Global Journal on Quality and Safety in Healthcare (May 2020)

Cost-Effectiveness Analysis of Supply Chain System: Sudan's National Medical Supplies Fund 2011–2014

  • Ayat Mohammed Elhassan Makkawi,
  • Mohamed Awad Mousnad,
  • Gamal Khalafalla Mohamed

DOI
https://doi.org/10.36401/JQSH-20-6

Abstract

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Introduction: The objective of this study was to evaluate the economic impact of supply chain investment on the performance of the National Supply System of Essential Medicines in Sudan from 2011 to 2014. Methods: This is a retrospective cross-sectional study designed from National Medical Supplies Fund documents. The cost-effectiveness analysis involved an economic evaluation of the performance of the supply chain system, with the cost calculated by using the activity-based costing method, by examining a supply chain according to its main components or functions including the cost of procurement, central storage, distribution and management, and administrative function. Effectiveness of supply chain investment was measured as an indicator of supply chain performance, which includes availability, coverage, affordability, and building capacity indicators. Statistical analysis was performed by using Microsoft Excel 2010, STATA (version 14) and the level of statistical significance was set at p < .05 for all analyses. Results: The new system in 2014 (Model B), which reflects the performance of the system after the NMSF started investing more in the supply chain, will probably be more costly than the baseline system of 2011 (Model A) but will produce a much higher level of performance. The incremental cost-effectiveness ratios of moving from the baseline system of 2011 (Model A) to the new system in 2014 (Model B) were $286,826.02 per percentage of availability of medicines at the central warehouse; $310,728.18 per percentage of medicines procured that have a median price ratio of 1 or less than 1; $149,149.53 per percentage of public health institutions’ coverage by National Medical Supplies Fund (NMSF) services; and $12,682.78 per number of NMSF staff trained. A paired t test showed that there was a statistically significant difference between the average cost-effectiveness ratios of the 2 models. Conclusions: The investment in the supply chain had a significant impact on the performance of the National Supply System of Essential Medicines in Sudan. The new policies and interventions as embedded in the new 2014 model represent a more efficient and cost-effective approach, and a better performing system than the baseline model of 2011.

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