Impact of the COVID-19 Pandemic on Medical Product Procurement, Prices, and Supply Chain in Zimbabwe: Lessons for Supply Chain Resiliency

Pre-COVID-19 Context

Respondents described long-standing resource constraints, including a lack of credit lines to procure medicines and medical products, and stated that the COVID-19 pandemic exacerbated the situation through diversion of time and resources within the supply chain. A lack of credit lines with medicine suppliers meant that all payments for procurement had to be made up-front, often in a foreign currency that has been perennially in short supply in the country. The local Zimbabwean currency (Zimbabwe dollar) is not easily exchangeable for a foreign currency through formal channels and often depreciates in value; thus, many suppliers prefer payments to be made in foreign currencies. Other challenges that predated COVID-19 include shortages of medicines, especially in the public sector, and supply chain and distribution inefficiencies. For example, respondents reported that there were long-standing shortages of TB prevention medicines that became worse during COVID-19. Zimbabwe's reliance on imports and limited domestic manufacturing capacity for medicines and medical products also made the country vulnerable to supply chain shocks caused by COVID-19.

I think there were already challenges around the supply chain, around distribution, around the management of NatPharm [national central medical store] and the relationship between NatPharm and the Ministry of Health… Those root issues were there before COVID-19 started, and then COVID-19 exacerbated and if anything, took money, resources, time, and emotion away from those who normally work on other issues in the health sector and forced them to split their time in-between multiple places. —Respondent, bilateral donor

Supply Restrictions From Manufacturing Constraints and Export Restrictions

Respondents reported restrictions in the supply of medicines and medical products attributable to manufacturing constraints. They also described changes and restrictions on exports in important source countries or transit countries. For example, there were shortages of malaria and HIV testing kits after manufacturers had changed their production lines to manufacture COVID-19-related testing kits instead. Consequently, manufacturers faced constraints in meeting demand and rationed quantities of orders that could be fulfilled. For example, there were difficulties in getting orders for laboratory testing cartridges because manufacturers rationed quantities fulfilled.

It [demand for testing cartridges] got so overwhelming that when countries placed their orders, the manufacturer was the one then determining the amount of product to give to a particular country…That affected our supply chain, the quantity of products that we were receiving from that manufacturer and that really created lots of disruptions, stockouts, in line with the routine testing that we were doing, including also for the COVID-19 testing that we were doing. —Respondent, Ministry of Health and Child Care

Restrictions on exports of medical products that were implemented by India and South Africa in response to the COVID-19 pandemic resulted in shortages of medicines and supply delays. Both countries are important sources of medicine imports for Zimbabwe, and South Africa is a key transit country where imports pass through its ports. The export restrictions were placed on all medical product categories, including medical products not used for COVID-19 treatment and management. Wholesalers and distributors could still import medicines from South Africa but had to apply for a permit, and obtaining clearances took a long time.

The South African government stipulated that no drug could be exported out of South Africa unless you have a permit. Whether it be as a source country or a transit country [for the drugs], no drug could leave the South African border without a permit. That created a huge backlog, you can imagine trying to work with SAHPRA [South African Health Products Regulatory Authority] in South Africa trying to get export licenses and permits. It didn't matter whether it was COVID-19 [drugs] or cancer [drugs]…it literally took about 2 months [to obtain permits]. —Respondent, wholesaler/distributor

Logistical and Stock Management System Disruptions

Movement restrictions and lockdowns introduced globally in response to COVID-19 resulted in a shortage of freight transport options, which led to increased delivery lead times for imported medicines and medical products. For example, a respondent from a procurement agency described when orders for medicines placed in August 2020 had still not been delivered by May 2021. In-country movement restrictions and COVID-19 infections among staff handling medicines also disrupted local distribution of medical products.

NatPharm [national central medical store] had been affected also by COVID-19, some of the staff, maybe 50% of the staff got COVID-19 and they shut down for a short period, but when they returned back, they worked in a very precautious way…Also this affected NatPharm's capacity to offload [commodities from transport vehicles]. —Respondent, multilateral donor

Local movement restrictions and diversion of logistic resources, such as vehicles, disrupted stock quantification processes at health facilities needed for the Zimbabwe Assisted Pull System (ZAPS) to adequately procure from the central medicines store. Consequently, quantification of procurement needs relied on inaccurate extrapolations from past consumption, resulting in a mismatch between procurement forecasts and consumption.

ZAPS is labor-intensive or resource-intensive in the sense that we actually have vehicles going around the different health facilities collecting data. This data is essentially how much they need and for how long. Because our vehicles were now being channeled towards COVID-19 activities, ZAPS itself suffered. I can tell you that in Q2 [second quarter] 2020, Q3 [third quarter] 2020, we could not carry out the ZAPS activities the way we used to. —Respondent, Ministry of Health

Disruptions to Local Procurement Processes

During the COVID-19 pandemic, respondents described a marked reduction in participation in local competitive bidding and tendering processes for medicines and medical products by international bidders and other traditional suppliers. Shortages of active pharmaceutical ingredients, scaling down of business operations due to COVID-19 restrictions, and inability to meet supply timelines were cited as reasons by international and other traditional suppliers for not submitting bids for supply tenders. The reduced number of bidders, especially by more established traditional suppliers, led to reduced competitiveness of the tender process and higher procurement prices.

Because of COVID-19, we didn't get as many international bidders who participated in our [tendering] process. It actually affected the competitive effectiveness of our procurement system, meaning that you end up getting prices that are higher because of the few people that are participating in your process. —Respondent, procurement agency

Other barriers to participation by international bidders included an inability to provide sample products for evaluation due to logistical challenges caused by COVID-19 disruptions and bidding processes that required in-person submission and presence during adjudication of bids, which was precluded by COVID-19-related travel restrictions. However, a respondent affiliated with a procurement agency described how COVID-19 provided an opportunity for their organization to transition from a manual procurement and tendering process and adopt an online platform where bidders could participate remotely. Another adaptation reported by respondents included procuring from a short list of suppliers with a good record for quality and performance when a full competitive bidding process was not possible due to COVID-19 restrictions.

Respondents involved in procuring medicines and medical products for public sector facilities described disruptions to funding flows from the central level, as well as foreign currency shortages that led to procurement challenges. This particularly affected public sector facilities' ability to procure from private suppliers, who often had quotations with short validity and were thus sensitive to delays in payment disbursements.

On funding, we had quite some challenges. The funds [used to] come timely, but it wasn't the case anymore. So, 1 or 2 quarters [3–6 months] were skipped for us to get the funding. Secondly, when you look for quotations from the suppliers, you know procurement is a slow process. But private suppliers, your quotation duration will be 48 hours…If you get a quotation today, they expect you to [take] action within 48 hours, which was quite difficult for government institutions. —Respondent, Ministry of Health

Respondents described programmatic and operational shifts within the health system to focus on the COVID-19 response at the expense of other functions and reported that this shift led to the diversion of resources from procurement of essential medicines and commodities to procurement of COVID-19-related products. For example, vehicles and human and financial resources were repurposed from other health system areas, including procurement, for the COVID-19 response. Consistent with the health system's programmatic shift toward COVID-19, the procurement agency responsible for procuring medicines for all public sector health facilities experienced a significant decrease in procurement requisitions for medical products that were not related to COVID-19 needs.

There was sort of a diversion, more focus was on COVID-19 at the expense of other diseases…that's 1 of the challenges that we also faced, that more [procurement] requests were coming from that [COVID-19-related] side at the expense of other requests. —Respondent, procurement agency

Impact on Product Availability and Prices

Respondents described shortages of medicines and medical commodities attributable to COVID-19 disruptions. The classes of medicines most reported as being in short supply included first-line HIV antiretrovirals (e.g., tenofovir, lamivudine, and dolutegravir [TLD]) and preventative TB medicines (e.g., isoniazid and rifapentine), with shortages also being reported for chronic condition medicines, such as antihypertensives. The shortages of HIV antiretrovirals caused delays in long-planned transitions of patients to new TLD-based regimens.

We were really on a trajectory to get all HIV patients who are eligible to be able to take 3- to 6-month supply of TLD with them home…but because of the shortages, that whole process to the multi-month dispensing has really slowed down and there [were] shortages of TLD across the country. And so, many providers [were] only able to dispense a month at a time. —Respondent, bilateral donor

Among nonmedicine products, respondents described shortages of laboratory reagents due to the manufacturing and logistical impacts of COVID-19. Further, the existing stock of reagents intended for other clinical uses was diverted for COVID-19-related use.

We experienced shortages, specifically with lab reagents, not only the manufacturing, but the delay in freight in getting them into the country and then the diversion of some of those commodities and reagents to COVID-19 testing versus, for example, viral load testing, and so that messed up some of the quantification. —Respondent, bilateral donor

The impacts of COVID-19 on the prices of medical products in Zimbabwe varied by product type and mode of procurement. There were large increases in the freight cost component of imported products, and some of the increased freight costs were passed along in the price markup. For example, a respondent affiliated with a medicine wholesaler and distributor described freight charges increasing by as much as 500%. Significant price increases were also reported for personal protective equipment (PPE), such as latex gloves and masks, and for other COVID-19-related commodities. Respondents noted that reliance on direct importation of products magnified the effects of freight price increases, while reduced competition due to the reduced number of respondents bidding for supply tenders also resulted in increased unit prices of some products.

The overall effect is that the unit cost of the product that were bought during the time of COVID-19, especially after March, April, May lockdown, the unit prices became very high because mainly you would be relying on those who had reserved some stock in the country, and they knew that the international world is generally closed. They had little competition. The prices of whatever [goods], either pharmaceutical, lab, medical supplies, and even other things that were used for health, the prices increased significantly. —Respondent, multilateral donor

According to respondents, there were eventual price reductions, especially for PPE, as more suppliers eventually came on the market and some of the initial global restrictions on travel and logistics in response to COVID-19 eased. Prices of some commodities were reduced to below production cost in some instances due to short shelf life and reduced demand and health service utilization related to COVID-19 disruptions. For example, respondents noted reduced demand for cold and cough medicines as COVID-19 control measures, such as lockdowns, also resulted in reduced incidence of seasonal cold illnesses.

After the exaggerated increase in prices, there was a subsequent lowering of prices, to even below cost. People were basically doing expiry pricing…The people within even our manufacturing sector, would give you a fresh batch of products for the same price [same price as discounted expiring batches] because, by their prediction, if they didn't do that, they were going to be stuck with an expiring raw material [for which there was no demand]. —Respondent, wholesaler/distributor

Donors providing medical products incurred additional program-level costs associated with emergency shipments and chartering flights for shipments where regular freight routes were not available. However, donor-funded products and commodities did not experience significant price changes, and respondents attributed this to the long-term service agreements and contracts with suppliers that guaranteed a fixed price.

I didn't see any price volatility… I think largely because for quite a lot of the products there are service level agreements signed by the procurers with suppliers that fixed the price. —Respondent, international NGO

Changes in Demand and Utilization of Health Services

Movement restrictions introduced to contain COVID-19, fear of COVID-19 infection, and health facility closures led to reduced patient access and demand for health services, which in turn impacted the use of medicines and increased expiration of excess stock.

We had stock [of medicines], we knew the movement in terms of traditional demand…then came COVID-19, the movement of such products was affected. Just as an example, we are now approaching winter, during COVID-19 we are now putting on masks, the children are at home and off school. So, the [medical] conditions that would normally affect us during the winter, it means that they are not there…we saw stagnation in terms of the movement [in the supply chain] of colds and flu remedies, as well as antibiotics. —Respondent, wholesaler/distributor

Simultaneously, respondents also reported increased demand for COVID-19-related medicines, including unregistered and unapproved medicines. A participant affiliated with a national medicines advisory committee also described political pressure on the committee to endorse medicines that were not scientifically proven as COVID-19 therapies, such as hydroxychloroquine and ivermectin.^30,31

Then there is demand now for products for the treatment of COVID-19, which traditionally we didn't have. For example, initially, hydroxychloroquine, we had stock, we had registered it for the treatment of lupus and arthritis, so we had few stocks just for the treatment of those conditions and then suddenly there is an upsurge [demand for COVID-19 treatment]. —Respondent, wholesaler/distributor

Mitigatory Factors

Respondents described some factors that mitigated the impacts of COVID-19-related disruptions on the supply chain of medicines and medical commodities in Zimbabwe. Donor-funded commodities, such as HIV and maternal and child health products, were perceived to be resilient to supply shocks and price volatility. Global pooled procurement of these products was identified by respondents as being key to this resiliency compared to products that were procured at the national level, where there are no equivalent long-term supply agreements specifying volumes and prices. Zimbabwe's minimum/maximum stocking system, where health facilities have buffer stock available, was also cited as key to smoothing out the effects of COVID-19-related supply shocks.

In terms of stock rupture…I think that was limited…it could have been worse… because the country works on minimum and maximum stock levels of what stock sit at the facilities and what stock sits at the central level…and that stock is about 9 months. So, for your medicines that are required for chronic conditions, which is where it's more predictable, the forecast for chronic conditions is more stable and less volatile. So, I guess the ruptures [stock shortages] were less extreme because of those technical considerations. —Respondent, international NGO

Another important mitigatory factor was the availability of funding to support the procurement of commodities through a multilateral donor-funded Health Development Fund (HDF), as well as existing reserve stocks of essential medicines that had been procured under the HDF before COVID-19. A respondent who oversaw a multicountry health sector portfolio for a multilateral donor stated that other countries in the region that did not have support programs like the HDF had not had the same commodity resiliency as Zimbabwe. However, the respondent also noted that the COVID-19 pandemic had also disrupted and delayed the process for a new phase of the HDF financing mechanism, hence, potentially impacting the continuity of a key source of resiliency.

Zimbabwe's recent experience with environmental shocks from Cyclone Idai in 2019 was also cited as an important mitigatory factor. In response to disruptions from Cyclone Idai, donors had mobilized medicines and resources. Leftovers of those resources and medicines were still available in the country when the COVID-19 pandemic began, which helped ease supply disruptions.

Health System Adaptations to COVID-19

Respondents described several adaptations made by the health system that helped mitigate the impacts of COVID-19 on the procurement and supply chain of medicines and medical commodities. Clinicians switched treatment regimens and modified dispensing schedules based on stock availability. For example, patients were switched to alternative regimens when there was a shortage of some types of antiretrovirals. Where stock was available, facilities introduced multi-month dispensing of medicines for chronic health conditions to ensure continued access amid challenges patients faced in reaching health facilities. New service delivery models, such as integrated outreach services, online ordering, and home delivery of medicines, were other key innovations used to ensure continued medicines access during the COVID-19 pandemic. Emergency ordering from the central medical store was used to ensure that facilities had the minimum required stock levels and to redistribute stocks among facilities. Other adaptations included repurposing existing laboratory testing products for other disease diagnostics for the COVID-19 testing program.

We had to engage in a robust program of product redistribution so that the little commodities that were already available in country could at least be pinched to last more than we had anticipated. —Respondent, Ministry of Health

Another reported adaptation was increased use of special medicine imports that were exempt from registration requirements under section 75 of medicine regulatory rules.³² Respondents affiliated with wholesalers and distributors described using this flexibility to import medicines and products that were in short supply on the market.

There was a spike in Section 75 applications, which are basically special imports for unregistered medicines. Even from my experience with our community pharmacies, there was, I think, over 350% increase in special imports. Because something is not available on the market, we could get authorization to import it directly and get it to the market…it could be specific patient-driven Section 75s or the bulk Section 75s for medicines that were not available. —Respondent, wholesaler/distributor