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Netlink - Special edition - May 2006

This is a special edition of Netlink, the members’ email newsletter for the Ecumenical Pharmaceutical Network (EPN). This edition features information on PEPFAR’s Supply Chain Management System (SCMS). During the EPN Forum in Tuebingen, Germany, Network members discussed the possible implications of the integration or establishment of the SCMS in countries under the PEPFAR programme. They developed a statement (available on this site) expressing issues of concern regarding the system and giving recommendations to address them.

This edition focuses on:

The President's Emergency Plan for AIDS Relief (PEPFAR's) Supply Chain Management System (SCMS) [AS PRESENTED BY THE CONSORTIUM]

SCMS Opens Opportunity for Change

Time Magazine recently wrote about new initiatives promoting transformational changes in the developing world.  Time said: “This is not about pity.  It’s more about passion.  Pity sees suffering and wants to ease the pain; passion sees injustice and wants to settle the score.  Pity implores the powerful to pay attention; passion warns them about what will happen if they don’t.  The risk of pity is that it kills with kindness’ the promise of passion is that it builds on the hope that the poor are fully capable of helping themselves if given the chance.”  The Supply Chain Management System (SCMS) is about passion.

No doubt the world is facing one of the greatest health challenges in history, namely the HIV/AIDS pandemic.  Countless programs in resource-limited settings are fighting valiantly to prevent, treat and care for those affected by HIV/AID.  The problem is that too often they lack adequate medicines, HIV tests, and other essential health supplies for preventing and treating HIV and AIDS. Ministries of health, nongovernmental organizations, and faith-based organizations all face shortages of life-saving medicines and insufficient laboratory supplies, compromising their ability to provide effective services. The reasons for these shortages are not simply a lack of money. They include inadequate experience in estimating commodity needs, inefficient procurement systems, and weak infrastructures for the storage and distribution of commodities.

A Bold New Initiative

That is about to change. A bold new program has been launched by the United States under the President’s Emergency Plan for AIDS Relief (the Emergency Plan).  A major component of the Emergency Plan is mobilizing a safe, secure and reliable supply chain system to deliver critically needed drugs to those who need them most.  This will be a first; the envisioned supply chain system does not currently exist. But, because of the scope of this project, there is a unique opportunity to strengthen existing systems and develop sustainable world-class healthcare distribution structures across target regions.

To implement the envisioned SCMS, the US Government has awarded a contract to the Partnership for Supply Chain Management.  This is a unique public-private sector team bound by a common vision, transforming global access to healthcare. The team blends the core competencies of 17 organizations that will have a major impact on drug delivery in the world.  SCMS combines the organizational skills, services, experience, infrastructure, systems, relationships and geographic reach to make the Emergency Plan vision a reality.

SCMS is flexible and responsive in providing solutions that meet the needs of HIV/AIDS programs and other stakeholders serving people living with aids. It will assist in defining client drug and medical supply needs and develop appropriate and innovative solutions that support their care and treatment targets. There will not be a “one size fits all approach.”  SCMS services can be used in-part or in total based on the needs of the local healthcare programs.

SCMS Objectives

SCMS will take a “national” approach but mobilize all resources available -- local, national, regional and international -- to attack the infectious disease pandemic.  Its primary focus will be on HIV/AIDS.  This multi-channel strategy will demand coordination among all structures in both the public and private sectors. SCMS defines the private sector to include faith-based organizations, non-governmental organizations and commercial businesses.

Following this “national” strategy, SCMS will work with local supply chain capabilities to form integrated systems serving both countries and regions. From the beginning, SCMS will work to strengthen existing in-country supply chains at national, regional or sub-regional levels. It will not form new in-country parallel supply systems.  Committed to collaboration, SCMS will work closely with governments, nongovernmental organizations (NGOs), and faith-based organizations (FBOs) to build upon the public health systems and processes that work well today.  SCMS will also collaborate with international agencies and donors to ensure that its work complements and augments existing efforts to make the best use of available resources.

A key object of the SCMS will be to work with existing supply chains to shorten their order and delivery cycles and improve stock keeping.  A key strategy will be the development of regional distribution centres that can provide rapid re-supply to organizations delivering healthcare services to people living with HIV/AIDS, malaria and TB.

Through long-term contracts with manufacturers SCMS will hold strategic stocks of HIV/AIDS, malaria, TB drugs and other commodities.  Systems-based forecasting will guide distributors and manufacturers to ensure there are no drug stock-outs.

This model will not just provide long-lasting, high quality solutions to the HIV/AIDS crisis.  It will ensure funds are applied in a manner that will provide SCMS partners in the developing world with the necessary infrastructure to deal with future health crises.

SCMS Services

Available services include:

  • Fielding in-country support teams to assist country programs in selecting appropriate products, assisting  with commodity requirements, establishing local quality assurance standards, assessing needs for strengthening in-country supply chains, submitting procurement requests, tracking shipment deliveries, reducing risks of theft and diversion, lowering regulatory barriers, and monitoring supply chain performance.Preparing global forecasts of needs for antiretroviral (ARV) drugs, test kits, laboratory supplies, other pharmaceuticals for care and treatment of persons with HIV/AIDS and related infections and related medical supplies and equipment.
  • Procurement of these products, initially for Emergency Plan-supported programs, and subsequently for other HIV/AIDS programs.
  • Quality assurance for all SCMS-purchased products, including ensuring adherence to U.S. government procurement standards, post-procurement testing, and assistance in establishing in-country storage and handling procedures that help ensure product quality.
  • Warehousing and freight forwarding for both international and in-country distribution.  This includes regional storage of SCMS-procured commodities; frequent, secure door-to-door or door-to-port freight forwarding; assistance in product registration and customs clearance; and assistance in strengthening or establishing secure, robust in-country distribution systems.
  • Assistance in strengthening in-country logistics management information systems, to include biometric smart card and mobile telephone data entry techniques, that enable local organizations’ supply chains greater security and responsiveness.
  • Establish a global information system to manage information about the procurement and distribution activities of the Emergency Plan.  These systems will keep all Emergency Plan participants informed along with related activities of other donors and funders. We will link this system to national information systems in order to minimize over- and under-supply of individual program requirements.

THE REACTION OF EPN MEMBERS AND THEIR RECOMMENDATIONS ON THE PEPFAR SCMS:

A Statement of the Ecumenical Pharmaceutical Network (EPN) on the US President’s Emergency Plan for AIDS Relief (PEPFAR) Supply Chain Management System

Tuebingen ,Germany, June, 2006

The Ecumenical Pharmaceutical Network (EPN), comprised of Christian Health Associations and hospitals, non-profit drug supply organisations and church related development agencies from 29 countries who attended the Annual Forum and General Meeting held from 8th – 13th May 2006 in Tuebingen, Germany issues this statement on the Supply Chain Management System.

We recognise and acknowledge that scaling up medical assistance and the care of the men, women and children in our communities who are infected and affected by the scourge of HIV/AIDS, require uninterrupted supply of high quality, low cost products that flow through an accountable system. Therefore, we welcome the intention of SCMS of strengthening or establishing (where non exist) secure, reliable, cost-effective and sustainable supply chains that meet the care and treatment needs of the people living with and affected by HIV/AIDS.

However, as a network of health care service providers and Drug Supply Organizations, we have discussed the SCMS strategy from the information availed to us at our meeting, and do wish to express the following issues of concern:

  1. We note that the SCMS is coming into existence 3 years after the launch of PEPFAR and the number of patients on ARVs through PEPFAR has been increasing. This indicates that there are existing supply systems which are functional. They should not be destabilized.
  2. There has been little or no involvement of stakeholders from the countries targeted, in the design of the SCMS hence loss of opportunity to articulate country specific issues. 
  3. The creation of such a large multi-country supply system will have a negative impact on the existing supply systems because of imbalance in the trading volumes. It is more than likely that manufacturers and suppliers shall give priority attention to this major client at the expense of the smaller existing clients. The plan of supplying more than 120 commodities will take up a large proportion of the Essential Drugs supply needs, rendering the existing supply organisations irrelevant.
  4. There is no adequate assurance that in-country manufacturers and suppliers will be supported to ensure growth in capacity and sustainability.
  5. Whereas the SCMS project proposes to supplement and strengthen the existing supply chain capacity and to collaborate closely with governments, non-governmental organizations and faith-based organizations to build upon the public health systems, we see a danger of brain-drain of the best human resources from the existing systems to the SCMS.
  6. The SCMS project presents an alternative procurement system which negates the principles of Sector Wide Approach Strategy (SWAps) of common management arrangements which includes working through existing public procurement system.
  7. While the objectives of SCMS are good for the short-term, there is real danger in the long-term sustainability beyond the PEPFAR funding. There is no clear exit strategy to ensure that the capacity established will be sustained.
  8. The suggestion of voluntary choice in the use of SCMS services for the PEPFAR recipients seems rather academic, since decisions will be made at US country missions and not by the recipients of the funds. We find it most unlikely that a local PEPFAR funds sub- recipient would have the mandate to choose to procure products outside SCMS which is funded by US government.

RECOMMENDATIONS

In order for the SCMS project to succeed in delivering its objectives and to ensure that useful and sustainable capacity is established within the existing public health procurement systems, EPN makes the following recommendations for SCMS action:
  1. That an in-country mechanism and forum for continuous dialogue and communication be established for key stakeholders to review country issues on the system design, identify collaborating stakeholders and provide monitoring feedback. This should include, MOH, National AIDS Control Program, Public and FBO/NGO Drug Supply Organizations, Pharmaceutical Societies, representatives of Pharmaceutical Manufacturers and PEPFAR awardees, and other donors such as Global Fund, World Bank–MAP programme etc.
  2. There should be clarity in the strategies for addressing the two different situations: countries which have no existing in-country supply structures and those where something does exist.  In the countries where there are already existing systems, needs/gaps analyses should be the first step in strengthening the existing systems. 
  3. Capacity building should target strengthening of the existing Public and FBO/NGO Supply organizations and should be started before the supply activities are started. The capacity building should include recruitment of qualified staff, skills development in logistics (e.g. transport) and other supply chain management issues, contract negotiation, quality assurance and M&E. Capacity building should be a continuous exercise that focuses on use and strengthening of existing local experts. 
  4. The SCMS should ensure good knowledge and understanding of the country specific laws, policies and regulations to ensure integration or harmonization since this has a bearing on systems strengthening and sustainability.
  5. Transparency and accountability should be enhanced through participatory M&E. The M&E plan should be clear to all stakeholders from the onset. There should be a strategy for in-country capacity building for M&E of the performance of the country SCMS activities and its impact on the other existing systems.
  6. That a clear exit strategy be articulated for each targeted country before the project begins. This should clearly define the milestones to be achieved during the life of the project to ensure there will be no crisis at the end of the project. This should also include management succession planning by including and developing capacity of local human resources.
  7. The SCMS project must incorporate a comprehensive risk management strategy since the lives of many people will be dependent on its efficient and uninterrupted performance irrespective of environmental and political changes.


We the members of EPN, in the spirit of goodwill and solidarity, further affirm that the fight against HIV/AIDS deserves concerted efforts. Efforts that bring out the best from all stakeholders to ensure sustainability, effective use of resources, expanded local capacity and the empowerment of people in their contexts. In view of the above, we ask that the realities on the ground are respected, the concerns expressed receive due attention and the recommendations considered fully as the SCMS prepares to implement its plan.

Thank you.

 

This statement has been signed on behalf of Ecumenical Pharmaceutical Network.


Mr. Albert Petersen                        Dr. Eva M A Ombaka
Chair, EPN Board                             Coordinator EPN

Contact address: epn@wananchi.com 

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