This paper analyzes challenges facing Tanzania's public pharmaceutical sector supply chain and distribution network. It finds critical issues like delays in government funding to the Medical Stores Department, expensive medicines costing over $20 million annually, and a $24 million debt. There are also lack of stock control, poor demand and stock information flow, and forecasting errors. This leads to delays, stockouts, and medicine shortages. The poor supply chain performance negatively impacts access to medicines and health care quality. The paper recommends integrating activities across the supply chain and collaborating between participants to improve performance using a process innovation model.

1. Electronic copy available at: http://ssrn.com/abstract=1977609
Pharmaceutical Supply Chain and Distribution Network
Implications on Access to Medicine and Quality Health Care
Critical Analysis of The Public Pharmaceutical Sector in Tanzania
By
Nesia Satoki Mahenge
Supervised by
Prof. Jan Van Dalen, PHD
Professor of Supply Chain and Strategic Management
This paper was submitted in partial fulfillment of the requirement for the degree of
Master of Business Administration (MBA)
at
Maastricht School of Management (MSM)
Maastricht, The Netherlands
http://www.msm.nl
P.O.Box 1203, 6201 BE Maastricht
The Netherlands
August, 2010

2. Electronic copy available at: http://ssrn.com/abstract=1977609
ABSTRACT
Problem: Despite the efforts made by the Government of Tanzania since 1994 to reform the health
sector, Tanzania is still facing a number of challenges: increasing morbidity and mortality rate due to
HIV/AIDS and Malaria, increasing demand for health care due to population increase at a 2.032%
growth rate and varying disease patterns, difficulties in forecasting demand fluctuations of medicines,
shortfall in annual health sector budget allocations and increasing costs of essential health care
medicines. These challenges hinder the achievement of quality health and weaken the nation.
Objective: The aim of this research was to critically analyze the current challenges facing the
pharmaceutical supply chain and distribution network, evaluate implications on access to medicine
and quality health care and identify areas for application of process innovation to improve the
performance and match demand and supply of pharmaceuticals. The case study focused on the Public
Pharmaceutical Sector in Tanzania.
Design/Methodology/Approach: This was an explanatory research design based on embedded
multiple case studies. The unit of analysis was pharmaceutical supply chain and its participating
organizations. The case study was based on “how” and “what” type of questions with a mixture of
qualitative and quantitative data. Multiple sources of evidence “triangulation” were used to collect
primary and secondary data. Worldwide pharmaceutical supply chain cases from the USA, India,
China, Ghana and Zambia were selected for analysis to guide analytic generalization and
recommendations. Cross-case and within case analysis techniques along with the conceptual
framework and literature review were used to analyze the cases and case study protocol and database
were developed.
Key Findings: The study found critical challenges; significant delays of more than 3 months of
government funding to MSD, medicines are expensive; more than 20 million US dollar expenditures
per year on medicines, a staggering debt of approximately 24 million US dollar to government, lack of
stock control, poor demand and stock information flow, errors in demand forecasting as a result
causing delays in delivery, stock-out, medicine shortages at health facilities and demand-supply
mismatching. Changing disease patterns was also contributing to unavailability of medicines.
Conclusion: The poor performance of pharmaceutical supply chain and distribution network has
negative implications on access to medicines and quality health care.
Recommendations: Process innovation model was proposed for analyzing the pharmaceutical
supply chain performance. It was recommended a need for integration of activities in the supply chain
along with collaboration and coordination among participants at each stage.
KEYWORDS:
Pharmaceutical Supply Chain, Distribution Network, Health Care Quality, Access to Medicine, Challenges,
Multiple Case Studies, Process Innovation Model, Performance