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Private Sector Role in Health Supply Chains

Strong supply chains are essential to effective health care delivery in all sectors – public, faithbased, employer-provided and private. In OECD countries, supply chains rely heavily on the private sector for supply, distribution and provision of key auxiliary services even when the health system itself is largely or exclusively public sector. These supply chains work quite well in ensuring consistent availability of high quality product. In contrast, health supply chains in many Low and Middle Income Countries (LMICs) perform poorly and have less private sector involvement. This observation leads us to ask: How might a greater role for the private sector and/or greater leveraging of private sector supply chain best practices improve health supply chains in LMICs? This study has two objectives: 1) to provide an understanding of the current and potential role for the private sector in health supply chains; and 2) to provide recommendations regarding how national governments, policymakers, private investors, international donors and foundations should think about investment in private sector health care initiatives for LMICs. We define health supply chain as the network of entities that plan, source, fund, and distribute products and manage associated information and finances from manufacturers through intermediate warehouses and resellers to dispensing and health service delivery points. This paper puts a primary focus on the activities of the for-profit private sector and the deployment of for-profit best practices by other sectors in the health supply chain. It is informed by in-depth case studies of health supply chains in Ghana and Zambia, as well as interviews of over 40 supply chain and health experts in 12 countries about private sector initiatives in those countries. Over 40 private sector-oriented initiatives which seek to bring new models to LMIC supply chains were identified and reviewed. The major findings are as follows: