Expanded program on immunization versus medical store department’s vaccines supply chain management in Tanzania: a cost minimization analysis

Abstract

Up until July 2016, the Medical Store Department (MSD) in Tanzania was the agency responsible for management of vaccine supply chain and delivered the vaccines up to the regional vaccine’s stores. MSD charged the Ministry of Health (MOH) 11.6% and 20.4% per invoice value for vaccines and injection supplies as costs for storage and distribution, respectively. With the introduction of new expensive vaccines into routine immunization program, the MOH experienced an increased debt for vaccine storage and distribution. Thus, in July 2016 the MOH decided to delegate the functions of vaccine supply chain management from MSD to Expanded Program on Immunization (EPI), with the aim of reducing storage and distribution costs.

This is a retrospective cost-minimization study that was conducted to estimate the costs associated with storage and distribution of vaccines at EPI and MSD in 2018. The study used an ingredients approach to estimate resources use. Recurrent costs included salaried & volunteer/special task labor, per diem and allowances, vaccines, injection supplies, clearing and landing, utilities and communication, photocopies and stationery, cold chain energy, vehicle maintenance, transport and fuel and insurance costs. The capital costs included vehicles, buildings, trainings and cold chain equipment. The study used the government perspectives and capital costs were appropriately annuitized and discounted at 3%. Microsoft Excel sheets, 2016 was used for data analysis with input data from UNICEF forecasting tool, WHO capacity and volumes estimation tool, diesel generator calculator and supply chain service fee estimator version 1.02.

The total operational costs for vaccine supply chain management at MSD was estimated at

$2,031,656, which was three times higher than the costs at EPI, which was $ 543,650. The main operational cost driver at MSD was distribution cost (40%) due to large numbers of dry trucks, which contributed to high costs of fuel and travel allowances. At EPI the main cost driver was storage costs due to buildings incurred in 2018 for renovation and construction of new warehouses for vaccines and injection material storage. Therefore, the cost of vaccine supply chain management system i.e. storage and distribution were lower at EPI compared to MSD. This evidence justifies the decision made by the MOH in 2016 to delegate the functions of vaccine supply chain management system from MSD to EPI