HOW TO BOOST PRIVATE SECTOR ENGAGEMENT IN PUBLIC HEALTH SUPPLY CHAINS


Our work at ARC allows us to see first-hand what the ‘translation’ gaps are between the public and private sectors, and we believe there are five approaches that can significantly advance the success of collaboration between the two.

Date: 
February 8, 2023
Author(s): 
Bonnie Fundafunda, Ed Llewellyn, Bronwyn Timm
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Everywhere ARC – Africa’s public health supply chain institution – works in Africa, our team members can find chocolate, washing powder, soap, SIM cards, condoms, pencils, beer and soft drinks in hard-to-reach places. In those same places, medicines don’t always reach the health facilities or patients needing them; and if they do, the service is not sustained or assured.

There is a prevailing theory that if the private sector can do it, why can’t the public health system get medicines to people? There are many reasons why it is not yet happening effectively, one being that the health supply chain is much more complicated than delivering consumer goods, but maybe it doesn’t have to be. There are existing private sector supply chains that public health providers can – and should – learn from. Therefore, private sector engagement in the public health supply chain is essential.

Governments don’t need to start from scratch to work out how to get medicines to patients. The private sector has immense knowledge and tried-and-tested approaches that public health can leverage. If public supply chains followed similar routes, channels, pick-up points, pricing and packaging guidance, could patients in hard-to-reach areas experience better availability of medicines? This case for change is growing. Many donors and governments already firmly support the business case for applying private sector approaches to the public health supply chain.

Now, it’s about how we do it.

Notably, the private sector must understand the functioning nature of government systems and how governments commit to reforms before presenting innovations in a public sector process. While this might seem a given, it is revealing that despite multiple public-private partnerships in the sector, there is little to show for the success of that idea.

In most developing countries, the most visible private sector service to health ministries is through logistics services under a third-party logistics framework. Generally, this service applies to delivery from a central medical store to a health facility in an urban district. Even this service is highly contentious, given that many in civil service oppose transferring services to the private sector. Yet there are more services that the private sector can offer the public sector. For example, the services from retail pharmacies in Kampala to Ministry of Health patients outlined in recommendation four below. This is an excellent example of additional services the private sector can offer to the public health sector.

Our work at ARC allows us to see first-hand what the ‘translation’ gaps are between the public and private sectors, and we believe there are five approaches that can significantly advance the success of collaboration between the two.

1. Begin with a review of public procurement rules and regulations

Government decision making begins at the policy level, and all supply chain planning and investment considerations must also be integrated at this level. Governments make decisions and commit resources only when there are policy provisions for such actions – with the obvious exception of emergency settings.

Public sector engagement with the private sector occurs within an established transactional framework, principally laid down in national procurement laws and regulations. This means that any innovation from the private sector is likely to happen in the context of this public procurement transactional process.

ARC recommends that both private sector partners and governments consider how public procurement rules and regulations apply to engagement with the private sector and what, if anything, needs to change so that it can better access and apply innovations developed and proposed by the private sector.

2. Set up and participate in local, independent roundtables

There is a need for independent, non-transactional forums where ministries of health and private sector players can meet to share knowledge about innovations in supply chain.

These knowledge-sharing platforms can take the form of roundtables where government can educate the private sector on procedural matters related to the procurement of goods and services from the private sector, as well as explain government policies and strategies related to working with the private sector. The private sector can use these platforms as opportunities to share innovations and strategies that the public sector could adopt.

ARC has a successful track record of designing structured interactions on specific technical challenges or solutions like these. We have seen the value of these forums for helping pave the way for public-private collaboration in healthcare supply chains.

3. Map a total view of supply chain costs and explore funding frameworks

Visibility, visibility, visibility. Understanding existing supply chain costs and where funding is coming from across the system is essential for identifying and improving the functioning of the public health supply chain. In many African countries, donor contributions form part of public health supply chain funding, but where and when these contributions come into play is not always clear.

Getting clarity on this can help governments plan how best to apply funding, and be strategic about addressing any identified funding gaps.

Governments can work with donors to map a total view of supply chain costs and then develop and implement detailed budgets, business and investment cases for targeted interventions that follow the supply chain strategy, align with the roadmap, and guide government and donors’ funding requirements.

Given that any innovative funding scheme will require a new government policy to enable venturing into that strategy, ARC recommends that governments consider new funding frameworks. ARC encourages countries to explore policy change and advocacy at the government level (including at a parliamentary level) to explore measured innovations.

4. Include a broader set of products and priorities in supply chain services

We believe that supply chain solutions must ensure the budget equally addresses the needs of all medicines and health products for all health programmes.

Ministries of health and donors should pursue an integrated approach to formulating solutions for supply chain services, so that all health programmes can benefit from system strengthening in supply chain. Donors need to consider a broader set of products and priorities, and this will increase the space for innovators to prevail.

ARC’s work in Uganda on differentiated service delivery (DSD) is a helpful example. Our team was tasked with developing models to increase access to chronic medications for people living with HIV on a stabilised treatment plan. An urban and a rural model were developed.

From the outset, the rural model included ways for recipients of care to access basic healthcare services in addition to their chronic medication. The urban model looked at accessing medicines from the retail pharmacy outlet as quickly and efficiently as possible. In the urban model, after just one pilot phase, the Ugandan government has requested that we explore ways to expand the basket of medications included in the programme. This shows that supply chain solutions must be adaptable and expandable to fit a broad set of priorities and products.

5. Plan to invest in the people within supply chains

Introducing innovations in supply chain systems will require investment in workforce development to support and sustain the resilience being developed. To achieve this, the private sector can be leveraged to support public health supply chains as:

  • Service providers
  • Partners
  • A source of technical assistance, sharing on good practices and capacity building

For any innovation, a long-term service delivery and staffing model is critical. Governments must ask questions like: Will the innovation be owned and operated by the public sector? Or will it be held and overseen by the public sector and operated by the private sector? These are essential questions to be answered as scale-up and integration of the innovation is considered part of a health system strengthening roadmap.

In much of our work, ARC has focused on leveraging the private sector as a source of technical assistance, information on good practices and capacity building to translate good practices and the necessary capacity building requirements into action. However, we have also put together solutions, such as an Outsourcing Toolkit, to help countries explore ways to engage the private sector more deeply as service providers and partners.

We believe that it is crucial to support governments in understanding where they have a comparative advantage and should continuously invest in capacity building of their staff or where a more sustainable solution may be to outsource the function. Through outsourcing, the public sector passes the risk and challenge of building human capacity to absorb innovations to the private sector.

With these five approaches, we believe there can be significantly increased fruitfulness from collaborations between the public and private sectors, all of which can positively impact the people that the public health supply chain exists to help – patients.


About the authors

Bonnie Fundafunda, PhD. is ARC’s, Chief of Staff. He has over 30 years’ of experience in health policy, planning, strategy, operational systems and business development in Africa.

Bronwyn Timm is ARC’s Executive Director of Sustainability & Partnerships. She learnt and implemented design thinking, agile organisations, disruptive growth methodologies and best practices in her work at McKinsey and AB InBev.

Edward Llewellyn is the Executive Director for East & Southern Africa at ARC. He has advised on organisational transformation across the private and public sectors for twenty years.