The supply chain for medicines is one that suffers from profound market failures in sub-Saharan Africa.
Providers can offer healthcare services according to specific guidelines, but these services will only be effective if, for example, OxyContin is available to a woman in labor, and if that medication works. Poor pricing control, poor regulation, poor quality and poor liquidity all cause fragmentation in the supply chain. With little transparency, and too many middlemen adding margins to the prices, we see stock outs, and substandard drugs and costs for essential medicines that can add up to as much as three times the average price for drugs in Western countries.
With the support of three different donors, PharmAccess Ghana will be establishing the Med4All digital supply chain platform as a joint social venture with CHAG, a network of 330 faith-based healthcare facilities that account for an annual 6.5 million patient visits and admissions, particularly serving poor and remote communities. Through this initiative, PharmAccess will capitalize on opportunities created by digital technology to directly and transparently connect trusted Ghanaian manufacturers and importers of medicines to healthcare providers in the value chain at low cost.
Med4All will supply healthcare facilities with effective inventory management tools and train the providers to manage and order stocks based on demand, reducing the risks of stock-outs and waste, as well as shelf times and the cost of capital. Forecasting information will also be used to pool the procurement of all CHAG facilities, enabling PharmAccess Ghana to negotiate better prices with suppliers. At the same time, access to credit through MCF will enable facilities to pre-finance medicine stocks through a receivable finance product. In partnership with the NHIA and Fidelity Bank, MCF will pre-finance NHIA claim reimbursements to enable facilities to buy medicine stocks directly, without having to use expensive supplier credits. Finally, a set of cost-efficient methods will be used to ensure the quality of the medicines procured on the platform, set up with a partnership through Ghana’s FDA.