Abstract
Background
The Health Promotion and System Strengthening (HPSS) project is part of a development cooperation between Tanzania and Switzerland. It supports the Dodoma Region in the areas of health insurance, community health promotion, pharmaceutical management, and management of maintenance and repair services. The project is funded by the Swiss Agency for Development and Cooperation and implemented by the Swiss Tropical and Public Health Institute.
Access to health care is determined by the availability of medicines and medical supplies. Patients equate quality of care with the availability of medicines. Clinicians depend on effective, safe, and good quality medicines to provide adequate health care. If medicines are out of stock, patients suffer and lose confidence in health services. Stock-outs discourage patients from enrolling in the Community Health Fund (CHF) and other insurance schemes.
The Medical Stores Department (MSD) is the backbone of the public medicine supply in Tanzania. It faces challenges in filling orders for health facilities. In the last few years, this supply gap has been growing and now includes more than 40% of orders.
Centrally, the Ministry of Health (MoHCDGEC) allocates defined sums for medical supplies for each health facility directly to the MSD. At the health facility level, complementary funds from the CHF, national health insurance, and cost sharing are generated and managed by the Health Facility Governing Committee. Therefore, health facilities have two main sources of funding for their supplies: direct funding deposited at the MSD by the Ministry and supplementary funds collected by the health facility. Of those supplementary funds, 67% are dedicated to the purchase of medicines by health facilities when the MSD is out of stock.
In the Dodoma Region, a 2010 situation analysis and a 2011 comprehensive baseline survey revealed an availability of essential medicines of 53% with a corresponding stock-out rate of 47% based on 24 tracer medicines. The order fulfillment rate by the MSD was 58.6%.
The supply gap of more than 40% stemming from the stock-out situation and the low order fulfillment rate for supplies by the MSD needs to be complemented by medicines from other sources. Health facilities normally fill this gap with purchases by quotation from multiple private sources both within and outside of the Dodoma Region and use complementary funds (e.g., insurance schemes, user fees, basket funds), incurring in the process high opportunity costs such as travel and fuel, per diems, and high medicine prices. This makes the whole task of filling this gap cost inefficient. The procedure is uneconomic, bureaucratic, intransparent, and lengthy and supplies are of questionable quality.
Alternative strategies were needed to fill the supply gap and complement the public-sector supply system. To resolve this situation, the Dodoma Regional Administration and Local Government embarked on a novel process to establish a Prime Vendor System (PVS) and to engage, on a public-private partnership (PPP) basis, one private-sector pharmaceutical vendor as the primary supplier for supplementary medicines needed by public health facilities in the region.
In principle, a PVS was established in the Dodoma Region to serve as a “one stop shop” intended to alleviate opportunity costs previously incurred by health facilities when they had to search for alternative sources for supplies they could not obtain from the MSD. At the health facility level, complementary funds were once used to make purchases from multiple private sources. However, this supplementary source was now to be used for purchases only from one appointed Prime Vendor (PV).
