Framework on Distribution Outsourcing in Government-Run Distribution Systems.


A significant proportion of procurement and distribution of essential drugs in most countries in sub-Saharan Africa is done by the Ministry of Health (MoH) or a para-statal agency closely linked to the Ministry of Health. The drug distribution needs within a country, however, usually overwhelm such drug distribution logistic systems along one or more of these dimensions. Outsourcing provides one means of augmenting the performance of existing logistics systems as needed. However, our understanding of how to couple such outsourcing with government run systems in developing countries is very limited.

The purpose of this work is to develop a framework/approach for considering and selecting outsourcing opportunities as a means of improving public sector pharmaceutical supply chain performance. In addition, this work includes developing a set of tools for modeling the potential cost and performance of these outsourcing opportunities that can support the design and assessment of outsourcing policy proposals. The primary audience for this work is both developed and developing country policy makers and practitioners working in the pharmaceutical sector.

Following the background to the study and details of the literature review, the approach for evaluating the opportunity for distribution outsourcing in a government run distribution system is described. The final section provides the results of the application of the approach to a drug revolving fund in Kano, Nigeria, used to provide essential medicines to primary and secondary health facilities within the state. Appendix A forms part of the main report, Appendix B (Assessment Survey, Costing Surveys, and Costing Model) is appended as a separate document.


Watson, N.; Forster, G.; Hasselback, L. Framework on Distribution Outsourcing in Government-Run Distribution Systems. MIT-International Zaragoza Logistics Programme at Zaragoza Logistics Center (ZLC), Zaragoza, Spain (2011) 67 + 86 pp.

Published 1 January 2011