Strategies to reduce risks in ARV supply chains in the developing world

Chris Larson; Robert Burn; Anja Minnick-Sakal; Meaghan O'Keefe Douglas; Joel Kuritsky

doi:10.9745/GHSP-D-14-00105

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Figure 1.
2013 Pricing (US$) for Adult and Pediatric Formulations of Fixed-Dose Combination Antiretroviral Drugs,^a Pooled Procurement vs Annual Tender^b

^a Adult formulation: Lamivudine/Nevirapine/Zidovudine 150/200/300 mg dispensed in 60 tabs; pediatric formulation: Lamivudine/Nevirapine/Zidovudine 30/50/60 mg dispensed in 60 tabs.

^b Pooled procurement across PEPFAR-supported countries; annual tender in an East African country.
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Figure 2.
Catchment Area of Regional Distribution Centers

To support global pooled procurement and reduce turnaround times for delivery of ARVs, the Supply Chain Management System project established 3 regional distribution centers (RDCs) in Ghana, Kenya, and South Africa. These facilities hold strategic stock, provide regularly scheduled shipments to neighboring countries, and expedite emergency orders to prevent stock-outs. To provide a sustainable resource, the RDCs were established as independent commercial enterprises, attracting major private-sector pharmaceutical clients.
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Figure 3.
Proportion of ARV Shipments Delivered On Time, Manufacturers Versus SCMS Regional Distribution Centers, January 2007–March 2012

Abbreviations: ARV, antiretroviral; RDC, regional distribution center; SCMS, Supply Chain Management System.
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Figure 4.
Number of Bottles of ARVs Transported by Air and Ocean and Proportion of Ocean Shipments, 2006–2014

Abbreviation: ARV, antiretroviral.

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TABLE. ARV Supply Chain Risks and Corresponding Risk Mitigation Strategies by the SCMS Project

Risk Category	ARV Supply Chain Risks	Risk Mitigation Strategies
Supply	• Production delays	• Multiple-source procurement
	• Shipping delays	• Pooled procurement
		• Use of RDCs
		• Flexible product specification
Demand	• Expanding treatment programs	• Frequent update and review of supply plans
	• Inaccurate and/or delayed demand forecasting and supply planning	• Regional aggregation of country forecasts and supply plans for pooled procurement
	• Burdensome procurement procedures	• Restocking RDCs based on analysis of likely demand (as opposed to firm orders)
Cost	• High per-unit product costs	• Pooled procurement based on aggregate demand plans
	• High shipping costs	• Freight consolidation and ocean shipping