Each year, on World Malaria Day we evaluate how new developments in the market can help supply chain stakeholders improve the outcomes of malaria programs in low-and middle income countries.
This year, we look at the impact of supply chains on malaria programs through the lens of the COVID-19 pandemic.
We know that the already fragile humanitarian- and public health supply chains will come under increased pressure owing to the global measures that have been implemented to curb the spread of COVID-19. Even with risk mitigation measures in place, supply chain stakeholders in the public sector will have to dramatically improve coordination to ensure access to malaria prevention, diagnosis and treatment services is not compromised by the efforts to limit the spread of the new disease1.
For humanitarian- and public health supply chains improved coordination means:
- increased engagement among stakeholders,
- expanding supply sources through prequalification,
- creative problem solving,
- leveraging alternative modes of transport, and
- sharing more resources and assets.
Through efforts to better coordinate, organizations have the opportunity to showcase their expertise in supply chain- and risk management, by proactively advising clients such as principal recipients, and government procurement units, on how to best adjust their forecasting, procurement, warehousing, and logistics activities to minimize stockouts during the COVID-19 pandemic.
From a supply chain, and procurement perspective, there are several key activities (downstream and upstream) that are typically implemented as a standard practice to prevent stockouts, but one such activity that stood out to us – in the face of COVID-19 – is supplier diversification. In line with this, we found two recent global malaria commodity sourcing developments to be especially relevant during these crisis times.
These developments include:
- New additions to the World Health Organization (WHO) list of prequalified in vitro diagnostic products2 to offer a wider range of fit-for-purpose testing products (for varying epidemiological situations), and to mitigate over-reliance on single products and/or suppliers.
- Changes to operational guidance from the Global Fund to Fight AIDS, Tuberculosis and Malaria to make competitive bidding of malaria rapid diagnostics tests (MRDTs) a standard practice thereby reducing the instances of single sourcing3.
More prequalified MRDTs
Since 2018, the WHO updated the list of prequalified in vitro diagnostic products to include a wider range of malaria diagnostic products from four suppliers with production facilities across India and South Korea. Please see Table 1 below for products and manufacturers.
|MRTD||Manufacturer||Production site||Year of prequalification|
|STANDARD Q Malaria P.f/P.v Ag|
|SD Biosensor, Inc.||South Korea||2020|
|STANDARD Q Malaria P.f Pan|
|SD Biosensor, Inc.||South Korea||2020|
|STANDARD Q Malaria P.f Ag|
|SD Biosensor, Inc.||South Korea||2020|
|AdvDx Malaria Pf Rapid Malaria|
Ag Detection Test
|Advy Chemical Pvt Ltd.,||India||2019|
|Alere Malaria Ag P.f||Standard Diagnostics, Inc.||South Korea X 2 sites||2019|
|First Response®Malaria Ag. P.f./P.v. Card Test||Premier Medical Corporation||India||2019|
|First Response® Malaria Antigen P. falciparum (HRP2) Card Test||Premier Medical Corporation||India||2018|
|First Response® Malaria Ag. pLDH/HRP2 Combo Card Test||Premier Medical Corporation||India||2018|
|First Response®Malaria Ag. P.f./P.v. Card Test||Premier Medical Corporation||India||2018|
|SD BIOLINE Malaria Ag P.f/P.f/P.v||Standard Diagnostics||South Korea||2018|
In general sourcing terms, a wide and diverse supplier base, and product range, translates to less risk, more competition, and more opportunities for a healthy market. A practical approach for mitigating sourcing risk suggests that two suppliers are used, with meaningful quantities allocated to both (at least 25% of orders to each), and that the suppliers’ manufacturing, warehouse and distribution sites are not all in the same region5.
Under normal global trading conditions, one would say that there is sufficient diversity in the ranges of malaria tests, manufacturers, and production sites, especially when taking the Global Fund’s list of approved MRDTs6 into consideration as well. However, under the unique circumstances of global lockdown measures, even the most logical and practical of sourcing strategies are tested to their limits; and there is already evidence of the strain in the market.
For example, the Global Fund has already reported moderate risk for the delivery of diagnostics products, mainly because of the COVID-19 lockdown in India. However, the donor also stated that there will be some supply continuity thanks to the geographical diversity of suppliers (in their case Thailand, China and South Korea). This is testament to the importance of having production sites in various regions.
Further, a Notice of Concern has recently been issued to one of the prominent global suppliers of MRDTs. In cases like this, where one supplier’s stock is temporarily affected, it is critical that enough alternative sources are available.
For PFSCM, it is important that this market remain vibrant and healthy, and advocates that malaria initiatives remain a priority to suppliers upstream. From the Ebola outbreak in West Africa from 2014 to 2016, we have learned that one cannot neglect existing health programs when new disease outbreaks strike. For example, during the peak of the Ebola outbreak, stockouts of rapid diagnostics tests were reported8, and the malaria mortality rate increased and surpassed Ebola deaths9.
More suppliers at the table
As mentioned above, having multiple suppliers in various locations, not only ensures supply continuity, but also promotes innovation, drives competition, and builds local economies10 (in the case of local sourcing).
In line with this, another positive development that is bringing more suppliers to the table of malaria programs, is the Global Fund’s update to its Operational Guidance for Procurement of Malaria Rapid Diagnostic Tests.
The update to the guidance, which was confirmed in November 2019, will promote competitive bidding for diagnostics becomes the standard practice; ending the option for countries to single source. In the past some countries did single sourcing of MRDTs as product training across all health facilities and malaria programs were aligned or standardized. Health care workers were thus trained on one main type of MRDT product. Sourcing from multiple suppliers could have possibly negatively impacted health program outcomes during that time.
Malaria tests have now become so similar in use and function, that they are considered interchangeable.
Last year, the Global Fund determined that countries have demonstrated effective use of multiple types of RDTs (targeting the same species) at the same time, and thus training and supervision should be independent of product brand to ensure health workers are able to use the product(s) available at any given time.
Again, from a supply chain and procurement perspective, we welcome this development. When it comes to a practical approach, competitive bidding has many benefits. PFSCM has first-hand experience in this. For us, competitive bidding is considered a standard practice.
An example of the effectiveness of competitive bidding comes from within our own organization. In 2018, we achieved significant cost savings in excess of $800 000, for the procurement of a large order of MRDT kits for an East African country.
The savings came to light after PFSCM proposed competitive bidding for the order of 307,469 packs comprising 25 MRDT kits each. The shipment, comprising more than 10, 40-foot containers, was also tendered to ensure the best delivery and service is achieved.
Table 2: Advantages and disadvantages of competitive bidding
|Stimulates healthy market dynamics for best pricing and service levels.||More procurement effort.|
|Reduced risk of production delays, recalls and quality issues.||Multiple in-country registrations.|
Table 3: Advantages and disadvantages of single sourcing
|Good supplier relationships.||Lack of market competition could affect pricing and service levels.|
|Less procurement effort.||Risk of production delays, recalls and quality issues.|
|Long-term forecast and planning for improved production scheduling and framework agreements.|
|Once-off, in-country registration.|
When it comes to MRDTs, countries will continue to procure tests based on the epidemiologic context of malaria in that country, and in alignment with national treatment guidelines and WHO policy. Therefore, it is especially important that enough affordable, high-quality same species and multi-species tests are available and prequalified.
Having enough products prequalified, is only one effort to limit supply risk. The procurement strategies, such as competitive bidding versus single-sourcing, also need to be in place to make sure countries, and procurement agencies, can access these products in an affordable manner.
By prequalifying more products, the WHO is improving the resilience of sourcing strategies for malaria diagnostics, and by encouraging competitive bidding the Global Fund is helping international and local markets grow.
Malaria programs will continue to face uncertainties, and pressure in the face of COVID-19, but by acting upon lessons from the past, and planning for the future, supply chain stakeholders can coordinate their efforts to limit stockouts and ensure the fight to end malaria is not overshadowed by COVID-19.