic changes in the Public Procurement.

Level of Innovation:


• Procurement of generic drugs comprising essential drugs. • Rationalization of the Drug procurement for the Government Health facilities, eliminating shortage and excess. • Excellent packaging standards with measures to prevent pilferage. • Totally transparent process throughout the Procurement cycle with a simple and clear standard bidding document. • Elimination of quantification with tenders based on past consumptions, and purchase orders based on actual monthly consumption - a genuine pull system. • Effective implementation of the Information and Communication Technologies (ICT) in the Drugs Supply Chain Management system. The system generates online information on inventory at district warehouses enabling the management to prevent stock outs and excesses. • An innovative passbook system, something like a debit card to health facilities, to enable them to lift the required goods from the district warehouses. This has simplified the supply chain, up to the facilities. • Scientifically developed Quality Assurance procedures to ensure the Quality of the Drugs. • TNMSC effectively facilitates Public Private Partnership in the Healthcare services in coordination with the multiple stakeholders.



• TNMSC is a pioneering organization functioning for more than two decades with a well noted innovations in the transparent Public Procurement System and other Diagnostics services at Healthcare facilities. • The model of TNMSC has already been replicated in other states in India such as Kerala, Rajasthan, Chhattisgarh, Haryana, Karnataka, Andhra Pradesh, Jharkhand, Bihar, Madhya Pradesh, Odisha. The Federal Government too has set up a similar agency for procurement of essential drugs. • TNMSC is steadily visited by various Governments including from Abroad for Training and Institutional Building purpose in various occasions from its inception which shows the keen interest in the Model for its replication. For Example, TNMSC has been visited recently by Afghanistan Government. Government of Nepal has a proposal to visit.

Other Background:


• Apart from the Public procurement, TNMSC has installed low-cost Diagnostic facilities and other services such as CT Scan, MRI Scan, Lithotripsy, Stem Cell Research services in the State. • TNMSC has been given many awards such as Rajiv Gandhi National Quality Award. • TNMSC had obtained ISO Certification 9001:2008 in the Year 1999 itself. It has been renewed in August 2016 and certification is valid up to August 2018. • TNMSC has rendered Consultancy services to various State Governments in India like Rajasthan, Andhra Pradesh, Odisha, Uttar Pradesh, Karnataka, Madhya Pradesh, and Kerala • TNMSC has rendered training course on Drug logistics and Warehousing for personnel from Karnataka, Assam, Sri Lanka, Myanmar and Nepal.

If the submission requires an official authorization, attach details of the same:

  Ms Apoorva IAS_1482929261.pdf


Submission Place:

Submission Date:
28 Dec, 2016

Submission By:
Ms Apoorva IAS