The Drug Management Cycle – Distribution Butch Staley

Working Definitions Supply chain – The network of retailers, distributors, transporters, storage facilities, and suppliers that participate in the sale, delivery, and production of a product. Logistics – The overall management of the way resources are moved to the areas where they are required. Distribution – The delivery or giving out of an item or items to the intended recipients.

Elements of the Distribution System Receipt and Inspection Storage Order and Issue Transport Inventory Control Port Clearance

Characteristics of Effective Distribution Constant supply Maintained quality Minimal loss/pilferage Accurate and timely inventory and transaction information Proper storage Efficient transport/delivery Adequate geographic coverage

Supply System Models There are many models, ranging from fully public to fully private, each with relative advantages and disadvantages, depending on context. Central Medical Stores model: South Africa, Tanzania Autonomous supply agency: Uganda, Benin Direct delivery: Caribbean Primary distributor (prime vendor): USA Fully private: Canada, Australia Mixed models: Europe, Caribbean

Pharmaceutical Distribution Models FULLY PRIVATE FULLY PUBLIC LEVELS International International Suppliers National Local Manufacturers Central Medical Store Local Wholesalers Regional Distributors Regional Medical Store District District Medical Store Private Pharmacies Hospitals Health Centers Health Posts Community Key Product flow in traditional CMS System Users

Central Medical Store Model LEVELS PRIVATE SECTOR PUBLIC SECTOR International International Suppliers National Local Manufacturers Central Medical Store Local Wholesalers Regional Distributors Regional Medical Store District District Medical Store Shops, Pharmacies Hospitals Health Centers Health Posts Community Key Product flow in traditional CMS System Users

Direct Delivery Model International Suppliers Local Manufacturers LEVELS PRIVATE SECTOR PUBLIC SECTOR International International Suppliers National Local Manufacturers Central Medical Store Local Wholesalers Regional Distributors Regional Medical Store District District Medical Store Shops, Pharmacies Hospitals Health Centers Health Posts Community Key Product flow in traditional CMS System Users

Primary Distributor Model LEVELS PRIVATE SECTOR PUBLIC SECTOR International International Suppliers National Local Manufacturers Central Medical Store Primary Distributor Local Wholesalers Regional Distributors Regional Medical Store District District Medical Store Shops, Pharmacies Hospitals Health Centers Health Posts Community Key Product flow in traditional CMS System Users

Fully Private Model International Suppliers Local Manufacturers LEVELS PRIVATE SECTOR PUBLIC SECTOR International International Suppliers National Local Manufacturers Central Medical Store Local Wholesalers Regional Distributors Regional Medical Store District District Medical Store Private Pharmacies Hospitals Health Centers Health Posts Community Key Product flow in traditional CMS System Users

Health System Supply Chain – Theory

The Complex Reality: Health Supply Chains in Kenya Just so that you can visualize the complexity of this system, we put up this very busy slide. As you can imagine, with all these different donors, reporting requirements for end users are immense. This level of complexity is not unique to Kenya--we see it all over the world. While the overview might appear to make logistics management seem relatively straightforward…. here is the reality!! Logistics is always in a balancing act between the here and now and the long term, so a very important consideration is to design logistics system interventions that balance between immediate impact and systems building to enhance long-term results The depiction of these systems shows why establishing separate systems are not an ideal solution for the long run. PEPFAR, 3x5 and scaling up ART are special initiatives that do require an emergency response and that might involve completely bypassing existing systems and structures in country. But all the parallel systems on this slide were set up with the same rationale and justification we are talking about today: the public sector systems had no capacity for absorbing new commodities. As we move forward and learn, we need to recognize that systems are dynamic and that solutions that are appropriate for the here and now may not be appropriate in 5-10 years.

Key Decisions Key decisions include: Push versus pull Centralized versus decentralized Roles and responsibilities: public, private, NGO Mix of in-house and contract services Levels of distribution and stock requirements

Assessment/Option Analyses Understand context – functionality and current capacity of public, private, and NGO systems and institutions Consider variable costs with each option Consider capacity to manage and operate proposed system Define methods for monitoring and measuring performance

Summary Designing a system for storing and distributing pharmaceuticals is complex and important In some countries, private (or parastatal) distribution companies may provide cost- effective alternatives for storage and distribution of pharmaceuticals