2 September 2010 | Tatum Anderson

The purchase and supply of anti-retroviral drugs is vitally important in southern Africa, explains Tatum Anderson

The AIDS crisis has affected southern Africa more than any other region in the world. As a result, the volume of anti-retroviral therapy (ART) drugs required in the developing nations grew tenfold in 2008 compared to five years earlier.

The nature of the disease, the available treatments and the procurement and delivery infrastructure in poorer countries makes getting drugs to the patients a challenge. Those with the illness must take ART every day for the rest of their lives and if treatment is interrupted the consequences can be life-threatening.

David Jamieson is deputy director of project planning and global partnerships at Supply Chain Management System (SCMS), a procurement consortium which delivers drugs to places including southern Africa.

Clinics running out of drugs – “stock-outs” – is a situation that must be avoided, he says.

He says: “There are frequent stock-outs because of shortage of funding and problems with countries’ own systems. That increases the pressure to ensure you have constant supplies. We’ve got to get to a situation in sub-Saharan Africa where we don’t run out of drugs.”

Risks to supply

But the demand for massive amounts of ART are putting already creaking procurement and distribution systems under strain. Warehouses are severely under-equipped, lacking basic equipment such as forklift trucks to make best use of storage space. Some roads to health clinics are impassable in the rainy season and there are health facilities without electricity, water or sufficient staff.

Clinics in South Africa’s Eastern Cape province have experienced disruption in supply since March. Suppliers claim to have gone unpaid and cannot afford to continue to ship the drugs, according to the Public Service Accountability Monitor, an independent watchdog.

Procurement has to respond to changes in the drugs required too. Health specialists, such as the World Health Organization, often release new recommendations on the type of drugs patients should take as new evidence emerges on side-effects and other issues.

Those purchasing drugs must manage the transition to new recommendations carefully, says Dumisane Kunene, the technical director of procurement at the National Emergency Response Council on HIV/AIDS in Swaziland.

“Keeping the balance between what is best for the patient and minimising losses through redundant current stocks becomes an issue when changes in treatment guidelines are introduced,” he says.

Some countries are turning to pooled procurement to ease elements of the purchasing process.

Carine Werder, international pharmacist coordinator at Médecins sans Frontières (MSF), an NGO which has been buying drugs in the region since 2000, says: “We put together the needs of the different countries where we work and purchase centrally. The countries can place their orders at our procurement centres and the centres organise shipments.”

A pooled procurement scheme can mean lower prices in return for large-volume purchases, according to Erin Koehler, deputy director of drug access at the Clinton Health Access Initiative (CHAI). The organisation, started by ex-US president Bill Clinton, has negotiated reductions of more than 60 per cent on some children’s anti-retroviral drugs.

And there are other advantages, says Koehler. “If you are a small country or purchasing a product for which there is low demand, it may be advantageous to pool procurement to generate volume to make the product available.”

Third-party purchasing agents can also take on complex forecasting, logistics, ordering and tendering, she adds. “For countries struggling with human resource capacity, it can be onerous to take on procurement responsibilities.”

That’s why some countries are turning to such agents. CHAI uses IDA Foundation to provide procurement logistics for the countries it works with; Crown Agents runs Botswana’s central procurement agency; and Lesotho and Swaziland have joined a scheme financed by one of the world’s largest global health funding bodies – the Global Fund to Fight Aids, TB & Malaria – which pools everything from malaria drugs to condoms.

But some warn collective procurement is far from a panacea. Better prices may be negotiated but agents themselves are likely to be expensive, says Brenda Waning, director of pharmaceutical policy at Boston University. She also believes moving procurement to agents undermines the incentive for individual countries to improve their own systems.

“By taking those tasks from countries and saying, ‘we’ll do it for you, and we will do it better’, you are losing the ability to build capacity in those countries.”

Large volume producers may

not spread the work to enough manufacturers either, potentially causing smaller suppliers to go out of business and drug prices to rise as a result, she adds. But whether or not countries opt for pooled purchasing, there are elements to ART procurement that apply across the board.

Emergency stocks are an example. ART requires a cocktail of three different drugs each day, which often come from different suppliers. However, if one manufacturer delays shipments, it is unacceptable to deliver the other two drugs alone says SCMS’s Jamieson.

He advises holding limited

stocks temporarily in warehouses that can cover these kinds of emergencies, to ensure that the right combinations of medicines can be delivered together.

Drugs should also be delivered frequently because that eases pressure on the in-country supply chain. “Countries get all they need in one block every couple of months in a steady flow,” he says. “It’s more of a supply chain supported by a procurement operation rather than traditional procurement methods used in developing countries.”

Planning ahead

Even if buyers choose not to take on the entire procurement process, there are still important tasks to perform, says John Loeber, a procurement team manager at the Global Drug Facility, a collective tuberculosis drug procurement scheme. “We need better forecasting by countries.”

He says forecasting in six-month windows would be good so stocks are kept with suppliers and remain fresh. The problem with using warehouses is that drugs can expire or shelf-lives drop to below a certain level and need to be destroyed.

CHAI’s Koehler agrees. “It’s important countries manage the overall process, whether or not they are doing the logistical procurement functions themselves.

“For instance, the tender itself impacts patient access by influencing the quality of drugs supplied. So a tender issued should specify the minimum quality standards suppliers have to meet.”

As the global economic crisis takes its toll and budgets are cut, efficient procurement is likely to become more crucial to prevent the deaths of millions of Africans.

Tatum Anderson is a business journalist