In consignment, the relationship between the buyer ( consignor) and the seller
(consignee) is that of principal and agent. The consignee is the agent. The
consignee acts entirely on behalf of the consignor.
What is consignment? It is the act of sending a quantity of goods by the
manufacturers and producers of one country or place to their agents in another
at the risk of the principals for the purpose of sales.
Goods so sent are known as “consignment”.
Under Administrative Order No.145, Subject: Revised Policies and Guidelines for the Institutionalization and Decentralization of the Department of Health Drug Consignment System, the advantages of the said system are:
1. It will enhance the availability of low cost, high quality drugs and medicines in DOH hospital pharmacies, without entailing additional cost or investment on the part of the government;
2. The income the Hospital will earn from the direst sales of these drug products may be used for the improvement of hospital operations, thereby improving healthcare services;
3. Funds allotted for the procurement of supplies and medicines will be freed up and maybe utilized for other equally important needs of the hospitals;
4. Even with mark-up by the hospitals, the prices of these consigned medicines will still be lower compared to private outlets. This situation may provide healthy competition with nearby private retailers and may therefore prompt them to lower drug prices as well; 5. No budgetary allotment and notification of cash allocation are required in these transactions since payment will be based on actual drug sales of the respective hospital pharmacies, decreasing red tape in the use thereof.
What are the objectives of this Order?
The objectives of this Order are as follows:
1. To provide time bound systems and procedures that would establish the DOH Drug Consignment System (DOHDS);
2. To define the attendant roles...