Increasing Access to Ready-to-use Therapeutic Foods (RUTF)
UNICEF
Field Article
By Jan Komrska Jan Komrska is a pharmacist working at UNICEF Supply Division leading Nutrition unit and responsible for procurement of products related to nutrition interventions of UNICEF. The author acknowledges the work of UNICEF Supplies Division reflected in this article.
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ince 2007, the use of ready to use therapeutic foods (RUTF) to treat severe acute malnutrition (SAM) in young children has been endorsed by the United Nations and non-governmental organisations (NGOs), and received wide notice by the media. With the proven success of RUTF, more countries have adopted their use as part of community-based management of SAM (CMSAM), and demand for the products has soared. Since 2006, UNICEF, the world’s major purchaser of RUTF1, has taken a series of steps to shape the market and diversify the supplier base. As a result of this effort, the market has grown from one qualified manufacturer in 2000 to 19 today. This number is expected to increase in the coming years, especially in countries where RUTF is used. RUTF are high-energy foods fortified with vitamins and minerals, packed in individual portions providing energy intake of 500 kilocalories. They can be in the form of a soft paste or a crushable biscuit that is easy to swallow. Individual packaging allows easy handling and prevents contamination of the product between feedings. UNICEF requires RUTF to be manufactured by qualified suppliers in accordance with stricter quality standards than normal food products. The product most in demand and the subject of this article is RUTF in peanut paste form. The first peanut paste RUTF was developed jointly by the French Institute of Research for Development and the manufacturer Nutriset in 1996 as a fortified peanut spread, now marketed under the name Plumpy’Nut®. UNICEF Supply Division is responsible for procurement of specific products (including RUTF) for UNICEF country programmes and external partners, assuring transparency in using public funds and maintaining agreed product quality.
UNICEF procurement of RUTF in the period 2000-2010 UNICEF began to procure RUTF in 2000, when Nutriset was the sole qualified supplier and annual demand was below 100 metric tonnes (MT)2. The first long-term RUTF supply arrangement (LTA) was established with Nutriset on a sole-source basis in 2001. Under an LTA, Supply Division places orders with suppliers, based on requisitions from UNICEF country offices. Suppliers are responsible for manufacturing the product and delivering it to the nearest seaport for shipment by sea freight or, in urgent cases, to an agreed airport for air shipment. Further transportation
of RUTF to the beneficiary countries is assured by UNICEF-contracted freight forwarders. Therefore, RUTF prices referred in this article exclude shipping costs. By 2004, demand began to rise as more countries began piloting the use of RUTF, and it became increasingly urgent for UNICEF to identify new sources of RUTF. During 2006, Supply Division began to work with manufacturers in countries where the product could be manufactured for local use, and approved suppliers in Niger and Ethiopia for local purchase in 2006 and 2007 respectively. With the publication of the UN Joint Statement in 20073, demand increased dramatically, outpacing global production capacity. The situation became critical in 2008, when a hunger emergency in the Horn of Africa caused a spike in demand in the second half of the year. Even after a second global supplier (Vitaset, located in Dominican Republic) had been approved, the 11,000 MT ordered by UNICEF, still largely from Nutriset, did not meet peak in demand. As a result of this experience, Supply Division made three key decisions in 2008: a) to initiate competitive bidding for RUTF in order to open the market for new suppliers b) to begin conducting annual forecasting for RUTF with individual country programmes, and c) to conduct a study on RUTF supply chain performance in order to identify weaknesses and propose solutions. These efforts were part of a larger procurement strategy developed by Supply Division through which UNICEF could leverage its buying power to influence the market, promote increased competition and ensure a diverse and sustainable supply base.
Implementation of the Procurement Strategy In 2008, in line with its procurement strategy, Supply Division launched the first competitive bidding exercise for the supply of forecasted 20,000 metric tonnes (MT) of RUTF, for the period 2009-2010. This exercise was preceded by a lengthy, multi-year process of advocacy for increasing production capacity with existing suppliers, identification of potential new global and local suppliers (usually existing food companies), and the development of manufacturing standards coupled with inspection of various manufacturing facilities. For the majority of products, UNICEF typically would establish a LTA, based on the
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results of competitive bidding, for a period of two to three years with the supplier making the lowest acceptable offer, and eventually a backup LTA with the supplier making the second lowest acceptable offer. However this approach was not applicable in the case of RUTF, because it would not encourage any further market development and would leave UNICEF with one or two suppliers. Therefore, it was decided to distribute total forecasted quantity among all companies meeting UNICEF technical requirements for manufacturing facilities as well as product specifications. Proposals were received from 13 companies and seven proved to be able to meet defined requirements for global supply of RUTF. LTAs were established subsequently with all seven suppliers, expanding significantly the supplier base (for more details see Table 1). The second competitive bidding exercise for supply of forecasted 54,000 MT of RUTF for the period 2011-2012 was issued by the end of 2010. The forecasted quantity was based on the assumption of continued expansion of CMSAM to new countries and scaling up of existing programmes. Proposals were received from 27 companies out of which 12 met UNICEF requirements for global supply of RUTF. LTAs were established subsequently with all 12 suppliers listed in Table 2. It is important to underline that RUTF products manufactured by UNICEF-approved manufacturers comply with the Joint statement specifications and they can be used by country programmes interchangeably. A key part of the procurement strategy was to support the development of local production in countries where RUTF is used, particularly in Africa, in order to bring the supply closer to the beneficiaries and reduce delivery lead times. After successful audits of the manufacturing sites by Supply Division’s Quality Assurance Table 1: UNICEF-approved RUTF Suppliers, 2005-2011 2005 2006 2007 2008 2009 2010 2011 Global suppliers
1
2
3
1
1
1
2
6
7
12
Local suppliers 0
1
2
2
4
7
7
Total
2
3
4
10
14
19
1
UNICEF is the largest, but not the only, purchaser of RUTF. Other major purchasers include MSF, the Clinton Foundation and different NGOs. 1 MT contains 72 cartons of RUTF. It takes approximately one carton to treat and save a child, so that each MT can save the lives of 72 children. WHO/WFP/UNSCN/UNICEF. Community-Based Management of Severe Acute Malnutrition. A Joint Statement by WHO, WFP, UNSCN and UNICEF, May 2007
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