The Drug

Management
Cycle
Distribution
Butch Staley

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.

Elements of the Distribution System

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

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

Pharmaceutical Distribution Models

LEVELS

International

National

FULLY PRIVATE

FULLY PUBLIC

International Suppliers

Local Manufacturers

Central Medical Store

Local Wholesalers

Regional

District

Distributors

Regional Medical Store

District Medical Store

Private
Pharmacies

Hospitals
Health Centers
Health Posts

Community

Key
Product flow in traditional
CMS System

Users

Central Medical Store Model

LEVELS

International

National

PRIVATE SECTOR

PUBLIC SECTOR

International Suppliers

Local Manufacturers

Central Medical Store

Local Wholesalers

Regional

District

Distributors

Regional Medical Store

District Medical Store

Shops,
Pharmacies

Hospitals
Health Centers
Health Posts

Community

Key
Product flow in traditional
CMS System

Users

Direct Delivery Model

LEVELS

International

National

PRIVATE SECTOR

PUBLIC SECTOR

International Suppliers

Local Manufacturers

Central Medical Store

Local Wholesalers

Regional

District

Distributors

Regional Medical Store

District Medical Store

Shops,
Pharmacies

Hospitals
Health Centers
Health Posts

Community

Key
Product flow in traditional
CMS System

Users

Primary Distributor Model

LEVELS

International

National

PRIVATE SECTOR

International Suppliers

Local Manufacturers
Local Wholesalers

Regional

District

PUBLIC SECTOR

Central Medical Store

Primary
Distributor

Distributors

Regional Medical Store

District Medical Store

Shops,
Pharmacies

Hospitals
Health Centers
Health Posts

Community

Key
Product flow in traditional
CMS System

Users

Fully Private Model

LEVELS

International

National

PRIVATE SECTOR

PUBLIC SECTOR

International Suppliers

Local Manufacturers

Central Medical Store

Local Wholesalers

Regional

District

Distributors

Regional Medical Store

District Medical Store

Private
Pharmacies

Hospitals
Health Centers
Health Posts

Community

Key
Product flow in traditional
CMS System

Users

Health System Supply Chain

Theory

The Complex Reality:

Health Supply Chains in Kenya
Commodity
Type

Family
Planning

(colour coded)

STI
Drugs

(including some
condoms for STI/
HIV)

Vaccines
and
Vitamin A

Essential
Drugs

HIV/AIDS
test kits
(&
hepatitis
B tests)

TB/
Leprosy

Malaria

MOH
Equipment
(including
laboratory
supplies)

Condoms
for STI/HIV/
AIDS
prevention

Organization Key
Government
World Bank Loan
Bilateral Donor
Multilateral Donor
NGO/Private

Source of
funds for
commodities

U
S
A
I
D

K
f
W

U
N
F
P
A

European
Union

DFID
(UK)

S
I
D
A

W
H
O

GOK

G
A
V
I

De-centralization projects

C
I
D
A

UNICEF

G
D
F

JICA

DANIDA (11 districts)

US
Gov

GOK,
WB/IDA

European Union (20 districts)

World Bank DARE

SIDA

Belgian Gov (BTC) (2 districts)

EUROPA

Procurement
Agent/Body

Point of first
warehousing

Organization
responsible
for delivery
to district
levels

U
S
A
I
D

K
f
W

U
N
F
P
A

WHO (3 districts)

Crown
Agents

KEMSA
Regional
Depots

Government
of Kenya

KEMSA Central Warehouse

NLTP
(TB/
Leprosy
drugs

(8 districts)
(6 districts)

KEMSA, District Hospitals, District

Stores

(essential drugs kits, malaria drugs, lab

supplies, reagents, HIV/AIDS test kits)

Dutch
Gov
Agent

Japanese
Private
Company

UNICEF

NPHLS store

GTZ

C
D
C

kits, HIV/AIDS test kits)

(5 districts)

ADB

(5 districts)

District level
decisions of
quantity, type and
procurement of
health
commodities

KEPI Cold
Store

DELIVER and Logistics

Management Unit, Division of RH
(MOH)
(contraceptives, condoms, STI

JICA

KEPI
(vaccines
and vitamin
A)

MEDS

Private
Drug
Sources

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

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

Summary
Designing a system for storing and distributing
pharmaceuticals is complex and important
In some countries, private (or parastatal)
distribution companies may provide costeffective alternatives for storage and distribution
of pharmaceuticals