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Jul 5, 2016   |   Blog Post

Getting the Tail on the Donkey: Financial Flows in Vaccine Supply Chain Distribution


Delivering the Money CoverAt the very least, the flow of funding in vaccine distribution systems is uncoordinated. Not knowing where money is going, when it will be allocated, and how much money will actually be available prevents effective distribution. Ensuring financial resources are efficient and accessible is vital to the success of delivering vaccines to the last mile, yet immunization program managers face a variety of financial bottlenecks, many of which are symptoms of deeper, underlying financial management challenges. A new policy paper, from VillageReach and the William Davidson Institute, explores these challenges in detail. At the heart of the matter, financial flow challenges force decision-making processes into a guessing game, where accuracy is about as certain as a round of “pin the tail on the donkey.”

From the very start, immunization program managers are blindfolded – they are asked to budget and conduct their activities in the face of uncertain financing at the national level. They are given no advanced insight into their true budget limit, so they have to guess. Many LMICs have unreliable revenue streams, and donors are often unable to make multi-year commitments, so even at the national level it can be unclear what the budget limit will be until after the budgeting process is underway or even completed. Program managers also face the specter of budget revisions, where parliament and other government bodies Vaccine Funding Flows Chartdrastically reduce the immunization budgets before final approval. This leaves program managers blindly scrambling to restructure their budget: limiting or delaying vaccination programs in the process.

Trying to restructure a budget is further complicated by uncertainty around the true cost of distribution. While a program manager might assume the cost of certain components of vaccine distribution, these are often conflated with other health commodities and are not well documented. Some costs – i.e. the cost of a dose of vaccine – might be predefined, but transport, human resources, and other distribution costs are far more complicated to understand in specific relation to the vaccine program. Unless these costs are clearly known and accounted for, it is incredibly difficult to reliably allocate the correct amount of money at the right levels of the supply chain. The situation becomes even more complicated when you factor in all of the additional financial roadblocks: budget miscalculations, annual revenue shortfalls, administrative delays, unexpected costs, and on and on. It’s enough to make any immunization program manager dizzy.

Vaccine Distribution Costs Pie GraphAnd then they are expected to hit their target – to pin the tail on the metaphorical donkey. Without the funding to deliver vaccines to the last mile, we will continue to fall short of our goals. This component of immunization supply chains has not been paid enough attention, but by tracking distribution costs, focusing on underlying financial process problems, and advocating for greater budget clarity we can begin to stabilize this critical component.  Together with our partners in Mozambique and globally, VillageReach is working to address this issue by 1) developing more accurate ways to systematically measure the costs of distribution, 2) use this data to advocate for improved budgeting processes and 3) incorporate streamlined funding processes into supply chain design. All of these efforts together will help to remove the “blindfold” and ensure that sufficient funding is available at all levels of the supply chain, from the national level down to the last mile.  Only then will vaccine distribution be protected from the dizzying uncertainty of financial flow management.

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