MeTA: Spotlight on the Supply Chain

As new funders, like UNITAID, buy more new drugs on behalf of the poorest countries, weak links in the supply chain are more visible than they have ever been - and the stakes are higher. Among the signs of a supply chain under pressure: procurement bottlenecks, high mark-ups by intermediaries, uninterpretable signals to suppliers about effective demand and stock-outs. And the result: reduced access to life-saving drugs, high out-of-pocket spending, rapid emergence of drug resistance and other negative consequences for individuals, families and communities.

Making the supply chain for essential medical technologies more efficient and transparent is rising on the donor agenda, and that's all for the good. Witness the UK's new Medicines Transparency Alliance (MeTA), which aims to "improve access to good medical care by sharing information among governments, non-profit organisations and pharmaceutical companies," according to Andrew Jack of the Financial Times. What will MeTA do? Details are still being worked out, but essential elements appear to include working within nine countries (including Ghana, Jordan, Kyrgyzstan, Peru and the Philippines) to collect and publicly share information about drug prices and mark-ups at different steps in the supply chain, on the theory that public awareness will make the market work more efficiently and reduce the prevalence of corrupt practices at each level, from national procurement through to retail pharmacies.

The UK Government has to be applauded for venturing into this vital and complex area. As it does so, MeTA designers might be well advised to consider three basic questions:

First, who's going to play, and why? To make an information sharing system work requires that the parties owning data - in this case, ranging from pharmaceutical companies to donor agencies to national government procurement agencies to wholesalers and more - have a genuine incentive to provide it in an accurate and timely way. As our work on improving the forecasting of demand for essential medical technologies has demonstrated, under the current arrangements, where the financial risks borne by different participants in the supply chain are not well distributed, some actors have incentives to keep key information to themselves, while others have incentives to systematically misreport. MeTA will need to analyze and understand these incentives, and think through the implications for obtaining quality data. MeTA designers might find it easier to engage key holders of information if the database that's developed helps good businesses (for example, by contributing to better demand forecasts and making the supply chain work more efficiently) rather than focusing on punishing the bad businesses that are trying to extract ill gotten gains from those who are sick.

Second, what can the country-level activities of MeTA contribute to improving aggregate-level information? Currently, major players at the international level, including those in the pharmaceutical business and funders, face a paucity of information about national-level demand: how much of what, and when? Demand forecasts, which are vital inputs for key decisions throughout the value chain - at every stage from R&D through formulation and packing by manufacturers, and for medium-term budget requests through quarterly disbursements by donors - now are based on an unsatisfactory combination of hopes and fears. If it considers the information needs at the international level, MeTA could make a welcome contribution to filling this gap. (Specific recommendations about data collection and data sharing systems will be presented in the final report of the Global Health Forecasting Working Group, to be launched on May 29 at the Global Health Council's annual conference in Washington, DC.)

Third, what might the unintended consequences of MeTA be, and how can these risks be mitigated? One of the driving ambitions of MeTA is to reduce corruption, but any realistic look at the supply chain has to conclude that the opportunities for profiteering sometimes contribute, in paradoxical ways, to access. Some intermediaries may only stay in business if they are able to capture significant financial rewards. Obviously, it's a complicated picture: the high prices to patients that result from corrupt practices limit access, and corruption has multiple corrosive effects on the quality and responsiveness of the supply chain. But MeTA will need to make sure it finds ways to increase the attractiveness of doing business well, at the same time that it tries to squeeze the grease out of the system.

We'll be eagerly watching as MeTA develops, and look forward to a design process that is an exemplar of the sort of transparency and efficiency that MeTA seeks to foster.