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How a repeatable, data-driven RFP and negotiation cycle secured competitive supplier deals and over AED 135M in realised savings.
| Client | Leading UAE healthcare group operating a network of hospitals, clinics and pharmacies. |
|---|---|
| Engagement | Recurring pharmaceutical strategic sourcing: data analysis, item-level RFP, negotiation, savings assessment, implementation support and compliance tracking. |
| Approach | A nine-step process run phase by phase, with the in-scope formulary reviewed and refreshed at the start of every phase. |
| Data foundation | Purchase (GRN) and consumption data for the same evaluation period, cleaned and mapped to a single item view. |
| Relationship | A partnership of more than six years, spanning spend analysis, strategic sourcing, compliance tracking, item master optimisation, inventory analysis and patient-level costing. |
| Status | Three years of savings tracking in place, with the cycle continuing phase by phase. |
A leading UAE healthcare group buys pharmaceuticals across a network of hospitals, clinics and pharmacies. Spend was fragmented, clinicians preferred different brands for the same drugs, and the group needed two things: competitive supplier terms, and a credible way to prove the savings afterwards.
EmpoweringCPO runs this as a repeatable programme rather than a one-off project. In each phase, purchase (GRN) and consumption data are combined to select the in-scope formulary. An item-level RFP follows, then evaluation, negotiation, landed-cost comparison, supplier selection and product tiering, savings assessment, approvals and implementation. After implementation, compliance with the negotiated deals is tracked.
The three most recent phases identified about AED 107M of incremental projected savings. Across three years of tracking, about AED 220M of savings was projected and more than AED 135M was realised, and compliance with negotiated deals rose from 57% to 69%.
Pharmaceuticals are a high-volume, high-variety category where small price differences compound quickly. The group faced a combination of structural and behavioural issues:
| Challenge | What it meant |
|---|---|
| Fragmented spend | Pharmaceutical purchasing was decentralised across a network of hospitals, clinics and pharmacies, which weakened buying power. |
| Varied brand preferences | Individual clinicians preferred different brands for the same drug, so volume was split across many products and suppliers. |
| Price competitiveness | There was no structured, item-level competition between suppliers, so pricing, discounts and rebates were not being tested. |
| Proof of savings | Savings agreed at the table only count if they are bought in practice, so compliance with negotiated deals had to be measured. |
| A repeating need | Contracts, prices and product ranges change, so sourcing had to be a recurring cycle rather than a one-off project. |
The programme follows nine steps, repeated phase by phase. At the start of each phase the in-scope formulary is reviewed and updated, so the cycle keeps pace with changes in purchasing, consumption and the supplier market.
| Step | Stage | What happens |
|---|---|---|
| 01 | Data consolidation and analysis | GRN and consumption data are collected for the same evaluation period, then cleaned, standardised and mapped to a consistent item dataset. |
| 02 | Formulary selection and sourcing strategy | Historical purchasing and consumption patterns identify the pharmacy items in the approved scope, and the strategy is validated with stakeholders. |
| 03 | RFP preparation and release | An item-level request for proposal is prepared, eligible suppliers are confirmed and commercial request and response templates are shared. |
| 04 | Supplier response and evaluation | Supplier offers are collected, queries and gaps are clarified, and product details, pricing and commercial terms are compared. |
| 05 | Negotiation and deal optimisation | Suppliers are engaged to improve terms, revised offers are evaluated and landed costs are compared to find competitive deal options. |
| 06 | Supplier selection and product tiering | Revised deals are assessed to identify suitable suppliers and cost-effective product options, against the selection criteria and stakeholder approval. |
| 07 | Savings assessment and validation | Potential savings are estimated against the relevant baseline using the agreed methodology and the right purchasing and consumption data. |
| 08 | Approval, contracting and implementation | Approvals are obtained, commercial documents are finalised and the implementation of approved deals and product tiering is coordinated. |
| 09 | Compliance and savings tracking | Purchasing is monitored against the approved arrangements and savings are tracked after implementation to find further improvement. |
Both datasets cover the same evaluation period but answer different questions. GRN data shows what was bought; consumption data shows what was actually used. Together they give a more complete view of spend and of the true cost impact of each deal.
| GRN data (purchase view) | Consumption data (usage view) | |
|---|---|---|
| What it captures | Goods received through purchasing | Pharmacy items actually consumed in the same period |
| What it shows | Purchase quantities, costs and the purchasing baseline | Real utilisation, rather than purchase volumes alone |
| How it is used | Sets the baseline and the starting point for supplier comparison | Assesses the cost impact of a deal based on what is really used |
Purchasing data records items as free-text descriptions, such as “Adol 500mg Tab 5’s”. Each description is broken down into its parts: the brand, the dosage, the form and the pack size. The molecule is identified from the brand, here paracetamol. The same breakdown is applied to every item description in the dataset, so that the same drug under different brands, spellings and pack sizes lands on one standard line.
| Item Description as Recorded | Brand | Dosage | Form | Pack Size | Molecule Identified |
|---|---|---|---|---|---|
| Adol 500mg Tab 5’s | Adol | 500 mg | Tablet | 5’s | Paracetamol |
With the formulary in place, the total purchase volume for each line is determined and the brand mix is examined. The aim is to move from brands preferred by individual doctors to clinically preferred brands with similar efficacy. The illustration below uses Paracetamol 500 mg Tablet. The values are illustrative.
| Brand | Cost per Piece | Current Share of Volume | Proposed Share of Volume |
|---|---|---|---|
| Brand A | 1.50 | 30% | 20% |
| Brand B | 1.25 | 10% | 80% |
| Brand C | 2.50 | 40% | – |
| Brand D | 3.00 | 20% | – |
| Weighted Average Cost | 2.18 | – | 1.30 |
Multiply this by every line in the formulary, and repeat it each phase, and the scale of the work becomes clear.
| Stage | What it involves | Savings |
|---|---|---|
| Brand shifting | Consolidating the formulary and moving volume from individually preferred brands to clinically preferred brands with similar efficacy. | 6% to 8% |
| RFP, negotiation and compliance | Competitive bidding to win brand share, negotiation of bonuses and rebates, committee approval, and weekly compliance tracking. | 5% to 10% additional |
| Overall | Spend consolidation and standardisation across the category. | 12% to 15% |
Each phase carries forward unresolved opportunities and adds new ones. The three most recent phases identified about AED 107M of incremental projected savings.
| Phase | Incremental projected savings (AED M) | Source of opportunity |
|---|---|---|
| Phase 3 | ~16 | New opportunities |
| Phase 4 | ~31 | Carried-forward and new opportunities |
| Phase 5 | ~60 | Carried-forward and new opportunities |
| Total, three phases | ~107 |
| Tracking year | Projected savings (AED M) | Realised savings (AED M) | Compliance |
|---|---|---|---|
| Year 1 | ~72 | ~41 | 57% |
| Year 2 | ~95 | ~58 | 61% |
| Year 3 | ~54 | ~38 | 69% |
| Three-year total | ~220 | 135+ | ~62% |
Realised savings have grown to more than AED 135M over three years, about 62% of what was projected, and compliance has improved every year. That trend reflects better visibility and follow-through after each award, and it is the area the programme continues to work on.
Structured competition and negotiation improve pricing, discounts, rebates and other commercial terms.
Product-level comparison supports informed supplier and product choices within the approved formulary.
Purchasing and consumption data support a consistent view of potential and realised savings.
Post-implementation monitoring shows adherence to negotiated deals and where to improve.
“EmpoweringCPO has consistently demonstrated expertise and dedication across various procurement projects. Their team exhibits professionalism, responsiveness, and unwavering commitment. Their clear communication and collaborative approach make them a pleasure to work with. EmpoweringCPO has been an essential partner in our journey towards excellence.”
Assistant General Manager, Corporate Procurement, Leading UAE Healthcare GroupPurchase and consumption data were cleaned and mapped before any sourcing decision, so every proposal and saving could be tested against real numbers.
Item-level RFPs created competition, and negotiation then improved pricing, discounts, rebates and terms, compared on landed cost.
Refreshing the formulary every phase meant new and carried-forward opportunities were captured continuously.
Scope, strategy and selection criteria were validated with stakeholders and approved before deals were implemented.
Monitoring continued after signing, so the gap between projected and realised savings stayed visible and could be acted on.
The programme continues with a further refresh of the in-scope formulary at the start of each new phase. The focus is on lifting compliance beyond its current level and applying the same approach to other high-spend categories. To apply the same approach to your own spend, see our strategic sourcing and savings compliance tracking services, or contact us to start with one category.
Start with one high-spend category. EmpoweringCPO brings the data, the RFP and negotiation process, and the tracking to prove the savings.
Client identity withheld for confidentiality. The brand example uses illustrative values. Amounts are in AED, rounded; ~ denotes approximate. Compliance is realised savings as a share of projected savings. Savings are measured against the agreed baseline and methodology.
EmpoweringCPO is a team of procurement professionals, founded in 2011 and based in India. We help organisations find procurement savings through procurement consulting and run their processes for them through procurement outsourcing, under agreed SLAs.
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