Pharmaceutical Quality Certificates, the Collapse of Centralized Procurement, and the Case for Restoring the SAMES Mandate in Timor-Leste
This essay examines why pharmaceutical quality certification is not a bureaucratic formality but the last line of defence against substandard and falsified medicines — and why Timor-Leste's decision to replace direct manufacturer procurement with layered public tendering has systematically undermined both quality assurance and medicine availability.
This is Essay III in the AIFAESA Policy Reference Series. Essay I established why healthcare is a market failure requiring regulation. Essay II argued for welcoming regulated private investment. This essay addresses a foundational concern cutting across both: the quality assurance of pharmaceutical products and the institutional architecture needed to guarantee it in Timor-Leste.
A medicine that does not contain what its label says it contains is not a medicine. It is a fraud packaged to resemble one, and its administration to a sick person is not treatment — it is an act of harm that carries a counterfeit appearance of care. This is not an extreme theoretical scenario. Substandard and falsified medicines are a documented global public health crisis, responsible for hundreds of thousands of deaths annually, predominantly in low- and middle-income countries. Timor-Leste, with its limited regulatory infrastructure, geographic isolation, and dependence on imported medicines, is among the countries most structurally exposed to this threat.
At the heart of the defence against substandard medicines lies a system of internationally recognized certificates — the product of decades of WHO standard-setting and multilateral regulatory cooperation — that establish a chain of documented accountability from the manufacturer's production floor to the patient's bedside. These certificates are not paperwork for its own sake. They are the evidence trail that allows any importing country to verify that the medicine it is receiving was made correctly, stored correctly, transported correctly, and comes from a source whose identity and authorization can be confirmed.
This essay examines that certification system in detail. It then tells the specific story of how Timor-Leste developed, and subsequently undermined, an institutional model for pharmaceutical procurement that was designed precisely to leverage the protection those certificates offer. The Central Pharmacy — later reorganized as SAMES (Serviço Autónomo de Medicamentos e Equipamentos de Saúde) and now operating under the name INFPM (Instituto Nacional de Farmácia e Medicamentos) — was established during the UN Transitional Administration with a mandate built around direct procurement from primary sources. That mandate, and the quality guarantees it supported, have been progressively hollowed out through procurement practices that prioritize local political economy over pharmaceutical integrity. The consequences have been visible in medicine shortages, quality failures, and a supply system under chronic strain.
The distinction between medicines and ordinary merchandise is not merely semantic — it is foundational to the entire architecture of pharmaceutical regulation worldwide. A substandard shirt is a consumer grievance. A substandard antibiotic administered to a child with bacterial meningitis is a death sentence. A falsified antimalarial sold in an endemic region does not simply fail to treat the patient; it allows the parasite to spread while the patient, their family, and their community believe treatment is occurring. The harm is compounded by the deception.
Medicines are not commercial products that happen to be subject to regulation. They are products whose primary purpose is to preserve and restore human health, and this purpose creates a categorical obligation on the state to guarantee that every medicine reaching a patient is what it claims to be, contains what it claims to contain, was made where it claims to have been made, and was stored and transported under conditions that preserve its integrity.
This principle is reflected in the legal frameworks of virtually every country in the world, from the most sophisticated regulatory agencies — the US Food and Drug Administration, the European Medicines Agency, Japan's PMDA — to the national medicine regulatory authorities of small developing countries. The WHO's prequalification programme, its Model List of Essential Medicines, and its entire certification scheme framework all rest on this foundational understanding: quality in medicines is not a commercial preference. It is a patient safety requirement, and by extension, a state obligation.
The WHO's guidelines on medicines quality explicitly state that quality cannot be tested into a product after manufacture — it must be built in through controlled processes from the beginning. This is why certification matters. It is not possible to open a container of tablets, look at them, and determine whether they contain the correct active ingredient in the correct concentration, made under conditions that prevent contamination. Only a documented and independently verified manufacturing, storage, and distribution process — attested by recognized regulatory authorities — can provide that assurance.
States carry an irreducible duty of quality assurance for medicines that enter their health systems. This duty cannot be delegated to market forces, commercial guarantees from suppliers, or informal trust in trading partners. The WHO's Model Quality Assurance System for Procurement Agencies, the TRIPS Agreement provisions on public health safeguards, and the 2001 Doha Declaration on TRIPS and Public Health all reflect an international consensus that access to quality medicines is a component of the right to health — a right that obliges governments to take affirmative action, not merely to refrain from interference.
Every country has the right and responsibility to ensure that the medicines reaching patients within its borders meet international standards of quality, safety and efficacy. This responsibility cannot be outsourced to commercial actors whose interests are not identical to the public interest.
— WHO, Model Quality Assurance System for Procurement Agencies, 2007 (adapted)
In practical terms, this duty encompasses: registration of medicines before they may be legally marketed; inspection of manufacturing and distribution facilities; post-market surveillance to detect quality problems in circulation; enforcement action against substandard and falsified products; and — critically — the institution of procurement systems that actively require and verify the documentary proof of quality that the international certification framework is designed to provide.
The international pharmaceutical certification system is a layered architecture of documents, each verifying a specific dimension of a medicine's quality chain — from the factory floor to the receiving country's border. These are not duplicative bureaucratic requirements. Each certificate addresses a distinct vulnerability in the supply chain, and the absence of any one of them leaves a specific gap in quality assurance.
| Certificate | What It Certifies | Issuing Authority |
|---|---|---|
| Certificate of Pharmaceutical Product CPP | That the product is registered and approved in the exporting country; that it meets WHO quality, safety, and efficacy standards; and that it is manufactured under GMP conditions. This is the primary reliance document under the WHO Certification Scheme (1969, revised 1997, 2021). | National Medicines Regulatory Authority of the exporting country (e.g., US FDA, EMA, TGA, Health Canada) |
| Good Manufacturing Practice Certificate GMP Certificate | That the manufacturing facility has been inspected and certified as compliant with WHO GMP standards — covering premises, equipment, personnel, documentation, production processes, quality control, and recall systems. Valid for a defined period; renewal requires re-inspection. | National Medicines Regulatory Authority or WHO Prequalification Programme |
| Good Distribution Practice Certificate GDP Certificate | That the distributor/wholesaler maintains conditions throughout the supply chain — temperature, humidity, security, documentation — that preserve product integrity from manufacturer to point of delivery. Essential for temperature-sensitive products including vaccines, biologicals, and certain antibiotics. | National Medicines Regulatory Authority; EU competent authorities; WHO |
| Certificate of Origin COO | The country in which the product was manufactured or where the active pharmaceutical ingredient (API) was produced. Establishes traceability of source; affects eligibility for trade preferences; required for customs classification; critical for anti-falsification. | Chamber of Commerce or Customs Authority of the exporting country |
| Free Sale Certificate / Marketing Authorization FSC / MA | That the product is freely sold and marketed in the exporting country without restriction. Provides additional assurance that the product has passed the exporting country's regulatory review and is considered safe and efficacious for its intended use. | National Medicines Regulatory Authority of the exporting country |
| Batch Certificate / Certificate of Analysis CoA | Product-specific and batch-specific document confirming that the specific lot of medicine being delivered meets the approved specifications for identity, purity, strength, and other quality attributes. Issued by the manufacturer's quality control laboratory for each batch shipped. | Manufacturer's Quality Control Department / Qualified Person |
| Good Storage Practice Certificate GSP Certificate | That storage facilities — warehouses, cold rooms, distribution centres — comply with WHO's Good Storage Practice guidelines, ensuring that products are maintained under conditions that preserve quality before dispatch. | National Medicines Regulatory Authority |
| Shipper's Declaration / Good Shipment Practice Documentation Shipment Docs | Documentation confirming that the product was shipped under appropriate conditions — including temperature excursion records for cold-chain products, packaging compliance documentation, and chain-of-custody records from point of manufacture to the importing country. | Freight forwarder / Logistics provider, with manufacturer oversight |
| WHO Prequalification Certificate WHO PQ | For medicines procured through UN agencies and international health programmes, WHO's prequalification provides independent assessment of a product's quality, safety, and efficacy and the manufacturer's GMP compliance. The gold standard for international public health procurement. | WHO Prequalification Programme, Geneva |
A critical and underappreciated structural problem in international pharmaceutical procurement — particularly acute for small importing countries like Timor-Leste — is what may be called the certification threshold problem. Obtaining the full suite of quality certificates, particularly the CPP and associated GMP documentation from major regulatory authorities, involves a formal process — submitting applications to national regulatory agencies, paying fees, awaiting inspection schedules, and processing through bureaucratic channels that are calibrated for the volume and complexity of major pharmaceutical markets.
Major manufacturers and their regulatory authorities prioritize certification requests from large markets and large purchasers. When a procurement represents millions of dollars of purchase commitment, the seller — whether the manufacturer itself or an authorized regional distributor — has powerful commercial incentives to invest the administrative effort required to produce complete, current, and properly authenticated certification packages. The certificates are forthcoming promptly, because the commercial relationship they enable is worth the effort.
When a purchase order is small — below the financial thresholds that manufacturers regard as commercially significant — the incentive calculus reverses. Obtaining a current CPP from, say, the US FDA or the EMA requires administrative effort, fees, and potentially months of lead time. A manufacturer receiving a purchase order for a quantity that represents a fraction of one percent of their annual production volume may be slow to respond to certification requests, may issue incomplete documentation, or may route the order through distribution intermediaries who cannot issue primary certificates at all. The importing country receives medicines of unknown provenance and uncertain quality, accompanied by documentation that may be outdated, incomplete, or of questionable authenticity.
This threshold dynamic is not theoretical. It is documented in the academic literature on pharmaceutical supply chains in small island states and least-developed countries. Research consistently shows that medicines procured in small quantities from secondary or tertiary distributors — rather than directly from manufacturers or their officially authorized agents — are significantly more likely to be accompanied by incomplete or missing certification, and to fail quality testing when subjected to independent laboratory analysis.
The solution to the threshold problem is aggregation. When a single authorized purchasing agency consolidates the entire national demand for a given medicine into a single large purchase commitment, the financial value of that commitment rises to a level that commands the manufacturer's full attention and full compliance with certification requirements. This is the economic logic — not just the administrative convenience — of centralized pharmaceutical procurement.
When the United Nations Transitional Administration in East Timor (UNTAET) established the foundations of Timor-Leste's health system between 1999 and 2002, pharmaceutical procurement was one of the areas where deliberate institutional design was applied. The Central Pharmacy — which would later be reorganized as SAMES — was established with a specific and coherent operational mandate: to serve as the sole government agency responsible for importing and distributing medicines and medical supplies within the territory.
The logic of this mandate was sound and explicitly quality-oriented. A single centralized purchaser, procuring the entire national requirement for essential medicines and supplies, would commit purchase volumes large enough to purchase directly from manufacturers or their officially authorized regional distributors. At those volumes, the manufacturer had every commercial incentive to provide full and current certification. The CPP, GMP certificate, Certificate of Analysis for each batch, and all accompanying documentation would be forthcoming promptly and completely, because the commercial relationship — worth potentially millions of dollars annually — depended on maintaining the trust of the purchasing authority.
UNICEF, WHO, and JICA re-establish the Central Pharmacy in April 2000, destroyed during the 1999 violence. The facility becomes the sole pharmaceutical warehouse, with all medicines — from all funding sources — channelled through it.
The Central Pharmacy operates under UN administration with procurement managed through WHO and international agencies. Quality certification requirements are enforced. Direct manufacturer relationships established. The model functions as designed: large consolidated orders command full manufacturer compliance and certification.
The Central Pharmacy is reorganized as SAMES (Serviço Autónomo de Medicamentos e Equipamentos de Saúde). The mandate of centralized procurement and distribution is retained in institutional design, but implementation authority shifts fully to the Ministry of Health of the new independent government.
Despite retaining formal responsibility as the central distributor, SAMES progressively ceases to directly procure medicines from manufacturers or authorized agents. Procurement authority migrates toward public tender processes managed through the Ministry of Health, fundamentally altering the supply chain structure and certification dynamics.
Academic research documents that since 2005, pharmaceutical stockout has been a constant issue across all health services in Timor-Leste. The World Bank, UNDP, and WHO all note persistent supply chain failures. A 2023 TATOLI report records 22% of SAMES drug items out of stock, with an annual government allocation of $15–20 million described as insufficient.
The Government of Timor-Leste requests UNDP to directly manage procurement of essential medicines and supplies — a tacit acknowledgment that the national procurement system, as constituted, cannot reliably deliver quality-assured medicines at adequate volume. UNDP applies principles of best value-for-money, quality assurance, transparency, and reliability that the national tender system had abandoned.
The critical institutional shift that occurred in the years following independence was the replacement of direct procurement with public tendering as the principal mechanism for sourcing medicines. On the surface, this change appears consistent with principles of good governance: public tendering promotes competition, prevents monopolistic procurement relationships, enables domestic enterprise participation, and creates an auditable record of the selection process. These are genuine virtues in procurement of general goods and services. In pharmaceutical procurement, however, they interact disastrously with the specific quality certification requirements of the international pharmaceutical supply chain.
Under a public tender system, the government issues specifications for required medicines and invites any qualifying company to submit a bid. The contract is typically awarded to the lowest compliant bidder. The winning company is then responsible for sourcing and delivering the specified medicines. This company — typically a Timorese national company that has bid for the contract based on price and commercial connections rather than specialized pharmaceutical procurement expertise — must then actually obtain the medicines from the international market.
What follows the award of the procurement contract to a Timorese national company is a cascade of subcontracting that systematically destroys the quality certification architecture the system is supposed to maintain.
The original manufacturer or authorized regional distributor. Has full capacity to issue CPPs, GMP certificates, and batch certificates. Willing to provide complete documentation for large consolidated orders. Often not contacted at all in the current system.
The company that wins the government tender. Typically has local connections and may have underbid the contract. Lacks pharmaceutical procurement expertise and international supplier relationships. Subcontracts internationally. Adds commercial margin. The specifications and certification requirements of the original contract begin to be diluted at this stage.
The company to which the Timorese primary contractor subcontracts the actual procurement task. Has regional market knowledge and supplier connections, but is itself often not purchasing directly from manufacturers. Adds further commercial margin. May procure from secondary wholesalers rather than authorized distributors. Certification documentation begins to break down here — particularly because the quantities involved, subdivided from the original contract, may now fall below manufacturers' certification thresholds.
In some cases, further subcontracting occurs, or medicines are sourced from secondary wholesalers operating in regional pharmaceutical markets where quality assurance standards are weaker. At this stage, the product's origin may be unclear, batch certificates may be missing or potentially falsified, and the product itself may be substandard, near-expired, or counterfeit. The financial pressure to source cheaply — because each tier of intermediary has extracted a margin — pushes procurement toward lower-quality, less-documented sources.
Each tier of intermediation adds cost through markup, reduces the financial value of any individual order (because the contract is being split and subcontracted in pieces), and dilutes the quality certification chain. When the manufacturer's certification office receives an inquiry for a small quantity — far below the threshold at which they would invest in producing full certification documentation — they may decline to issue certificates, issue incomplete documentation, or route the request back through regional offices that similarly lack authority to issue primary regulatory certificates.
The result is medicines arriving in Timor-Leste accompanied by documentation that is variously: outdated (certificates issued for previous batches, not the specific batch delivered); incomplete (CoA missing, or CPP from the wrong regulatory authority); of uncertain authenticity (certificates that purport to be from recognized authorities but have not been verified); or simply absent (documentation "to follow" that never arrives). All of these scenarios represent a failure of the quality assurance framework the certification system was designed to provide.
The power of centralized procurement is the consolidated purchase volume that commands manufacturer attention and compliance. Public tendering — especially with multiple contracts and multiple contractors — fragments this volume into quantities too small to motivate full manufacturer participation in certification.
SAMES no longer procures directly from manufacturers or their authorized agents. Every layer of intermediation between the government and the manufacturer is a layer at which quality documentation degrades, price increases, and accountability diffuses.
Each tier of subcontracting adds a commercial margin. By the time medicines reach SAMES warehouses through three or four intermediaries, their price substantially exceeds what direct procurement from the manufacturer would have cost — reducing the quantity that the budget can purchase and contributing to shortages.
Sub-threshold order quantities from secondary suppliers mean manufacturers have no incentive to issue full certification packages. The government receives medicines whose quality cannot be independently verified against international standards because the documentary chain is broken.
Secondary and tertiary supply chains in regional pharmaceutical markets, particularly for high-demand generic medicines, are known vectors for substandard and falsified products. Without direct manufacturer accountability and full batch certification, Timor-Leste's import system cannot reliably detect or prevent the entry of falsified medicines.
When quality failure occurs with a medicine procured through a multi-tier tender chain, accountability is impossible to trace. The primary contractor blames the subcontractor; the subcontractor blames the regional wholesaler. SAMES, as nominal distributor, bears the reputational cost without having controlled the procurement decision that caused the failure.
The consequences of these structural failures are not theoretical. They are documented in published academic research, reported in Timorese media, acknowledged by government officials, and reflected in the repeated requests for international assistance in managing pharmaceutical procurement that would, under a functioning system, be handled nationally.
Academic research published in peer-reviewed journals has documented persistent pharmaceutical stockout as a chronic condition across all health services in Timor-Leste since at least 2005. Qualitative research involving 46 health professionals across four districts identified poor procurement coordination, failure to adhere to policy guidelines, inadequate inventory management, and budgetary constraints as the principal contributors to ongoing medicine shortages. The researchers noted explicitly that the structural problems extended beyond logistics to the quality of the procurement system itself.
In September 2023, SAMES's own interim Executive Director publicly acknowledged that 22 percent of the agency's 359 essential medicine items were out of stock, with an annual government allocation of $15–20 million described as insufficient to cover both medicines and medical equipment. The admission that medicines were in the procurement process with projected arrival weeks away illustrates the structural lead-time failures of a tender-based procurement system versus the responsive replenishment that a direct-procurement relationship with manufacturers would permit.
The government's engagement of UNDP to manage procurement of COVID-19 essential medicines and supplies starting in 2020 — explicitly justified on grounds of quality assurance, transparency, and reliability — represents an institutional acknowledgement that the national procurement system, as currently operating, cannot meet the standards required for quality-assured pharmaceutical supply. UNDP's approach — applying principles of direct engagement with quality-assured suppliers, full documentation requirements, and independent oversight — is, in essence, a temporary reversion to the model the Central Pharmacy was designed to embody permanently.
The case for restoring the original mandate of SAMES/INFPM — direct procurement from manufacturers or their officially authorized agents, with full certification requirements — rests on multiple interlocking arguments that are mutually reinforcing.
Quality assurance is non-negotiable, and certification is its instrument. No amount of post-market testing can fully substitute for the pre-procurement assurance of complete certification. Testing is expensive, requires laboratory capacity that Timor-Leste has in limited supply, and can only catch failures after the medicines have already entered the system. Preventing the entry of substandard or uncertified medicines requires source-level quality assurance — which in turn requires a direct relationship with sources capable of providing that assurance.
Aggregation creates commercial leverage. A single national purchaser with a consolidated annual commitment of $15–20 million in medicines and supplies is a significant commercial counterparty for the manufacturers of essential generic medicines. At that scale, the purchaser can negotiate directly, demand complete and current certification, enforce delivery standards, and hold suppliers accountable for quality failures. No individual contractor winning a fragmented tender can exercise this leverage.
Direct procurement eliminates the price mark-up cascade. Every tier of intermediation represents a commercial extraction. A direct procurement relationship with a manufacturer or authorized regional distributor eliminates multiple layers of markup, allowing the same budget to purchase significantly greater quantities — addressing the shortage problem through procurement efficiency rather than additional budget allocation.
The model has been proven to work in Timor-Leste's specific context. This is not a theoretical argument imported from comparative experience. The UN-era Central Pharmacy, operating on exactly this model, functioned as the quality-controlled foundation of Timor-Leste's pharmaceutical supply at a time when the entire health system was being rebuilt from destruction. The system worked. It was subsequently degraded by procurement decisions that prioritized other considerations over pharmaceutical quality. The question is not whether the model can work — it demonstrably can — but whether the political will exists to restore it.
Legislation or ministerial decree should formally vest procurement authority in INFPM as the sole government entity authorized to procure medicines and medical supplies for the national health system. Public tenders for the procurement function itself — inviting companies to act as intermediary purchasers — should be prohibited. INFPM should purchase directly from manufacturers or their officially recognized and registered agents.
Every purchase contract signed by INFPM must specify, as a condition of payment, the delivery of complete certification packages: CPP from the competent authority of the manufacturing country, current GMP certificate for the manufacturing site, Certificate of Analysis for each batch delivered, Certificate of Origin, GDP certificate for the distributor, and shipment documentation. No payment released without complete documentation. No exceptions.
INFPM should actively pursue participation in WHO prequalification-based procurement frameworks — including the Medicines Patent Pool and cooperative procurement mechanisms available to Small Island Developing States. These frameworks provide access to WHO-prequalified medicines with complete documentation at negotiated prices, precisely solving the threshold and certification problems that plague unilateral small-market procurement.
The documented failure of SAMES to procure directly was partly attributable to lack of skilled procurement staff. INFPM should enter into a structured technical partnership — with WHO, UNDP, or a specialized procurement agency — to build in-house capacity in international pharmaceutical procurement: supplier qualification, contract negotiation, certificate verification, and quality monitoring.
AIFAESA, as the medicines regulatory authority, should develop a dedicated function for verifying the authenticity of pharmaceutical certificates presented by importers — including INFPM's own suppliers. Direct verification with the issuing authority (US FDA, EMA, TGA, WHO) for each certificate should be routine practice, not an exception triggered by suspicion. This function transforms certificate review from a passive documentation check into an active quality gate.
No procurement system provides perfect protection. AIFAESA should develop a systematic post-market surveillance programme — sampling medicines in distribution and testing against specifications — as a second layer of quality assurance. Where Timor-Leste lacks laboratory capacity for all tests, bilateral agreements with Australian, Indonesian, or regional reference laboratories should be established for out-referral.
The current application of standard public procurement regulations — designed for goods and services where price competition is the primary value — to pharmaceutical procurement is a category error. Timor-Leste's procurement legislation should explicitly recognize pharmaceuticals as a category requiring quality-specific procurement rules, consistent with WHO guidance on pharmaceutical procurement in small markets, including the option of direct negotiation with qualified suppliers as a primary method rather than a method of last resort.
Medicines are not merchandise. They are not interchangeable commodities where the lowest bidder can be trusted to deliver a functionally equivalent product. A medicine that fails quality standards does not simply fail to perform — it may actively harm the patient receiving it, may allow a disease to progress while the patient and their treating clinician believe it is being treated, and may contribute to the development of antimicrobial resistance that affects entire communities. The stakes of pharmaceutical quality failure are categorically higher than the stakes of any ordinary procurement failure, and the regulatory framework that governs pharmaceutical procurement must reflect this categorical difference.
Timor-Leste's Central Pharmacy — the institutional ancestor of SAMES and now INFPM — was founded on precisely the right insight: that a single centralized purchaser, buying in consolidated volumes directly from primary sources, generates both the commercial leverage to demand complete certification and the quality discipline to enforce it. The subsequent hollowing out of that mandate — through a shift to public tendering that fragments volumes, multiplies intermediaries, erodes certification chains, and cascades mark-ups — represents one of the most consequential and least-discussed governance failures in Timor-Leste's post-independence health system.
The human cost has been documented: chronic stockouts, inadequate budgets stretched thinner by intermediary margins, medicines of uncertain provenance and unverified quality reaching patients in facilities that have no means to independently test them. The institutional evidence is equally clear: the government's repeated recourse to UNDP and international agencies to manage procurement that should be managed nationally is an ongoing acknowledgement that the current system does not work.
The solution is not complex. It is to restore what was built correctly the first time, equip it with the technical capacity and legal authority it needs to operate as designed, and protect it from the procurement practices that have systematically undermined it. Medicines deserve a supply chain as serious as the stakes of their failure. Patients deserve a government that ensures they get one.
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