Transcript Medical products, vaccines, and technologies: Part 1

Unit 8 Supply Chain
Objectives
1. Describe the special nature of health
care commodities due to the need for
provider advice and counseling
2. Describe incentives along the supply
chain
3. Describe information flows in the supply
chain and opportunities for breakdown
Part 1: Special Nature of Health
Supplies
Health Supplies
• Drugs, Syringes, Suture, Contraceptives
etc.
• Perishable
• Some need health providers to be used for
maximum benefit
– Need to be prescribed based on diagnosis
Perishability
• Drug’s
– Expiration date must
be tracked to avoid
loss of potency
• Vaccines
– Must be kept
refrigerated or frozen
• Condoms
– Degraded by heat and
light
Adulteration
• Informal drug vendors profit from
relabeling products
• Adulteration can happen anywhere in the
supply chain
Production
• Research costs need to be paid for
– The most recently discovered drugs remain
under patent protection
• They cost more
• Their sales pay for the research for new drugs
• Patented drugs are prohibitively expensive
• Generics produced in country
Part 2: Incentives along the supply chain
Supply Chain Model
Selection
Use
Procurement
Distribution
Procurement
• Larger orders cost less than small
• Generics cost less than patent
• Good forecasts can lower costs by
preventing overstocks and shortages
• Prioritizing needs and bargaining
accordingly
Distribution
• Proper storage
• Inventory Control
• System, transport working
Use
• Clinical guidelines
• Treatment protocols
• Training and supervision
The Logistics Cycle
The Supply Chain
Health Logistics in Kenya
Commodity
Type
Family
Planning
(colour coded)
STI
Drugs
(including some
condoms for STI/
HIV)
Vaccines
and
Vitamin A
Essential
Drugs
HIV/AIDS
test kits
(&
hepatitis
B tests)
TB/
Leprosy
Malaria
Condoms
for STI/HIV/
AIDS
prevention
MOH
Equipment
(including
laboratory
supplies)
Organization Key
Gov ernment
World Bank Loan
Bilateral Donor
Multilateral Donor
NGO/Priv ate
Source of
funds for
commodities
U
S
A
I
D
K
f
W
U
N
F
P
A
De-centralization proj ects
DFID
(UK)
European
Union
S
I
D
A
W
H
O
GOK
G
A
V
I
C
I
D
A
UNICEF
JICA
G
D
F
GOK,
WB/IDA
US
Gov
World Bank DARE (8 districts)
SIDA (6 districts)
Belgian Gov (BTC) (2 districts)
EUROPA
Procurement
Agent/Body
Point of first
warehousing
Organization
responsible
for delivery
to district
levels
U
S
A
I
D
K
f
W
U
N
F
P
A
KEMSA
Regional
Depots
NLTP
(TB/
Leprosy
drugs
DANIDA (11 districts)
European Union (20 districts)
WHO (3 districts)
Crow n
Age nts
Gove rnm e nt
of Ke nya
Dutch
Gov
Age nt
UNICEF
KEMSA Central Warehouse
NPHLS store
KEMSA, District Hospitals, District
Stores (essential drugs kits, malaria drugs, lab
supplies, reagents, HIV/AIDS test kits)
Japanese
Private
Company
GTZ
C
D
C
kits, HIV/AIDS test kits)
ADB (5 districts)
District level
decisions of
quantity, type and
procurement of
health
commodities
KEPI Cold
Store
DELIVER and Logistics
Management Unit, Division of RH
(MOH) (contraceptiv es, condoms, STI
JICA (5 districts)
KEPI
(v accines
and v itamin
A)
MEDS
Private
Drug
Sources
Part 3: Information flows in the supply chain
Pull-Push Systems
• Pull (requisition) system = ordering
– Quantities to be issued are determined by personnel
who receive the supplies
• Responsive to changing local need
• Must train SDP personnel
• Push (allocation) system
– Quantities to be issued are determined by personnel
who issue the supplies
• Best if need “rationing”
• Pull-push (combined) system
– May vary by items
What We Know Works
• Invest in logistics management systems, not
just products themselves
• It’s never too early in product development or
program planning or health system reform to
consider logistics
• Collect and use information to drive supply
chain decisions, supply transactions and
coordination efforts
• Do what it takes to achieve visibility up and
down the supply chain
What We Know Works
• Institute a customer focus
• Train, train, train: people and technology are
both important
• Focus on fundamentals of logistics
management:
–
–
–
–
–
–
–
Forecasting and demand planning
Procurement
Warehousing and inventory management
Logistics management information systems
Freight forwarding
Distribution management
Quality assurance
• Measure everything
What We Know Works
• Adopt/adapt private sector practices, e.g.:
–
–
–
–
–
Long- and short-term forecasting and quantification
Pooled procurement under long-term contracts
Regional distribution centers
Consolidated, best-value freight shipments
End-to-end supply chain visibility
• Outsource functions intelligently
• Centralize and decentralize with care
• Always promote supply chain integration
Risks of Decentralization
• Decentralization:
– leads to multiple different procurements which leads
to high prices
– leads to decreased supervision and training which
leads to inequity among districts
– insufficient funds may lead to stockouts
• Need to monitor changes via a few key pharmaceutical
indicators
• Decentralization  Integration  compromised
logistics management information system
Supply system diseases
• Disease 1) Drug Adulteration
• Disease 2) Drug Leakage
– Drugs being taken out of supply chain
• They still reach patients but with potential
adulteration and lack of supervision
• Disease 3) Information failing to flow
– Information never collected
– Information not distributed
• Small people think that information is power and if
they give it away they give away power
Summary
• Medical supplies have properties unlike
other commodities.
– They often work best with expert advice on
their use
• Selection-Procurement-Distribution-Use
– Information at every step
• The more information flows the better