1. Alessandro de Luca Senior Vice President MERCK Group
Improving Access to Health
Supply Chain & Delivery
Addressing the Last Mile Challenge
Alessandro de Luca
Senior Vice President
MERCK Group
Title of the powerpoint

2. AGENDA Access to Health and Supply Chain Challenges Industry approach
Beyond a single company? LUMA

3. Many constraints to global access to quality medicines
Barriers to Global Access within the BoP as identified by the WHO
Unaffordable Prices
Medicines account for 25% to 70% of overall healthcare expenditure in developing countries compared to less than 15% in most high-income countries because of price levels
Unfair Health Financing
Leaves households responsible for the cost of essential medicines, placing the heaviest burden on the poor and sick who are least able to pay
One-third of WHO Member States have either no regulatory authority or only limited capacity to regulate the medicines market
Recent assessments by WHO shows 50% to 90% of samples of anti-malarial drugs failed quality control tests and more than half of ARVs assessed did not meet international standards
Poor Quality Medicines
Unreliable Supply
Inefficient procurement systems have been found to lead to payments of up to twice the global market price for essential medicines and lead to unnecessary waste of resources
Irrational Use
Estimates show that half of all medicines are inappropriately prescribed, dispensed or sold
Lack of New Medicines
Only 1% of medicines developed over the past 25 years were for tropical diseases and TB, which together account for >11% of global disease burden
Over 90% of R&D is focused on diseases for the richest 20%
Supply Chain presentation_ Brussels/ September 2013

4. The Supply Chain Objectives
Balance Supply & Demand
Ensure there is a sufficient supply available to meet demand
Provide consistent uninterrupted supply.
Cost
Minimize company cost and cost implications to countries and patients
Quality & Safety
supply of quality medicines till the final patient
Ensure drug safety in each step of the supply chain
To deliver the 3 of them is definitively a challenge in developing countries

5. Typical Pharma Distribution Channels and…
…Distribution Systems

6. The distribution challenge in Developing Countries:
The differences in the regulatory structure and distribution systems of medicines between developing income countries is significant when compared with high income countries .
Factor
OECD countries
Developing counries
Regulatory structure
Strong well-defined laws and overall good ability to enforce regulations.
Weak fragmented regulatory structures, ill-defined laws in some instances, and poor ability to enforce regulations.
Distribution systems
Few large distributors with nationwide coverage
Relatively low markups in distribution
Very fragmented distribution market
Few or none with nationwide coverage
High markups in distribution
Supply Chain presentation_ Brussels/ September 2013

7. Number of intermediaries in the channel
DEVELOPING COUNTRIES
DEVELOPED COUNTRIES
Source: ACT Watch

8. “People will tell you that delivering to Africa is impossible
“People will tell you that delivering to Africa is impossible. Please don’t worry because that isn’t true. 8

9. We can and will always find a way.
“People will tell you that delivering to Africa is impossible. Please don’t worry because that isn’t true.
We can and will always find a way.
But just don’t expect it to be the way you think or are used to in Europe.”
Global Logistics Provider, June 2013 9

10. AGENDA Access to Health and Supply Chain Challenges
Industry contribution: Some examples
Beyond a single company? LUMA

11. MERCK Example: Logistics for Praziquantel
WHO-Merck Donation Partnership to eliminate Schistosomiasis
THE LAST MILE
CHALLENGE
Registration
Manufacturing
Shipping
Clearing at country Airport
Delivery to Central Warehouse
Delivery to Patient
Yesterday
MoH, NGO…
PZQ Merck Serono
WHO
The Last Mile, who is accountable? 11

12. Today MERCK Example: Logistics for Praziquantel
WHO-Merck Donation Partnership to eliminate Schistosomiasis
THE LAST MILE
CHALLENGE
Registration
Manufacturing
Shipping
Clearing at country Airport
Delivery to Central Warehouse
Delivery to Patient
Yesterday
MoH, NGO…
PZQ Merck Serono
WHO
Today
The Last Mile, who is accountable?
PZQ Merck Serono 12

13. Last Mile Alliance Partners (LUMA ?)
MERCK Example: Logistics for Praziquantel
WHO-Merck Donation Partnership to eliminate Schistosomiasis
THE LAST MILE
CHALLENGE
Registration
Manufacturing
Shipping
Clearing at country Airport
Delivery to Central Warehouse
Delivery to Patient
Yesterday
MoH, NGO…
PZQ Merck Serono
WHO
Today
The Last Mile, who is accountable?
PZQ Merck Serono
Tomorrow ?
Last Mile Alliance Partners (LUMA ?) 13

14. Sanofi Train the Trainer Program Inter-University Degree in pharmaceutical supply chain management
Objective: improve supply chain management of medicines and other commodities for HIV/aids, malaria and tuberculosis
Inter-University degree from Ouagadougou (Burkina Faso), Auvergne and Lyon (France) Universities
Target audience : certified pharmacists working in sub-Saharan Africa
Results ( ): approx. 120 students from 14 countries

15. AGENDA Access to Health and Supply Chain Challenges Industry approach
Beyond a single company, towards collective action? LUMA

16. Strengthening Supply Chain: Last United Mile for Africa (LUMA)
LUMA is a partnership currently under development to strengthen the supply chain in Africa. The goal of the alliance is to: expand access, secure supply, improve health and support development
Supply Chain presentation_ Brussels/ September 2013

17. Thank you!
Supply Chain presentation_ Brussels/ September 2013