Every year on World AIDS Day, PFSCM reflects on our HIV supply chain work, and reviews key market developments that affected procurement and logistics.
Over the last year*, we procured more than $152 million worth of HIV health and medical products, and delivered 1,068 shipments to 69 countries. This comprised $12.5 million worth of antiretrovirals (ARVs), and $140.52 million worth of other HIV products like HIV rapid diagnostics tests (HRDTs), pre-exposure prophylaxis (PrEP), viral load and early infant diagnostic (VL-EID) products, reagents, consumables, and laboratory and imaging equipment used in the HIV diagnosis procedure.
Owing to COVID-19, 2020 was a particularly challenging year. Despite airlines being grounded, blank sailings, and production delays, we were able to maintain service performance for our HIV product categories.
Improved stakeholder engagement, increased use of real-time data reporting and flexible operational processes, as well as an agile 4PL business model; ensured that we could continue to place orders for-, and deliver, lifesaving HIV commodities.
Shipping and delivery
Even though COVID-19 affected the delivery of orders, the impact was not as profound on HRDTs as the product category is mainly shipped as ocean cargo. Ocean freight was less affected by COVID-19 restrictions and lockdowns, than air freight. In fact, PFSCM had to change some air shipments to ocean seeing as air freight was severely disrupted, with limited cold chain and frozen shipment options available.
The rapidly changing market conditions posed an opportunity for some companies, and we noticed a proliferation of all types of 3PLs. When freight prices were fluctuating greatly at the start of COVID-19 restrictions, our unique carrier-neutral 4PL model enabled us to quickly find, evaluate, onboard and allocate cargo to new suppliers. This same model helped us to navigate the changing health logistics sector. Through our approach and system, we are not bound to any specific 3PL, and we allocate cargo to the most suitable carrier based on an evaluation of performance, experience, price, and lane availability, and more. The flexibility of our model allowed us to deliver shipments throughout the tough initial COVID-19 uncertainties and lockdowns.
Further, to ensure on time and in full delivery of our temperature controlled, cold chain and frozen shipment, we increased our use of dedicated charter flights.
Around March, we moved a large shipment of reagents used in laboratory diagnostics and HIV viral load testing to Malawi via charter. PFSCM booked about 75 tons of cargo on the charter and was able to offer the remaining cargo space to a peer who had the same pressing need to move lifesaving health care products to Lilongwe. Sharing resources among PSAs and other service providers is not a common practice. After many years of service in this field, this is the first time we have been able to successfully co-load a charter. The charter ensured both parties could deliver on service commitments, and above all, it reduced costs and carbon emissions. The benefits are compelling.
Production and procurement
Production capacity for HIV diagnostics products stabilized greatly in the second half of 2020, however one manufacturer did recently report production delays as a result of raw materials shortages — a knock on effect of COVID-19 restrictions in some countries.
Further, the production capacity for HIV diagnostic products is not actually the problem. It is the overwhelming demand for auxiliary consumables such as pipette tips, deep well plates and PCR plates used in testing procedures for both HIV and COVID-19 that are causing production delays. Without the auxiliary products HIV testing cannot be done. This remains an area of concern, but of course, it also creates opportunities for new suppliers to enter the market, reducing the buyers’ overreliance on a few key producers of niche products.
And talking about opportunities; in 2020 we saw the demand for HIV self-tests growing. The market leader in this field is continuing to introduce its product in both developing and developed markets, while another large manufacturer has ramped up its production.
In other positive HIV market developments, a major diagnostics manufacturer is reconfiguring its TB LAM test to reduce the pack size for simplified ordering and inventory management that will prevent product expiration and waste down the line. This is a notable development for country recipients who have been advocating for a change in packaging size.
Meanwhile, new HIV diagnostics were prequalified by the World Health Organization. These include RDTs, CD4 technologies and a nucleic acid test among others. New products for the diagnosis of hepatitis co-infection have also been added to the list.
See a snippet below, and the full list can be found here.
Type of assay
|cobas HIV-1 Quantitative nucleic acid test for use on the cobas 6800/8800 Systems
|MERISCREEN HIV 1-2 WB
|VISITECT CD4 Advanced Disease
|STANDARD Q HIV 1/2 Ab 3-Line Test
|STANDARD Q HIV/Syphilis Combo Test
|Genedrive HCV ID Kit
|Alinity m HCV
|STANDARD Q HCV Ab Test
|Monolisa HCV Ag-Ab ULTRA V2
More prequalified products means less supply risk, and healthy market competition. With access to a diverse range of reliable products, buyers can develop resilient sourcing strategies.
PFSCM the then and now and HIV diagnostics
PFSCM has been procuring and shipping diagnostics products since our inception in 2005, but it is only since 2019 that we are solely focused on diagnostics, laboratory equipment and medical supplies with core dedication to HRDTs, viral load and early infant diagnostics.
We have extensive experience managing these product categories, which are among the most complex health products to source, procure, transport, and store.
Between 2006 and 2016, PFSCM and its partners collaborated to manage the procurement and distribution of laboratory commodities for The President’s Emergency Plan for AIDS Relief’s Supply Chain Management System.
During this time, PFSCM procured more than $500 million worth of laboratory items, developed an innovative laboratory quantification tool, facilitated training courses for laboratory staff, and vetted local vendors for in-field office managed procurement, among other technical support services.
In the meanwhile, we have been procuring various rapid diagnostic tests kits for the Global Fund PPM, and have also procured many non-pharma and laboratory products for both PPM and non-PPM clients.
PFSCM still procures and ships ARVs globally for other clients, and remains an expert supply chain manager in this field.
*(Nov 30, 2019 to Nov 30, 2020)