Financing medicine's last mile in Uganda : exploring linkages between patient access to medicine and supply chain access to finance

Abstract

Pharmaceutical companies operating in Africa are well positioned to contribute to the United Nations' ongoing efforts to improve access to medicine in Africa. This thesis explores how access to finance for businesses in the Ugandan private pharmaceutical supply chain affects access to medicine for end patients. Specifically, we consider three components of access to medicine-payment affordability, on-shelf availability, and geographic accessibility-and how each might be affected by supply chain financing. For payment affordability, we leverage field data via interviews with two distributors, two wholesalers and ten retail pharmacies in Uganda. We use the data to model free cash flows; the estimates gathered from interviewees are modeled with PERT distributions to capture variability in cash flows. For on-shelf availability, we explore methods of categorizing operational uncertainties associated with demand and working capital to inform how financing can improve on-shelf availability. For geographic accessibility, we analyze density in each district of retail pharmacies and financial lending institutions using data visualization. Our analyses reveal several key findings. First, retailers suffer substantial working capital constraints leading to constant product stockouts. Increasing access to working capital for retailers, combined with supply chain management training, may help mitigate stockouts and increase accessibility of medicines for patients. Second, literature on operational uncertainty and disruptions provides a framework for how to allocate financing to help improve on-shelf availability. Finally, a substantial portion of Uganda is still largely underserved in terms of pharmaceutical retail outlets and financial lending services. Our analyses fill a gap in the literature concerning how to approach improving patient access to medicine by financing pharmaceutical supply chain improvements. Our analyses serve as a basis for pharmaceutical companies looking to contribute to improving access to medicine in Africa.