Health System Challenges of Broken Supply Chains

Don de SavignyAliya Karim

Swiss Tropical and Public Health InstituteUniversity of Basel

d.desavigny@unibas.ch

Health Systems & Policies Research GroupDepartment of Epidemiology and Public Health

Are essential medicines supply chains relevant to value for money?

Yes: Follow the money….

Where does most public health funding go?

•To essential medicines and other health commodities: drugs, vaccines, diagnostics, etc.

• Only valuable if delivered….

•Largest single cost center in the health system.

•Usually 40-60% of total health expenditure of low income countries

•Typical example: Tanzania, pop 45 million

• Total expenditure for essential drugs in 2012 was $199.7 million USD

Expenditure sources:

Printz, Naomi, Johnnie Amenyah, Brian Serumaga, and Dirk Van Wyk. 2013. Tanzania: Strategic Review of the National Supply Chain for Health Commodities.

USAID | DELIVER PROJECT, Task Order 1. 2011. Tanzania: 2020 Supply Chain Modeling—Forecasting Demand from 2020–2024. Arlington, Va.: USAID | DELIVER PROJECT,

Source Of Funds

Procurement Agent/Body

Point of 1st warehousing

Point of 2nd warehousing

MEDICAL STORE

PRIMARY HEALTH CARE FACILITYDISTRICT STORE

ZONAL MEDICAL STORE

ESSENTIAL MEDICINES

ARVs MALARIA TB OIARVs Ped

REAGENT Blood safety(+ HIV test)

VACCINES CONDOMS CONTRACEPTIVESMEDICALSUPPLIES

REGIONAL/DISTRICT VACCINE STORE

HEALTH FACILITY

GOVERNMENT

MULTILATERAL DONOR

BILATERAL DONOR

NGO/PRIVATE

AXIOSTEC &CCT

CRS IMA CUAMMHOSPITAL COLUMBIA HOSPITAL

TEC &CCT

HEALTH FACILITY

HEALTH FACILITY HOSPITALTEC &CCT

ZONAL BLOOD SAFETY CENTRE

Point of Distribution

GOVERNMENT

WBGLOBAL

FUND

SIDA

PEPFAR

USAID

UNICEF

WHO

ABBOTT

CSSC

COLUMBIA

PFIZER

JICA

CLINTON

UNITAID

CIDA

CDC

GAVI

CUAMM

HAVARD

NORAD

HOSPITAL

TEC&

CCT

CLINTON

HAVARD

MEDICALSTORE

CRS

SCMS

EGPAF

MOH& SW

AXIOS

UNICEF

JICA

CDC

COLUMBIA

ABBOTT

GAVI

CUAMM

CROWNAGENTS

USAID

TMAP

AXIOS

PATIENT

But expenditure enters a highly fragmented scene Medicines & Technologies supply chain complexity – Tanzania 2007

Let’s briefly look at a specific case …

Anti-malarial drugs in Tanzania

mHealth supply chain monitoring of anti-malarials

Source: SMS for Life Tanzania

Real-time monitoring

and the stockouts persist: Last week’s situation….

Source: SMS for Life Tanzania

Real-time monitoring

Red if stock- out this week

Green if stock in

Grey if no report yet

ACT total stock-outs this week in Tanzania

National Average13% of health facilities have no first line antimalarial treatment in stock

Regional Range: 1% in Dodoma Region to 38% in Mara Region.

District Range: 0% in Kongwa District to 75% in Ukerewa District

Source: SMS for Life Tanzania

Tanzania in 2012

Malaria prevalence by region Anti-malarial stock-outs by region

Data source: Tanzania Malaria Indicator Survey 2011-12 Data Source: Tanzania NMCP SMS for Life 2012

Country % Availability Year Source

Benin 40% 2013 SARA (MoH)

Burkina Faso 47.7% 2012 SARA

Burundi 34.8% 2013 HAI

Congo 23.4% 2007 HAI

DRC 45.7% 2007 HAI

Ghana 68% 2003 MoH

Kenya 87% 2009 HF Survey (HAI/WHO/MoH)

Sierra Leone 35% 2012 SARA

Tanzania 41% 2012 SARA (IHI & GF)

Zambia 49% 2010 SARA (MoH/WHO)

But national averages mask a worse condition for the poor and most rural populations

Pharmaceutical availability:Not just Tanzania …Not just antimalarials …

•OECD countries availability > 90%•Low income countries public sector ~ average 38%•Low income countries private sector ~ average 60%

In-country supply chains are the weakest link in the health system

Manufacturers

GLOBAL SUPPLY CHAIN

•Global demand supply planning•Voluntary pooled procurement•Price negotiation•Shipment coordination

IN-COUNTRY SUPPLY CHAIN

•Quantification and forecasting•Procurement•Warehousing•Distribution to providers

Patients

Prashant Yadav www.globalhealthmagazine.com

In-country procurement and supply management cycle

Source: Modified from Rima Shretta

Logistics Management Information System

The private supply chain paradox

Contrasting public and private logistics approaches

Private supply chains for Coca Cola, beer, soap, shampoo and cell phone cards are incredibly efficient in Africa.

Important structural contrasts between public and private supply logistics

Public sector ……

•Highly regulated

•Lack of systematic information collection tools

•Central assumption based supply chain planning

•Higher need for traceability and security

•Limited competition in distribution segment

•Poor “contract” compliance on e.g. delivery lead time, etc.

•Limited ability to create incentives

•Completely different logistics systems

• E.g. CMS cf. Cross docking

Supply chain systems: a neglected issue

What typologies of supply systems are used in Africa?

Are there standard indicators of supply chain performance (incl. Stock-outs)?

Is there a logistics performance index best? What incentives would help?

How can costs and spending be better tracked, benchmarked and used?

What should an effective supply chain cost in relation to the commodities bill?

Why do public sector supply chains fail and private sector systems do not?

What can we learn from private professional logistics systems?

Should we privatize public sector supply and which parts?

How can we get a deeper structured understanding of issues affecting supply chains?

Some recent initiatives

Village Reach, Mozambique: creative bundling

Affordable Medicines Facility AMFm (Global Fund):

ADDOs (Tanzania, Ghana, Zambia): Accredited Drug Dispensing Outlets

ACT Watch (Multi-country): third party market data

Missing medicines campaign (Malawi): Civil society mobilization

ColaLife (Zambia): secondary distribution channels for ORS & zinc supplements

Outsourcing public health logistics; 3rd party logistics (South Africa)

Bar codes for stock tracking, management and logistics (GAVI)

New tools (PSM Toolkit)

Capacity support (GF RBM LMIS; Empower Health; UNITAID ESTHERAID, UNICEF)

Dedicated programmes (MIT-Zaragoza International Logistics Programme; Kuehne Institute for Logistics Management; USAID DELIVER; SCMS; GF P4i, RBM PSMWG))

Stock-out hotline (GF) STOCKOUTS@theglobalfund.org

Addressing supply chain failure is a system-wide issue

Stock outs at front line facilities are the face of a failed system for providers and the public;

with fatal consequences

What stock-out and other supply chain performance

indicators need to be tracked?

What percent of the essential medicines cost

should be devoted to ensuring delivery?

Who is accountable to ensure zero-stock out

performance?

Civil society and media must be enabled to exert pressure for

performance; Public access and data

visualization

What incentives are missing and what disincentives are

obstructing supply chains?

What Procurement and Supply Management design works best?

Summary point

Value for money in results based financing?

Re-double efforts to approach zero stock-outs

No excuse for stock-outs

Thank you