The Drug Management Cycle – Distribution

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

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

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

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

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

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

12. Health System Supply Chain – Theory

13. The Complex Reality: Health Supply Chains in Kenya

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