1. The Drug Management Cycle – Distribution
Butch Staley

3. 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.

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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. Health System Supply Chain – Theory

13. 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.

14. 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

15. 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

16. 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