Outsourcing vaccine logistics to the private sector: The evidence and lessons learned from the Western Cape Province in South-Africa

Abstract With few exceptions, immunization supply chains in developing countries continue to face chronic difficulties in providing uninterrupted availability of potent vaccines up to service delivery levels, and in the most efficient manner possible. As these countries struggle to keep pace with an ever growing number of vaccines, more and more Ministries of Health are considering options of engaging the private sector to manage vaccine storage, handling and distribution on their behalf. Despite this emerging trend, there is limited evidence on the benefits or challenges of this option to improve public supply chain performance for national immunization programmes. To bridge this knowledge gap, this study aims to shed light on the value proposition of outsourcing by documenting the specific experience of the Western Cape Province of South Africa. The methodology for this review rested on conducting two key supply chain assessments which allowed juxtaposing the performance of the government managed segments of the vaccine supply chain against those managed by the private sector. In particular, measures of effective vaccine management best practice and temperature control in the cold chain were analysed. In addition, the costs of engaging the private sector were analysed to get a better understanding of the economics underpinning outsourcing vaccine logistics. The results from this analysis confirmed some of the theoretical benefits of outsourcing to the private sector. Yet, if the experience in the Western Cape can be deemed a successful one, there are several policy and practice implications that developing countries should be mindful of when considering engaging the private sector. While outsourcing can help improve the performance of the vaccine supply chain, it has the potential to do the reverse if done incorrectly. The findings and lessons learnt from the Western Cape experience can serve as a step towards understanding the role of the private sector in immunization supply chain and logistics systems for developing countries.