The document summarizes 3 studies that used economic evaluation methods to analyze public health supply chains in Nigeria, Tanzania, and Zimbabwe. The Nigeria study compared 4 drug distribution systems and found that one system had the lowest cost per cubic meter distributed. The Tanzania study found that supply chain management enhancements increased costs but also improved performance. The Zimbabwe study showed that merging 4 individual supply systems into one integrated system maintained effectiveness while reducing costs. Policymakers in the countries studied have utilized the results to inform supply chain decision-making and strategies. The document advocates for increased use of economic evaluation in public health supply chain analysis.

1. Putting Cost into the Equation:
Economic Evaluation of Public Health
Supply Chains in Three African Countries
Suzy Sacher
Technical Advisor
John Snow, Inc.
November 4, 2015
American Public Health Association
Annual Meeting Photo: Eric Montfort
1a

2. Presenter Disclosures
The following personal financial relationships
with commercial interests relevant to this
presentation existed during the past 12 months:
No relationships to disclose
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3. Angola
Bangladesh
Bolivia
Burkina Faso
Burundi
Cambodia
D.R. Congo
Ethiopia
Ghana
Guatemala
Guinea
Honduras
India
Indonesia
Kenya
Laos
Liberia
Madagascar
Malawi
Mali
Mauritania
Mozambique
Myanmar
Nepal
Nicaragua
Niger
Nigeria
Pakistan
Paraguay
Peru
Philippines
Rwanda
South Sudan
Tanzania
Thailand
Uganda
Vietnam
Yemen
Zambia
Zimbabwe
The USAID | DELIVER PROJECT provides technical assistance
to strengthen public health supply chains in over 30 different countries:
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4. Nigeria
The studies focused on 3 countries
TanzaniaZimbabwe
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5. Public health supply chains are big business
EVERY YEAR
Public health
supply chains in
developing
countries handle
$180 billion
worth of drugs
worldwide.
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6. Purpose of Logistics Systems
RIGHT QUANTITIES of the
RIGHT GOODS to the
RIGHT PLACES at the
RIGHT TIME in the
RIGHT CONDITION at the
RIGHT COST. 6

7. Logistics Cycle
7

8. Public health supply chain 101: It’s not just the meds
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9. It costs serious money to operate these supply chains
Cost of public health supply chain = 20-50% of the value of commodities handled
Public health supply chains in developing countries cost > $36 billion/year.
This means..
Result: More money can be spent on medicines or critical health systems needs
$1.8 billion
annual savings
1%
Improved
efficiency
5%
Improved
efficiency
Improved efficiency
would equal
=
big savings
$
$ $360 million
annual savings

10. Should we remove a tier
of the supply chain?
Is it more cost effective to
implement an ELMIS or keep the
paper system?
Should we invest in a
direct delivery system?
Which elements of supply
chain strengthening
should we invest in?
How much should we invest in
supply chain strengthening versus
other health system areas?
Is the expense of a new
investment justified?
So many decisions … so little data
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11. Economic evaluations can be a critical tool to help with
these decisions.
…but the public health supply chain world
has underutilized these analytic methods
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12. A Framework to Fill an Analytical Gap
Used to design and conduct studies in 3 countries
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13. Study 1:
Nigeria
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14. Comparing four drug distribution systems
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Information capture
via inventory
counts
Information capture
via inventory
records
Dependent on
health facility
personnel
Dependent on
personnel
outside of
health facility
Information capture
and delivery occur
simultaneously
Information capture
and delivery occur
independently
System A System C
System B System D

15. Result: System C costs the least, per cubic meter
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System A System B System C System D
13,212
9,673
6,898
4,160
8,591
3,910
5,203
9,955
7,876
5,976
3,791
7,504
3,496 3,453
4,130
6,698
6,079
5,053
3,421
6,417
2,996
3,056
$2,500
$5,000
$10,000
R&R
Bauchi
R&R
Sokoto
R&DD Mal
CR
R&DD
Benue
R&DD HIV
CR
DDIC
Ebonyi
DDIC
Bauchi
IC&DD HIV
Benue
Costpercubicmeterdistributed
Upper
Mean
Lower
95%
confidence
interval
Bauchi Sokoto CR Benue CR Ebonyi Bauchi Benue

16. Study 2:
Tanzania
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17. Measuring the impact of management enhancements
Decision
on cost-
effectiveness
Enhancements
added:
Logistic
management unit
and
Electronic logistics
management
information
system
Economic
Evaluation:Cost Consequence
System
Design A
2013 2014 2015
System Design A
+ Enhancements
Cost Consequence
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18. The system with management enhancements was
more costly, but also more effective
Supply Chain Performance
Cost per value
of commodities
Enhanced
Original
Total Annual Cost
$59m
Value of Handled Commodities
Enhanced
Original
Enhanced
Original
$63m
Enhanced
Original
$251m
$208m
78%
68%
Cost per value of commodities
adjusted for performance
42%
32%Enhanced
Original
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19. Study 3:
Zimbabwe

20. 4
INDIVIDUAL
SYSTEMS
TRANSPORT LMIS MANAGEMENT
Impact of Merging Four Systems into One
ONE INTEGRATED SYSTEM
PERFORMANCE
Cost
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21. The integrated system was just as effective and less
costly, compared to the 4 individual systems:
Cost as % of Product Value Cost per Cubic Meter
17%
12%
Individual
Integrated
$960
$770
Stock Availability
87%
Total Annual Cost
Integrated
Individual
Integrated
Individual
89%
$1.7m
$1.5mIntegrated
Individual
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22. How have policy makers used these results?
Stakeholders are interested in
implementing Model C in other states
Nigeria
Approach and results are being used as
a model for the international community
Tanzania
Decisionmakers are using data as a key
element in national scale-up strategies
Zimbabwe
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23. What did we learn?
• Use economic evaluation for supply chain
decisionmaking.
• Be ready to educate stakeholders about economic
evaluation.
• International development partners, in particular, are
increasingly concerned with “return on investment.”
• Economic evaluation can help.
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24. (Nigeria)
Study Partners
Study Co-authors
James E. Rosen
Joseph McCord Julia Bem
Cary Spisak Noela Kisoka
Marasi Mwencha
Noel Watson
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25. Thank you!
Siyabonga
Tatenda
Mwashuma
Asante
Na'gode
Ese
Daalu