DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
BUSINESS CASE
SOUTH SUDAN EMERGENCY MEDICINES FUND
What support will the UK provide?
The UK plans to provide up to £10 million over the next 18 months (mid 2012 - January 2014) to
support the procurement and distribution of emergency medicines in South Sudan. The overall
budget of the Programme over this period is expected to be around £27 million. Two other
donors (USAID and Norway) are expected to provide the remaining £17 million.
Why is UK support required?
What need are we trying to address
South Sudan is one of the poorest countries in the world. Years of conflict causing
erosion of physical and social infrastructure and death and displacement of millions of
people have made South Sudan one of the poorest regions in the world. Just over half
(51%) of the 8.3 million South Sudanese live below the national consumption poverty
line, and most live in rural areas (81%) [MoH 2011]. South Sudan’s health needs are
vast due to the high poverty and long history of conflict. The basic health care system is
extremely weak, and there are severe shortages of health workers and functional
facilities.
South Sudan has the highest maternal mortality rate in the world with an estimated
2,054 women dying for every 100,000 births. There are major challenges in delivering
services in South Sudan including inadequate infrastructure and access, dysfunctional
referral systems and cultural and financial barriers. In addition, returnees to South
Sudan from Sudan are adding to the burden placed on health facilities particularly in 12
counties- most of which are on the border between Sudan and South Sudan.
More recently the country has been challenged with escalating tension from both
internal ethnic clashes and ongoing disputes with Sudan over oil and other issues still
unresolved following the 2005 Comprehensive Peace Agreement (CPA). This tension
with Sudan has led the Government of the Republic of South Sudan (GRSS) to shut
down their oil wells which were providing around 98% of GRSS revenues. Government
financial resources could run out in the third quarter of this year if government spending
remains the same as it is now. Given this context, and without an early agreement with
Sudan on oil, the government will be unable to sustain current spending on health (or
other government functions). This means that the international community will need to
continue to finance the delivery of many basic health services, prevent a breakdown in
the health system and protect the most vulnerable. This is vital to preventing excess
morbidity and a further deterioration in the already poor humanitarian situation
Background on the pharmaceutical crisis in South Sudan
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DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
Essential medicines have over the past three years been procured through the World
Bank managed Multi-Donor Trust Fund (MDTF). The fund provided medicines to all
public health facilities (47 hospitals, 350 Primary Health Care Centers (PHCCs) and
1,200 Primary Health Care Units (PHCUs) in the 10 States1. The total annual budget
was around $32 million.
The MDTF ends in December 2012. It is anticipated that the current supply of
pharmaceuticals funded by MDTF will last up to January 2013. After this date, there is
no planned central supply of medicines in South Sudan. Many NGOs also purchase
medicines on an ad hoc basis; however these supplies are inadequate for the complete
needs of the country and lead to a more fragmented system which is difficult to monitor.
In addition this will only provide medicines for NGO supported facilities. The end of the
MDTF will leave many health facilities dependent on private procurement of medicines
or facing a complete stock-out of essential drugs.
The donor community began discussions with the Ministry of Health (MoH) about the
financing of pharmaceuticals in August 2011, when it became clear that there would be
gaps in pharmaceutical procurement after the MDTF closed. Since then there have
been a number of high-level meetings between donors, the MoH, and the Ministry of
Finance and Economic Planning to emphasize the need for GRSS to budget
appropriately for pharmaceuticals for the whole country. Given the current oil crisis, it is
unlikely that GRSS will have the financial capacity to purchase and distribute
pharmaceuticals in time to avoid major stock outs of essential medicines from January
2013. The MoH must reduce its already limited operational and capital expenditures to
fall in line with government austerity measures. The MoH has budgeted 35 million SSP
(approx. $11m) for food and pharmaceuticals for the financial year 2012 to 2013.
However, it is difficult to know if this will actually be allocated to them and when it will
be released to MoH. Given that it takes at least 9-12 months to bring medicines into
South Sudan it is unlikely to be soon enough to avoid major stock outs. Even if the MoH
will receive this money, it will still be vastly insufficient to cover the need of the
population.
What will we do?
With other donors the UK plans to support an emergency medicines fund that will
provide South Sudan with a supply of emergency medicines for a one year period. The
Fund will allow the procurement of a tailored list of essential medicines and the storage
and distribution of medicines up to county level. Support to this fund will enable
delivery of primary care health services across most of the country.
Who will implement the support we provide?
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DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
Options appraisal shows that the best value for money will be achieved by providing
donor funds to USAID to support their DELIVER programme. The USAID DELIVER
Project assists the development of health supply chains for a broad array of essential
health commodities. DELIVER has a list of pre-approved wholesalers of
pharmaceuticals which will help speed up the process of procurement. DELIVER
would manage the whole supply chain from procurement and storage to distribution up
to county level. The emergency medicines fund will need to align closely with activities
under the DFID six State Health Pooled Fund to ensure that commodities are reaching
health facilities on the ground.
What are the expected results?
What are the planned results attributable to UK Support?
The results for the emergency medicines fund have been developed in line with the
anticipated outcomes of the Health Pooled Fund. The emergency medicines fund will
contribute to improving health outcomes and saving lives by:
 reducing under 5 mortality rate from a baseline ratio of 106 (deaths/1,000 live
births) in 2010; and
 reducing maternal mortality from a ratio of 2,054 (deaths per 100,000 live births)
in 2006. Data will be disaggregated by gender and poverty quintile.
The outcome of the emergency medicines fund is to maintain essential health services
through provision of quality priority medicines. The three outcome indicators are:
 Under 5 consultation rate;
 Proportion of antenatal clients receiving their second dose of intermittent
presumptive treatment (IPTp)
 Proportion of facilities that access county supplies of medicines
How will we determine whether the expected results have been
achieved?
We will jointly monitor the programme with USAID. In addition we will monitor through
the Health Pooled Fund (HPF) as provision of services under the HPF is dependent on
the availability of medicines.
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DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
Strategic case
A. Context and need for DFID intervention
Background on South Sudan
South Sudan is one of the poorest countries in the world. Years of conflict causing
erosion of physical and social infrastructure and death and displacement of millions of
people have made South Sudan one of the most underdeveloped regions in the world.
Poverty is widespread. Just over half (51%) of the 8.3 million South Sudanese live
below the national consumption poverty line, and most live in rural areas (81%) [MoH
2011].
South Sudan’s health needs are vast and partly result from the high poverty and long
history of conflict. War has left an already very basic health care system extremely
weakened, with severe shortages of health workers and functional facilities. South
Sudan has the highest maternal mortality rate in the world with an estimated 2,054
women dying for every 100,000 births. Only 44% of the population lives within 5 kms of
a health facility. User rates are low and estimated at 0.2 contacts per person per year.
Other major challenges to delivering services include inadequate infrastructure and
access, dysfunctional referral systems and cultural and financial barriers. In addition,
returnees to South Sudan from Sudan are adding to the burden placed on health
facilities particularly in 12 counties - most of which are on the border between Sudan
and South Sudan.
More recently the country has been challenged with escalating tension from both
internal ethnic clashes and ongoing disputes with Sudan over oil and other issues still
unresolved following the 2005 Comprehensive Peace Agreement (CPA). This tension
with Sudan has led the Government of the Republic of South Sudan (GRSS) to shut
down their oil wells which were providing around 98% of GRSS revenues. Government
financial resources could run out in the third quarter of this year if government spending
remains the same as it is now. Given this context, and without an early agreement with
Sudan on oil or sufficient alternative financing being secured, the government will be
unable to sustain current spending on health (or other government functions). This
means that the international community will need to continue to finance the delivery of
many basic health services, prevent a breakdown in the health system and protect the
most vulnerable. This is vital to preventing excess morbidity and a further deterioration
in the already poor humanitarian situation
Background on the pharmaceutical crisis in South Sudan
Essential medicines have over the past three years been procured through the World
Bank managed Multi-Donor Trust Fund (MDTF). The medicines were supplied in the
form of drug kits to all public health facilities (47 hospitals, 350 Primary Health Care
Centers (PHCCs) and 1,200 Primary Health Care Units (PHCUs) in the 10 States2. The
2
A total of 31 different kits were supplied, consisting of 11 lots (oral drugs, ACTs, syringes etc.) for the
three different levels.
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DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
total annual budget was around $ 28 million - $ 24 million for medicines, and an
additional $ 4 million for storage & distribution. Considering the population of South
Sudan – approximately 8 million – this is a relatively high per capita expenditure on
essential drugs.
The MDTF is coming to an end in December 2012 and was the main provider for
medicines in South Sudan. It will provide two more instalments (3-months supply) of
medicines before it finishes and these are expected to be delivered at Central Medical
Stores (CMS) around August and Oct/Nov 2012. It is therefore anticipated that the
current supply of pharmaceuticals funded by MDTF will last up to January 2013. After
this date, there will be no funded supply of medicines in South Sudan. This will leave
health facilities dependent on procuring medicines privately where funding is available,
the remainder will face a complete stock-out of essential drugs.
Around 70% of the public health facilities receive additional support from national and
international NGOs. This support often also includes funding for essential drugs (for
counties or facilities to procure themselves) or gifts in-kind. In addition, specific health
programmes use parallel mechanisms for the supply of additional medicines, for
instance anti-retroviral drugs (ARVs), anti-malarials and anti-TB drugs (funded by the
Global Fund, delivered by PSI/UNDP), vaccines (funded and supplied by UNICEF) and
Family Planning commodities (USAID).
The donor community began discussions with the Ministry of Health (MoH) about the
financing of pharmaceuticals in August 2011, as it was becoming clear that there were
gaps in pharmaceutical procurement when the MDTF closed. Since then there have
been a number of high-level meetings between donors, the MoH, and the Ministry of
Finance and Economic Planning to emphasize the need for GRSS to budget
appropriately for pharmaceuticals for the whole country.
However, given the current oil crisis, it is unlikely that GRSS will have the financial
capacity to purchase and distribute pharmaceuticals in time to avoid major stock outs
of essential medicines from January 2013. Even with a deal on oil between Sudan and
South Sudan, as is now possible, it will be many months before oil revenues resume.
The MoH must reduce its already limited operational and capital expenditures to fall in
line with government austerity measures. The MoH has budgeted 35 million SSP
(approx. $11.1 m) for pharmaceuticals for the financial year 2012 to 2013. This
includes funding for feeding centres. However, it is difficult to know how and when this
funding will actually be allocated to MoH. Even if the MoH will receive this money, it will
still be vastly insufficient to cover the need of the population, especially taking into
account further currency depreciation.
Why this project is important and why DFID is required to support it?
There is a clear need for DFID’s support to the procurement of essential drugs in South
Sudan.
DFID is currently the lead donor for the proposed Health Pooled Fund (HPF). This is a
fund that is expected to be supported by at least five donors - AusAID, CIDA, the EC,
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DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
SIDA and DFID. It aims to provide basic services at primary care level in six 3 of the 10
states of South Sudan, and also to provide emergency obstetric care in county
hospitals. The remaining four States will be covered by USAID and the World Bank.
Figure 1: Southern Sudan map by county (79) and state (10)
The HPF is dependent on the central supply of medicines, and was designed on the
basis that the GRSS would fund the procurement and distribution of medicines.
However, under the current circumstances GRSS no longer has the capacity to free up
adequate finance for the procurement of medicines for the country. Medicines are one
of the essential components for delivery of health services [WHO 2007]. Therefore the
HPF cannot deliver basic services to the population of South Sudan unless funding for
medicines can be made available.
DFID has taken a leadership role with USAID on the issue of pharmaceuticals. This
has included advocating to GRSS for medicines to be prioritised as well as advocating
to donor partners to consider providing financial support for medicines in enable
continued health services.
In addition to the reduction in GRSS funding for medicines, there is likely to be
reduction in GRSS funding for salaries and health services. The health needs in South
Sudan are likely to increase across South Sudan from 2012, due to increasing
returnees, refugees and IDPs, and a likely food security crisis with resulting
malnutrition. The combination of reduction in health services, with increasing returnees
and increasing malnutrition will lead to a humanitarian crisis, with significant mortality.
A key way of mitigating against the impact of this crisis would be to ensure that there is
an adequate supply of essential medicines for South Sudan, in order to be able to
maintain basic health services across the country.
3
These include Western Equatoria, Northern & Western Bahl el Ghazal, Warab, Lakes, Unity. Jonglei and
Upper Nile have been assigned to the World Bank, while USAID takes responsibility for Central and
Eastern Equatoria.
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DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
B. Impact and Outcome that we expect to achieve
In line with the Health Pooled Fund, the emergency medicines fund will contribute to
improving health outcomes and saving lives by:

reducing under 5 mortality rate from a baseline ratio of 106 (deaths/1,000 live
births) in 2010; and

reducing maternal mortality from a ratio of 2,054 (deaths per 100,000 live births)
in 2006. Data will be disaggregated by gender and poverty quintile.
The outcome of the emergency medicines fund is to maintain essential health services
through provision of quality priority medicines. The three outcome indicators are:

Under 5 consultation rate;

Proportion of antenatal clients receiving their second dose of intermittent
presumptive treatment (IPTp)

Proportion of facilities that access county supplies of medicines
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DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
Appraisal Case
A. What are the feasible options that address the need set out in the
Strategic case?
Figure 2 outlines the Theory of Change of the emergency medicines fund, which aims
to improve health outcomes and save lives. The emergency medicines fund will enable
the procurement, storage and distribution of essential drugs to counties in at least the
six HPF states for a period of one year. The Fund will also ensure that a transparent
and harmonized system is set up to monitor drugs and finances throughout the supply
chain. The provision of quality priority medicines will help maintain essential health
services, which will in turn improve health outcomes and save lives. This Theory of
Change is subject to a number of assumptions; key evidence and theory supporting
these assumptions is outlined in the box below.
Figure 2: Emergency Medicines Fund - Theory of change
Supporting health
systems (staff,
infrastructure) are
available to provide
quality care & treatment
Access to quality
essential
medicines
improves health
outcomes
Procurement of medicines
Emergency
Medicines
Fund
Storage & distribution to counties in six
States
Transparent & harmonized system in
place for monitoring drugs & finances
throughout supply chain
Maintaining
essential health
services through
provision of quality
priority medicines
Availability of
medicines
improves healthseeking behaviour
Improving health
outcomes and
saving lives
GRSS finds
additional resources
to ensure continuous
supply of medicines
& medical supply
following completion
of emergency
medicines fund
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DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
The key evidence and theory supporting these assumptions are as follows:
Assumption 1: Access to quality essential medicines improves health outcomes
One of the key components of a functioning health system is the availability of quality
essential medicines to provide care and treatment to those in need. It is commonly
accepted that improved access to good quality health services has major impacts on health
outcomes, in particular in low and middle-income countries. Indeed, access to essential
medicines is directly related to life expectancy [WHO 2004], and is one of the five UN
indicators to measure progress in the progressive realization in the right to health [WHO
2011].
Assumption 2: Supporting health systems are available to provide quality care &
treatment
A health system consists of six main building blocks [WHO 2007]. Each of these
components needs to be present and prioritised simultaneously and continuously across
the entire health network including in hard to access places if health services are to
function efficiently and have an impact on health outcomes. The six blocks are: health
services that deliver effective, safe, quality health interventions; leadership & governance
ensuring strategy policy frameworks; a qualified health workforce; a health information
management system (HMIS); an equitable health financing mechanism; and finally
availability of quality medicines & technology.
Through its various activities, the Health Pooled Fund (2012 – 2016) aims to address a
number of the building blocks, in particular provision of finances to support the delivery of
primary care health services in six states, support to the HMIS and to develop leadership &
management skills. Other donors (e.g EU, CIDA and UNFPA) focus on training of the
health workforce. The emergency medicines fund aims to complement these activities to
ensure that this building block is addressed and the health system can provide care and
treatment to its population.
Assumption 3: Availability of medicines improves health-seeking behaviour of
population
South Sudan has a very low per capita use of the public health sector: on average, people
visit a health facility only 0.2 times per year. Shortage of medicines has been shown to
reduce health-seeking behaviour. Indeed, a study in Malawi showed that unavailability of
anti-malarial drugs was one of the factors associated with delays in seeking appropriate
treatment for fever [Chibwana et al, 2009].
Assumption 4: GRSS finds additional resources to ensure continuous supply of
medicines & medical supply following completion of emergency medicines fund
The current intervention only covers medicines for one year, and provision of essential
drugs will be handed over to the Government of South Sudan at the end (2013). The
current business case assumes that the government of South Sudan finds additional
resources to ensure continuous supply of medicines & medical supply following completion
of emergency medicines fund. It should be acknowledged that if the current crisis
continues, this may not happen. Therefore, in parallel to the proposed emergency
medicines fund, it is critical that there is continuous dialogue with the GRSS and partners
to advocate for the availability and prioritisation of funding for essential medicines.
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DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
In addition to the criteria set out in the Theory of Change and the cost associated with
each option there are a number of other critical factors on which the final decision
regarding procurement, storage and distribution modality will be based. These include
the capacity to set up a transparent system for procurement, storage and distribution
and ensure timely supply of quality priority medicines. Lastly, the sustainability of the
system will be taken into account.
The capacity of a system to deliver is an essential factor to ensure that quality
medicines will actually arrive at their final destination. The context in South Sudan is
particularly challenging in terms of importation requirements, storage capacity, incountry distribution, and lack of existing reporting systems in place. The capacity to
deliver will therefore rely for a large part on the expertise and previous experience of
implementing partners.
Transparency of the system is critical to ensure that both medicines and funding can
be tracked throughout the supply chain. There are currently few official government
structures in place for monitoring stock or finances at different levels. This poses a high
risk of leakage of drugs to the private sector and diversion of funds.
The timely supply of medicines is crucial to avoid a shortage of drugs to the extent
possible. After selection and quantification of medicines has been agreed upon and
orders are placed with the procurement agent, it takes approximately four months for
manufacturing, and an additional three months for quality assurance, kit packaging and
transport (by sea/road) to Juba. Subsequently, drugs have to be transported to county
and facility level. As mentioned, the essential medicines kits provided through the
MDTF are expected to cover the need of the population until approximately the end of
January 2013, and emphasis should be placed on a system that can supply medicines
as quickly as possible to avoid or at least minimize the period during which facilities are
faced with stock-out of priority drugs.
In order to ensure that the drugs provided improve health outcomes of the population, it
is of paramount importance that quality medicines are provided. Due to weak
legislation and absence of a national drug regulatory system, the pharmaceutical
market in South Sudan is riddled with low-quality and counterfeit medicines. 4 This
highlights the importance of setting up a system whereby medicines imported into the
country adhere to strict quality criteria. In addition, quality of medicines should be
maintained throughout the supply chain until the final point of use, whereby special
emphasis should be placed on proper conditions for storage and distribution.
The cost aspect of the different options is discussed in section C.
Sustainability of the system is an important criterion for evaluating the options, as the
current emergency drug fund only intends to cover the need for priority medicines in
the six states for one year. After this period, the government of South Sudan and/or
partners should take over. Therefore, attention should be given to a system that is
Meeting May 17, 2012 - Ministry of Health/Dept of Pharmaceutical Services: “Quality Assurance & Quality
Control of Medicines in South Sudan”
4
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DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
complementary to capacity building initiatives within the Ministry of Health and national
structures thus increasing the likelihood of a successful hand-over of the project.
The following sections outline the options explored taking into account the theory of
change and the critical criteria outlined above. Section A1 summarizes a number of
options that are not deemed feasible or realistic, and the rationale for why these are not
further explored is laid out. Subsequently, section A2 looks at the feasible options,
including the counterfactual.
A.1 Procurement, storage & distribution: options not deemed feasible
Option: Pooled fund with the Ministry of Health in charge of the procurement &
distribution of all essential medicines
The Ministry of Health would prefer to procure and distribute all essential medicines
themselves. Even though in theory the preferred option would be to use national
systems and bodies, in reality there is ample evidence that the MoH does not have the
capacity to do this at this time. There is limited technical expertise within the MoH/DPS
to manage the tender process in a timely manner. The MoH has no written procedures
for supplier performance monitoring, which leads to delayed or non-compliant
deliveries [USAID, 2010].
A recent fiduciary risk assessment (FRA) showed that DFID South Sudan cannot at
this stage enter into financial aid agreements that directly put funds into government
systems. The corruption risk is high and commitment of GRSS to reform is not yet
credible and is challenging given the current financial context.
In addition, there are major challenges encountered at Central Medical Store (CMS)
level. Government storage capacity covers less than half the space needed for one
consignment (3-months) of kits (as supplied under MDTF) for the country. The
government does not have a fleet of trucks to regularly facilitate distribution to health
facilities. Lack of capacity for coordination between the Department of Pharmaceutical
Services/MoH leading the process, CMS and the transport agents, makes it difficult for
CMS to efficiently organize for dispatch operations.
Lack of systems to track & trace the goods distributed to states/counties poses a high
risk of leakage of drugs to the private sector. Indeed, there are numerous anecdotal
accounts of public-sector drugs surfacing in private pharmacies. Given the current
challenges following the oil closure it is likely that leakage of high-value goods from the
public sector is going to increase.
In light of these factors, the option of procurement & distribution of essential drugs by
the MoH with pooled funding is not deemed a feasible option and will not be further
considered.
Option: Pooled funds with the World Bank to subcontract IMA for procurement &
distribution of essential drugs
The World Bank aims to deliver drugs to the two States assigned to them – Jonglei &
Upper Nile. For this, they plan to contract Interchurch Medical Association (IMA), which
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DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
in turn has an agreement with the Ministry of Finance/MoH, whereby IMA is
accountable to the MoH. This option involves considerable involvement of the GRSS,
which is likely to slow down the process. In addition, it is as yet unclear how IMA will
procure (direct sourcing from manufacturers vs. through a Procurement Agent), store
and distribute (to State/County level) the medicines, and what their capacity is. In light
of the urgency of the current delivery, there is a real chance that quality priority
medicines will not arrive at facility-level in a timely manner. For this reason, this option
will not be further pursued. Discussions are ongoing to see whether the WB and IMA
may be interested in harmonising their own drug procurement and distribution with
USAID and DFID and we have expressed the potential to support the procurement of
some commodities depending on the level of funding offered by other donor partners.
Option: Pooled funds with a UN-agency to carry out the procurement &
distribution of essential drugs
Under EU regulation, DFID could directly contract a UN-agency to conduct the
procurement and distribution of drugs to the six States. This option has as an
advantage that there is no need for international tendering to select a procurement
agent, cutting out a time-consuming step in the chain, and UN-agencies are typically
capable of handling large orders.
For this Business Case, one of the UN-agency’s most involved in supply chain
management in South Sudan – UNICEF – has been approached. UNICEF has
delivered vaccines and cold-chain equipment throughout South Sudan for many years.
From 2005-2007, UNICEF also supplied essential drugs to USAID, but due to long
delays in supplying the products the agency switched to IDA as procurement agent.
There is also anecdotal evidence that the current provision of cold-chain equipment is
subject to major delays. Lastly, UNICEF has indicated that it is not keen to manage the
procurement & distribution of essential drugs. For the above-mentioned reasons, this
option will also not be further considered.
Option: NGOs will be allowed to procure medicines individually through a top-up
in their budget
Currently, NGOs procure additional medicines individually to avoid stock outs, as the
quantity supplied by MDTF is insufficient. The Basic Services Fund (BSF) provides
around £900,000 annually to 17 NGOs working in 35 counties to purchase additional
essential drugs and supplies, such as anti-malarials and antibiotics. USAID/SHTP II,
OFDA and ECHO support other NGOs in the 51 remaining counties. As mentioned
before, the tasks and responsibilities of supporting counties have been re-divided
amongst donors, and all counties will be supported by an NGO in the near future. This
support includes service delivery running costs, salary incentives, county health
department capacity building, supervision and potentially provision of selected
additional medicines. Whilst this may help alleviate some of the crisis, the HPF will be
unable to cover all NGO medicine costs. Additional funding made available by DFID
could possibly be channelled to the different NGOs for the purchase of additional
essential drugs.
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DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
On the upside, arguably NGOs working at county-level are closest to the beneficiaries
and the needs on the grounds. However, this option also has a number of major
drawbacks. Funding NGOs to purchase medicines for counties would result in a highly
fragmented system, with many parallel supply chains and no involvement from Ministry
of Health. This results in a lack of oversight on how finances are used and the quantity
of medicines procured, as well as challenges with collating data and moving towards a
more harmonized sustainable system where the needs are understood.
In addition individual small procurement will not give best value for money and NGOs
(in particular smaller NGOs) do not always have strict rules to ensure the quality of
medicines purchased. Serious concerns have been voiced over the quality of
medicines imported from locally or regionally sourced drugs.
Importation of drugs from international sources requires tax exemption for each NGO
individually. It has been shown in the past that these waivers are difficult to obtain, and
can therefore lead to significant delays in procurement. The capacity of each NGO to
select, quantify, procure and monitor medicines use is also unknown. A final challenge
is that currently there is not an NGO in every county, and not all facilities in a county
are currently covered by an NGO, which implies that procured medicines will not reach
all facilities. For the above reasons, this option will not be considered further.
Option: DFID to launch international competitive bidding process
This option will involve DFID launching an international competitive bidding process to
contract agencies to procure – and possibly also distribute – medicines. This option
has been discarded for two reasons.
Firstly, it will require considerable time (at least 6 months) to run the tendering process
to select a procurement and distribution agent. 5 . More time will then be needed to
negotiate contracts, and the process after the contract has been awarded.
As shown in figure 3, provision of medicines under MDTF from preparing tender
documents to arrival of drugs at county-level took around 30 months. Reasons cited for
this lengthy process included low capacity related to evaluation of the bids, and
cumbersome World Bank procedures to obtain a Letter of Credit. Even using DFID
procedures it will take at least 6-9 months from the moment the purchase orders are
placed, manufacturing of medicines (4-6 months) and shipped to Juba (2-3 months).
Under this option, medicines will therefore certainly arrive in the counties well after
February 2013.
The second reason why this option has not been considered is that additional DFID
capacity would be required and this would take time to recruit.
5
As a comparison, the International Competitive Bidding (ICB) launched by MDTF in 2009 for the supply of
essential drug kits received 22 bids from suppliers
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DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
Figure 3: Timeline (in months) under MDTF using government systems – from
tendering to arrival essential medicines kits at facility-level
Source: Personal correspondence, Ministry of Health GRSS & MissionPharma
A.2 Procurement, storage & distribution: options to consider
Four potential options have been identified for consideration. To appraise the options of
ensuring quality essential medicines to the population, the supply chain is regarded in
two components:

A procurement component, which includes the selection, quantification and
procurement of medicines, up to importation and delivery to the warehouse in Juba;

A storage, distribution & reporting component, which includes storage in Juba
and onwards distribution to all counties in the six DFID-supported States, and also
reporting on stock levels and consumption;
Both components can be managed by either the International Procurement Agency
(IPA) or under USAID’s pharmaceutical programme DELIVER. Including the
counterfactual, this results in the following four options:
Option 1:
Do nothing/counterfactual
Option 2:
Pooled fund with DFID directly procuring medicines via IPA, and
using IPA for storage & distribution
Option 3:
Pooled fund with DFID directly procuring medicines via IPA, and
using USAID’s DELIVER mechanism for distribution
Option 4:
Using a single source USAID DELIVER Project to procure and
distribute the drugs to counties in all six States
As described in the previous section, the existing system of storage and distribution of
essential medicines has a number of problems. There is low capacity within the
MoH/DPS to manage this part of the supply chain, and a high risk of leakage of
medicines to the private sector. If DFID provides funding to procure essential
medicines, it should ensure that the drugs reach the final destination, in a timely
manner, and quality is maintained. Apart from the options discussed here, no other
viable alternative for storage & distribution were identified by any of the stakeholders.
For the purpose of this business case we have used a very limited list of commodities
for procurement cost estimates (See section C) and have focused on distribution to
eight states at this time. Discussions are ongoing with the World Bank in case the fund
can and needs to cover the two World Bank supported states in addition to the eight
14
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
states supported by USAID and the Health Pooled Fund. Both the number of
commodities and the number of states may be expanded depending on the level of
funding received from donor partners.
All four options are described in turn below. For the last three, roles & responsibilities of
the different actors, as well as pros & cons of the option, are discussed. The critical
factors to be assessed include capacity, transparency, timeliness, quality medicines,
cost and sustainability (see previous section). In addition, implications for the DFID
South Sudan office in terms of potential additional human resources needed are taken
into account.
In addition, it is assumed that the medicines will in each option be delivered down to
county level at least. The last part of the supply chain – making sure that drugs get
from county to facility level – would utilise local existing mechanisms. Typically, staff
from health facilities or NGOs come to collect the medicines at county level. As part of
the Health Pooled Fund, NGOs could be contracted to strengthen and support the
county health department with the storage of drugs, and distribution from the county
warehouse to the final destination.
Option 1: Do nothing/counterfactual
This option outlines the counterfactual, i.e. DFID does not fund the emergency
procurement & distribution of essential drugs to the six HPF-supported states beyond
existing projects.
Given the current budget and technical constraints, the government will be unable to
procure essential medicines when current stocks run out. At the same time, health
facilities are for a large part dependent on the supply of essential drugs from CMS to
provide treatment to the population.
During the past months, DFID has made concerted efforts to lobby humanitarian and
development donor partners (those involved in the HPF, but also for instance nontraditional health donors such as Japan and China) to contribute funding to purchase
essential drugs for the six States covered by the HPF. This has resulted in some
success, with Norway indicating its willingness to contribute, but only on the basis of a
DFID lead. And given the lengthy process of procuring & distributing medicines and
looming nationwide stock-out occurs, it is improbable (and otherwise, too late) that
another partner will address this situation in the near future. The displacement effect,
where in the absence of DFID funding the supply of essential drugs would still go
ahead thus seems not to apply here. DFID lead is essential.
Severe shortages of essential medicines will also undermine the impact of the Health
Pooled Fund (HPF), as provision of health care will be badly affected. Amongst other
plans, the HPF aims to conduct 70,000 under-5 consultations, provide 30,000 children
ages 6-59 months with vitamin A, treat 6,000 pregnant women with malaria treatment
and ensure 6000 women attend a 4th ANC where they are immunised; these activities
would be severely compromised if medicines are not available [HPF Business Case,
Year One Milestones]. It is also very demotivating for health workers if they do not have
15
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
any medicines to give to patients, which may further affect quality of care provided. A
sharp fall in the provision and quality of health care service – which is further
compounded by increasing returnees, food insecurity and conflict – will lead to
significant increases in morbidity and mortality across South Sudan.
Option 2: Pooled fund with DFID directly procuring medicines via IPA, and using
IPA for storage and onwards distribution
This option for procurement would involve MoUs being signed with donors and the
money being channelled into a pooled fund. The pooled fund could be used to procure
medicines.
DFID would not procure goods and associated services directly, and all services and
goods with a value over £101,000 need to be purchased through international
competitive bidding. A competitive tendering exercise was run to select DFID
appointed procurement agents to carry out purchasing duties in the UK and overseas
offices. As a result of this exercise, the procurement agent recently appointed for South
Sudan is the International Procurement Agency (IPA).
For the procurement of essential medicines, IPA would conduct an international
competitive 6 bidding process in order to select and contract a Procurement Agent
(possible agents mentioned were MissionPharma and IDA). The Procurement Agent
would carry out the sourcing of supplies, kit packaging, quality assurance, transport
and import in country to central warehouse level.
For storage, distribution & reporting, IPA would hire warehousing space in Juba, or
possibly use their warehouse in Kampala for bulk storage of drugs. IPA would contract
logistics firms in South Sudan for the distribution of medicines to the counties in the six
states. A system capturing information on stock levels and consumption data would
have to be set up.
6
For a restricted (and speedier) bidding process, whereby selected suppliers are invited to submit their
bids, a separate Business Case would have to be submitted to DFID for approval.
16
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
Figure 4: Pooled fund with DFID directly procuring medicines via IPA, and using IPA for
storage & distribution (Option 2)
Roles & responsibilities
IPA’s role would be to manage the contract and monitor the process with the
procurement agent, arrange storage space (central and/or decentralized level),
contract local distributors, and provide regular reporting to DFID. Under a specific
service contract, IPA (or a sub-contractor hired by IPA) could also be tasked with
arranging tax waivers for importation of medicines, set up distribution schedules for
drugs (incl. volume, weight and quantities to be supplied to each county) and manage
the reporting system (e.g. determine when which drugs will have to be supplied where).
DFID South Sudan (SS) would supply IPA with a list of essential drugs & medical
supplies to be procured (incl. quantities and specification), and support the process of
arranging tax waivers, of providing input in the distribution schedule and of managing
the reporting system.
Pros & cons
The advantages for the procurement component under this Option can be summarized
as follows. IPA is a general procurement services company with experience in
essential drugs management, especially TB control programmes. 7 Over the past
decade, it has supplied essential drugs, TB medication and malaria drugs to a variety
of countries, including for DFID-funded projects e.g. in India8 (performance of IPA on
these projects could not be independently verified). The framework contract between
DFID and IPA contains Key Performance Indicators to ensure transparency and
secures value for money and compliance with EU Directives. Quality of medicines will
be ensured through the use of reputable procurement agents (MissionPharma or IDA),
7
http://www.dfid.gov.uk/work-with-us/procurement/procurement-of-goods-and-equipment/internationalprocurement-agency/ ; http://www.ipa-bv.nl/index.html
8 Based on email correspondence with Arie van Vroon, Logistics Manager IPA; May 21 2012
17
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
which use stringent quality control & assurance criteria and have extensive experience
with large essential medicines orders for South Sudan. In addition, IPA has a 2.95%
fee rate and full transparency of costs.
On the downside, an international competitive tendering process that has to be
undertaken will require time for launching the tender, receiving and evaluating bids,
and awarding the contract. As shown in figure 7, this process is expected to delay the
procurement-component by approximately one to two months compared to Option 4,
which would translate into two additional months of stock-out of essential drugs at
facility level. Another factor on the downside is that the performance of IPA on some
other DFID contracts in South Sudan was said not to be unequivocally positive, and
examples of delays and poor contract management were cited.9
In terms of storage, distribution & reporting, IPA already has experience with setting up
distribution and reporting systems of medicines in various countries. In South Sudan,
IPA has managed procurement & distribution activities of anti-malarial treatments for
the Malaria Consortium since 2009. IPA already has some framework agreements with
logistics firms in South Sudan, which could potentially be used for the distribution of
medicines to the counties in the six states.
On the downside, IPA has as of yet to establish local presence in the country, which is
crucial to facilitate communication and ensure the process is managed at both ends of
the supply chain. Procedures for import of medicines are complicated – including
obtaining waivers for tax exemption – and there are ample examples of medicines
being stuck at the border for long periods of time. In addition, no comprehensive
reporting system is in place, even though the MoH is piloting new tools. At this point,
IPA does not have established collaboration with the Ministry of Health to facilitate the
process of obtaining waivers for importation, making use of available storage capacity,
strengthening existing reporting systems, building upon lessons learnt and
strengthening the capacity of the national system. In addition, this Option would imply
two parallel systems being set up at the same time by USAID & DFID, resulting in more
fragmentation (see figure 4).
Lastly, for DFID internally choosing Option 2 will strengthen the framework agreement
between DFID and IPA, and further establish the relationship between the two entities.
However, this option will likely require additional human resource capacity at the DFID
SS office on selection & quantification of drugs, support arranging of tax waivers,
providing input in the distribution schedule and managing the reporting system. The
DFID SS office is already stretched to capacity, and the extra work involved would
possibly mean that additional staff has to be employed.
Option 3: Pooled fund with DFID directly procuring medicines via IPA, and using
USAID’s DELIVER mechanism for distribution
9
Personal communication, DFID Programme Manager SSU
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DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
USAID intends to use DELIVER for the procurement, storage and distribution of
essential medicines to the two States they support. A vertical supply system will be set
up, whereby DELIVER is responsible for the whole chain, from the moment purchase
orders are placed, up to delivery of medicines at county level.
For the third Option, a pooled fund would be set up with which to procure medicines,
and the procurement of essential medicines for the six states with DFID-funding would
follow the mechanism as described under option 2. IPA would tender to contract a
procurement agent, and be in charge of managing the supply chain until the medicines
arrive in country (CIP Juba). At that stage, the responsibility would be handed over to
USAID/DELIVER (see figure 5). In effect, the supply chain managed by IPA would join
the USAID/DELIVER supply chain at central warehousing level, and from there
DELIVER would take over storage, distribution & reporting (see Option 4 for a
description of the second part of the supply chain).
Figure 5: Pooled fund with DFID directly procuring medicines via IPA, and using
USAID’s DELIVER mechanism for distribution (Option 3)
Roles & responsibilities
IPA’s role would be to manage the contract with the procurement agent, monitor the
process with the procurement agent, arrange tax waivers, manage the hand-over of
goods to DELIVER and provide regular reporting to DFID.
DELIVER would be responsible for storage and onwards distribution to counties,
including setting up a distribution channel, reporting of stock levels and consumption,
and feeding back information. Selection & quantification of medicines would be
harmonized with USAID, and one reporting system (incl. indicators) agreed upon.
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DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
DFID SS would be responsible for supporting the process of hand-over of medicines
from IPA/procurement agent to DELIVER.
Pros & cons
The pros and cons of using IPA to carry out the procurement of medicines have been
described under Option 2. The pros and cons of using DELIVER for the storage,
distribution & reporting component are set out under Option 4.
A major drawback specific to this Option is the fact that two supply chains managed by
two different agencies will come together at Juba-level, while the medicines are
possibly supplied by the same procurement agent (e.g. Mission Pharma or IDA, see
figure 5). This increases the lines of communication and transaction costs, and
enhances the risk of ‘bad linking’ between IPA and DELIVER at country level, which
could lead to an over- or undersupply of medicines at warehouse or facility level.
For this reason (as well as the fact that important advantages associated with
DELIVER relate to the second part of the supply chain), the option of using DELIVER
for procurement and IPA for the storage/distribution/reporting component is not
considered.
In addition, it would put considerable additional management burden on DFID,
coordinating the two agents and two supply chains at central level.
Option 4: Using a single source USAID DELIVER Project to procure and
distribute the drugs to counties in all six States
The fourth option entails DFID linking up with USAID and using the vertical lot
approach managed by DELIVER for the procurement, import, storage and distribution
of medicines.
For this to happen, pooled funds or individual funds could be directed to USAID
following agreement of MoUs between donors. Funds from the donors could in turn be
channelled through USAID’s DELIVER mechanism, which is prequalified by USAID.
USAID in turn would contract DELIVER to set up and manage the whole supply chain,
providing medicines to the USAID and HPF-supported states (eight in total). DELIVER
has five pre-approved wholesalers (amongst which MissionPharma, which has
extensive experience in-country10) for the procurement of essential medicines, ensuring
a quick process of contracting an agent. USAID/DELIVER would manage waivers for
tax exemption and import of medicines.
For storage, distribution & reporting, USAID/DELIVER would hire storage space at
central or decentralized level, and contract local distributors to arrange transport to
counties in all eight states. DELIVER plans to come to South Sudan in shortly to set up
a detailed plan of implementation for USAID’s two states, which could possibly be
extended to include storage, distribution & reporting of the DFID-funded medicines to
10
Other pre-approved wholesalers include Amstelfarma, Action Medeor, IDA foundation and UNICEF
20
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
the six states. It will do this in close collaboration with the MoH/DPS and the USAIDs
supported programme Systems for Improved Access to Pharmaceuticals and Services
(SIAPS) which provides technical support to the MoH directorate of Pharmaceuticals.
Figure 6: Using a single source USAID DELIVER Project to procure and distribute the
drugs to counties in all eight States (Option 4)
Roles & responsibilities
USAID/DELIVER would be in charge of the whole supply chain, from procurement,
import, and storage until the delivery of medicines at county level. They would also
report back to DFID on stock levels and drug consumption, and provide support with
the possible adjustment of orders for the upcoming (e.g. 3-monthly) supply.
DFID would provide information to DELIVER on quantity and type of medicines to be
supplied to the six HPF states, and ensure funds are channelled to USAID in a timely
manner.
Pros & cons
The advantages for the procurement component under this Option can be summarized
as follows. USAID/DELIVER is not a general procurement agent, but is specialized in
strengthening supply systems for essential health commodities and ensuring their
sustainability, and has extensive in-house expertise related to every step in the supply
chain for essential medicines (e.g. M&E of the system, ensuring transparency). 11 It has
a successful track record in delivering timely quality services, including in DFID-funded
projects, for instance in the emergency and longer-term supply of family planning
commodities for USAID/DELIVER/DFID in Tanzania [USAID, Dec 2011]. DELIVER
11
http://deliver.jsi.com/dhome/topics
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DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
also has pre-approved a limited number of reputable procurement agents, which
makes the process of contracting an agent considerably faster than when an
international competitive bidding process has to be launched. This is estimated to save
approximately two months (see figure 7), translating in two months less stock-out of
essential drugs at facility level. As in Option 2 & 3, quality of medicines will be ensured
through the use of reputable procurement agents (MissionPharma or IDA).
The downside of the first component is that DELIVER charges a 5.5% fee rate,
considerably higher than IPA.
For storage, distribution & reporting, an important advantage is that DELIVER has local
presence in South Sudan via USAID, which is the lead donor in the health sector. It has
an in-depth knowledge and understanding of the particularly challenging local context,
and close collaboration with key partners and GRSS. It is DELIVER’s core business to
set up storage, distribution and reporting systems for health commodities, and it has
extensive experience with this. In addition, companies that could be charged with
storage and distribution of essential drugs are already prequalified with DELIVER and
operate in South Sudan.
Importantly, USAID has close links with the MoH/DPS through its SIAPS program, and
this option ensures optimal collaboration with and involvement of the Ministry of
Health.12 This maximizes opportunities for using existing national systems, facilitates
obtaining information (e.g. updates on drug regulations) and permissions (e.g. for
import and tax exemptions), builds capacity within the national system, ensures
sustainability and increases the likelihood of the MoH taking over the responsibility
when the program comes to an end.
This set-up involves pooling of orders from both USAID and DFID/HPF into one
streamlined harmonized system, with joint quantification, ordering, storage, distribution
and reporting mechanisms. This simplifies communication, allows for more flexibility
(e.g. temporary exchange between DFID/USAID stock if required) and most likely
decreases transaction cost for both partners. It will also reduce the cost of medicines
by obtaining economies of scale, and facilitates hand-over of (part of) the system to the
Ministry of Health.
Lastly, Option 4 provides scope for further discussions on spreading the available
funding from USAID, Norway and DFID more equally over the eight (or ten) States. The
Ministry of Health has stressed the importance of equitable distribution of resources,
12
USAID/SIAPS works closely with the MoH/DPS on selection and quantification of medicines and
reporting on stock levels and drug consumption. Together with the MoH, it set up a continuous monitoring
system in the two USAID-supported states capturing key indicators measuring performance of drug
availability and management, which DELIVER would link up with. It is important to try and aggregate
information that is available currently (e.g. from NGOs, MoH/SIAPS, JSI) and at the same time reinforce
the existing PMIS/LMIS and expand a system (CMRS) recently set-up by the MoH in two USAID-supported
states to comprehensively monitor stock levels, drug consumption and rational use that will be supplied
through the emergency drug fund. Sentinel site monitoring using the MoH HMIS could be set up as part of
the Health Pooled Fund. This information can then be used to adjust the content of the kits, start moving
towards a push/pull system, and in the end ensure that medicines supplied match the actual needs of the
population.
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DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
and pooling of funds for the procurement and distribution of a harmonized package of
essential drugs will facilitate moving towards a more equitable supply.
For DFID internally, risks & responsibilities can be shared between the two agencies
(USAID and DFID), and this set-up will greatly decrease the administrative burden on
DFID office. On the downside, DFID will have less control over the process and set-up
of a system designed by DELIVER. For instance, DELIVER may opt for quality but
expensive distribution options (e.g. airlifting a large amount instead of risking a delay in
the supply of drugs) on which DFID has little influence. These issues should be clarified
in the Memorandum of Understanding (MoU) between USAID/DELIVER and DFID.
Table 1: Summary of pros and cons of IPA vs. DELIVER for the procurement and
storage/distribution component
Procurement
Storage,
distribution &
reporting
IPA
DELIVER
Pro
Capacity: experience with
medical procurement, incl. for
DFID
Transparency: KPIs, one agent
responsible (Option 2)
Quality: use of reputable
Procurement Agents
Cost: 2.95% fee rate
Con
Timeliness: int’l competitive
tender – slower
Capacity: mixed experience
other projects DFID SS; will
require significant input from
DFID SS team who have limited
capacity
Capacity: extensive experience
with medical procurement, incl.
for DFID
Transparency: established
indicators, one agent
responsible (Option 4)
Timeliness: use pre-approved
procurement agents – faster;
Quality: use of reputable
Procurement Agents
Sustainability: close links with
MoH/SIAPS; no
fragmentation/one system;
more equitable distribution of
available resources
Risk: shared with USAID
Cost: 5.5 % fee rate
Pro
Capacity: experience with
storage/ distribution/reporting
systems; existing contracts with
companies in SS
Con
Capacity: no local presence
(yet)
Capacity: local presence via
USAID; extensive experience w
storage/distribution/ reporting
systems; existing contracts with
companies in SS
Sustainability: close links with
MoH/SIAPS; no
fragmentation/one system;
equitable distribution of
available resources
Cost: shared with USAID
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DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
IPA
DELIVER
Sustainability: no established
links with MoH; parallel systems
DFID internal
Pro
Con
DFID: strengthen framework
agreement with IPA
DFID: will require substantial
support from DFID SS officethis may need additional HR in
the office
DFID: requires no additional HR
DFID SS office
DFID: less control over process
Comparison of options
When comparing the different Options in terms of capacity, Option 4 (using DELIVER
for the whole supply chain) appears to be favourable for the procurement as well as the
storage, distribution & reporting component.
For transparency, both Option Two and Option Four score substantially higher than
Option Three, as only one agent (i.e. IPA or USAID/DELIVER) is responsible for and
have overview over the whole system.
In terms of timeliness, projected timelines are visualized in figure 7. As shown, Option
Four is expected to result in the quickest delivery of medicines, mainly because no
International Competitive Bidding has to be launched. Option Three may experience
further delays due to administrative procedures, especially around hand-over of
medicines between agents (from IPA to DELIVER) at central level.
Even under the speediest scenario – Option Four - medicines are not expected to
arrive in country before February or March 2013. The final delivery of essential drug
kits under the MDTF will take place around October or November this year and is
expected to cover the basic needs of the population during three months; hence, there
may be a gap in supply and approximately one month whereby facilities will face a
stock-out of essential drugs. As soon as there is more clarity on the exact timeline and
expected date of delivery of the emergency drugs, the state and county health
department (through the MoH), as well as NGOs, should be informed of the situation,
so potential gap-filling local procurement can be prepared, and available drugs can be
rationed.
Both IPA and USAID/DELIVER will make use of reputable Procurement Agents that will
ensure quality of the medicines delivered. Possibly, delays due to problems with
importation of medicines will mean that medicines are kept in sub-optimal storage
conditions, which may affect their quality. Therefore, the likelihood of ensured quality of
medicines may be slightly higher under Option Four.
Option Four is preferred in terms of time and sustainability: it ensures integration with
or involvement of national structures to the extent possible, minimizes fragmentation by
harmonizing the USAID and DFID-funded supply of medicines to 8 states, and aims for
an equitable distribution of available resources.
Section C compares the options in terms of cost.
24
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
Figure 7: Projected timeline under Option 2, 3 & 4 – from contracting to delivery at
counties & facilities
25
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
B. Assessing the strength of the evidence base for each feasible
option
In the table below the quality of evidence for each Option is rated as either Strong,
Medium or Limited
Option
1
2
3
4
Evidence rating
Strong
Medium/High
Medium/High
Medium/High
The evidence for Option 1 is strong: the scenario of doing nothing will undoubtedly
result in increased mortality and morbidity in the six states. The evidence for Option 2,
3 and 4 is rated as Medium to High: DFID has a significant amount of local knowledge,
the proposed systems for the procurement, storage and distribution of medicines are
based on past experience with the Multi-Donor Trust Fund (MDTF) and USAID/
DELIVER’s track record in other contexts, and the link between outputs and outcomes
is well established.
What is the likely impact (positive and negative) on climate change and
environment for each feasible option?
Option
1
2
3
4
Climate change and environment
risks and impacts, Category (A, B,
C, D)
C
B
B
C
Climate change and environment
opportunities, Category (A, B, C, D)
C
C
C
C
This BC is mainly about the procurement storage and distribution of essential drugs
and medicines in a geographically defined area with poor infrastructure and facilities.
The main possible risks associated with this intervention are around the storage and
supply of medicines and the possibility that these may go astray, be used for purposes
that are not recommended and/or being dispersed in the environment in a manner that
could pose a level of threat.
Disposal of medicines has an environmental risk especially in relation to the water
supply, if handled, treated or disposed of incorrectly some medicinal products can
poison people, livestock, wild animals, plants and whole ecosystems. More specifically,
the main threat is generally posed by chemical and pharmaceutical wastes, especially
large quantities. Some pharmaceuticals are toxic as well. In environmental terms, when
chemical and pharmaceutical waste is disposed of in unlined landfills, especially
unlined pits, these wastes may contaminate ground and surface water—particularly
when large quantities are disposed of. This can also have a direct health impact on
26
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
people who use the water for drinking, bathing and cooking, as well as damaging
plants and animals in the local ecosystem. Burning or incinerating healthcare waste,
while often a better option than disposal in an unlined pit, may create additional
problems (USAID, 2009; WHO, 2005).
Furthermore, burning or incineration of healthcare waste may produce toxic air,
pollutants such as acid gasses, Nitrogen Oxides (NOx) particulates. In the specific
case of drugs and medicines, dioxins can be a concern. Dioxins have been proven to
be potent cancer-causing agents; they do not biodegrade; and are persistent organic
pollutants, meaning that they accumulate in progressively higher concentrations as
they move up the food chain (WHO, 1999, 2004, 2005).
In the context of this business case, different options have the potential to be more
risky in terms of their level of security and safety in terms of storage and delivery and
ensuring that the medicines/medical supplies reach intended recipients and are not
disposed of inappropriately.
Option 2 presents some level of risk and the possibility that some supplies may go
astray during the storage, distribution and handling. It would require the set-up of a
system capturing information on stock levels and consumption data.
Option 3 would also involve a similar level of risk because of the proposed use of two
supply chains managed by two different agencies, which would come together at Jubalevel. This method would not only increase communication and transaction costs, it
would also enhance the risk of ‘bad linking’ between IPA and DELIVER at country
level. Such a weakness in the chain of supply could in turn lead to an increased risk in
mishandling and misappropriation of supplies that in turn could result in inappropriate
usage and disposal of medical supplies and resulting environmental problems.
Option 4 entails DFID linking up with USAID and using the vertical lot approach
managed by DELIVER for the procurement, import, storage and distribution of
medicines. USAID/DELIVER would be in charge of the whole supply chain, from
procurement, import, and storage until the delivery of medicines at county level. This
would likely reduce the risk of mishandling supplies and would facilitate monitoring of
movements of supplies thus making it easy to identify possible mishandling of supplies
and implement remedy measures. USAID/DELIVER has also successful track record in
delivering timely quality services, including in DFID-funded projects and an established
local presence in South Sudan via USAID, which is the lead donor in the health sector.
Furthermore implementation through USAID as a main partner would likely simplify and
speed up the communication process and taking of remedial action if needed through
well-established channels of communication and co-operation that have already been
tested in several countries and a variety of fields.
References:
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DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
USAID (2009): Environmental Guidelines for Small-Scale Activities in Africa; USAID
Bureau for Africa Office of Sustainable Development Economic Growth, Environment
and Agriculture Division Washington, D.C.
WHO (1999): Guidelines for safe disposal of unwanted pharmaceuticals in and after
emergencies. World Health Organization, Geneva
(http://whqlibdoc.who.int/hq/1999/WHO_EDM_PAR_99.2.pdf).
WHO (2004): Findings on an Assessment of Small-scale Incinerators for Health-care
Waste. World Health Organisation – Geneva.
WHO (2005) Management of Solid Health-Care Waste at Primary Health-Care
Centres: A Decision-Making Guide. World Health Organization, Geneva
(http://www.who.int/water_sanitation_health/medicalwaste/decisionmguide_rev_oct06.p
df)
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DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
C. What are the costs and benefits of each feasible option?
In order to determine the type and quantity of medicines to be procured, the first part of
the costing section describes the process of selection & quantification of priority
medicines. Then, the costs and benefits of each of the four identified options are
outlined below. All costs are calculated to cover a limited supply of medicines for a one
year period (approximately March 2013 – March 2014), and costs will be incurred in the
second half of 2012/first half of 2013.
C.1 Selection of priority medicines
Medicines procured under the current proposal are intended to cover the basic health
need of the population in the six HPF States. In light of limited resources, only the
priority medicines for the treatment of the top causes of morbidity and mortality will be
purchased. This selection is based on data from the USAID SIAPS programme, MoH
and MDTF data was used to support the costings applied for each of the medicines.
The final list will depend on the quantity of funding available. Additional funding from
USAID and Norway will help cover additional medicines for the other states and
depending on the amount of funding available will support a larger list of medicines.
The selection of priority drugs is being developed through a consultative process with
key stakeholders: the Ministry of Health/ Department of Pharmaceutical Services
(MoH/DPS), USAID/SIAPS, USAID, DFID and the World Bank. Various lists have been
circulated, ranging from a very narrow selection of tracer drugs to the full MoH
essential drug list (EDL). A final harmonized list has not yet been agreed upon between
the partners, and for the sake of this Business Case the first three of the following lists
of essential medicines/supplies have been costed for the six HPF states:
1.
2.
3.
4.
Selection of 14 tracer medicines (MoH PMIS)
Selection of 44 essential drugs (WB selection)
Selection of 44 essential drugs & 21 medical supplies (WB selection)
Selection of 220 drugs and supplies (MoH EDL)
Key partners – MoH, USAID, DFID and the WB – are working together to harmonize
and agree on the list of medicines to be supplied to each of the counties, in order to
harmonize medicines to be supplied, ensure equitable distribution of resources &
supplies and simplify the management of the supply chain.
Annex 1 shows the medicines included in each of the first three lists, and Annex 2
explains the methodology used for quantification of the medicines and commodities to
be supplied to hospital, health centre and health unit level to cover the basic needs of
the population in the six states during one year.
29
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
C.2 Costs
Medicine cost
It has been mentioned that both IPA and DELIVER may select MissionPharma as the
preferred procurement agent for this intervention due to their experience in South
Sudan, and prices from other agents (e.g. IDA) do not differ dramatically from these.
Therefore, unit prices quoted by MissionPharma for MDTF’s Limited International
Bidding (LIB) in 2009 with delivery CIP Juba by sea/truck were used as a starting point
to calculate the price of the medicines procured with the emergency fund.
From 2009 to date, some commodities have experienced huge fluctuation and there
are several factors that drive up the unit prices when drugs are purchased today
compared to 2009. These include:
1. An increase in the price of oil (Oil Index Oct 2009 USD 84 vs. May 2012 USD
which impacts on commodity prices and freight;
2. Commodity cost Indexes in sourcing market have increased Year on Year;
114)
On the other hand, the USD has become stronger towards the Indian Rupee (where
most medicines are purchased) in the period, lowering the USD cost increases;
Based on the above factors, an additional 11% has been added to the prices quoted in
the 2009 LIB in order to come up with an estimate of the medicine cost.13. However,
the current emergency order does not include infusions and fluids (less freight cost),
again decreasing the price. See also the sensitivity analysis below, which assesses
cost-effectiveness when the estimate (11%) is varied.
As the final decision on which medicines will be purchased has not been taken yet, the
cost of the medicines has been calculated for three different lists:
1. Only the tracer drugs are purchased (14 items),
2. 44 essential drugs only
3. 44 essential drugs and 21 supplies.14
As only some of the unit prices for the longer list of 220 items could be obtained, this
selection of drugs has not been costed at this stage. In addition it is unlikely that
sufficient funds will be available to pursue the procurement of the full list for the six
states. For the costing of this business case, the list consisting of medicines & supplies
(65 items in total) is used as it has been discussed previously between then MoH and
the WB and it provides a list of essential medicines and items that will allow many of
the common conditions in children and pregnant women to be treated for the purposes
of this costings exercise.
13
These percentages are based on estimates of price increase made by MissionPharma [personal
communication]
14 The unit cost of seven supplies could not be obtained, hence a gross amount of $150,000 has been
added to the final cost to include an estimate of these cost. This amount is based on the cost price (unit x
quantity) of similar items included in the list (e.g. umbilical tape & adhesive tape).
30
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
Table 2: Estimate of medicine costs based on different selections/number of items for
the six States covered by the Health Pooled Fund
Tracer drugs
Essential
drugs
Essential drugs
+ supplies
EDL MoH
Number of items
14
44
65
220
Total price
(2009-prices)
$1,494,456
$4,468,281
$6,230,223
$1,658,846
$4,959,792
$6,915,548
+ 12% adjustment
*
*
For costing of the different options, only the process costs is known to differ between
Option 2 & 3 on the one hand, and Option 4 on the other, differ. For procurement, IPA
applies a 2.95% surcharge fee to the commodity costs, while DELIVER applies a 5.5%
surcharge fee on the commodity cost (see table 3).
Storage & distribution cost
There are many more uncertainties around the estimate of costs related to storage and
distribution. For example, the limited costing data that could be obtained from previous
storage & distribution cycles (MDTF costing data, Jan 2010) are in South Sudanese
Pounds (SSP), and this part of the in-country supply chain will for the current
emergency medicines fund also most likely be paid in SSP. Inflation in the country has
been very high, with an historical inflation rate of 83% [CPI index Jan 2010 – Jan
2012]15, and a projected inflation rate of 100% until Jan 2013 (Jan 2012 – Jan 2013;
IMF)16, when expenses on storage & distribution will likely be incurred.
In light of the limited data available from previous storage & distribution cycles for
essential drugs; the very high inflation rate which may render predictions on prices to
be paid in SSP unrealistic 17 ; lack of information on the volume & weight of the
quantified medicines; and the fact that a detailed plan of implementation of the incountry supply chain is not yet available, the current estimate for storage & distribution
cost is taken as a percentage of the value of the medicines.
Typically, this part of the supply chain represents around 12-13% of the total value of
drugs.18 This was also the case in South Sudan, where one instalment (3-months) of
essential drugs supplied by MDTF cost around $ 6 million, and around $ 700,000 –
800,000 (including partial air-lifting) was paid for off-loading, storage and distribution
(12.5%). On the other hand, however, there are examples where this part of the supply
chain represents 100% of the medicines value (e.g. a recent distribution by DELIVER
Aggregate Consumer Price Index South Sudan – all item index: Jan 2010 = 74.75, Jan 2012 = 135.6.
http://ssnbs.org/cpi/2012/5/12/consumer-price-index-for-south-sudan-april-2012-2.html
16 International Monetary Fund (IMF): Briefing of donor community, March 2012, South Sudan
17 The cost data for off-loading, storage & distribution made in Jan 2010 for MDTF-drugs were converted to
cost to be paid in Jan 2013, and adjusted for the smaller quantity and only 6 states. The final cost for
storage & distribution came to > 100% of the medicine price, which seems, even in the context of South
Sudan, unrealistically high.
18 Personal communication; information from DELIVER May 31,2012; examples from other countries e.g. vertical
supply chain for GF-funded medicines in DR Congo;
15
31
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
in two states in Nigeria)19, and uncertainties around the context in South Sudan and
possible hyperinflation can easily cause a steep rise in costs incurred.
For these reasons, an average percentage mark-up for storage & distribution is varied
between 15% and 90%, with an average of 60%.
Table 3: Different estimate of costs for off-loading, storage & distribution
Value of medicine
Storage &
distribution
Technical
Assistance + 4%
TOTAL – storage &
distribution
Estimated average –
60%
Lower estimate
– 15%
Higher estimate
- 90%
$6,915,548
$6,915,548
$6,915,548
$4,149,329
$1,037,332
$6,223,993
$165,973
$41,493
$248,960
$4,315,302
$1,078,825
$6,472,953
IPA has a fixed fee structure for capacity building and technical assistance, which
would be applied to all storage & distribution costs. This will be calculated on a caseby-case basis, and at this stage it was not possible to obtain a reliable cost estimate.
For technical assistance (distribution, storage, warehouse, etc.) DELIVER applies a
78% (based on US Negotiated Cost Rate Agreement-NICRA) overhead charge on US
home based salaries and expat salaries. Overhead is not applied to local hire salaries.
It was confirmed that these costs are included in the storage & distribution cost (so part
of the 60/15/90% mentioned above). Finally, DELIVER applies a 4% fixed fee
(corporate fee) to the sub-total.
Due to the lack of further detailed costing information, for this Business Case it is
assumed that the fee charged by IPA and DELIVER for Technical Assistance on
storage, distribution & reporting is the same.
19
Phone call DELIVER, May 31 2012
32
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
Table 4: Expected resource costs of the intervention
Option
1:
Counterfactual
Option 2:
Procurement IPA,
storage &
distribution IPA
Option 3:
Procurement IPA,
storage &
distribution
DELIVER
Option 4:
Procurement,
storage &
distribution
DELIVER
Medicines:
2009 prices –
65 items
-
$6,230,223
$6,230,223
$6,230,223
+11%
-
$6,915,548
$6,915,548
$6,915,548
Procurement
2.95%
2.95%
fee
Procurement
$7,119,557
$7,119,557
sub-total
Storage &
$4,149,329
$4,149,329
distribution
@60%
Technical
$165,973
$165,973
Assistance
Storage &
$4,315,302
$4,315,302
distribution
sub-total
TOTAL
$11,434,859
$11,434,859
(USD)
TOTAL
£7,559,014
£7,559,014
(GBP)*
* www.oanda.com 1 USD = 0.66105 GPB (May 20, 2012)
5.50%
$7,295,903
$4,149,329
$165,973
$4,315,302
$11,611,205
£7,675,587
For budgeting purposes, it is important that the estimated range of funding required is
taken into account. If the storage / distribution component cost only 15% (the lower
bound estimate) the total cost of providing essential medicines to the 6 states would be
£5,284,680, whereas if it were 90% (the upper bound) it would cost £8,850,469. £10
million funding is therefore provided by DFID in order to ensure that the basic list of
medicines can, with some certainty, be procured, with any additional funding available,
plus the Norwegian finance then be used to purchase medicines from the longer MoH
EDL list, and/or to support the World Bank supported states, as required.
C.3 Benefits
The costs associated with the four options need to be balanced with the benefits – both
quantifiable as well as non-quantifiable – each of the scenarios brings. The quantifiable
benefits relate to the effect that availability of essential drugs has on extending healthy,
economically productive lives. These can be measured in disability-adjusted life year
(DALY), which reflect overall disease burden and are expressed as the number of
years lost due to ill-health, disability or early death. These DALYs are discounted for
the different options based on the capacity of the system to deliver quality medicines
in a timely manner.
33
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
The non-quantifiable benefits aim to describe how the options differ in terms of
transparency and sustainability of the system.
Quantifiable benefits
The quantifiable benefits of the intervention (Option 2 & 3) are compared to the
counterfactual ‘do nothing’ scenario.
For this exercise, a conservative estimate of the quantifiable benefits of the intervention
is made using WHO CHOICE data for selected childhood illnesses (in particular,
diarrhoea
and
ALRI)
and
malaria
(see
table
5
and
www.who.int/choice/results/afre/en/index.html). The interventions, in bullet points
below, are selected as they address major causes of morbidity and mortality in South
Sudan [MoH 2011] for which the current Emergency Drug Fund provides medicines,
and are costed by WHO CHOICE.

UFV-58: Package of treating children under 5 years with Vitamin A, zinc and
oral rehydration therapy

UFV-7: Case management of Acute Lower Respiratory Tract Infection (ALRI) in
children under five years

MAL-42: Provision of intermittent presumptive treatment for pregnant women

MAL-47: Case management of artimisin-combination therapy
The intervention targets the population in six states, covering approximately 4.5 million
people [SSCCSE 2011].
The DALYs derived from WHO CHOICE are adjusted as coverage under WHO is
assumed to be 50% - which in the context of South Sudan, may be overly optimistic.
Hence, DALYs averted are adjusted down to reflect 30% coverage (in line with HPF
business case). Then, WHO CHOICE provides data per 1 million population and the
total DALYs averted are multiplied by 4.5, to reflect the number of people that are
covered by the Emergency Fund. Were extra states covered with any remaining
finance, this would increase the number of people funded beyond this level, making
this a conservative estimate of the extent of the benefits to be achieved.
In addition, the drugs that are provided are intended to treat a whole range of illnesses.
The diseases mentioned in table 5 represent only part of the illnesses treated with the
drugs supplied, and therefore give a conservative estimate of the DALYs averted in
reality. This is particularly conservative because this is not only a sub-set of the
illnesses which can be treated with the essential list of 63 drugs to be procured, it also
fails to capture any benefit from any treatments provided from the longer list of drugs
that may be purchased, depending on the cost of procuring the essential list.
The DALYs averted in the ‘do nothing’ scenario is set at zero: if medicines are not
provided, most illnesses cannot be treated and DALYs not averted.
As the medicines that will be provided under each option are the same, the DALYs
averted across the different options at this stage are set as equal.
34
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
Table 5: Expected benefits (in DALYs averted) of the intervention
Option 1:
counterfactual
UFV-58: Vit. A + Zinc + ORT
(@ 50%)
UFV-7: Case management –
ALRI (@ 50%)
MAL-42: Intermittent
presumptive treatment in
pregnancy (IPTp) (@ 50%)
MAL-47: Case management
with artimisinin-based
combination therapy (@ 50%)
TOTAL
Option 2, 3 & 4: intervention
DALYs
averted per
year per 1
million
population
Adjusted for
@30%
coverage
DALYs
averted in
target
population
(approx.. 4.5
million)
-
10,780
6,468
29,106
-
4,389
2,633
11,850
-
91
55
246
-
9,112
5,467
24,602
0
65,804
Subsequently, the different options were assessed in terms of the capacity of a system
to deliver quality priority medicines in a timely manner. Following the options appraisal
(see table 1), the capacity of the system under Option 2, 3 and 4 is estimated at 80%,
80% and 90% respectively (experience vs. extensive experience, local presence,
possible bad linking between agencies for Option 3). The quality of the medicines
supplied under all three options is assumed to be optimal (100%), but as a result to
potential delays with hand-over of drugs between agents, some quality may be lost due
to sub-optimal storage conditions (Option 3, 90%). In terms of timeliness, Option 4 is
expected to result in the quickest supply at country level (see table) even though a
some stock-out may still occur (95%), followed by Option 2 (75%, 2 months delays)
and then Option 3 (65%, 3 months delay). The DALYs averted, discounted with the
estimated overall likelihood that quality medicines will be delivered in a timely manner
under the different options, are summarized in table 6.
Non-quantifiable benefits
For Option 1 – the ‘do nothing’ scenario’, the non-quantifiable benefits for this
Business Case are negative. In South Sudan there is already a very low per capita use
of health care. If health facilities are faced with a prolonged shortage of medicines, this
will undoubtedly further negatively affect health-seeking behaviour. Also, lack of
medicine to prescribe will be demotivating for health workers, which may further
deteriorate quality of care provided. In addition, it is likely to reduce the impact of the
Health Pooled Fund, which commences in 2013 and aims to increase access to quality
health services. Conversely, the other options will have a synergistic effect with the
Health Pooled Fund.
35
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
There is of course always the benefit of funding being available for other uses.
However, in light of the dramatic effect the counterfactual scenario would have, it is not
likely that funding of other activities would result in more benefits.
Option 2, 3 & 4
In terms of transparency, both Option Two and Option Four score substantially higher
than Option Three, as only one agent (i.e. IPA or USAID/DELIVER) is responsible for
and has an overview over the whole system. The fact that one experienced entity is
responsible for the whole supply chain – including procurement, import, storage,
distribution and reporting –is more transparent, increases efficiency and simplifies the
system, thereby decreasing the risks of delays, over- or undersupply, irrational drug
use, wastage and leakage of medicines and funds.
For sustainability, Option 4 is preferred: it ensures integration with or involvement of
national structures to the extent possible, minimizes fragmentation by harmonizing the
USAID and DFID-funded supply of medicines to 8 states, and aims for an equitable
distribution of available resources. One harmonized supply chain, which is closely
linked and partially integrated with the national system, builds capacity of counterparts
and has a much higher likelihood of being handed over, increasing sustainability.
For DFID internally, risks and responsibilities will be shared with USAID, and no
additional staff needs to be hired.
Table 6: Discounted DALYs averted, according to the likelihood of timely delivery of
quality medicines under the different options
Option 1:
counterfactual
DALYs averted –
not discounted
Capacity of system
Quality medicines
Timeliness
Overall
DALYs averted –
discounted
0%
Option 2:
IPA/
IPA
Option 3:
IPA/
DELIVER
Option 4:
DELIVER/
DELIVER
65,804
65,804
65,804
80%
100%
75%
60%
80%
90%
65%
47%
90%
100%
95%
86%
39,483
30,796
56,263
C.3 Costs vs. benefits
Subsequently, it was assessed which of the options represents best Value for Money,
i.e. would give most benefits for the costs incurred. Table 7 shows the expected costs
and benefits of the different options. The cost given is £10 million (or $15.1 million), the
proposed budget, which should cover the essential drug list in 6 HPF states (estimated
at maximum £8.8 million), plus some contingency which should allow procurement of a
longer list of drugs and/or reaching out beyond the HPF states, with precise decisions
36
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
on the allocation of this finance to be made as the situation on the ground evolves. The
benefits are the DALYs anticipated by each option as calculated above.
It appears that Option 4 – using a single source USAID/DELIVER supply chain –
represents best Value for Money, and also has a number of non-quantifiable benefits
that should be taken into account. For instance, the higher likelihood that the system
that would be set up under this option is successfully handed over to the Ministry of
Health cannot be put into numbers, but is crucial for the longer term impact of the
intervention – which also covers the Health Pooled Fund – beyond the one-year
funding for essential drugs. And even without taking these factors into account, Option
4 comes out most preferable in this analysis compared to the other options.
Table 7: Summary – expected costs & benefits of the four options
Estimate total costs
Benefits –
quantifiable
Cost per
DALY averted
Benefits –
nonquantifiable
Option 1:
counterfactual
Option 2:
IPA/ IPA
Option 3:
IPA/ DELIVER
Option 4:
DELIVER/
DELIVER
0
$15,127,449
$15,127,449
$15,127,449
0
39,483
30,796
56,263
-
$383
$491
$269
Negative –
decrease in
healthseeking
behaviour,
quality of care
affected

Transp
arency

Transpa
rency

Sustain
ability

DFIDinternally
It should be noted that this likely to be a significant underestimate because while the
full costs to DFID are included, the benefits are not. The DALYs produced are based
upon just a small sub-set of the drugs to be purchased, and cover only the six HPF
states. With the finance anticipated to be remaining once these costs are met (at least
£1.2 million, but possibly significantly more) additional drugs will be purchased and/or a
wider population reached. While these benefits cannot be included in these
calculations (given that it is unclear how much money will be available and decisions
on its use will be made at the time based on need), they mean that the true cost per
DALY averted can be comfortably said to be lower than each of the three figures
provided here.
A final assessment examines if the options outlined above represent good Value for
Money compared to external benchmarks. One way of assessing this is to compare
GNI20 per capita to estimate cost-effectiveness thresholds. According to this approach,
interventions are:
GNI per capita rather than GDP per capita is used, as the latter includes estimates of South Sudan’s
significant oil wealth, which in 2010 accounted for about 71% of GDP. GNI excludes oil revenue.
20
37
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012

Very cost-effective – if they avert one DALY for less than the average GDP per
capita income for a given country or region

Cost-effective – if they cost less than three times average per capita income per
DALY

Not cost-effective – if they exceed three times average per capita income
In 2010 GNI per capita was approximately $984. 21 When using this figure as a
threshold, all three options appear to be very cost-effective and represent good Value
for Money. In light of the current oil crisis, the GNI could fall substantially during the
coming period, possibly even halve ($ 500 per capita). Even in that case, the
intervention remains very cost-effective for all three options, with the preferred option
falling very comfortably below the limit22.
Sensitivity analysis
Lastly, a sensitivity analysis was conducted by testing the robustness of the findings
outlined above. Assumptions underlining key drivers of cost and benefits were adjusted
either up or down, and the impact was evaluated on the Value for Money/ Cost per
DALY averted.
On the cost side, one key assumption used is that the unit cost of medicines has
increased by 11% between 2009 and 2012, and this parameter was change to 8% and
16%, respectively. The other key cost driver already tested is the cost for storage and
distribution, here represented as a percentage of the medicines’ value. As before, the
effect on the Value for Money of changing the 60% estimate to 15% and 90% is tested.
However in both cases adjusting the parameter in question did not raise the cost of
procuring the desired minimum set of drugs (WB essential list) for the intended
minimum population (HPF 6 states) above £10 million. This means that the ‘loss’ in
benefits would only be to the extra population to be reached, or the extra drugs to be
procured with the remaining finance. These were unquantified benefits, not captured in
the cost per DALY calculation provided above, meaning that the cost per DALY would
still not be expected to rise above $269.
Key assumptions reflecting the benefits of the emergency drugs can be affected in
various ways. For one, the coverage is set to an already low estimate of 30%.
However, a possible escalating border conflict, food insecurity and displacement of
people can further deteriorate attendance rates at health facilities. In addition, shortage
of cash of the South Sudanese government may mean salaries of health workers are
not paid, resulting in an exit of qualified staff, and a drop in health service provision and
corresponding attendance rates. The unstable context may also affect the likelihood
that medicines are delivered on time, e.g. it will be impossible to reach certain areas,
21
http://ssnbs.org/home/2011/8/11/release-of-first-gdp-and-gni-figures-for-south-sudan.html
Indeed, even if the Norwegian finance is also included, taking the total expenditure to over $25 million,
the cost per DALY averted still only reaches $457, with massive uncounted benefits resulting from the extra
population and drug purchasing reach associated with the Norwegian finance. It is clear that allocating
money towards the purchase of essential medicines represents excellent value for money in the South
Sudan context.
22
38
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
nationwide lack of fuel for distribution, and a higher risk of leakage. As the current
context is more likely to affect the benefits in a negative rather than a positive manner,
the analysis veers towards the lower estimates.
As shown in table 8, a key driver determining Value for Money of the provision of the
emergency drug fund is the coverage rate: the cost per DALY averted increases to
$535 when coverage is only 15%. This means it is of utmost importance that the
project places considerable attention to maximize the extent to which medicines can
actually reach those in need, and those in need can reach the medicines at the health
facility. It should be noted nonetheless that even with this risk reaching its outer
predicted limit, the intervention still represents very good value for money under any
circumstances except almost total economic meltdown (when GDP per capita is
predicted to fall as low as $500 per capita). However even in that scenario it would still
be rated as cost effective under WHO guidelines.
Table 8: Sensitivity analysis on key drivers of benefits under Option 4
Actual
Lower
estimate
Higher
estimate
Impact on
cost/ DALY
averted
Benefits
Coverage rate
30 %
15 %
35 %
[ $535 – $229 ]
Likelihood of
timely supply
86 %
70 %
100 %
[ $328 – $230 ]
D. What measures can be used to assess Value for Money for the
intervention?
The analyses from the appraisal in Section C are used to set out relevant and sensible
Value for Money measures. Indicators to monitor both costs as well as the benefits are
outlined below.
In terms of cost, the total amount spent on the procurement of essential medicines &
supplies for one year is a key indicator. Then, the cost for off-loading, storage, and
distribution are another indicator, as is the money spent on Technical Assistance. As
the sensitivity analysis shows, especially the inflation rate and storage & distribution
are key cost drivers, which should be closely monitored.
The benefits of the intervention can be monitored according to the critical factors
identified to evaluate the different options: the capacity to set up a transparent system
for procurement, storage and distribution and ensure timely supply of quality priority
medicines, in a sustainable manner. Indeed, the sensitivity analysis demonstrates that
the likelihood of timely supply of quality drugs is a key driver of benefits obtained, and
therefore Value for Money. Proposed indicators to measure with each of these factors
are outlined in table 9 below.
39
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
Table 9: Proposed indicators to assess Value for Money for the Emergency Drug Fund
Indicator
Current estimate
Actual
(end Year 1)
Cost
1. Cost of medicines procured
$6,230,223
2. Cost for off-loading, storage,
distribution & reporting
50% of commodity cost
3. Fee: Technical Assistance
4% of cost (2)
Benefits
Capacity:
Transparency:
Timeliness:
Quality:
Sustainability:
100% of medicines procured arrive at
county level
At any point, DFID has overview of
funding spent and location of medicines
No delays in import of medicines at
customs
No delays in distribution of medicines to
county level
100% of medicines entering the country
have proof of adherence to stringent
quality criteria
Hand-over of (part of the) supply chain
to MoH at the end of the project
The indicators can be tracked through Annual Reviews or Project Completion Reports
in order to help indicate whether the intervention continues to represent good Value for
Money.
E. Summary Value for Money Statement for the preferred option
The costs and benefits of feasible options identified for the emergency medicines fund
in South Sudan have been assessed in terms of the capacity of the system to deliver
quality priority medicines in a timely manner. The preferred Option 4 would be using a
single source USAID DELIVER Project to procure and distribute the drugs to counties
in all six States. The costs and quantifiable and non-quantifiable benefits of this Option
have been evaluated, and it appears that the preferred Option represents very good
Value for Money according to WHO criteria: on average $208 per DALY averted, which
is considerably less than the per capita GNI of $984 [2010 figure]23. It evens remains
23



According to WHO approach interventions are:
Very cost-effective – if they avert one DALY for less than the average GDP per capita income
Cost-effective – if they cost less than three times average per capita income per DALY
Not cost-effective – if they exceed three times average per capita income23.
GDP per capita in South Sudan is USD $1,546 (2010 figures). However this figure is misleading. The GDP figures are
relatively high because they include estimates of South Sudan’s significant oil wealth, which is 2010 accounted for about
71% of GDP. Now that extraction has been temporarily suspended GDP is very different. However, even when the oil
was flowing, the associated revenues provided only marginal benefits for the population outside the capital of Juba. A
more conservative number can be derived by using GNI per capita (2010) instead of GDP to compare against. GNI
excludes oil revenue which goes to foreign firms and governments and is estimated at USD $984. This statistic reflects
better the benefit that national income delivers to the population in times when the oil is flowing. It will be over optimistic
if oil production does not re-start and no alternative sources of revenue are found, but in this context it is worth noting
40
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
very cost-effective if the GNI drops dramatically over the coming period, as it is
expected to do as a result of the oil shutdown. In addition, there are a range of nonquantifiable benefits, which include creating a transparent, efficient and simple drug
supply system, whereby DFID and USAID share risks, and which maximize
sustainability. A sensitivity analysis showed that even when assumptions of key drivers
of costs or benefits are altered, the intervention remains to represent very good Value
for Money.
that the question of whether the cost of each approach constitutes good value for money under this estimate is not
marginal.
41
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
Commercial Case
Indirect procurement
A. Why is the proposed funding mechanism/form of arrangement
the right one for this intervention, with this development partner?
The options appraisal concludes that best VfM is achieved by providing funding to
USAID who will use their DELIVER funding mechanism to manage drug procurement
and distribution. Whilst on purely quantitative terms this mechanism is slightly more
expensive than using IPA for procurement and distribution there are a number of key
reasons why this offers the best VfM in non-quantitative terms:
1.
IPA will require significant support from the DFID South Sudan team and in
particular the health team- in particular this will require intense support defining
distribution schedules, working with MoH to define the medicines list and in promoting
and ensuring tax exemption etc. DFID South Sudan does not currently have the
capacity to support this.
2.
Avoidance of a fragmented system- use of DELIVER will help support one
mechanism of medicine procurement and distribution across most of the country.
3.
Improved burden and risk sharing between donors.
4.
USAID has ongoing presence in the MoH pharmaceutical division through their
technical assistance programme SIAPS and
5.
The presence of the global contract with John Snow International (JSI) for
management of the DELIVER mechanism- this mechanism has been known to deliver
medicines in a number of difficult contexts.
USAID are the largest bilateral donor in South Sudan. Their programming is executed
under the auspices of a Country Transition Strategy (2011-2013). There is no fixed
budgetary framework because the value of annual assistance is conditional on central
policy objectives (framed in USAID headquarters in Washington DC) and
Congressional approval. However in US fiscal year 2011 the overall expenditure on
South Sudan was USD 298,332,000 of which Health expenditure was USD
44,874,000.
The DELIVER mechanism is a global facility for the fast supply of high quality drugs
and pharmaceuticals. JSI won the management contract through a competitive tender
following a USAID request for proposals. JSI charge a management fee of 5.5% and
DFID will have to pay this (but this is offset by the negation of the local overheads fee
for which USAID have agreed a waiver)
The DELIVER Programme is linked to a global Performance Measurement Plan which
includes a set of progress indicators which are reviewed annually. These performance
measurement indicators include value for money as one of the assessment criteria.
On auditing, JSI are instructed to sub contract a reputable ‘big five’ accounting firm to
42
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
conduct an annual financial audit. USAID also conducts internal monitoring: the
Inspector General will normally assess one or two sample projects a year in a country
programme (this does not guarantee of course that the South Sudan Emergency
Medicines Fund will be one of the selected sample projects but DFID can seek to
influence the USAID decision on this if we have a particular concern on use of our
funds). Globally, DFID has no reason to doubt the effectiveness or rigour of USAID
internal auditing arrangements and DFID has entered into bilateral agreements with
USAID on DELIVER in Tanzania and Malawi.
USAID does not hold a national risk assessment plan to the same degree as DFID
South Sudan. It does however conduct specific checks on the possible diversion of
project funds for the support of terrorism. Contracts include rigorous financial
requirements which should mitigate USAID (and partner donors) from the mis-use of
funds for non -project purposes.
If there is any reason to terminate the South Sudan component of DELIVER this
should be achievable (with the authorisation of USAID headquarters) without affecting
the global status of the DELIVER contract (e.g. a poorly performing South Sudan
component could be terminated but a well performing component of the global
contract, hypothetically in Tanzania, would not be affected). DFID can also withdraw
from the agreement without it affecting DELIVER globally.
This project is not intended to provide long term capacity support to the Ministry of
Health, etc, but is an emergency response initiative. However complementarity will be
developed between the Fund and a separate USAID funded initiative which has
embedded technical support to the Ministry of Health’s procurement department.
In conclusion there are clear commercial reasons from operational and value for
money perspectives for selecting USAID as the manager of DFID’s contribution to the
Fund.
43
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
Financial Case
A. What are the costs, how are they profiled and how will you
ensure accurate forecasting?
The expected cost of the DFID contribution is £10 million over 1.5 years (from
August 2012 to January 2014 ).
2012/13
2013/14
Programme
7 million
1.5 million
Capital
1 million
0.500 million
B. How will it be funded: capital/programme/admin?
Programme and Capital (storage and warehousing) funded. However the exact
proportion of Capital to Programme will be confirmed following discussions with
USAID and DELIVER which is implemented by John Snow International.
The total value of the Fund is contingent on confirmation of an additional
contribution from Norway and additional funding from USAID above the 10m USD
made available for the two states that they support. At the time of writing the
expected donor funding profile looks like this:
Donor
USAID
DFID
Norway
STG TOTAL
USD
16,000,000
9,000,000
£ ( rate of 0.64378 )
10,300,500
10,000,000
5,794,040
26,094,540
C. How will funds be paid out?
Funds will be paid by DFID to USAID on receipt of a formal request. This will
include a financial statement of need for the forthcoming period. Payments for
procurement of goods will be made in compliance with USAID Procurement
Policy.
DFID will make one transfer of £10 million to USAID. DFID funds will be deposited
in the US Treasury and will then be drawn down by John Snow International. We
have a written assurance from USAID that these funds will only be drawn down in
arrears for any management costs incurred by JSI thereby ensuring that this
transfer ( which is technically in advance) would not be in breach of Blue Book
rules on advance funding.
USAID has requested that all of the DFID contribution to be transferred in
advance because the USAID/DELIVER Project does not have a facility to forward
finance the purchase of pharmaceuticals (categorised by USAID as MCH-
44
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
Maternal and Child Health). Funds are therefore required to be deposited in
advance so that JSI have the necessary assurance to begin procurement
processes through the placement of orders for specified drugs. There is
essentially therefore a two- step process: funds are ‘obligated’ in to the JSI
contract which makes funds available to them; and JSI then draw down on the
account set up for them through their letter of credit as they spend the funds
USAID states that:
‘JSI can draw funds as soon as an obligation is added to the Contract. This
includes any startup funds needed. However, the only instance where funds are
drawn in advance of expenses being incurred is to start operations in country. In
that case, JSI draws funds based on a detailed cash flow projection submitted by
the project that includes all expected expenses and accruals to be paid over the
next month. JSI HQ then sends the requested funds to the field office to be
disbursed.*
In all other instances, before JSI draws down funds, they have to have received a
vendor invoice, which is then given to their Project Administrators for approval as
well as providing the supporting documentation (Purchase Order, Proof of goods
delivery, etc.). On a weekly basis, the accounting department gathers all invoices,
enters them into the accounting system, and prepares “prepayment edit” reports
showing the dollar amount to be charged to each project/task order. JSI then
completes a spreadsheet that shows the Contract Obligated Amount, MINUS the
amount drawn to-date and ONLY draw the difference. Once they confirm receipt
of the amount drawn into their bank account, they make sure to pay the vendors
within 72 hours (3 business days). At the end of each month, they do another
draw down that for other costs such as Direct Labor, etc.
JSI draws actual cost only for expenses incurred during the month. They
complete a final draw at month end that includes the fee due for the costs incurred
during the month.’
(*NOTE: JSI will be opening an office in South Sudan. However, the ‘advance’ of funds to the field
office would essentially be a bank account transfer, making funds available to the field office to be
spent the same way they are at the JSI Washington DC office- as expenses are incurred, with the
management costs and fees drawn down at the end of each month)
The Instrument for transfer of funds will be a trilateral Joint Financing
Arrangement (JFA) between USAID (the Lead Donor), DFID and Norway. This is
likely to be based on Nordic Plus principles and template
USAID will hold the contract for management of the implementing partner- John
Snow International and will supervise the programme. They will provide reports
back to DFID (and Norway) every six months. Reports will be available no later
than 30 days after the end of every six months.
If the programme is terminated early, through no fault of the implementing
partners, USAID, using its procurement policy and guidelines, will give back any
unspent funds to DFID.
45
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
DELIVER is funded through a letter of credit agreement with the US Government.
Sub recipients of DELIVER invoice on actual for reimbursements. Procurement
and transport are paid once the product is delivered, however in some cases
vendors want a down payment on procurement purchases whereby the remaining
balance is paid out once the procurement is delivered.
D. What is the assessment of financial risk and fraud?
As most of the procurement will be done using USAID systems (including US
Treasury) and the Implementing Agency (John Snow International) are governed
by USAID financial regulations we judge the overall level of fiduciary risk for this
programme to be low given the extensive financial controls in place for USAID
contract management. This judgement is based on DFID’s corporate knowledge
of USAID globally, satisfactory experience of working with and through USAID
systems in comparable contexts (e.g. in Tanzania).
Any potential risks of using these instruments as opposed to DFID- managed
commercial contracts will be mitigated through the use of six-monthly tranched
releases to USAID, based on six monthly financial and progress reports that are
reviewed by programme staff, to ensure that the services provided are
appropriate and of high quality and to ensure that funds are released only on
clear evidence of financial need.
In terms of USAID’s management of fiduciary risk- partners such as DELIVER are
required to exercise accountability and to put in place performance and internal
controls measures to mitigate corruption. This includes some of the following:
frequent physical count of inventory, increasing the visibility of the supply chain,
reducing inventory holding points if appropriate, ensuring appropriate warehouse
security, conducting monitoring visits to relevant supply points and meeting with
key stakeholders, carrying out a zero tolerance policy for corruption with staff and
sub-contractors. Additionally, funding balances and expenditures are closely
monitored by both DELIVER HQ and the field office.
46
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
E. How will expenditure be monitored, reported, and accounted
for?
Rigorous monitoring and accounting of expenditure will take place using ARIES in
accordance to the ADAMANT principle to ensure value for money and compliance
with Blue Book requirements and programme arrangements.
USAID will monitor and account for expenditure and will submit to DFID a certified
annual statement showing funds received and expended including six monthly
financial and progress reports. The Implementing Agency will submit an annual
audited account. The reporting will be a single process, with updates as required.
DFID and USAID will agree on a common set of indicators to be used for
measuring the effectiveness of performance. The frequency of monitoring
assessments (including possible joint missions) is yet to be agreed but a
minimum of at least two assessments a year is anticipated
There will be monthly trilateral discussions between the health technical and
programme teams for DFID, USAID and the local DELIVER representative. In
addition there will be 6 monthly meetings at head of office level.
Whilst primary accountability for DFID funds will reside with USAID through the
agreed local Contribution Arrangement for Co-Financing, the implementing
partner (John Snow International) will be accountable to USAID.
DFID will also monitor the provision of pharmaceuticals via our overview of
facilities that will be supported through the Health Pooled Fund (HPF). But
primary monitoring and evaluation responsibility lies with USAID as the Lead
Donor ( DFID will seek participation in any monitoring visits proposed by USAID)
Management Case
What are the Management Arrangements for implementing the intervention?
The daily management of the programme will be done by USAID,
The Agreement Officer’s Technical Representative (A/OTR) is at Headquarters and the
Health Advisor at USAID South Sudan will serve as the local Activity Manager (AM) for the
award in South Sudan. Specific certification requirements are outlined in USAID’s policies
and the Automated Directives System which is a web-based catalogue of USAID rules and
regulations. Locally the AM will:




oversee the technical activities on the ground
develop and monitor the statement of work;
serve as the Mission point of contact for visitors;
serve as the Partner point of contact ( responding to submitted reports);
47
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012



write up minutes for quarterly meetings and place them on file;
serve as responsible for site visits and submitting reports;
serve as responsible for tracking finances
DFID will have monthly trilateral meetings with USAID and DELIVER regarding the
programme (NOTE: This could also include Norway). In addition there will be 6 monthly
meetings at head of office level. There will also be on-going dialogue with the Ministry of
Health regarding the fund.
Management structure within DFID: This programme will be managed by the DFID
Health Adviser, with the support of the Deputy Programme Manager for Basic Services,
based in South Sudan. The DFID programme team will meet at least six monthly with
USAID bur will also contact USAID on an ad hoc basis if they have any questions for
clarification on USAID management of the intervention.
Six monthly progress and financial reports will be produced as well as annual reviews.
Regular monitoring will be conducted and reports shared with DFID on a semi-annual
basis. DFID will undertake annual project reviews and a Project Completion Report a few
months before Programme closure in line with our normal reporting requirements. Any
revision of the Key Performance Indicators will be done as part of the annual review
process and this will be linked and jointly conducted. Financial reports, compliance and
administrative functions will be managed by the USAID and shared with the DFID
programme team.
Management by USAID. Management by USAID will be as described above as
mandated by USAID regulations and policies. Specific terms and conditions will be set
out in the local Contribution Arrangement for Co-Financing agreed between DFID and
USAID.
B. What are the risks and how these will be managed?
Risk
Delays in procurement: DELIVER
cannot forward fund the procurement
of commodities, and hence this
process can only start when an MoU
has been signed, and funds have
been transferred from DFID to
USAID/DELIVER.
Risk of delays in timeliness of the
process if administrative issues take
longer than anticipated
Infrastructure and distribution:
Medicines arrive at county level but
Likelihood
(1 low
likelihood;
3 of high
likelihood)
1-2
Impact
Mitigation
2-3
Start process of drafting
MoU/agreement as soon
as Option is decided
upon, to minimize risk of
delay later down the
chain
2
2
Communication of county
health dept and NGOs so
48
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
are not transported from county level
to facility level
supply of medicines to
facilities can be
anticipated and arranged
in advance.
Include distribution
component in contract
NGOs as part of HPF.
Medicines cannot be delivered due to
the rainy season
Work closely with USAID
and DELIVER to monitor
these risks. We will also
keep an eye on other
logistical support e.g.
through WFP or the
NGOs and health cluster
if there is an emergency
situation.
Clearly clarify preferences
and expectations in MoU
between USAID/DFID
USAID/DELIVER sets up system that
is not according to DFID’s preference
(e.g. large part airlifting
1
1
Lack of capacity: Medicines arrive
at facility level but not used rationally
2
2
Economics: Inflation
3
3
Medicines are subject to border
taxes. This will mean that we cannot
afford to procure as many medicines.
3
3
Security and conflict: Delays to
distribution of medicines to certain
counties
2
2
Link with HPF and other
initiatives training health
workers
Cost of fuel continues to
increase meaning that it
is more expensive to
transport medicines. We
will continue to advocate
for a resolution to the
current oil crisis. In
addition we are building
flexibility into the budget
to try and take account of
the potential increase in
costs.
By working through
USAID they can link to
their SIAPS programme
which is embedded in the
MoH Pharmaceutical
division. In addition we
can make sure any MoUs
on the emergency fund
include language that
ensures that medicines
purchased under this
mechanism are tax free.
Work with NGO partners
to try and mitigate against
this- may need NGO
partners to help support
49
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
Looting of drugs from facilities
1-2
2
Budget: Government does not find
the
funding
to
support
the
procurement and distribution of
medicines for 2014
3
3
Corruption: Medicines are sold on
to the private sector
2
2
DELIVER ( South Sudan
component) not performing to
expectations
distribution in this context.
NGOs are used to
operating in insecure
contexts. They are used
to operating remotely,
prepositioning drugs/
medical supplies and
using village health
committees/CHDs to
provide an accountability/
oversight function. The
link between the
medicines fund and the
HPF will help to mitigate
some of this risk by
allowing the NGOs to
manage the medicines at
county level.
We will continue to lobby
GRSS to find funds to
purchase medicines.
We mitigate against this
by not using government
systems for procurement,
storage or distribution.
NGOs will work closely
with the County Health
Departments to make
sure this does not happen
at county level too.
The global contract with
John Snow International
allows for the termination
of a certain county
programme if not meeting
expectations in the
Performance
Management Plan
C. What conditions apply (for financial aid only)?
Not applicable
50
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
D. How will progress and results be monitored, measured and
evaluated?
USAID has a global Performance Measurement Plan with DELIVER. This includes a set of
progress indicators which are reviewed annually. These performance measurement
indicators include value for money as one of the assessment criteria.
DFID select a set of indicators from USAIDs already comprehensive monitoring framework
to be used for measuring the effectiveness of performance. The frequency of monitoring
assessments (including possible joint missions) is yet to be agreed but a minimum of at
least one assessments a year is anticipated. DFID has selected a subset of key indicators
that reflect the different stages in the process: procurement, management, and
distribution.
Regular monitoring will be conducted and reports shared with DFID on a quarterly basis.
DFID will undertake an annual project review. Any revision of the Key Performance
Indicators will be done as part of the annual review process and this will be linked and
jointly conducted with USAID.
In addition DFID will monitor progress through the HPF, the delivery of which is dependent
upon availability of medicines through this emergency medicines fund. The outcome
indicators for the emergency medicines fund are closely linked to the HPF.
The logframe in Flag B provides the overall monitoring framework. In terms of over and
underachievement. It is likely even in the best case scenario that there will be stock outs
for between 1-2 months regardless of the emergency medicines fund. Overachievement is
defined as no stock outs in clinics following the end of MDTF supplies. Underachievement
is defined as more than 2 months of stock outs.
51
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
ANNEX 1: Selection of products (46 medicines & 12 supplies, 58 total) & annual quantification for facilities in
the six States
The14 tracer drugs (list 1) are highlighted in green
Product Descriptions
Unit
Pack
Hospital
PHCC
(High)
PHCC
(Low)
PHCU
21
34
81
445
Total
Quantity
Oral medicines
1
Acetylsalicylic acid 300mg
1,000
504
409
971
5,340
7,224
2
Albendazole 200mg Chewable Tablet
1,000
252
273
324
890
1,738
3
Amoxicillin 250mg Capsule
1,000
11,340
9,200
14,567
10,680
45,787
4
Ciprofloxacin 500mg Tablet
100
1,764
2,044
2,913
-
6,722
5
Co-trimoxazole 100mg+20mg Tablet
1,000
2,016
1,636
1,942
1,780
7,374
6
Co-trimoxazole 400mg+80mg scored Tablet
1,000
4,032
3,271
3,884
3,560
14,748
7
Diazepam 5mg
1,000
84
68
81
-
233
8
Diclofenac sodium 25mg enteric coated Tablet
100
12,600
14,311
19,422
32,040
78,373
9
Doxycycline 100mg (as hyclate) scored Tablet
1,000
2,520
4,089
9,711
53,400
69,720
10
Erythromycin 250mg
1,000
1,260
1,636
3,884
-
6,780
11
Ferrous sulphate 200mg + Folic acid 0.25mg
1,000
3,024
3,680
4,856
5,340
16,900
12
Magnesium Trisilicate Tablet
1,000
1,008
818
647
1,780
4,253
13
Oral rehydration salt (ORS), 100 sachets
1
2,520
2,044
4,856
10,680
20,100
14
Paracetamol 500mg, double scored Tablet
1,000
15,120
12,267
14,567
26,700
68,653
15
Praziquantel 600mg
1,000
-
-
-
-
-
16
Salbutamol 4mg
1,000
504
818
1,942
-
3,264
52
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
Product Descriptions
Unit
Pack
Hospital
PHCC
(High)
PHCC
(Low)
Total
Quantity
PHCU
17
Tinidazole 500mg
100
-
-
-
-
-
18
Vitamin A (Retinol) 200,000IU Caplet
100
1,512
1,840
2,913
10,680
16,945
19
Zinc Sulphate dispersable 20mg Tablet – blisterpack
100
12,600
12,267
19,422
53,400
97,689
Syrups & suspensions
20
Amoxicillin, dry powder for susp. 125mg/5ml Bottle/100 ml
1
2,100
1,704
2,428
8,900
15,131
21
Metronidazole, dry powder for susp. 200mg/5ml B/100ml
1
8,400
6,815
8,093
13,350
36,657
22
Paracetamol Suspension, 120mg/5ml, 60ml Bottle
1
12,600
13,630
16,185
22,250
64,665
378
273
324
-
974
Injectables
23
Ampicillin 500mg powder for inj.
100
24
Benzylpenicillin 1M IU, Vial
50
3,780
4,089
6,798
-
14,667
25
Ceftriaxone, powder for injection 1g vial
10
12,600
4,089
4,856
-
21,544
26
Diclofenac Sodium, for injection 75mg/3ml Amp/3ml
100
1,764
1,227
1,942
-
4,933
27
Gentamycin 40mg/ml, 2ml amp
100
7,560
4,089
6,798
-
18,447
IV fluids/infustion
28
Dextrose 5% Bottle/ 500ml + infusion set
1
189,000
102,222
145,667
-
436,889
29
Dextrose 50% 50 ml Vial
Sodium Lactate Compound Solution (Ringers Lactate)
Bag/500ml+set
1
18,900
-
-
-
18,900
1
50,400
40,889
48,556
-
139,844
100
26,250
15,333
24,278
-
65,861
30
31
Water for Injection 10 ml, Plastic Vial
Topical preparations
32
Benzoate acid compound (Whitfield's ointment) 40g
1
12,600
12,267
29,133
53,400
107,400
33
Benzyl benzoate 25% application, 200ml
1
2,520
2,044
4,856
10,680
20,100
34
Clotrimazole 500mg Pessary with applicator
1
37,800
40,889
72,833
53,400
204,922
53
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
Product Descriptions
35
Tetracycline eye ointment 1% 5g tube
Unit
Pack
Hospital
PHCC
(High)
PHCC
(Low)
Total
Quantity
PHCU
50
63,000
40,889
48,556
80,100
232,544
1
5,040
4,089
4,856
10,680
24,664
Disinfectant
36
Chlorhexidine 1.5% +Cetrimide 15%, 1L with dispenser
Antimalarial
37
Artesunate + Amodiaquine (Adult) 50+153 mg [24 tabs]
1
8,400
12,778
22,255
33,375
76,807
38
Artesunate + Amodiaquine (Child) 50+153 mg [12 tabs]
1
4,200
6,815
12,139
22,250
45,404
39
Artesunate + Amodiaquine (Toddler) 50+153 mg [6 tabs]
1
4,200
6,815
12,139
22,250
45,404
40
Artesunate + Amodiaquine (Baby) 50+153 mg [3 tabs]
1
3,150
5,111
8,093
11,125
27,479
41
Quinine dihydrochloride inj 300mg/mL 2ml Amp
100
378
409
486
-
1,272
42
Quinine sulphate 300mg film coated
1,000
504
409
647
-
1,560
43
Sulphadoxine+Pyrimethamine 500/25mg Tablet
100
3,780
4,089
5,827
16,020
29,716
Keep cool
44
Oxytocin 10 IU, Amp/1ml
1
50,400
61,333
72,833
-
184,567
45
Lidocaine HCL 1% Vial 20ml
10
1,764
2,044
2,913
-
6,722
46
Diazepam 10mg/2ml Amp/2ml
100
756
-
-
-
756
47
Supplies
Bandage First-aid Medicated (wound plaster) 6.0cm x 5m
8cms wide Roll
Roll
50,400
20,444
19,422
26,700
116,967
48
Cotton Wool Absorbent EP/BP 500g Roll
Roll
12,600
2,044
2,913
5,340
22,898
49
Gauze Compresses (pads) 12-ply, 10 x10cm, Sterile
P/100
1,008
1,227
1,942
-
4,177
50
Tape Adhesive (plaster) 2.5 cm x 5m, each
Catgut chromic 2/0(M3.5), 75cm, N: 25mm 1/2 circ.RB, as
W448 P/12sa
Each
6,300
6,133
9,711
26,700
48,844
P/12
504
-
-
-
504
51
54
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
Product Descriptions
Unit
Pack
Hospital
PHCC
(High)
PHCC
(Low)
Total
Quantity
PHCU
52
Catheter Foley CH16 2-way Balloon 5-15ml, sterile disp P/10
P/10
756
409
324
-
1,489
53
Catheter Foley CH18 2-way Balloon 5-15ml, sterile disp P/10
P/10
756
409
324
-
1,489
54
Condoms lubricated male (ISO 4074) square foil, 53mm wide
144
-
-
-
-
-
55
Envelope resealable dispensing plastic, bag, 80 x 100 mm
P/100
100,800
102,222
145,667
267,000
615,689
56
Gloves Examination latex Non-sterile Medium Disposable
P/100
25,200
30,667
48,556
26,700
131,122
57
Gloves Gynecological 7.5 - Medium Latex pre-powdered
P/25
12,600
10,222
9,711
-
32,533
58
Syringe Luer 5 ML w Needle, 0.7x30mm, Sterile disp 21G
100
25,200
16,356
23,307
-
64,862
59
Syringe Luer 2 ML w Needle, 0.6x25mm, Sterile disp
23G
100
5,040
3,271
4,694
-
13,005
1
2,520
8,178
11,653
26,700
49,051
60
Malaria RDT (First Response), 25 tests/box
61
Infusion giving set, with air-release & needle
62
Gauze hydrophilic 90cm x 9am 12x 8 mesh
63
Scalp vein infusion sets 21 G (0.80 mm)
64
65
Razor blade 8cm, non sterile, reusable, metal/10
Nylon monofilament 2-0, 75 cm, 3/8 circle 30 mm cutting
needle
66
Umbilical tape, 25 m x 3 mm
67
Ethanol (ethyl alcohol) 70 % denatured, 1 litre
55
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
Annex 2: Methodology used for quantification of medicines &
supplies
The quantification of need per medicine per level (reference/state/county hospital,
lower/higher PHCC and PHCU) was conducted by the Ministry of Health in close
collaboration with USAID/SIAPS. The exercise was based on issue data and
consumption data to the extent available, disease prevalence, and knowledge of
common stock outs 24 , and resulted in a quantification tool for all 220 items. Some
quantities were adjusted, notably the malaria RDTs25, gloves and Ringer’s lactate.26
For the current Business Case and projection of need, the number of hospitals, PHCCs
and PHCUs in the six states was derived from the ‘Distribution report for MoH/MDTF
Essential Drugs & Supplies kits’, prepared by the MoH/DPS and updated in Jan 2011
(see annex 1). For the quantification exercise, the national distribution of 80 highutilization PHCCs and 270 low-utilization PHCCs was applied to the six States,
resulting in 34 higher and 81 lower PHCCs.27
It is acknowledged that the quantity supplied under the current push-system does not
accurately reflect the need in the facilities, and there are widespread accounts of expiry
of medicines (e.g. IV fluids) and stock-outs (e.g. antibiotics and anti-malarials).
However, at the moment consumption data is not collected or aggregated in a
consistent manner, and it is therefore difficult to use the limited information available as
a solid basis for adjusting the quantities supplied.
24
The full EDL from MoH/SIAPS includes quantities of medicines required for each level for one year. For
the list 2 and 3 (44 medicines), five drugs were added to the MoH EDL list, namely acetylsalicylic acid
300mg, erythromycin 250mg, salbutamol 4mg, Whitfield’s ointment 40g, benzylbenzoate 25% application.
For these, the forecasted amount needed was based on the quantity supplied in the MDTF-kit. Two drugs
are included in the World Bank list but not in the MoH/USAID list nor in the MDTF-kit, namely tinidazole
500mg and praziquantel, and therefore not included in the current quantification. The latter was supplied as
bulk (specific areas in the country where it is needed).
25 According to MoH/SIAPS quantification tool, 1.2m malaria RDTs would be needed vs.195,000 malaria
ACT treatments. Seen the fact malaria is endemic in South Sudan, the practice of presumptive treatment of
malaria in case of fever, the fact other donors (e.g. Global Fund) already provides RDTs, and the relatively
high price of RDTs, the quantity to be purchased has been adjusted to 300,000.
26 Reports that there is already much Ringer’s Lactate and many gloves in the facilities (pushed through the
MDTF essential kits)
27 When the final list of medicines to be procured and supplied to each county is drafted, an exact breakdown of higher/lower PHCCs should be obtained from the MoH.
56
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
Annex 3: List of health facilities per State – six States of the Health
Pooled Fund
STATE
COUNTY
Eastern Equatoria
Northern Bahr el
Ghazal
Lakes
Unity
Western Bahr el
HOSP
PHCC
PHCU
Budi
Ikotos
Kapoeta
East
Kapoeta
North
Kapoeta
South
Lopa/Lafon
Magwi
Torit
TOTAL
1
1
4
4
17
14
0
4
3
0
1
7
3
0
1
1
7
0
3
8
2
26
0
15
18
24
98
Aweil Center
1
2
9
Aweil East
1
5
23
Aweil North
0
2
17
Aweil South
0
1
6
Aweil West
TOTAL
0
2
5
15
12
67
Awerial
0
2
6
Cueibet
Rumbek
Centre
1
2
5
1
3
10
Rumbek East
1
4
11
Wullu
0
1
11
Yirol East
1
1
9
Yirol West
TOTAL
1
5
1
14
12
64
Abiemnhom
0
1
2
Guit
0
1
5
Koch
1
3
1
Leer
0
2
3
Mayendit
0
2
12
Mayom
0
3
6
Panyinjar
0
2
21
Pariang
0
2
4
Rubkona
TOTAL
1
2
1
17
0
54
Jur River
0
4
17
57
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
STATE
Ghazal
Warrap
COUNTY
HOSP
PHCC
PHCU
Raja
1
5
11
Wau
TOTAL
2
3
9
18
26
54
Gogrial East
0
2
9
Gogrial West
0
4
11
Tonj East
0
2
4
Tonj North
1
4
13
Tonj South
1
1
9
Twic
TOTAL
1
3
9
22
9
55
OVERALL
21
115
445
Source: Ministry of Health Directorate of Pharmaceutical Services – Functional facilities for
distribution – April 2011
58
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
Annex 4: List of meetings & people (May 7 – 19, 2012)
1
2
3
4
5
6
7
Organization
DFID
8
9
10
11
12
Michael Dunnery
USAID
Ministry of Health
13
14
15
16
17
18
Name
Rurik Marsden
Simon Williams
Jay Bagaria
Laura Chappell
Caroline Dale
John Benza
Hamish Falconer
MSH
UNICEF
UNDP
SSU NGO health
forum
World Bank
Heather Smith
Anna Hoffman
Leila
Dr. Mawien Atem
Mawien
Dr.Mozes Deng
Malual
Albert Nettey
Dr. Romanus
Mkerenga
Kim Beer
Ruth Goehle
Mo Ali
Henry Owino
19
Dr. M Kamil
20
Josie Muigai
21
22
Mission Pharma
BSF/ BMB
MottMacdonald
Deng Mathach
Geertruid Kortman
23
Hannah Yousif
24
Wim Groenendijk
25
Kate Louwes
26
27
28
OVCI
Merlin
Site visits
Helena Karin Aiello
Shaheenul Haque
Katore PHCC
(higher)
Malakia PHCC
(higher)
Lologo PHCC
(lower)
Position
Deputy Head of Office
Deputy Programme Manager
Health adviser
Health economist
M&E
Commercial adviser
Programme Manager
Procurement adviser
(call Juba – Scotland)
Team leader, health
Deputy team leader
USAID/ DELIVER
Director General, Dept of
Pharmaceuticals
Director, Pharmaceutical
Supplies Management
MSH SIAPS Procurement &
Logistics adviser
Chief, Health & Nutrition,
UNICEF
Procurement adviser
NGO coordinator
Former NGO coordinator
Procurement specialist,
MDTF, World Bank
Health lead, World Bank
Infrastructure Advisory
Services, IFC
Local representative
Primary Health Care
Consultant,
Officer Primary Health
Policy Development/M&E
Officer
Team leader
Reproductive health technical
adviser
Country Health Director
NGO-supported MoH PHCC
Non-NGO-supported MoH
PHCC
NGO-supported MoH PHCC
59
DFID Support for an Emergency Medicines Fund in South Sudan – 3 August, 2012
ANNEX 5: REFERENCES
Southern Sudan Centre for Census, Statistics and Evaluation (2011) Key indicators for
Southern Sudan. SSCCSE, Feb 8 2011
Ministry of Health (2011) Summary of Findings of the Southern Sudan Household
Survey 2011. MoH & SSCCSE, April 2011
PWC (2010) The World Bank Report to the Southern Sudan Multi Donor Trust Fund
(MDTF-SS)
Administrator;
2ND
Quarter
Report,
April
June
2010.
PriceWaterhouseCoopers (PWC) August 2010
USAID (2011) Pharmaceutical Logistics Assessment South Sudan. USAID, October
2011 http://resources.ghtechproject.net/content/pharmaceutical-logistics-assessmentsouth-sudan
USAID (2010) Assessment of Southern Sudan Pharmaceutical Management System.
MSH/SPS & SCMS, USAID, Oct2010
USAID (2011) Final report – DFID funding for contraceptives in Tanzania. USAID
Tanzania, Dec 2011
WHO (2004) The World Medicines Situation. World Health Organization (WHO), 2004
WHO (2011) The World Medicine Situation – Access to Essential Medicines as Part of
the Right to Health. World Health Organization (WHO), 2011
WHO (2007) Everybody’s business: Strengthening health systems to improve health
outcomes.
WHOs
Framework
For
Action,
2007
www.who.int/healthsystems/strategy/everybodys_business.pdf
Chibwana AL, Mathanga DP, Chinkhumba J, Campbell CH. Socio-cultural predictors of
health-seeking behaviour for febrile under-five children in Mwanza-Neno district,
Malawi. Malaria Journal 2009, 8:219
60