current methods of drug procurement in India and the implementation of the country’s national MDR TB program; described lessons learned from experience with HIV/AIDS initiatives with respect to increasing the number of suppliers and reducing the prices of second-line anti-TB drugs; and explained the need to quantify, aggregate, and share risks to improve the marketplace for second-line drugs.

CHALLENGES IN DRUG SUPPLY CHAIN LOGISTICS1

DOTS programs have been focused on reducing stockouts, in which drugs become unavailable. Less risk is associated with overstocking first-line than second-line drugs because the former are relatively inexpensive, noted Prashant Yadav, Senior Research Fellow, and Director of Healthcare Research, William Davidson Institute, University of Michigan. For second-line drugs, overstocking can waste scarce financial resources that could otherwise be used for expanding MDR TB programs. At the same time, an uninterrupted supply of second-line drugs is imperative if an MDR TB program is to be successful. MDR TB programs therefore must maintain a fine balance between effectiveness and efficiency.

Yadav highlighted six challenges that arise in the supply chain for second-line drugs, from grant disbursement to distribution. The descriptions below correspond to the challenges numbered 1 through 6 in Figure 8-1.

Uncertainties in the Timing of Grant Disbursement

The flow of funds, whether from a ministry or a Global Fund grant, is often uncertain. When financing is uncertain, procurement planning is difficult. For example, stringent procedures must be followed before Global Fund grants can be disbursed, which often leads to delays in disbursement, said Yadav. Similarly, Ministry of Health budgets often are subject to delays in the release of funds.

Unpublished data show that among the categories of drugs purchased using Global Fund grants, the time gap between planning a purchase and receiving a shipment is greatest for TB drugs. According to Yadav, this gap also is higher in India than in the surrounding region and compared with the global average.

If it is difficult to predict when funds will become available, procurement

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1 This section is based on the presentation of Prashant Yadav, Senior Research Fellow, and Director of Healthcare Research, William Davidson Institute, University of Michigan. (At the time of the workshop, Dr. Yadav was Professor of Supply Chain Management, MIT-Zaragoza International Logistics Program.)



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