Cost and cost drivers associated with setting-up a prime vendor system to complement the national medicines supply chain in Tanzania

Abstract

IntroductionEconomic analysis of supply chain management interventions to improve the availability of healthcare commodities at healthcare facilities is important in generating evidence for decision-makers. The current study assesses the cost and cost drivers for setting-up a public-private partnership programme in Tanzania in which all public healthcare facility orders for complementary medicines are pooled at the district level, and then purchased from one contracted supplier, the prime vendor (referred to as ‘Jazia Prime Vendor System’ (Jazia PVS)).MethodsFinancial and economic costs of Jazia PVS were collected retrospectively and using the ingredients approach. The financial costs were spread over the implementation period of January 2014–July 2019. In addition, we estimated the financial rollout costs of Jazia PVS to the other 23 regions in the country over 2 years (2018–2019). A multivariate sensitivity analysis was conducted on the estimates.ResultsJazia PVS start-up and recurrent financial costs amounted to US$2 170 989.74 and US$709 302.32, respectively. The main cost drivers were costs for short-term experts, training of staff and healthcare workers and the Jazia PVS technical and board management activities. The start-up financial cost per facility was US$2819.47 and cost per capita was US$0.37.ConclusionIn conclusion, the study provides useful information on the cost and cost drivers for setting-up a complementary pharmaceutical supply system to complement an existing system in low-income settings. Despite the substantial costs incurred in the initial investment and operations of the Jazia PVS, the new framework is effective in achieving the desired purpose of improving availability of healthcare commodities.