Why are market shaping efforts for essential commodities in LMICs so narrowly focused and reliant on international partners? R4D’s new project supports the Government of Ethiopia to shift the paradigm.
The Challenge
The pharmaceutical supply system in Ethiopia has suffered from frequent supply interruption, inefficient utilization and high wastage of resources and customer dissatisfaction. Ultimately, this contributes to poor availability of critical health commodities for those who need them.
Improving access to high quality and affordable essential health and nutrition products is one of the strategic priorities of the Government of Ethiopia (GoE) towards achieving improved health outcomes. Globally, market shaping approaches have been successfully deployed to increase access to some critical life-saving medicines; but in Ethiopia, as in most countries, this is generally on a product-by-product basis and is often led by and reliant on international partners. As a result, the government is continually dependent on these partners to play a market manager role to support entry of new lifesaving products into the Ethiopian market.
The Opportunity
The Ethiopian Pharmaceutical Supply Service, the government institution that acts as a supply chain leader in the public health system, has achieved notable improvements in supply chain performance over the last ten years, critical gaps remain that impede full access to health and nutrition products in the public health system.
The establishment of a Quantification and Market Shaping Directorate (QMSD) will have a major impact on the introduction and scale-up of lifesaving products, ensuring that key market inefficiencies are addressed, and progressively increase the continuous availability of high quality and affordable health and nutrition products in the public health system. As the lead market manager in Ethiopia, QMSD is tasked with coordinating broader, system-level and holistic market shaping practices across all product categories.
Our Work
R4D is partnering with the GoE to support the development of the strategy, structure, and capacity of QMSD to play the market manager role, where they are proactively identifying and addressing market inefficiencies and working to promote improved access to high quality and affordable essential health and nutrition products. R4D has also pivoted and expanded our support in light of the COVID-19 pandemic to assist EPSS in managing their most pressing supply chain needs.
Since 2019, the following activities have been completed to address immediate priority actions and lay the foundation of a strong market shaping function within EPSS:
- EPSS and R4D co-conducted a comprehensive market shortcomings assessment which identified critical barriers across financing, regulatory, procurement process, supplier and demand aspects of pharmaceutical markets. Based on the findings, EPSS has prioritized four critical market barriers and, together with R4D and other key stakeholders, will design appropriate market shaping interventions.
- The Ethiopia Pharmaceutical Procurement List (PPL) was revised in an effort lead by EPSS’s QMSD team in collaboration with R4D, the Ministry of Health, the Ethiopia Public Health Institute, Regional Health Bureaus, and others. This revision will serve as the foundation of future procurement design frameworks, supplier registration prioritization frameworks, and regulatory efficiency improvement solutions – in turn, this will enable EPSS to use its procurement power to maximum effect, as well as ensure expedited review of the most critically needed products so that regulatory delays are minimized.
- QMSD and R4D jointly developed a price data establishment guide to provide standard parameters and requirements for establishing PPL price data. This will allow ESPA to make data-driven decisions and engage in negotiations with suppliers based on high-quality data on historic and recent pricing data trends at both the local and global levels.
- The Supply Chain COVID-19 Response Strategic Task Force (EPSS, R4D, UNFPA, GHSC-PSM and McKinsey) assessed gaps and risks to EPSS’s COVID-19 response as well as risks posed by COVID-19 on the routine supply chain system and developed guidelines to mitigate those risks. QMSD worked with R4D and other EPSS Directorates to assess and respond to potential stockout of essential medicines – for example, by fast-tracking procurement process for essential medicines that are most at risk of stock out due to order cancelations, ingredient supply shortages, or delays when clearing customs.
By 2022, the team will support EPSS to codify a strategic vision for market shaping and to develop and ratify an organizational blueprint for QMSD, using the comprehensive market shortcomings assessment and additional targeted research to inform its structure, mandate, scope, and relationship and coordination mechanisms with other directorates within EPSS and with other government entities. A responsive and strong organizational design will be the cornerstone to QMSD’s long-term ability to scope market shortcomings and design appropriate solutions.
On an ongoing basis, R4D is also providing catalytic support to build and strengthen the capacities of QMSD’s leadership and staff. This capacity building support aims to create and codify in-house capability, with the ulitimate goal of fostering QMSD’s ability to own and continuously play the market manager role. Moreover, this work aims to make these capabilities robust and self-sustaining, so that EPSS can continue to grow its own internal capacity over time as well as leverage external expertise on an as-needed basis in the service of EPSS’s strategic priorities.
Photo credit: R4D
