Kano’s Drug Revolving Fund – A Story of Shared Responsibility and Success

4 Mins read

Oluoma Omeje [Lead Writer]

The shortage of essential drugs is a global issue that particularly affects low- and middle-income countries with strained health systems. This problem is even more pronounced in Nigeria, where primary healthcare (PHC) facilities often face frequent drug shortages and stockouts.

Over a decade ago, the continuous availability of essential drugs and medical consumables was a significant challenge in Kano State, Nigeria. To address this, Kano State implemented the Drug Revolving Fund (DRF) system in 2005, which has since become a model of success and sustainability.
The Drug Revolving Fund (DRF) is based on a simple yet effective principle. Under this principle, the initial stock of supplies (seed stock) at public health facilities is being sold at cost-recovery prices (including a markup to cover various elements like inflation) that allows for continuous replenishment. This principle ensures that drugs remain affordable and consistently available in these public health facilities and the markup helps mitigate the effects of Naira depreciation, preventing capital loss. This system is designed to maintain a steady supply of drugs and medical consumables, ensuring they are accessible and of high quality across all public health facilities in Kano State.

Image credit: Nigeria Health Watch

Kano’s DRF system was established in 2005 after several unsuccessful attempts with other models. Prior approaches included free drug distribution, partial subsidies, and various community-based initiatives, each encountering its own set of challenges. The turning point came when the Department of International Development (DFID) assessed the situation and provided strategic support to address the identified problems, such as the lack of government structure, capacity building, community involvement, and accountability.

Early-stage testing and implementation of the sustainable financing model

The implementation of the DRF in Kano State involved a thorough assessment of existing facilities to ensure they could accommodate the new system. Following the assessment, recommended upgrades were made, particularly in pharmacy departments, and extensive training was provided to staff and committee members. This initial pilot phase lasted two years, culminating in a pilot programme in 2007 that included 60 health facilities — 25 PHCs and 35 secondary healthcare facilities.

Image credit: Nigeria Health Watch

One of the critical components of the DRF system’s success lies in its sustainable funding model. Initially, essential medical supplies (the seed stock) were stocked in the 60 healthcare facilities enrolled in the DRF system in Kano State. The inclusion of a markup on the cost of drugs distinguished this financing model. Despite this markup, the overall cost of these drugs and essential health commodities remained lower than market prices, ensuring accessibility to necessary medications and supplies. This markup serves multiple purposes crucial to the programme’s sustainability. It covers operational expenses, inflation adjustments, supervision costs, potential losses due to expiration, and other unforeseen expenditures. Importantly, this self-sustaining model means the programme does not rely on regular government funding injections to remain operational. Instead, it operates independently, ensuring continuity and reliability in healthcare service delivery.

After the pilot, health facilities were carefully monitored to ensure adherence to DRF guidelines and practices. This meticulous oversight guaranteed that participating players upheld their commitments to providing essential care and maintaining stock levels.

Remarkable success

Seventeen years since its inception, the DRF system continues to thrive. It has expanded significantly from the 60 healthcare facilities to 890 public healthcare facilities in Kano State. This network includes 846 PHCs, 44 general hospitals as well as numerous faith-based health facilities that report monthly on their activities. This widespread adoption and ongoing participation underscore the programme’s enduring impact and effectiveness in healthcare provision across the region.

Image credit: Nigeria Health Watch

One of the notable key success factors in Kano State’s DRF implementation is collaboration with the Kano State Drugs and Medical Consumables Supply Agency (KSDMCSA) which is legally mandated to procure, store, and distribute drugs and medical consumables. The KSDMCSA, through a rigorous and meticulous process, guarantees a steady supply of essential medications.
Our facilities are at more than 80% availability of commodities if you go to our facilities, and you are prescribed 5 drugs you will at least get 4 in most facilities you will get all that 80%.” — Director of Pharmaceutical Services, Kano Primary Health Care Management Board.

A staff member at the pharmacy of a PHC stated that drugs are often available, and the pharmacy unit collaborates with service departments to efficiently meet service demands for both drugs and consumables used in the facility. Additionally, beneficiaries from some health facilities mentioned that most of the prescribed medications are often available for purchase at the facilities. They prefer to buy available medicines in the PHCs because they are often cheaper compared to pharmacy stores outside the facility.

Image credit: Nigeria Health Watch

The pharmacy always has the drugs for me to buy, … and it is cheaper than the stores outside” — Outpatient at the PHC.

A major strength of Kano’s DRF is the active participation and sense of ownership by the community. The community has a stake in the Drug Management System (DMS) (including the financial management system) through endorsed facility committees, ensuring local ownership and accountability. Financial transactions within the DMS are meticulously handled through bank transactions, safeguarding funds collected from patient payments and procurement processes.

With robust supervisory structures and community involvement, the system operates sustainably, achieving over 80% availability of essential drugs. This success has led to facility renovations and additional community investments, with monthly revenues from consumables contributing significantly to local development initiatives.

Continuous learning

Despite its success, the DRF system is not without its challenges. Achieving 100% coverage of PHC facilities remains a goal, as some have not yet been fully capitalised. The state continues to work on improving infrastructure and expanding training programmes for healthcare workers to enable these pending PHCs to qualify for capitalisation.

Kano State’s DRF shows the power of shared responsibility and strategic planning. By involving the community, ensuring accountability, and building a self-sustaining system, Kano has created a reliable supply chain for essential drugs and medical consumables. The success of the DRF in Kano offers valuable lessons for other states and countries striving to improve their healthcare systems and ensure continuous drug availability.

Improving this model across the country is even more important as pharmaceutical providers like GlaxoSmithKline (GSK) cease operations in Nigeria. This sustainable financing model also contributes to achieving the Health Minister’s four-point agenda by improving quality of care and service delivery in the PHCs as well as improving equity and affordability of quality care for patients. Furthermore, it creates opportunities for local manufacturing which can improve equitable access to medicines, if a healthcare value chain is effectively developed to support local production and distribution.

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