Health Commodities Supply Chain Integration

Insights from Project Optimize

Tina Lorenson PATH, Commercialization Officer July 30, 2012 Photo credit: PATH/ Sridharan Rangachari

Supply Chain Integration Rationale

• • • Parallel systems leads to inefficiencies Increasing complexity Health commodities are becoming more complex to manage (e.g., new vaccines in single dose presentations, with novel delivery devices) Vaccines are being tested in a controlled temperature chain environment Pharmaceuticals are becoming increasingly more temperature sensitive (e.g., in Tunisia, >60 non-vaccine pharmaceutical require storage between 2-8 o C) Optimize

Supply Chain Integration in Practice

• Trend to integrate a package of health services via child health days, reaching every district (RED), etc.

• A survey in African countries showed many countries already integrate vaccines with drugs, but the degree of integration varies • In Africa, integrated areas can be grouped into four categories: • • Ordering and reception (35%) Storage and distribution (42%) • Management processes (60%) • Staff, equipment, and finance (57%) • The wealth of experience with integration to date is not well documented Optimize

Supply Chain Integration in Senegal

• • Implement and validate the integrated distribution of vaccines with other drugs and health products (full integration) Implement and validate a moving warehouse that will streamline the vaccine supply chain from regional to peripheral level Optimize

Overview of Integration in Senegal

Pre-integration Post-integration DPM = Direction of Medical Prevention; DSR = Reproductive Health Division; EPI = Expanded Programme on Immunization; PDA = District Supply Pharmacy; PNA = National Supply Pharmacy; PNT = National Program to Fight Against Tuberculosis; PRA = Regional Supply Pharmacy.

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Moving Warehouse in Senegal

On October 27, 2010, a WHO representative handed the keys of the mobile warehouse trucks to the minister of health.

Two moving warehouse trucks providing monthly delivery of vaccine (left and right image). Stock and consumption data are entered on site and transmitted via the Internet to districts, regions, and the PRA (right image).

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Primary roles

− − Carry out monthly delivery of vaccines and supplies since June 2011: Top-up existing stocks in 110 facilities Transmit consumption data via the Internet and provide data entry Deliver essential drugs to one district (Pété) since Nov. 2011 Deliver reproductive health drugs and products since Feb. 2012     − − Discussed delivery of: HIV, malaria & TB drugs & products (May 2012) Vitamin A, zinc and ORT (May 2012)

Secondary roles

Perform supportive supervision Provide refrigerator maintenance Collect filled safety boxes Optimize

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Current Immunization Supply Chain Logistics

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Future Supply Chain Logistics

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Cost Comparison of Supply Chain Logistics Options

Comparing indicators between baseline and moving warehouse- with and without new vaccine introduction − Available space in the moving warehouse will accommodate dry goods and pharmaceuticals

Scenario description Vaccine availability No. of doses Value of vaccines Logistics costs for the system Logistics cost per dose Logistics costs as % of value of vaccines Baseline

Baseline system 89% 414,881 Moving warehouse 99% 499,072

New vaccine introduction PCV and Rota constrained

Baseline system Moving warehouse 29% 36% 217,313 248,102 $ 337,249 $ 389,878 $ 431,320 $ 481,779 $132,647 $143,122 $117,788 $131,117 $0.33

$0.29

$0.54

$0.53

39% 37% 27% 27% Optimize

Gap Analysis: Additional resource needs for new vaccine introduction in the St. Louis Region

Location Baseline Additional resource needs Moving Warehouse Storage capacity

Central Région District Health post

Transport capacity

Podor St. Louis 1 St. Louis 2 Cold room 9.45 m 3 Cold room 9.45m

3 3 TCW 1152 3 RCW50s 4 additional trips Cold room 9.45 m 3 Cold room 9.45m

3 2 RCW50s 7 RCW4/30s 1 Big Box or 5 RCW 4/30 1 Big Box or 5 RCW 4/30 Optimize

Cost Comparison of Unconstrained System

Comparing indicators between baseline and moving warehouse- with and without new vaccine introduction − Available space in the moving warehouse will accommodate all dry goods and pharmaceuticals

Scenario description Vaccine availability No. of doses Value of vaccines Baseline

Baseline system 89% 414,881 $ 337,249 Moving warehouse 99% 499,072 $ 389,878

New vaccine introduction PCV and Rota constrained

Baseline system Moving warehouse 29% 36% 217,313 248,102

New vaccine introduction PCV and Rota unconstrained

Baseline system Moving warehouse 100% 100% 646,120 664,363 $ 431,320 $ 481,779 $ 1,296,861 $ 1,298,657

Logistics costs for the system Logistics cost per dose Logistics costs as % of value of vaccines

$132,647 $143,122 $117,788 $131,117 $ 146,421 $ 133,451 $0.33

$0.29

$0.54

$0.53

$0.23

$0.20

39% 37% 27% 27% 11% 10% Optimize

Summary of preliminary findings in Senegal

• • Moving warehouse demonstrates marginal cost savings (lower cost per dose delivered) • • • Increased cold chain and personnel costs with moving warehouse Increased vaccine availability (i.e. more doses delivered to health posts to meet need) Increased costs offset by higher inventory moving through system.

Additional savings possible once integration with other health goods • Current transport capacity of moving warehouse vehicles is underutilized significantly Optimize

Supply Chain Integration in Tunisia

• • • Segmented integration from national to sub-national (all temperature sensitive products) Full integration from regions to SDPs (all products for government run programmes) Planned deliveries based on convenient transportation circuits and efficient route planning (includes supervision and service delivery) Optimize

Benefits of Integration in Tunisia

• • • The supply chain systems for health commodities are streamlined by removing inefficient steps common in vertical systems The supply chain system benefits from economies of scale from integration and is cheaper by leveraging renewable energy from the sun for storage and transport as sub-regional levels Transport is more reliable • • Planned deliveries of all health commodities rather than various ad-hoc collection/delivery systems for groups of health products; Less breakdowns and maintenance required on an electric vehicle • No reliance on fuel and budgets to pay for petrol (often lacking at sub national levels) Optimize

Optimize Integration Summary

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Optimize project objectives

Understand the feasibility and benefits of an integrated health commodity supply chain with vaccines • Analyze the structural effects of supply chain integration • Evaluate the impact of integration on supply chain management

Support components

• • • • Develop and implement a logistics management information system (LMIS) that can support a streamlined and integrated supply chain Develop and implement a monitoring and evaluation (M&E) plan for all project activities • Implement advocacy and communication to support project activities

Vision components

Develop and apply a computer-based vaccine and drug supply chain model Develop a roadmap toward scale-up of successful innovations and development of a future vision of health supply systems Optimize

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Optimize Integration Next Steps

• • Outcome metrics and qualitative finding will be aggregated and analyzed after one year of country demonstration experience (estimated May 2013) Findings and lessons learned will be shared globally to aid stakeholders and countries in critically assessing the potential impact of integration and tested interventions Optimize

Thank you

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