National Drug Stockout Risks and the Global Fund Disbursement Process for Procurement

Despite substantial financial aid from international donors for procurement of health products, stockouts of life‐saving drugs related to prevalent infectious diseases are still widespread in Africa. Rigorous research to understand the underlying causes of these stockouts is lacking. To this end, the authors study the relationship between The Global Fund to Fight AIDS, Tuberculosis and Malaria and its grant recipients. Specifically, the authors leverage historical fund disbursement and drug procurement data from 2002 to 2013 to build a discrete‐event simulation model predicting the joint impact of procurement and grant disbursement processes on national drug availability for the Global Fund's recipient countries in Africa. This model is validated against cumulative stockout levels inferred from historical grant implementation lengths, and used to evaluate potential high‐level modifications in the disbursement or procurement process. Results show the existence of significant intrinsic stockout risks in most African countries, with particularly high levels in East Africa, due to the unpredictability of fund disbursements and the frequency of grant performance monitoring performed by the Global Fund. Interventions shifting some fund disbursements upfront to protect against disbursement timing uncertainty are predicted to be more effective than others that include regional buffer stocks and bridge financing.