Strengthening

affordable access to
quality essential medicines in the private
health sector of Somalia
Options for a private sector medicine quality assurance
system

Dr Harry Jeene, 2017

Ralsa Foundation | harry@ralsa.org

Table of Contents
Executive summary ....................................................................................................................... 3
The global situation ...................................................................................................................... 5
Affordable access to quality essential medicines ................................................................................... 5
The problem of poor quality drugs ........................................................................................................ 5
Definitions .............................................................................................................................................. 6
The scale of the problem ........................................................................................................................ 7
Affordable medicines ........................................................................................................................... 10
Generic drugs ................................................................................................................................... 10
Differential pricing ........................................................................................................................... 11
Compulsory licensing ....................................................................................................................... 12
Research priorities on pharmaceutical supply chains in Low Income Countries ................................. 13
Proven interventions in pharmaceutical supply chains in Low Income Countries ............................... 13
Pharmaceuticals in conflict affected, fragile and failed states .................................................. 15
Private pharmaceutical sector in Somalia .................................................................................. 18
Literature review .................................................................................................................................. 18
Box psychotropic drugs in Somalia ................................................................................................... 20
Medicine logistics within Somalia ........................................................................................................ 20
Importing medicines into Somalia ........................................................................................................ 21
Drug Quality ......................................................................................................................................... 23
Diagram Mogadishu medicine flow and quality model ................................................................... 23
Drug affordability ................................................................................................................................. 25
A potential model for medicine quality assurance in the private sector .................................. 25
A private sector medicine quality assurance laboratory ...................................................................... 25
Collaborative mechanisms ................................................................................................................... 25
Branding ............................................................................................................................................... 27
Box recreational drugs quality assurance in the Netherlands .......................................................... 28
Conclusion ............................................................................................................................................ 28
Research protocols ..................................................................................................................... 29
Research protocol Sub-standard medicines ......................................................................................... 29
Research protocol procurement and supply chain .............................................................................. 31
Preliminary budget medicine sampling ................................................................................................ 33
Preliminary budget supply chain analysis ............................................................................................ 33
References and Documents consulted ................................................................................................. 34
Acknowledgements .............................................................................................................................. 42

2
Strengthening affordable access to quality
essential medicines in the private health
sector of Somalia

Executive summary

Driven by dissatisfaction with slow progress in health care in Somalia, the Swiss
Development Cooperation organised a series of consultations in the summer
of 2016. The aim was to discover gaps and innovative approaches that would
have the potential to create quick wins, at modest investment. Though not
explicitly stated, it was clear that unorthodox and even disruptive ideas would
be welcome.

A major gap was identified around the private health care sector. While all
agreed that the private sector likely provided most of the health care in
Somalia, very little hard data existed. Concerns were expressed on the quality
of diagnosis and prescribing, the quality of medicines and on the affordability,
especially for the poor.
Quality of medicines was prioritised as an area where a relatively small
intervention could potentially make an impact in a short timeframe. It was
realised that sub-standard medicines were a problem in all less developed
countries, and possibly more so in Somalia, where no medicine regulatory
authority exists, or is even likely to emerge soon.
It was also realised that very little was known about this procurement and
supply chain in Somalia. Research would be required, but this would be
hampered by limited research capacity in-country, a precarious security
situation, and the possibility that unscrupulous elements could be involved in
this chain.
The Swiss Development Cooperation therefore commissioned this feasibility
study in order to collect available data, perform some preliminary interviews
with key actors, and produce the foundation of research protocols, if
appropriate.

3
The study found that, based on global literature, it was very likely that
substandard drugs were present in Somalia, though possibly at a lower level
than the 30 to 50% often mentioned in informal discussions. Literature, formal
or grey, on the private sector in Somalia was confirmed to be extremely
limited. Exploratory interviews with key actors revealed a number of rather
well-organised procurement and supply chains. Some of these attempted to
sell quality medicines, but said that they were hampered by the lack of a
quality assurance mechanism, and the fragmented nature of procurement,
limiting their access to affordable prices. Many respondents requested
anonymity and hinted at unscrupulous elements.

The conclusion is that an assessment of the scale of the problem of
substandard drugs is required in order to judge whether an intervention in this
area would be relevant. A feasible research protocol with preliminary budget is
included in this paper.

Interviews suggested that a private quality assurance facility, a laboratory, with
a branding mechanism might be feasible. There is at least an initial willingness
of some key actors in private procurement to cooperate at some level to
achieve this. This would require a second piece of formal research to map out
the procurement actors, do a political economy analysis and gauge the
willingness to cooperate. One potential institution to perform this activity has
been identified.

Any intervention could be donor subsidised, but it might also possible to
attract external investors. So far the Somali pharmacy diaspora is not (or
hardly) involved, nor is private equity. The absence of sound data, and the still
precarious security situation, do play a major role in this reluctance to engage.
A robust assessment of the problem, the actors, and potential solutions might
stimulate both internal cohesion of pharmaceutical actors and external
investment of skills and money.

Even if no intervention materialises, then the research outcomes will provide
the foundation of understanding of the private sector, required for the
establishment of the public regulatory framework.

4
The global situation
Affordable access to quality essential medicines

Essential medicines save lives and improve health when they are available, affordable, of
assured quality and properly used. Still, lack of access to quality essential medicines
remains one of the most serious global public health problems (WHO, 2004).

The concept of essential medicines dates back to the 1978 Alma Ata declaration “Health for
all by the year 2000” which advocated for universal free healthcare and the 1987 Bamako
initiative that introduced cost-sharing. The Bamako initiative was criticized for its (over?)
reliance on the public sector, and its neglect of the private sector, whether for-profit or not-
for-profit (Vogel & Stephens, 1989). The affordability and assured quality of medicines
became prominent around the turn of the century. Yet in 2017, 39 years after Bamako,
equitable access to quality essential medicines remains problematic, particularly in low
income countries and fragile states. Somalia is both low income and a failed state, though
some optimists would prefer calling it an emerging state.
The semi-public sector provides far less than half of the required health care, leaving the
bulk to the almost unregulated private sector. Data are extremely weak but (gu)estimates
are that the annual health expenditure as 11 USD (semi)-public and 38 USD private per
capita (WHO, 2014). No data are available on expenditure on pharmaceuticals in Somalia,
but the World Health Organization estimates that in Low Income Countries (LIC) between
47% and 55% of the total household expenditure for health is on pharmaceuticals. For
Somalia this would put private pharmaceutical expenditure at almost USD 20 per capita per
year. The UN data base puts the GDP per capita at USD 120, also for 2014. Affordable access
is thus clearly a problem.
But if the pharmaceuticals are not working because of poor quality, all efforts are in vain1.
This study and concept note thus has a focus on the issue of pharmaceutical quality in the
private sector in Somalia, with some attention to affordability.

The problem of poor quality drugs

Poor quality, or even completely ineffective and harmful, drugs have been a problem
throughout human history. The first described deliberate faking of modern drugs was
probably fake bark from the Quinine tree in Latin America imported to Europe in the 1700s.
In the twentieth century much pharmaceutical progress has been made, and we now have a
fair idea what good quality drugs are, and specifications have been established.
That does however not mean that all drugs, whether in the public health system or in the
market, are now of good quality. The manufacturing process may be suboptimal, the

1
Proper use of medicines also is a major factor. The quality of diagnosis and prescription is of major
importance. This is a very broad subject, and not addressed in this study.

5
manufacturer may not be licensed, the drug may have too much or too little of the active
pharmaceutical ingredient, or even none, and medicines may have degraded in the long and
often hot, supply chain. This may be deliberate, or due to poor practice.

A fact sheet of the World Health Organisation (WHO, 2016) groups these poor quality drugs
together under the heading “SSFFC medical products” and summarises the current status
as:
• SSFFC medical products may cause harm to patients and fail to treat the diseases
• They lead to loss of confidence in medicines, care providers and health systems.
• They affect every region of the world.
• SSFFC medical products from all main therapeutic categories have been reported to
WHO including medicines, vaccines and in vitro diagnostics.
• Anti-malarials and antibiotics are amongst the most commonly reported SSFFC
medical products.
• Both Generic and Innovator medicines are falsified including very expensive products
for cancer to very inexpensive products for treatment of pain.
• They can be found in illegal street markets, via unregulated websites through to
pharmacies, clinics and hospitals.

Definitions

The debate on poor quality pharmaceuticals has been hampered by a confusion on
definitions. The World Health Organisation in its January 2016 fact sheet (WHO, 2016) still
groups all together under the rather unhelpful abbreviation of SSFFC medical products
which stands for Substandard, Spurious, Falsely labelled, Falsified, Counterfeit.

This paper uses the definition as proposed in the “Health Policy and Planning” journal in
December 2016 (Hamilton, Doyle, Halliwell-Ewen, & Lambert, 2016).
• Unregistered generic drugs: refers to safe and effective medication manufactured
without proper Intellectual Property (IP) law authorization. This is a legal and
economic problem but does not pose a direct threat to public health.
• Substandard drugs are, ‘genuine medicines produced by manufacturers authorized
by the National Medicines Regulatory Authority (NMRA) or prequalified by WHO
which do not meet quality specifications set for them by National or WHO
standards’.
• Degraded medicines were of adequate quality when they left the factory but have
subsequently degraded, for example through inadequate storage or transport
conditions (Newton et al. 2009).
• Falsified refers to medicines that have been fraudulently produced, labelled and
distributed and which do not meet the quality specifications for that drug
• Poor quality refers collectively to falsified, substandard and degraded medicines,
which all pose serious threats to public health.

6

Quality medicines is the other term that will be used in this study. This is quality as
determined by the standards of the World Health Organisation, usually based on the
pharmacopeia of the US or UK. These are standards that have a proven positive health
impact. Cost has no place in this technical definition, though it is clear that any medicines,
and certainly in a poor country, must be affordable.
This does not mean that quality medicines are the best medicines possible; Big brands often
have optimised excipients that, for example, give a slightly faster absorption. These branded
drugs almost always have more appealing packaging. Additional health benefits are in
general minimal. Patented brand name may also be the commonly used name for generic2
equivalents. This study will mainly use the chemical names.

In Somalia big brand innovator pharmaceuticals are rarely seen outside elite health facilities
in the big cities (personal observation). The vast majority of pharmaceuticals seems to be
from either known generic manufacturers, or are of unknown origin. The overly broad (and
disputed) term of counterfeit will be avoided. The issue of intellectual property rights is
outside the scope of this public goods oriented study.

The scale of the problem

Remarkable little robust and relevant information is available on the scale of poor-quality (in
the broad definition) pharmaceuticals in Low Income Countries (LIC) in Africa.

An abundance of literature is available on counterfeit drugs sold in developed countries.
Much of this research was funded by the established pharmaceutical industry, and had a
focus on products that pretended to be manufactured by brand names.
The Pharmaceutical Security Institute (PSI) is an initiative of the established pharmaceutical
industry, and aims to collect data on counterfeiting. It has however been criticised to be
mainly concerned with brand reputation management to the point of being reluctant to
issue specific warnings of a public health threat in order to protect the brand image
(Cockburn, Newton, Agyarko, Akunyili, & White, 2005). In 2017 its website (psi-inc.org) still
hardly provides any specific and public health relevant information. Much research is
available on counterfeit drugs for lifestyle diseases in prosperous countries and on internet
pharmacies, very little on essential drugs for low income countries.

2
In Kenya the most popular over the counter painkiller has the chemical name of paracetamol or
acetaminophen. In Kenya It is almost universally called Panadol, which is the brand name for paracetamol
from the GSK pharmaceutical company (in the US Tylenol). Panadol comes in in blue boxes in blister-packs, and
absorbs marginally faster. The generic paracetamol comes in brown paper envelopes, and costs 1 USD cents
per 500 mg tablet, against about 10 cents USD for Panadol.

7
Both the US and the EU have extensive regulations, often with a focus on brand protection3.
Much of this research lumps all problematic pharmaceuticals together under the name of
counterfeit. This makes it difficult or impossible to disaggregate substandard products from
products that were in breach of the, often disputed, patent rights, but did contain the active
pharmaceutical ingredients in the right quantities.

Much of the “information” on substandard drugs in LICs comes from investigative
journalism, often based on superficially reading of research, for example when carefully
phrased potential extrapolations are interpreted as facts. These “facts” can assume a life of
their own, and be quoted again in other non-scholarly publications, usually without
reference to source such as (UN Office of Drugs and Crime, 2009) which quotes 50% “fake
drugs” for West Africa.
Quite a few studies, even from reputable organisations, seem to suffer from methodological
issues. A much quoted study on malaria drugs in Africa (WHO, 2011) suggested a very high
prevalence of substandard quality in six countries, with the highest prevalence in Nigeria at
40%. A confirmation study in Nigeria (Kaur et al., 2015) found 36% at convenience sampling,
but much lower rates at 10.6 % for random sampling, suggestive that sampling in the WHO
study might have been imperfect.

A sudden increase in competition between traditional pharma and the emerging generic
producers was triggered around the turn of the century by a huge dispute over the pricing
of anti-retroviral drugs to treat AIDS. This debate was heavily emotionally charged, and led
to “research” publications that were biased, and possibly even intentionally misleading. This
happened on both sides of the debate, but due to the heavy financial muscle of traditional
pharma, and high emotionality of their opponents, the traditional pharma view became
dominant. An example is a publication in the influential journal Nature. It describes the
medicine scene in South Asia, and claims that criminal have abandoned trafficking narcotics
in favour of counterfeit medicines (Aldhous, 2005), without quoting any robust evidence.

Many of the most quoted articles came from potentially biased sources, such as consultants
that were financially connected to the established pharmaceutical industry, and none have
a “declaration of no interest”. Others came from quasi- “independent” think-tanks such as
the International Policy Institute (IPI), which closed down in 2011 after it was found to be
funded by both the pharmaceutical and the oil industry4 .
Roger Bate, a former director of IPI, exaggerated the counterfeit issue in a wide variety of
publications, such as Trade AEI Press (“Roger Bate-Making a Killing_ The Deadly Implications

3
For example:
http://ec.europa.eu/health//sites/health/files/files/falsified_medicines/qa_safetyfeature_v5_0.pdf
4
IPI also was very active in denying climate change.

8
of the Counterfeit Drug Trade-AEI Press 2008) )5 and The Journal of International Criminal
Justice (Attaran, Bate, & Kendall, 2011). But recently in The Journal for Economics and
Management Strategy (Bate, Jin, & Mathur, 2015) Roger Bate rehabilitated himself
somewhat by an excellent market analysis of an expensive off-patent generic antibiotic
Cipro. Unfortunately, he does not publish who financed this very expensive study, nor does
he give a declaration of potential conflict of interest of the authors, nor does he make raw
data available, as would be required, had he published in a reputable health-related peer-
reviewed journal.

In Kenya there have been regular alarming reports in the press about 30% or more
counterfeit drugs. A careful analysis (Chorev, 2015), not by a medical person but by a
conflict analyst, debunks that myth and concludes that counterfeits and substandard drugs
were much less common in Kenya. This was mainly because past concerns were largely
around one malaria drug for over the counter sale which was no longer in use. The press
reports had omitted to mention that the facts were out of date. Chorev attributes the
exaggerated press stories, outdated and without evidence, as a localised version of the
global struggle between intellectual property right holders (Big pharma) defending their
margins and proponents of affordable, if need be generic, medicine. He is certainly not mild
in criticising both sides.

Most publications in the first decade of this century therefore had a strong focus on the
counterfeit aspect, and thus the interests of established big pharma, or innovator pharma as
this sector prefers to call itself now. Even the World Health Organisation caved in under this
heavily financed onslaught and published biased data without robust evidence (WHO, 2005)
though it soon after refocused on the quality and regulation of generic medicines.

Few studies could be found from the first decade that assessed the quality of generic
medicines. Two studies, seemingly without potential conflict of interest, are available from
East Africa. In Tanzania four essential medicines were tested, each for one brand product
and between 3 and 7 generics, obtained from 11 different wholesale suppliers. All samples
met specifications. A very robust study examined a number of generic products from the
essential medicine list in Rwanda and Tanzania (Kayumba et al., 2004). They examined
commonly used antibiotics and antimalarials and found that all samples met active
ingredient and dissolution criteria. The samples were procured from reputable wholesalers
in the private sector. These studies, by actors without potential conflict of interest,
obviously do not prove that no substandard drugs can appear at retail level, but these do
indicate that good quality generic drugs were available in-country at wholesale level.

5
Bate’s arguments were right; falsified or fake medicines are deadly and should be made international crimes,
but exaggerations and half-truths undermine the argument in the long term

9
More recently (Bate et al., 2015) Roger Bate found 4.8% substandard, and 5.1% falsified in a
large sample of an expensive and recently off-patent antibiotic. Quite interestingly the
falsifications did not just affect the original innovator brand holder, but also the by now
recognised generic manufacturers.

Even at the above 9.9% the problem has not been solved yet. A well-sampled field study,
using mystery buyers, collected drugs, from innovator and generic brands, in six African
countries (Kaur et al., 2016) found that deliberately falsified anti-malaria medicines were
only a minor problem (1.2%) in 2 out of 6 countries, but sub-standard tablets made up
between 6 and 35% of the samples. Degradation seemed to play a minor role, so likely poor
production practices were relevant.

While a good amount of research is available for malaria medication, this is not the case for
other groups of drugs. Malaria has benefitted from a dedicated funding effort through the
Global Fund to improve pharmaceutical supply lines, but this is not the case for most other
pharmaceuticals. Problems with drug quality might therefore be a (much?) bigger problem
with, for example, antibiotics. A well sampled study from India (Seear et al., 2011) of two
antibiotics and one antimalarial found zero falsified drugs, but up to 40% with substandard
amounts of active ingredients, though mostly still over 70%. In this case (heat) degradation
in storage seemed the culprit.

In conclusion it seems that in recent years poor quality drugs seem not as common as
assumed around the turn of the century. This may, or may not, be due to a real decrease.
Sampling methods have improved and non-licensed generics are no longer automatically
rejected but objectively tested. Falsified drugs are still being found, but in rather smaller
percentages. Many of the substandard drugs found are quite close to meeting standards,
and this suggests that sub-optimal manufacturing, and/or degradation in the hot climate,
could be important factors.
Substandard pharmaceuticals could still make up between 10 and 20% in the market in poor
countries, and this remains a serious threat to health.

Affordable medicines
Considerable progress has been made this century in making drugs more affordable for poor
countries: below we address generic drugs, differential pricing and compulsory licensing.

Generic drugs
Generic drugs are drugs whose patent has expired, and that therefore can be freely
manufactured. In the second decade of this century considerable changes have happened.
Generic drugs are now accepted also in the developed world, particularly when insurance
schemes pick up the bills. Quality assurance mechanisms have matured, but at the cost of
increased prices. The pharmaceutical industry has separated further into innovators versus

10
generics manufacturers. Traditional pharma has used its huge financial capacity to buy up
many of the successful generic producers and establish their own generic arms, for example
Sandoz (parent Novartis), but some Southern generic producers managed to blossom, such
as TEVA (Israel) and Dr Reddy and Ranbaxy (India). Many smaller generics producers are still
bought up by bigger actors, as soon as they become somewhat successful.
The pre-qualification scheme for generic producers of the World Health Organisation has
improved quality, at a cost, but also created almost insurmountable barriers to new
entrants from LICs, which could provide beneficial competition on price.

ASRAMES in Eastern Democratic of Congo started as an NGO to provide quality medicines to
the NGO sector at the end of the last century. It has now expanded to also provide the
public sector in the East of the country. It was initially very successful, and it build a solid
reputation. It managed to become pre-qualified for USAID and the EU, but in order to get
there it had to buy more and more pharmaceuticals from well-known (generic) brands.
The last few years they have been struggling. The public sector model in the DR Congo is
based on patient contributions, and the health facilities need considerable mark-ups on
medicine sales to cater for the running costs of their facilities, and this creates a downward
pressure on prices. Increasingly public health actors prefer to buy less well-known or even
dubious medicines at low price in the almost unregulated market.
Asrames had found it increasingly easy to procure quality medicines thanks to the better
global medicine registration and the pre-qualifications of the World Health Organisation.
This quality improvement did come at the cost, and this has been exacerbated by the
formation of oligopolies of large generic manufacturers. It takes several millions of dollars to
set up even a small facility to produce a single generic drug. While the QA systems are
beneficial for quality, as an unintended outcome they also lead to a price increase that
might make quality drugs unaffordable to the poor.

The problem of fast rising prices of generic drugs is not limited to developing countries. In
December 2016 a report by the Special Committee on Aging of the United States Senate
(Collins & McCaskill, 2016) gave a scathing critique on monopolizing tendencies around off-
patent generic drugs. Even though the mechanism in the US was slightly different, it is
indicative of the trend in the generic sector, where financial powerhouses buy up small
generic manufacturers, and (ab)use the, in themselves useful, quality assurance and pre-
qualification mechanisms to lock out new entrants.

Differential pricing
Differential (or tiered) pricing of pharmaceuticals are mechanisms whereby Innovator brand
manufacturers offer lower prices to poorer countries for medicines that are no longer
patented. This can be driven by competition from generics, or simply because a big turnover
with a small margin is more profitable than a small turnover with a big margin (Yadav,
2010). The largest companies now often use three tiers; poor, low middle, and high-income

11
countries. In many countries, including Kenya, there are now also intra-country differentials:
Public, private for profit, and Faith Based and the like. Yadav shows that leakage in-country
is usually limited in such a system, as for the upper wealth quintiles that frequent the elite
oriented private sector, the additional waiting times in the public or Faith Based sector are
not worth the price advantage.
This differential pricing mechanism unfortunately often does not benefit the smaller and
poorer countries, due to lack of negotiating and bulk purchasing capacity. In Kenya for
example, many drugs are more expensive than in India, that has negotiated better prices.
There is a widely acknowledged problem of suitcase smuggling, facilitated by the extensive
family connections between India and Kenya. The size of this is unknown, but likely small.
Interviews with pharmaceutical retailers in Kenya suggested that there was also a “grey”
parallel import market. While Kenyan law allows this parallel import since a hard-won high
court battle in 2014, the Ministry of Health has not yet issued the required licenses.
Somalia so far does not benefit from differential pricing as a country, but has no legislation
yet that prohibits parallel import. The scale of this, both for transit and for the domestic
market, is unknown.

Compulsory licensing
Research and development of new medications is very costly at up to one billion USD for
just one novel product (PRMA, 2016). Quite understandably industry wants to patent their
rights to regain their investment, and this is regulated under the Treaty for Intellectual
Property Rights, which gives an exclusive license to manufacture for usually twenty years.

When AIDS hit at the end of last century, industry developed pharmaceuticals at
considerable cost, and made these available. Unfortunately, the price of these drugs was far
beyond the purchasing power of poor countries, where the AIDS problem was biggest. This
caused a major confrontation between those that saw pharmaceuticals as an industry that,
like all industries, had to maximise profits, and those that saw access to medicines as a
human right. Rights activists pointed out that the pharmaceutical industry had much higher
profit margins than most other industries at between 10 and 25% of turnover. The
argument from industry that they needed to invest in research and development was
undermined by the fact that the industry spends far more on marketing than on R&D. Even
in 2013 only one out of the top ten pharmaceutical giants spent slightly more on research,
all the others had R&D around 15% and marketing at around 25% of turnover (Olson, 2015).
Article 31 of the Treaty on Intellectual Property Rights6 provided an escape route for
countries that were strongly affected by diseases that could be treated by patented drugs.
Under strict conditions state actors could apply for “compulsory licensing” at nominal fee,
for domestic markets. This lead to a rise of the compulsory licensed HIV drugs in for

6
https://www.wto.org/english/docs_e/legal_e/27-trips_04c_e.htm#Footnote7

12
example Brazil and India7. The required investments were in tens of millions of dollars, and
only bigger countries were able to raise these sums. Prices dropped by on average 86.2%.
Established industry often tried to prevent compulsory licensing by offering differential
pricing, reducing prices by 91% in India (Wasserman & Priest, 2012). Compulsory licensing
has slowly expanded to include other drugs, particularly for cancer. As a mechanism, its
main success was a forcing of differential pricing, rather than parallel industries developing,
though for example Ghana tried. A main reason for this was that compulsory licensing was
for domestic use only, and established industry has been very active in combatting exports.
This is likely to change as export is now allowed since January 21, 20178. Due to a change in
scale this will lower the investment barrier, and give also the smaller countries access to
compulsory licensed drugs, and it will strengthen their position to negotiate differential
pricing.

Research priorities on pharmaceutical supply chains in Low Income Countries
In 2011 and 2012 a global review was done on the available research on pharmaceutical
supply chains in low income countries (Bigdeli, 2015) and hundreds of interviews and tens
of workshops were done. This produced seven areas were more research was deemed
required:
• Medicine selection and use
• Sustainable financing and affordable prices
• Leadership and governance
• Availability of medicines
• Human resources for health
• Quality of medicines and quality assurance systems
• Medicines information and information systems

All of these areas are of course valid for Somalia, but not necessarily all practical in the short
term. The eighteen detailed research questions that were formulated, based on the seven
areas defined above, were too focused on the public sector to be of much use in the Somali
context of the private sector. Area 4, availability of medicines and area 6, quality seem most
relevant and acute for the private sector in Somalia, followed closely by 2: affordability.

Proven interventions in pharmaceutical supply chains in Low Income Countries
An enormous body of recent literature (www.iaphl.org) exists in the public health supply
chain. This is reflective of the huge international investments of the last decade, particularly
by the Global Fund for AIDS, TB and Malaria (GFATM), The Global Alliance for Vaccines and
Immunizations (GAVI), the President’s Initiative for Aids Relief (PEPFAR) and the Global
Initiative for Reproductive Health Commodities. In a massive tome with well over a

7
As an unintended outcome this clause also caused the established industry to largely abandon research into
diseases that mainly affected poor countries
8
Export is allowed under clause 31f, which only took effect after two-thirds of WTO members had ratified the
treaty. Due to strong efforts of patent holders this took 12 years.

13
thousand references (National Research Council & others, 2013) all is summed up what is
wrong with the health logistic systems in developing countries, and what is being done
about that. The private sector is however mainly approached as a source of counterfeit (in
the broadest sense) drugs and improper treatment, and solutions are mainly sought in
strengthening the public good governance domain.

Good Governance of Medicines (www.who.int/medicines/ggm/en) is a programme of the
World Health Organisation that has been ongoing since 2004. It also has an enormous body
of literature, mostly public sector focussed and emphasizing options for strengthening
public sector mechanisms to control the private sector. How this is to be achieved when
governance is almost absent is hardly addressed.

Of course governance of the pharmaceutical sector must be created in Somalia. But in the
current context of only emerging essential governance, still with a very limited reach,
pharmaceutical governance will likely have a low priority. Political will might also be low, as
Somali actors that are formally public, may have extensive interests in the private sector.
This situation is exacerbated by the fact that UN organisations have de facto been providing
that governance, but for the semi-public sector only. This makes it likely that strengthening
the private sector through better public regulation, will turn out to be a long-term objective.

An excellent meta-analysis of public regulatory mechanisms (El-Jardali et al., 2015)
produced the following diagram with a plethora of options:

While it was clear that multi-facetted interventions had a positive impact, the evidence for
individual interventions was weak or very weak. This does not mean that there is no impact,
just that research so far did not provide strong evidence for effectiveness. Registration and
prequalification likely had some impact, but registration of outlets without a strong
inspection system probably had not. Though the quality of the evidence was low, quality
testing at point of sale did seem to be effective. In Kenya it was found that public regulation
had an impact on the private sector in the more prosperous urban areas, but much less in
rural areas (Wafula, Molyneux, Mackintosh, & Goodman, 2013). He finds that corruption in
the public sector is a factor, but also that the formal regulatory requirements are too
expensive for the bottom of the pyramid pharmacies, and pleads for a regulatory-light.

14

Much less is published about the private health supply chain in the poorest countries, and in
particular almost nothing about situations with limited governance.
Some documents stood out: “Assessment of Governance and Corruption in the
Pharmaceutical Sector: Lessons Learned from Low and Middle Income Countries” (Diack,
Seiter, Hawkins, & Dweik, 2010) was a discussion paper in the Health, Nutrition and
Population group of the World Bank, and the Bank explicitly dissociates itself from the
content. The paper bluntly identifies that lack of political will, can be a problem, and it
proposes a realistic, non-condemning, approach to the private pharmaceutical sector. Its
analytical framework is comprehensive, although too ambitious for the Somali context.

The very useful document “Private sector pharmaceutical supply and distribution channels
in Africa” was published in the same World Bank series (McCabe et al., 2011). The paper
was based on short studies in Mali, Malawi and Ghana. In a few elegant paragraphs they
demonstrate how the public sector and branded pharma fails to deliver, particularly to the
poor. They also point out some unintended negative outcomes of global initiatives,
including impact on price of the quality assurance mechanisms currently promoted. They
do point out the problems in the private sector but, unlike the tendency in most
publications, they do not seek the solution only in strengthening public bodies to control the
private sector; they also focus on options and solutions within the private sector, including
regulatory-light and self- regulation.

It is becoming increasingly clear that a broad range of well financed public health
interventions is required to make real progress in increasing pharmaceutical quality for
consumers in the private sector. It will take time to get these issues higher on the Somali
policy agenda, and perhaps an attempt at self-regulation by the private sector might
stimulate the debate.

Pharmaceuticals in conflict affected, fragile and failed states

Characteristic of these conflict affected, fragile and failed states is a limited ability to
provide public social services such as health, combined with a limited governance and
regulatory capacity in all sectors.
Humanitarian actors tend into fill the priority gaps, such as immediately life-saving actions,
key public goods such as immunization and epidemic control, and often some mother and
child health. The humanitarian actors rarely have sufficient capacity to meet all health
needs and demands, and the private health sector usually steps in.

When there was a flourishing public sector before the disturbance, this private sector often
consists of the same people that staffed the public sector before. Because government was
no longer able to pay salaries and provide supplies, they had no choice but to become

15
private practitioners. In short-term disturbances the human resources remain largely in
place, and quality often remains fair, even though the regulatory framework is no longer
functional. In longer term crises there is often a brain-drain, and lesser qualified, or even
non-qualified, people start delivering health services9, and this almost inevitably leads to an
increase in improper use of medicines (Fujita, Zwi, Nagai, & Akashi, 2011). This problem is
beyond the scope of this paper.

Pharmaceuticals do not remain in place, but they are consumed. A constant stream of
supplies is required, but the public supply system has collapsed, and this poses distinct
problems.

Pharmaceuticals are rather special commodities, quite unlikely potatoes or soft-drinks.
Drugs are very specific chemical compounds, and they must be delivered within milligram
specifications, without any adulterations, in a temperature controlled supply-chain. It is for
a lay-person, or even a health professional, impossible to determine whether a certain
medication contains the right active pharmaceutical ingredient in the correct quantities:
This can only10 be done in the laboratory (MSH, 2012).,
Globally there is an extensive quality assurance system, with agreed standards, most of
these based on the US and UK pharmacopeia. There is a global accreditation system for
manufacturers, and every country should have its own National Medicine Regulatory
Authority (NMRA) that assures the quality of all medicines entering a country (WHO, 2010),
through testing, licensing and inspections. This regulatory authority, often of limited
functionality in poorer countries, is usually one of the first things to collapse in a crisis, as it
does not seem to have any immediate life-saving benefits.

Humanitarian actors have their own pharmaceutical supply systems, with strict quality
assurance, amongst others through prequalification, for example USAID (Heltzer, 2007).
Their massive scale can assure procurement at just above production cost. Donor
conditionality usually does not allow sale of these products to the private sector.

This leaves the private health sector with no other option than the open market. The private
sector in Somalia is fragmented, so it has no bulk purchasing power, and thus minimal price
negotiation power with pre-qualified manufacturers or bulk suppliers. It must depend on
middlemen to import the required pharmaceuticals. As crisis almost inevitably causes
economic hardship, there is a strong downward pressure on price, and these middlemen
move towards the lowest possible prices in the global market, without the benefit of any

9
An extensive search by the two of the leading universities of Somalia failed to identify a single pharmacist to
start up their pharmaceutical faculty.
10
Lately some limited field methods have become available.

16
system for quality assurance. This downward price pressure combined with absent quality
assurance creates high risk.

When the crisis is of longer duration some supply systems develop, often in a parallel
manner (Kohler et al., 2012). There are usually attempts to revitalise regulatory
mechanisms, but quality assurance tends to remain limited, and costs of externally
guaranteed quality medicine often exceed the purchasing power of the population.

Because medicines are high value, low volume products, they are relatively easy to falsify or
to produce to suboptimal standards. There are undoubtedly criminal actors involved in
every pharmaceutical market, even in countries that are not in crisis, as shown in the “Scale
of the problem” chapter. There is evidence that a well-functioning National Medicine
Regulatory Authority (NMRA) can decrease the amount of sub-standard drugs in the market,
but it is also clear (WHO, 2010) that few Low Income Countries (LIC) have a strong NMRA. In
Somalia the private pharmaceutical sector operates largely extra-legal11, but is there really a
big difference with countries that do operate in a legal environment that is hardly enforced?

Attention of the international community and the Somali (and other fragile) Health
Authorities has been focussed on strengthening the (semi)-public health supply and on
establishing a legal framework. The private health sector is often said to deliver poor quality
care, but these statements seem based on little or no evidence. A meta-analysis of
ambulatory care, including medicine provision (Berendes, Heywood, Oliver, & Garner, 2011)
in low and middle income countries concludes that both public and private provide poor
quality care, but that the private sector is slightly better, particularly in medicine supply.
Criticism notwithstanding, because of its size and reach, the private sector should receive
more attention from international and local public players.

While all private health actors in a disrupted state must make a profit in order to eat, the
majority of the private health actors that have chosen to remain, rather than go into exile,
may also have a genuine desire to serve their population with the highest possible quality
medicines at affordable prices. Pavignani makes strong arguments, based on an analysis of
six countries in crisis, for a policy change in the aid mechanisms towards also supporting
these private actors, so that they can provide a better quality service, at affordable cost
(Pavignani, Michael, Murru, Beesley, & Hill, 2013).

A selection of consulted documents in this lengthy (but somewhat frustrating) literature
search is in the reference section of this note. Full texts have been deposited on DropboxÒ.
Those genuinely interested can request a link from the author of this paper: harry@ralsa.org


11
Extra-legal in the sense that no functioning legal framework is present

17
Private pharmaceutical sector in Somalia

Literature review

Published research on private pharmaceutical supply chains in Somalia is very limited, and
much concerns Somaliland. One excellent study by UNICEF stands out, A survey of
Somaliland Private Pharmacies (Mazzilli, Ahmed, & Davis, 2008). The good local security
situation made this study possible, but it is limited to the formally established pharmacies in
the bigger towns, and did not attempt to capture the informal drug shops which were
prevalent in the rural areas. Some of the conclusions were:

• Pharmacies are extremely relevant in terms of access.

• Private pharmacies are small but competitive operations.
• Private pharmacies have a high proportion of professional owners
• There are potential strengths in the composition of human resources.
• Pharmacies work in connection with the rest of the health sector.

These conclusions were for Somaliland only. Somaliland declared independence a quarter of
a century ago, but has not been recognised, neither by Somalia, nor by the international
community. Nevertheless, it has developed a fairly competent governance system and for
many years it has been described as a de facto (though not de jure) state (Pegg, 1998),
comparable in many aspects to many low income African countries. There is now
pharmaceutical legislation and an emerging enforcement system, completely independent
from Somalia. Pharmacies without Borders (Rydell & Elmi, 2012) notes that quality
assurance systems are in place, but not yet fully functional. Also in 2012 Population Services
International describes their social marketing through 583 registered pharmacies in 10
towns, in an organised network. Somaliland is however not representative for the rest of
Somalia, and thus is not the main focus of this paper. Once plans shape up for intervention
it would be imperative to examine the Somaliland experiences in detail.

The main body of Somalia has gone through big changes in the last few years. Mogadishu
was liberated in 2011, and a federal government established, with a federal ministry of
health. Currently there are five regional states, each with its own ministry of health.
Pharmaceutical legislation is in place, but implementation capacity remains extremely
limited. The rule of law does not extend far beyond the main cities (with the exception of
Puntland). In spite of an extensive search of the published and grey literature, no
documentation was found on private pharmacies in the rural areas, except for Puntland.

A fairly good overview is available on the private health sector in Somalia (Buckley, O’Neill,
& Aden, 2015). It is based on a series of interviews in Nairobi, Hargeisa and Garowe but not
Mogadishu or the new states. The report mentions that a number of associations and

18
networks do exist, but that these do not seem to be very active, and that functional quality
assurance mechanisms seem to be lacking.

Field observations are available for Puntland. (Jeene, 2010) finds a well organised wholesale
pharmacy in a medium size town, without formal quality assurance, but with supplies
seemingly from well-known manufacturers. He also found some very dubious “drugs” in
small villages shops, while the public drug supply system was in poor shape. In 2014 (Jeene,
2014) he found a much improved public drug supply in the same region12, visibly improved
(but still not quality assured) private pharmacies also in the bigger villages, and much
diminished activities of the small drug shops in the rural areas. In 2016 he visited the same
area for a public health mission (Jeene, 2016). He found the situation largely unchanged
with many supplies from Yemen and Dubai, through both Hargeisa and Bosaso. As the
pharmacy visits were “A cup of tea with old friends”, these were not formally documented.

In mid 2016 Jeene also visited the capitals of the newly established region states, again with
a focus on the public health system. He found main private pharmacies that also had a
wholesale function. Stock was largely from well-known, mainly generic, manufacturers, and
well organised. Ordering was fast through daily flights. Owners in all these cases were
pharmacy technicians, and the pharmacies were established in the last few years.
All were aware that there was no formal quality assurance, but they selected on packaging
appearance, and a relation of trust with their wholesalers, mainly in Mogadishu. Many
supplies originated in Turkey. All pharmacists spoken to would like a quality assurance
mechanism, and would be willing to pay a small premium for that.
The urban pharmacies did however complain that there was a lot of “competition” by “fake”
drugs that travelled “overseas” from Asia and “overland”, presumably through opposition
controlled areas. The precarious security situation discouraged detailed discussions on these
sensitive issues and for the same reason no visits to rural pharmacies were possible.

This suggests that there may be two distinct private pharmaceutical supply flows; one extra-
legal system that aims for quality, if affordable, with an urban focus, the other system illegal
and (part?) criminal with a more rural focus13. These flows will obviously mix at some stage,
and it is by no means meant to imply that urban drug sellers are saints and the rural ones
devils.

. 12 The drug supply in that region was through an NGO. The main pharmaceutical supply in the semi-public
sector was and is through UNICEF. 


13
About half the Somali population is urban or IDP, the other half rural and pastoral (UNFPA, 2013)

19


Box psychotropic drugs in Somalia
Psychotropic drugs

Drug abuse studies in Somalia have focussed on abuse of khat, a chewed plant with stimulant properties. Abuse of pharmaceuticals
has so far received little attention. Yet a robust 2003 study of 8124 combatants (Odenwald et al., 2007) found that in Southern
Somalia the use of khat during the last week in this population stood at 70.6%. The use of “tablets”, mainly diazepines, in the past
week stood at 19.6%. These patterns are likely to have changed since 2003, as Al Shahab has banned khat around 2010, but neither
Al Shahab, nor the Somali Federal Government, have undertaken any action on “tablet” abuse, making it unlikely that usage has
reduced much.
Anecdotal evidence suggests that diazepines are freely available in small pharmacies and drug shops. Jeene observed that the
“better” pharmacies had limited supplies of diazepines in a controlled drugs cupboard with a register. This suggests that supply of
psychotropics was largely through illegal channels. The high use of psychotropic drugs amongst armed men should obviously be a
matter of concern for public health officials and peace makers alike, but that is not the subject of this study.

Diazepines have a built-in consumer based quality assurance mechanism. If the expected high fails to appear within one hour, the
consumer will not buy these tablets again, so only high potency products remain in the market.
Globally, diazepines are controlled drugs, and this legislation is rather strictly enforced in the Arab world and South Asia, where most
of the Somali extra-legal drug supply is thought to be sourced from. Diazepines could thus disaggregate suppliers that are merely
extra-legal because no functional legal framework exists, and those suppliers that are outright criminal.
Investigation of such criminal networks are in the domain of the UN Office for Drugs and Crime(UNODC, 2016) and specialised
agencies, and could be highly dangerous in the Somali context. For this study on the pharmaceutical supply chain in the private sector
of Somalia these “tablets” might be a useful indicator for a criminal supply chain.

Medicine logistics within Somalia

A rather provocative working paper “Always Cola, rarely essential medicines” (Yadav,
Stapleton, & Van Wassenhove, 2010) still keeps the public health logistic community talking
about how different medicines are from consumer products. Yet the bottom of the pyramid
drug suppliers in Somalia do treat pharmaceuticals very much like consumer products, with
all the good and all the bad that entails. The good is that stock is almost always available,
and turnover usually fast, because they react fast to demand, and have extensive networks,
vertical to their suppliers to order and horizontal to colleagues where they can borrow.
Mobile phone networks are everywhere in Somalia (if not just blown up by the opposition)
and transport is surprisingly common, also across frontlines.

The total public pharmaceutical supply chain
of any country is a very complicated system
with many actors, as this diagram from Kenya
shows. In Somalia the model would be even
more complex because of the intricate
interaction between Somali power holders,
the UN agencies, NGOs and donors, each with
their own political economy. No wonder that
logistics move slowly.

20
 The logistic system of the Somali private sector
is not yet fully clear, but initial interviews
suggest that it is much simpler than in the
public sector

Simplified model, similar systems exist in
Bosasso, Berbera, and Kismayo


The last mile
The last mile logistic chain within Somalia is fast. It is almost completely smartphone based,
and demand is known on an almost instant basis. It is also largely cash based, in this case
mainly electronic cash through mobile phone. Orders are made by phone, e-cash is paid,
and the goods are shipped. From Mogadishu to the regions this usually goes by plane, as the
internal flight network is now very good and cheap. Bulk goods and items with a steady
turnover go by road from Mogadishu to region. From region to district and from district to
village it goes by road. There is no public transport of any kind, but the informal private
network is very efficient. It does not seem to matter much if frontlines have to be crossed,
though that does cause some delays and extra cost.
The whole process is almost instantaneous. There are no formal forecasts, no requests for
quotations, no contracts, no lengthy administrative procedures. It is a network of almost
instant information, cash and goods flows, and very much based on trust.
This does not mean that it is a purely reactive mechanism. At wholesaler level there is often
health technical expertise with computerised stock management and trend forecasting, for
example based on seasons, though levels of sophistication seem to vary widely. There also
seems to be a wide variation in storage facilities, ranging from air-conditioned warehouses
to shipping containers in the full sun.

Importing medicines into Somalia
Key actors are the importers. These are purely traders. Historically in Somalia the ports were
the main sources of income for whatever faction was in power. Military/commercial
complexes historically developed with mutual dependency. The three main ports
corresponded to three of the main clans of Somalia14. While militia might change, in Somalia
the traders tended to remain the same, and in the emerging governance of Somalia, traders
still have an extra-ordinary influence. This influence is said to be also strong on customs
procedures in the port. These importers tend to be loosely organised as chambers of
commerce, and many Somali feel that these chambers are more powerful than the formal
government, or are densely infiltrated in the formal government.

14
The inland dry-ports of Las Anod and Gedo “belong” to minority clans

21
The other key actors are a relatively small number of pharmaceutical wholesalers.
As the Mogadishu15 wholesalers have
technical expertise, they will try to buy
from reputable suppliers. Of course they
are looking for profit, but in the pharma
trade reputation is highly valuable. The top
level Somali wholesalers usually order from
wholesalers in the Middle East or South
Asia, often based in free-ports in Turkey,
Dubai, Salalah Freeport, and South Asia.
Alternatively, they order directly from
(mainly generic) manufacturers.
16
Almost all transport will then still go through the Somali importers, largely through the
Freeport system. Drugs are selected both on perception of quality and on price.

The importers are traders with a history going back at least a few thousand years, but they
have no technical expertise and no reputation to lose. They see high value cargo going
through their system, and they smell profit. Five minutes on Alibaba or Indiaexport websites
will show that very low prices can be obtained. For amoxicillin for example, a website states
that it is for veterinary use, but it also offered in capsules, with custom packaging, with
hologram if required. These products can thus be sold as suitable for human use (WHO,
2015). They can than enter the Somali market and provide a huge margin. Drugs are not
selected on quality, but solely on price.

And of course there are many other small ports that are under the control of local militia,
such as Hobley, Eyl, Barawe, Adale, Faax, ElHur, Barwaqo, Ras Habaad, Ceel Baduur,
BanderBeyla, Hafun, Bargaal, Bereeda, Caluula, Abo, Geesaley, Qandaala, Ceelayo,
Lasqoorey, Mayd, Xiis and Saylac, with 3,333 kilometres of sandy beaches in between,
populated by a mix of impoverished fisher folk, semi-retired pirates and disgruntled
opposition forces, having a several thousand year history of maritime trade to the Arab Gulf
and South Asia, which is still ongoing today with small dhows. The scale of this is unknown,
but the nature of the goods is assumed to be weapons, narcotics and counterfeit goods,
including possibly deliberately falsified drugs. Drugs are often assumed to be deliberately
fake, though in reality nobody knows.

15
And importers in the other ports.
16
Daily flights by Turkish Airlines to Mogadishu and FlyDubai to Hargeisa do provide a courier services that
bypasses the main importers, but that is only for small cargo. Big consignments, certainly sea freight, still have
to go through these importers.

22
Drug Quality
Below is a simplified diagram of the flow of medicines into Somalia, exemplified by
Mogadishu. The true situation will not be as black and white (or red and blue as in the
diagram), and there will be many nuances. There will also be all kind of connections with
similar systems in the other entry points into Somalia. Most of these ports also have a
chamber of commerce where various stakeholders interact, and of course there is
interaction in the actual market place. A model like this can however help to look at all
these actors in a somewhat systematic way.
Diagram Mogadishu medicine flow and quality model

In blue are the supply lines were at least the intention is to buy medicines of quality.
In red are the supply channels where quality either has a low or no priority, and the dhow
channel that is perceived to be deliberately criminal. It may contain medicines that are
exported from a low priced to a high priced country under the tiered pricing regime, or
drugs that are produced under compulsory licensing in another country. Whereas the
established pharmaceutical industry considers this criminal, this is a beneficial practice from
the public health point of view.

The wholesale import system has good intentions, but it has at no point quality assurance
built in. Even if the manufacturer is pre-qualified by WHO standards, there is no lot quality
assurance for products that are exported. Any National Medicines Regulatory Authority has,
as the name says, only responsibility for medicines entering its own country. In the free-
ports or Dubai transit, again there is no NMRA responsible, and again on entering Somalia
there is no quality assurance, because the Somali NMRA does not exist yet.
The red systems do not even have the intention of quality assurance.

23

Prospects for the development of an effective Somali Medicine Regulatory Authority look
dim. Due to donor decisions, the medicine supply mechanism for the semi-public health
system will remain with the UN, with all quality assurance outside Somalia until 2021. It will
be many years before any emerging NMRA will have the capacity to inspect and regulate the
Somali regions districts and villages. Even implementing regulation at the import level may
be problematic because of the entrenched power position of a few importers, and the
resulting lack of political will.

The top-level pharmaceutical wholesalers in the main ports are the key actors that do have
a genuine interest in quality assurance. Several of these have stated that they would want a
private sector quality assurance mechanism, provided that such a mark of quality would be
evident to their consumers down the chain. They state their motives as benevolent, but
some are also frankly stating that this would push their low quality competition out of the
market.

Assuming that substandard drugs have a significant presence in Somalia, establishing a
medicine quality testing system and communication system for private sector actors could
be a way of quickly improving access to quality medicines.

Two crucial pieces of information are lacking:
1) The information presented above on importing and distribution systems is based on
conversations with actors in the pharmaceutical sectors, and might thus be both
incomplete and biased, or even incorrect.
2) There is no information available on the quality of the pharmaceuticals currently
available at client level

Obviously there are many other factors that influence access. The quality of prescribing, the
perception of drug quality of consumers and providers, the affordability and many others.
There is space for decades of PHDs and policy making, but getting clarity on the above
mentioned issues could lead to an action that could be implemented fast and at modest
cost, with measurable results.

24
Drug affordability
In most public funded health systems organisational buyers can negotiate competitive
prices based on scale, for both generic and branded products. This is also the case in
Somalia, even though there is no public health system as such, but a UN/NGO system that
takes the place of the proper public sector.

This semi-public system does not have sufficient capacity to serve population needs, and the
private pharmaceutical sector provides a large, but unknown, proportion of medicines.

The private sector in Somalia does not have much negotiation power, and serves a
population with limited purchasing power. The Medicine Regulatory Authority has been
established by law in Mogadishu, but is not yet functional. Private sector providers might
thus be tempted to purchase products from the smaller generic providers that have not yet
been pre-qualified17. The quality of these products might be good, but is essentially
unknown, and no testing is available in Somalia. Equally the private sector has no defence
against falsified products, whether these pretend to be original innovator brands or an
increasingly recognised generic brand. At the moment the private sector in Somalia cannot
(fully) benefit from the available affordability mechanisms. These affordability options will
be a component in the feasibility study on joint quality assurance mechanisms.

A potential model for medicine quality assurance in the private sector

A private sector medicine quality assurance laboratory
Establishing a basic pharmaceutical quality assurance laboratory is neither difficult nor very
costly. One hundred square meters in a fair quality building would be sufficient for a
laboratory and some administration. Reliable water and electricity supply is essential.
Interior finishing, with sinks, waterproof floor and walls, and the like is all available locally.
Laboratory equipment is easily imported, and environmental impact would be minimal.
Mid-level human resources are available locally, but senior level may have to come from the
diaspora.

Collaborative mechanisms
Much more challenging might be to facilitate the existing wholesalers to work together.
Currently the wholesale market is highly competitive. Testing is relatively expensive, so this
makes only sense for decent size batches. This might stimulate several wholesalers to
procure together, which as an added benefit could provide economy of scale, and through
better access to existing affordability mechanisms.

17
The absence of QA also makes the system vulnerable to completely fake counterfeits, though innovator
brands, whether real or counterfeit, are only seen in a few elite health facilities in the big cities (personal
observation).

25
Such an initiative inevitably, and desirably, causes a shift in power balance towards more
quality oriented actors, and away from solely profit oriented actors. In the highly
fractionised and weaponised Somali context this could pose dangers.

Collaborative quality assured systems are possible. Well known examples in Africa are the
Faith Based national medical stores, such as MEDS in Kenya, CHAN in Nigeria, JMS in Uganda
and CHAM in Malawi. These are successful largely based on reputation. They do not test all
drugs themselves, but they ensure that sufficient testing is done somewhere in the supply
chain. Through bulk purchase these Faith Based systems are able to negotiate favourable
differential prices, and this plays a major role in the success in the usually unsubsidised Faith
Based Health sector. The Faith Based health facilities themselves tend to operate with a
large degree of independence. Many of these Christian Central Medical Stores now also
supply non Faith based health actors that aim at the bottom of the pyramid.
In the Islamic world the Agha Khan health network has a similar role, though it mainly
supplies facilities in its own network. The Red Cross and Red Crescent Movement, though
humanitarian, has some similarities to a Faith Based Organisation, but in general only
supplies its own facilities.

Social franchises are another cooperation model characterised by (Viswanathan, Behl, &
Seefeld, 2016)
• a third party administrator recruits, capacitates, monitors, and manages supplies
• a focus on the sale of healthcare services, in addition to healthcare commodities
• centralised marketing for the franchise brand
• the use of written standards
• frequent supportive supervision visits and annual audits
• financial self-reliance for the network’s administrator and the franchisees; and 

• making quality assured healthcare services available to under-served populations.
Well known examples are Marie Stopes and Population Services International, which is also
active in Somaliland with a franchising-light model, with a limited focus.

Commercial franchising of pharmacies is a common model in the USA and South Africa. This
tends to be a rather strictly controlled model looking similar to a chain, with most systems
in common, but the franchisee carrying the risks and the profit. Pharmacy chains staffed by
employees are a fairly new phenomenon in Africa. An example is the Mimosa pharmacy
chain in Kenya that, with funding of a private equity investment fund, has been expanding
aggressively and also took over some local pharmaceutical manufacturers. The model is
somewhere between franchise and employee, with a strong component of performance
related bonus, under a very strict uniform model. The company declined to give further
information citing commercial confidentiality.
It is not clear yet what kind of a collaboration model could work in Somalia, but the
experience of PSI in Somaliland suggests that franchising-light might be suitable.

26
Branding
An interesting recent experiment is Pharmnet in Kenya. This is a voluntary network of
independent pharmacies with a centralised procurement and branding mechanism. It is a
kind of franchise super-light. Initial results seemed good with branding, and increased
footfall and profit for participating pharmacies. It was only modestly successful on common
procurement and quality assurance (Cardno, 2016). Jointly procured and quality assured
drugs were often of the well-known brands and thus more expensive than equivalent,
though maybe slightly less quality assured, products in the open market. Participating
pharmacists often continued to buy less known, but still registered or prequalified products,
because these were more affordable for their clients. Undoubtedly some potentially lower
quality medicines also slipped in. The branding of the Pharmnet chain suggested to clients
that only guaranteed quality products were available, but this was not always the case.
Informal interviews with some stakeholders showed quite some other controversies. As
these were initial informal interviews and no research permit had been requested, this had
to be abandoned. Currently Pharmnet provides evidence of brand recognition and increased
turnover, but no data are available on the quality of the medicines sold. It would be very
worthwhile to examine this initiative further with a formal research protocol and the
informed consent of the many stakeholders. This experience suggests that branding of some
form of a pharmaceutical franchise or cooperative may be easier than achieving guaranteed
quality, if downward pressure on price is an important factor and competition high.

The pharmaceutical industry, both innovator and established generic, uses branding for
individual products, or single manufacturer, extensively. This is rather expensive and the
Somali market is at present too small and too fragmented to justify the considerable
investment required.

Substandard drugs were a perceived big problem in West Africa, and established industry
developed innovative ways of certifying around 2010. One of the better known methods
uses mobile phones. Pharmaceutical products are individually labelled with a twelve-digit
code, protected by a layer that has to be scratched off. The purchaser sends an sms with the
code to a toll-free number, and gets immediate notification whether this is a genuine
product. Additionally, the manufacturer or wholesaler can also be alerted when and where
a fake products are sold (Ogundeji, 2014). In East Africa this has not yet taken off for
pharmaceuticals, but it is used commercially for agro-chemicals (Sproxil, 2016).

It might be possible to “brand” a quality assurance pharmaceutical laboratory, in a similar
manner. The pharma supply chain is already strongly associated with mobile phones, and
network and phone penetration is very high in Somalia. This might open up the market for
lesser known, but still high quality, manufacturers, increase competition, and lower prices.

27
Box recreational drugs quality assurance in the Netherlands
In spite of an extensive literature search no examples of such a private pharmaceutical quality assurance
system could be found. There is however something similar in existence for recreational drugs in the
Netherlands (Vandergouwe & Richter, 2016). The Netherlands has largely decriminalised recreational drug
use, but trade remains criminal, so the supply chain is completely unregulated. Based on the principle of
harm reduction, the Dutch Ministry of Health has established a quality assurance system where consumers
can deliver samples of recreational drugs on an anonymous basis for quality testing. Only if real dangerous
substances are encountered will a public alert be given. It is well known and tacitly accepted that traders
in recreational drugs also use the system, and use the provided analysis results as a sales argument.


Conclusion

The semi-public health sector in Somalia does not have sufficient capacity, and the private
health sector likely provides most of the health care in Somalia.
The private pharmaceutical supply systems lack quality assurance, and have very limited
options to access the various global affordable medicines mechanisms. This makes the
private pharmaceutical system vulnerable to sub-standard medicines, and keeps prices
higher than necessary.
Based on the literature review, field observations and some preliminary interviews with key
stakeholders, it seems likely that a quality assurance mechanism for the private
pharmaceutical sector is possible in Somalia, and that this may lead to improved quality and
possibly also lower prices.

Before any investment in such a mechanism is made the following two questions must be
answered:

1) What is the proportion of substandard medicines in the Somali market?
a. Would an intervention it be relevant?
2) What is the willingness and ability of key actors in the private pharmaceutical supply
chain to participate in such a quality assurance mechanism?
a. Would an intervention be feasible? (including willingness to pay)

There are clearly more questions that can be asked like: what is the quality of prescribing or
what popular perceptions influence the choice of pharmaceuticals or what is the impact of
cost factors on client behaviour. These questions would require a lot of expensive research,
and they would not answer whether the concept would be feasible, but more whether it
could be profitable or self-sustaining.

If the concept is both relevant and feasible, and the required investments are modest, it
may make sense to make the investment, and answer the additional questions through
market research once the quality assurance system is functional.

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Research protocols
In this chapter we identify some options for research protocols that could be adapted for
Somalia’s context, with some provisional cost indications.

Research protocol Sub-standard medicines
This research is purely aimed at determining whether quality assurance in the private sector
is relevant. Methods must therefore be doable and affordable.
A very practical research methodology is available from India (Seear et al., 2011). The
protocol and methodology allows differentiating between:
• falsified,
• adulterated,
• degraded,
• substandard manufacturing,
• and acceptable quality drugs.
This differentiation is not commonly done but very important in this particular case for
designing the desired private intervention. Should, for example, degradation be the major
factor, then improving warehousing in the port could be more sensible than strengthening
the procurement systems.

Under this protocol three common essential drugs of high public health importance were
tested, using an as good as possible sampling of facilities. In India the sampling was
geographic in one large town, capturing 100 outlets in 10 divisions with a fair distribution on
socio economic status. There were no registers so samples were taken from clinics, formal
pharmacies, and drug shops, based on geographical distribution.
There were no mystery clients, but simply the handling of a prescription and accepting the
medicine offered and paying. There was no noting of the name of the pharmacy, nor of the
name on the packaging. The focus was solely on the quality of the medicine and the price.

Big samples, well randomised, of multiple drugs, are always desirable, but not always
possible because of cost. In this first study we will have to settle for “Good enough”
In Somalia we would probably aim at two highly relevant drugs, one antimalarial and one
antibiotic. Prescriptions are uncommon in Somalia, so the shopper would just use the
common name.
Geographic sampling is likely feasible in Mogadishu, but less so in the emerging states.
Sampling would likely be proportional in:
1) Mogadishu, geographical
2) state capitals,
a. in the affluent centre
b. the poorer periphery
3) district towns, and in
4) village drug shops.

29

Sampling might be possible also in opposition controlled areas, provided this is done
through grassroots organisations. All this would be as good as possible purposive
sampling, but not fully random. A sample of 120 each, with a 95% confidence level and
an expected prevalence of 15% would give a confidence interval of around 5%, not
counting design effect. This is sufficient for the purpose of determining relevance of a
planned intervention.

A good quality laboratory is required that can do Liquid Chromatography and Mass
Spectrometry to detect nature and quantity of the active pharmaceutical ingredients (API).
Such a laboratory is available in Nairobi (Wafula et al., 2016). The cost per sample is
however considerable at between USD 145 and 350. This lab also determined dissolution
and uniformity of dosage unit, which would not be absolutely required for the purpose of
this research question. More economical laboratories might be identified.

This cost of laboratory analysis will be a limiting factor, and it is therefore proposed to limit
the sampling framework to Mogadishu and the emerging states, and not Puntland and
Somaliland. This study should have a focus on the Mogadishu import and wholesale
network, supplying the South. Any conclusions can later be tested in the other areas, if
desired.

The actual buying of the samples can be done through the existing networks of local NGOs,
specifically the water and sanitation actors. These staff members have survey skills and can
buy drugs in any outlet without drawing any undue attention, which could be dangerous in
the political context. Training in sampling and purchasing would be possible in two days,
likely in Mogadishu.

It must be realized that this endeavour is purely aimed at identifying the scale and nature of
the problem, and not a criminal investigation of counterfeiters. It must be practical, fast,
and good enough.

This activity should not be mixed with interviewing the supply chain, for security reasons.
As researchers will not pretend to be patients or ask for advice, and drugs are purchased
from stores open to the general public, as no manufacturer or store details are recorded, no
human subjects involved and no treatments given ((Seear et al., 2011), ethics approval will
likely be waived by the federal ministry of health.

30
Research protocol procurement and supply chain
This phase probably should follow the assessment of quality through the field testing.
Should no sub-standard medicines be found in the market, this phase would not be
required, but should a substantial proportion of the medicines in the market be sub-
standard, than this will certainly raise the interest of the importers and wholesalers.
This activity is somewhere between research and scoping for business opportunity, and has
the following components.

1. Political economy analysis of the key actors in import and top-end supply of the
private pharmaceutical chain
2. Estimation of the willingness of actors to some form of collaborative action to
improve quality and reduce prices, and if positive
3. Develop a business case for this collaborative action, possibly a private quality
assurance laboratory

• The political economy analysis will be based on interviews of key actors. High
visibility actors are easy to find through Bakara market in Mogadishu, and through
snowballing the less visible actors can be identified. Much of the required
information will be commercially sensitive, and therefore a delicate approach is
required. Semantic analysis of transcripts would be ideal to pick up nuances, but
might be unachievable. The current impression is that the less visible actors, the
importers in this paper, may have some characteristics of cartels with the resulting
ambiguity on their legitimacy status (Haines & Beaton-Wells, 2012), certainly if this
legitimacy is to be considered in the global context versus the Somali one. Because
of all sensitivities, the principal investigator needs to be a highly respected Somali
scientist, without perceived political or commercial linkages. This phase could touch
upon estimating the willingness to cooperation, but likely mainly in the form of some
exploratory questions.

• The estimation of willingness to cooperation can likely be explored, starting with
some key informants’ interviews, followed by small group discussions. This phase is
probably best lead by an expert in economy or trade with some knowledge on
affordable pricing mechanism and quality assurance. This person also must be
perceived to be free of conflict of interest. Ideally this process would come up with
some collaboration form towards some activities, whether on quality or price, that
would be supported by most, or at least a significant proportion, of the key actors.
This exploration should not focus exclusively on a donor supported initiative.

31
 • Once relevance is established, and key stakeholders and interests are mapped out, a
business case would be fairly easy to design. The likelihood that private sector actors
would come in is high. This might be from the diaspora, as particularly the US has
many pharmacies owned by diaspora Somalis. It might be from Private Equity funds
that are increasingly interested in investing in African health care, also at the Bottom
of the Pyramid (Kohli & Wanjiru, 2014).
So far the limits of risk appetite and the lack of knowledge of opportunity have
limited both the Somali diaspora pharmacies and private equity funds to explore
options. The recent election of a new, likely technocratic, government, combined
with the report of these two studies, could encourage these actors to become
involved. Equally, this might be an attractive action for a donor that is looking for an
additional approach to Somali health, with relative low cost, potentially fast impact,
and moderate risk.

Even if no intervention materialises, then the research outcomes will provide
the foundation of understanding of the private sector, required for the
establishment of the public regulatory framework.

32
Preliminary budget medicine sampling

Item unit # unit cost cost USD
Laboratory samples 240 200 48,000
Principle investigator & trainer days 12 600 7,200
Flights PI flights 2 350 700
Accommodation & security PI days 5 350 1,750
Workshop venue days 2 500 1,000
Participants/samplers DSA days 48 120 5,760
Participants/samplers flights flights 16 100 1,600
samplers professional fees each 12 500 6,000
Stationary/sample bags etc lumpsum 1 750 750
Total USD 72,760
Based on 240 samples
based on 12 samplers
4 samplers Mogadishu, 2 per state

Preliminary budget supply chain analysis
No costing is as yet possible, but likely at least 50 days of professional fees required, with
minimal other costs.

33
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 Acknowledgements

The Swiss Development Cooperation funded this literature review and preliminary feasibility
study under their Horn of Africa program.
Thanks to Dr Enrico Pavignani for his input in the literature review and backstopping the writing.
A special thanks to Somali and Kenyan friends and colleagues who kindly agreed to interviews
and brainstorms over skype and over cups of tea. They came from academia, government,
private sector and NGOs. Many of our Somali friends requested anonymity because the
issue of private pharmaceutical supply chains was seen as very sensitive, certainly in the
run-up to the elections. Several Kenyan friends also requested anonymity as they were
either ethnic Somali or sometimes purchasing from Somali suppliers, which might not be
strictly legal. The decision was therefore taken to mention nobody by name, but I am very
grateful for your time and efforts.
Any mistake or misinterpretation in this document is exclusively mine, and anything useful can
be freely shared.

Dr Harry Jeene
Ralsa Foundation
harry@ralsa.org

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