Effectiveness of Supply Chain Planning in Ensuring Availability of CD/NCD Drugs in Non-Metropolitan and Rural Public Health System

Abstract

Several studies have reported on the shortage of drugs with the changing demographic and disease profile, especially triggered by the growing burden of lifestyle diseases. However, very few have evaluated the demand-side challenges from the objective of universalisation of healthcare. Therefore, this study was designed to evaluate the factors that have impeded access to affordable generic and essential drugs in non-metropolitan urban and rural India. The study was conducted in six states and responses were elicited from a sample of doctors, pharmacists, nurses, accredited social health activist (ASHA) workers, state officials, warehouse managers and patients across the study states. The study reveals that while the acceptance of prescribing generic drugs has improved over the last decade, the use of branded drugs has been restricted only to complex cases or where generic drug efficacy has not been established. The centralised procurement efficiencies seem to have hit a plateau in terms of assuring drug availability to the last mile, thereby impacting local purchase, especially pandemic procurement. Most states have also established dedicated corporations for drug procurement, albeit at different levels of organisational maturity as far as adherence to the processes and systems are concerned. However, supply chain phenomena like the bullwhip effect gets accentuated given the levels of our public health system. Learnings from other consumer-facing sectors with similar challenges of increased variability and uncertainty are yet to be explored for the health sector to leapfrog towards achieving improved ‘drug availability’ or ‘zero stock-out’. Standardising drug categories, regular updating of the essential drug list (EDL) reflecting the demographic and disease profile, various practices like complete digitisation, rolling forecasts, stock-keeping unit rationalisation, flexible public procurement contracts, etc., have been explored as potential solutions in this paper. Creating a dedicated team of forecasters within the procurement organisations, well adept at using analytics, could be key to real-time demand estimation, paving the way for a quarterly rolling forecast to facilitate procurement using well-designed rate contracts with suppliers that captures variability in such rolling forecasts.