MedSource: Frequently Asked Questions

What is MedSource?

MedSource is a private commercial group purchasing organization (GPO) based in Kenya. A group purchasing organization such as MedSource helps its members—pharmacies, hospitals, clinical laboratories, and other health care providers—realize savings and efficiencies by aggregating purchasing volume and using that leverage to negotiate discounts with manufacturers, wholesalers, distributors, and other vendors. MedSource is the first GPO in Kenya.

What is MedSource’s relationship to MSH?

MedSource is owned by MSH but operates independently. MedSource has its own governance structure, including a board of directors, staffing, and management team.

How does MedSource support MSH’s mission?

MSH’s mission is to improve health and save lives of the world’s most vulnerable people. MSH does this in part by strengthening health systems. MedSource is an outgrowth of our roots in pharmaceutical systems strengthening. Our research and experience show that when people in low- and middle-income countries are sick, they often seek treatment from a private-sector provider—such as a retail pharmacy—first. By establishing a GPO to help private pharmacies and other health facilities procure products, we’re using a new way to address barriers that may exist for people in accessing safe, quality assured, and affordable medicines.

Why was MedSource launched in Kenya?

We have worked in Kenya for more than two decades and have a good understanding of the pharmaceutical systems environment. The average Kenyan faces numerous challenges in accessing quality and affordable medicines. Most rural locations in Kenya have few or no retail drug outlets, forcing patients to travel long distances¹ to access basic, essential medicines, especially when there are stock-outs² at public health centers. Urban residents, on the other hand, largely face challenges around affordability and quality of medicines, with up to 40% of outlets reported to be noncompliant.³ MSH became interested in developing private-sector solutions, and we’re confident that we can make a positive difference and improve the lives of people in Kenya.

How will MedSource help improve health outcomes in Kenya?

MedSource is intended to support independent, licensed pharmacy retailers, as well as private-sector clinics and small and medium-size hospitals in Kenya, through a set of procurement, IT, and capacity building services. The patient seeking services through these health providers is the ultimate beneficiary, so we will help MedSource members become better providers of quality services and quality products. We will offer training on inventory management, good dispensing practices, consumer education, and patient counseling.

What kinds of medicines and related products will be supplied?

Our procurement list was developed in tandem with Kenya’s national pharmaceutical regulatory authority and in consultation with several hundred licensed facilities and health professionals in Kenya. All medicines are currently registered and regulated in Kenya.

Are there costs associated with being a member?

Yes, there is a nominal annual membership fee of 5,000 Kenya shillings (approximately US $50). However, this fee has been waived for 2018.

How will MedSource members benefit?

Members will benefit from purchasing medicines at lower costs and of assured quality. They will also benefit from access to credit to grow their businesses, capacity building services, and technology solutions. For example, members will be offered access to software to manage their inventory and prevent stock-outs.

Will MedSource improve affordability for patients?

MedSource helps members purchase medicines and other health supplies at lower costs, and we hope that the savings will be passed on to patients. We will collect data on outcomes and share the aggregated results.

Will MedSource compete with public pharmaceutical entities?

No. Our intention is not to compete with public entities such as KEMSA and MEDS in Kenya or disrupt existing relationships.

Are members required to purchase all products only from MedSource?

No. Members choose when and how to take advantage of MedSource benefits.

Will MSH continue to produce the International Medical Products Guide (formerly the International Drug Price Indicator Guide)?

Yes. The primary purpose of our pricing guide is to make price information more widely available to improve public-sector, faith-based, and NGO procurement of medical products of assured quality for the lowest possible price. MSH will ensure that it has no conflict of interest with MedSource operations.

Will you make the prices of medicines and products available to the public?

No. This is private information that can only be accessed by MedSource members. MedSource has also signed nondisclosure agreements with distributors and wholesalers that offer special pricing to members. We do, however, plan to analyze and share our aggregated data in the future, as we know this can be beneficial for the overall pharmaceutical sector.

What is planned for the future of MedSource?

We hope to replicate this model in other countries.

Notes

¹The National Health Sector Strategic Plan (NHSSP) II of Kenya estimates that the physical infrastructure in some regions of the country has a coverage of one facility per 50 to 200 km, thereby adversely affecting geographical and financial access to basic health care. 

²Access to Essential Medicines in Kenya; A Health Facility Survey (2009)

³Guidelines for Good Distribution Practices for Pharmaceuticals (Pharmacy and Poisons Board, 2006) stipulate the minimum compliance requirements for a retail pharmaceutical outlet in areas such as nature and set up of premises, necessary equipment, reference books, possession of operating license, and pharmaceutical operations. A retail pharmaceutical outlet in disregard of any of these stipulations is said to be noncompliant, thereby raising concerns about quality of services delivered.