Private Sector Role in Health Supply Chains: Review of the Role and Potential for Private Sector Engagement in Developing Country Health Supply Chains

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Strong supply chains are essential to effective health care delivery in all sectors—public, faith-based, employer-provided, and private. In the countries of the Organisation for Cooperation and Development (OECD), supply chains rely heavily on the private sector for supply, distribution, and provision of key auxiliary services even when the health system itself is largely or exclusively public sector. These supply chains work quite well in ensuring consistent availability of high-quality product. In contrast, health supply chains in many low- and middle-income countries perform poorly and have less private sector involvement. This observation leads us to ask: How might a greater role for the private sector, greater leveraging of private sector supply chain best practices, or a combination of the two improve health supply chains in low- and middle-income countries?


This study has two objectives: (1) to provide an understanding of the current and potential role for the private sector in health supply chains, and (2) to provide recommendations regarding how national governments, policymakers, private investors, international donors, and foundations should think about investment in private sector health care initiatives for low- and middle-income countries. We define “health supply chain” as the network of entities that plan, source, fund, and distribute products and manage associated information and finances from manufacturers through intermediate warehouses and resellers to dispensing and health service delivery points. This paper puts a primary focus on the activities of the for-profit private sector and the deployment of for-profit best practices by other sectors in the health supply chain. It is informed by indepth case studies of health supply chains in Ghana and Zambia, as well as interviews with more than 40 supply chain and health experts in 12 countries about private sector initiatives in those countries. Over 40 private-sector-oriented initiatives that seek to bring new models to low- and middle-income country supply chains were identified and reviewed.