Costing the supply chain for delivery of ACT and RDTs in the public sector in Benin and Kenya

The supply chains for ACT and RDTs are integrated within the existing public sector supply chain in both countries. A mapping of the supply chain structure helped determine how products move from the central to the peripheral level and identify and estimate costs. This was done through a combination of Ministry of Health document reviews and interviews with stakeholders. In Benin, warehousing and distribution are carried out by La Centrale d'Achat des Medicaments Essentiels et des Consommables Médicaux (CAME), an independent, not-for-profit organization. Procurement of ACT and RDTs is done through international procurement agents and coordinated by the Programme National de Lutte Contre le Paludisme (PNLP). ACT and RDTs are stored in a dedicated malaria warehouse and collected by zonal depots or sent to one of two regional depots in Parakou and Natitingou using CAME trucks. Regional stores pick up stock from the CAME depots, and health centres and hospitals collect stock from the regional stores. The national hospital, the Centre National Hospitalier Universitaire (CNHU), and departmental hospitals supply directly from CAME Cotonou. Product quality control is carried out by the Laboratoire National de Contrôle de Qualité (LNC) upon arrival in the country, and the costs for this are borne by the public sector. In Kenya, the supply chain management is carried out by the Kenya Medical Supplies Agency (KEMSA), a parastatal organization. KEMSA manages procurement, warehousing, and distribution of medicines and health products in Kenya. It also stores and distributes products procured by other donors directly to health facilities. KEMSA has two warehouses in Nairobi, and since 2013, county governments have been involved in the distribution of products. The county governments have been responsible for distributing products to health facilities, with KEMSA providing technical support. The objective of this research was to estimate the supply chain costs for ACT and RDTs from the central to the peripheral levels of the public sector health systems in Benin and Kenya. The two countries were selected to allow for east-west geographical diversity in Africa and to allow for the anomalies in supply chain design in Anglophone and Francophone countries. The countries are also ranked differently on the World Bank logistics performance index (LPI). Benin has an LPI of 2.85, placing it 83rd out of 155 countries surveyed, and is the highest-ranked low-income country. Kenya has an LPI of 2.43 and ranks 124th out of the 155 countries. The data collected will help countries to better budget and plan for these costs. Specifically, the research aimed to identify the various cost components within the supply chain functions of procurement, storage, transportation, and quality control for ACT and RDTs at each level of the health system, from the central to the peripheral levels. The research also aimed to determine the major cost drivers within the supply chain functions and allow for accurate estimates to be used for programme planning, budget, and policy-making decisions. The research used a micro-costing approach to estimate the supply chain costs for ACT and RDTs. The approach involved collecting data on the various cost components of the supply chain at the central, intermediate, and facility levels. The data was collected between June and November 2013, and information sources included central warehouse documents, health facility records, transport schedules, and expenditure reports. The data was also supplemented by document reviews and semi-structured interviews with stakeholders. The results of the research showed that the supply chain costs for ACT and RDTs in Benin and Kenya were significant. In Benin, the supply chain costs added USD 0.2011 to the initial acquisition cost of ACT and USD 0.3375 to RDTs (normalized to USD 1). In Kenya, the supply chain costs added USD 0.2443 to the acquisition cost of ACT and USD 0.1895 to RDTs (normalized to USD 1). The total supply chain costs accounted for more than 10% of the initial acquisition cost of the products in some cases and were sensitive to product volumes. The major cost drivers in the supply chain were found to be labour, transport, and utilities, with health facilities bearing the majority of the cost per unit of product. The research concluded that accurate cost estimates are needed to ensure adequate funding for supply chain activities. Product volumes should be considered when costing supply chain costs rather than dollar value. The research also highlighted the need for further work to develop cost models that can be applied at the country level without extensive micro-costing. This will allow other countries to generate more accurate estimates in the future.