Health Care Distribution
Health Care Distribution
Business Model Description
Set up warehousing facilities, install integrated health supply chain management system, including acquisition of equipment and vehicles to procure, store and distribute health care supplies to pharmacies, health centers and clinics, including hospitals across Lesotho.
Expected Impact
Improve access to health care and empower communities to achieve better health outcomes and healthy workforce.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Lesotho: Maseru District
- Lesotho: Leribe District
- Lesotho: Mafeteng Dstrict
- Lesotho: Qacha's Nek District
Sector Classification
Health Care
Development need
According to World Health Organization (WHO) Lesotho's life expectancy was 50.7 years in 2019 compared to global average of 73.3 years. HIV/AIDS and tuberculosis are among the highest 10 causes of death, with HIV topping the list at 204 and 245 deaths for females and males per 100,000 population, respectively (20, 21).
Policy priority
National Health Strategic Plan prioritizes efficient delivery of health services through strengthening of supervision and quality assurance and health outreach services. Budget Speech 2023/24 allocates M3.2 billion (USD 177.7 million) for health work force in critical areas, procurement of equipment in hospitals, and implementation of disease prevention programmes (2, 12).
Gender inequalities and marginalization issues
As a result of their culturally constructed lower status in the society and their special role in reproduction, special consideration has to be accorded women, particularly in the rural areas where there shortages of infrastructure. The Plan shows that one out of 30 women is likely to die from childbirth (2).
Investment opportunities introduction
The Ministry of Health has a Public-Private Partnership (PPP) arrangement that covers service delivery, supply chain and hospitality services, but the coverage is still limited and provides an opportunity for further PPPs and direct private investment in the sector (2).
Key bottlenecks introduction
Low numbers of nurses and doctors per capita, the third-highest HIV/AIDS rates worldwide, a short life expectancy and lack of facilities for all needed treatments in Lesotho (4).
Health Care Retail
Development need
In Lesotho, supply of medicines to health centres is neither systematic nor regular, leading to frequent stock outs of medicines and supplies at the first line health facilities (3).
Policy priority
Government plans to support and uphold timely procurement, processing and distribution of medicines to the last mile and strengthen the capacity and skills of District Health Management Teams and hospitals in procurement and supply chain management (2).
Gender inequalities and marginalization issues
There are more women (30%) with HIV infections than men (23%), and access to health services is also skewed towards urban areas because of disparities in health facilities and infrastructure between the urban and rural areas (2).
Investment opportunities introduction
Through the support of Millennium Challenge Compact II, Government plans to improve the delivery of health services and management of the primary health care system in Lesotho, which provides basis for new investment opportunities in the health sector (5).
Key bottlenecks introduction
Lack of enabling infrastructure has contributed to Lesotho`s economic imbalance (6). This has caused disparities between the urban and rural areas, with biased locational investment.
Drug Retailers
Pipeline Opportunity
Health Care Distribution
Set up warehousing facilities, install integrated health supply chain management system, including acquisition of equipment and vehicles to procure, store and distribute health care supplies to pharmacies, health centers and clinics, including hospitals across Lesotho.
Business Case
Market Size and Environment
USD 50 million - USD 100 million
In 2021/22 NDSO's distributed medical supplies of over M1 billion (USD 55 million), which are estimated to be 80% of the market share (19).
Lesotho imports about 90% of medical requirements is imported and this constitute basis for distribution of medical supplies. The proportions of distribution is 86% pharmaceuticals, 11% other medical consumables and 3% laboratory supplies (19).
Indicative Return
20% - 25%
National Drug Services Organization (NDSO) takes up 80% of the market and recorded ROI of 20% - 25% (19). It was established by Legal Notice Number 19 of March 2007, to operate as a Trading Account and the Central Medical Stores to operate and manage procurement, warehousing and distribution of the health sector goods across Lesotho (18.)
Investment Timeframe
Medium Term (5–10 years)
NDSO's records show that its operations realised the return over a 10 year period largely boosted by growing demand of health care supplies (19).
Ticket Size
USD 1 million - USD 10 million
Market Risks & Scale Obstacles
Business - Supply Chain Constraints
Impact Case
Sustainable Development Need
Lesotho health system suffers from fragmented health information, supply chain management for essential medicines and vital supplies, and poor budget execution. Health facilities are concentrated in Maseru (38.4%), with the rest spread over 9 districts (3, 7).
Gender & Marginalisation
Lesotho health system weaknesses have caused imbalances between the urban and rural areas, including distribution of critical medicines that mostly affect women given their higher HIV prevalence rate (30%) compared to men (23%), and their special role in reproductive health (2, 6, 7).
Expected Development Outcome
Investment in healthcare distribution can help integrate and improve supply chain management of essential medicines and vital supplies, including contributing to district infrastructure, and result in better and sustainable health care access.
Gender & Marginalisation
Investment in health care distribution will reduce health access imbalances between the urban and rural areas, including improving distribution of critical medicines that will mostly benefit women given their HIV status and role in reproductive health.
Primary SDGs addressed
3.c.1 Health worker density and distribution
3.8.1 Coverage of essential health services
In 2020, there were 20.73 doctors, nurses and midwives per 10,000 population (8).
Universal health coverage (UHC) index of service coverage (worst 0–100 best) 48.0 as at 2019 (25).
By 2030, substantially increase health financing and the recruitment, development, training and retention of the health workforce in developing countries (9).
By 2030, achieve universal health coverage (26).
9.1.2 Passenger and freight volumes, by mode of transport
Logistics Performance Index: Quality of trade and transport-related infrastructure (worst 1–5 best) 2.0 as at 2018 (25).
Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure (33).
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Corporates
Public sector
Indirectly impacted stakeholders
People
Gender inequality and/or marginalization
Public sector
Outcome Risks
Use of chronic medicines may have toxic properties that are damaging to certain organs of the body with far-reaching health complications.
Disposal of packaging material of medicines can be harmful to the planet, particularly where there is no proper waste management in place (10).
Impact Risks
If minimum infrastructure platform is not addressed, distribution may still not reach the most vulnerable rural populations and undermine the impact of the investment.
Absence and poor maintenance of an integrated information system to monitor implementation could affect the assessment of the impact of the investment.
Access and affordability of diagnostic and laboratory services are critical for monitoring the impact and their absence could prove counterproductive.
Impact Classification
What
Distribution of health care supplies improves access and contributes to better health outcomes.
Risk
Poor infrastructure, absence of efficient and well maintained information system and periodic diagnostic laboratory services may undermine the impact.
Contribution
Health care distribution contributes to access and good national health outcomes, which are critical for a healthy nation and productive workforce.
Impact Thesis
Improve access to health care and empower communities to achieve better health outcomes and healthy workforce.
Enabling Environment
Policy Environment
National Health Strategic Plan 2017 – 2022 prioritizes efficient delivery of health services through strengthening of supervision and quality assurance, as well as the outreach services with the participation of the private sector (2).
Budget proposes development of industries driven by innovation and technology, such as, health care predictive analytics, digital education, fintech, nanotechnology and others, with health sector budget allocation of M 3.2 billion (USD 177.8 million or 8.2% of GDP) (12).
Financial Environment
Development partner support for on drugs, provides critical funding for the market of healthcare distribution and investment opportunities. Examples are US President’s Emergency Plan for AIDS Relief (PEPFAR), Global Fund, Maternal and Child Health and Tuberculosis under Partners in Health (32).
Fiscal incentives: Health Strategic Plan commits to free public health package or highly subsidized. Hospitals charge mainly registration fee and user charges are borne by government. Per capita health spending is USD 7 and registration is USD 1 to 2.5, making a subsidy of 64% (2, 22, 23, 24).
Although Lesotho is yet to develop a policy and strategy guiding the PPPs in its health system, there is a PPP Unit in the Ministry of Health, coordinating PPP activities, including an arrangement of case-by-case negotiations resulting in an MOU, where there is agreement on specific incentives (2, 30, 31).
Regulatory Environment
Under the Medical, Dental and Pharmacy Order No. 13 of 1970, Lesotho Medical, Dental and Pharmacy Council (LMDPC) promotes the health of the population, determines standards of professional education and training, and sets and maintains fair standards of professional practice (14).
Lesotho Medicines and Medical Devices Control Authority Act 2023 regulates the manufacture, import and export, storage, distribution, sale and use of medicines and medical devices (13).
Licensing of Pharmaceutical Outlets Guidelines provide basis for issuance of pharmaceutical licenses (17).
Marketplace Participants
Private Sector
Christian Health Association of Lesotho, Scott Hospital, Willies Hospital, Lesotho Pharmaceutical Association, Husteds Pharmacy, Triapharm, Metropolitan Lesotho, Supra Health Care, Medicare Leribe Lifeline, Pharmacy.
Government
Ministry of Health, Ministry of Finance and Development Planning, Ministry of Social Development, Ministry of Local Government and Chieftainship Affairs, Lesotho National Development Corporation. Revenue Services Lesotho, Lesotho Medical, Dental and Pharmacy Council.
Multilaterals
United Nations Development Programme, World Health Organization, United Nations Children's Fund, African Development Bank, World Bank, European Union.
Non-Profit
Partners in Health, Lesotho Council of Non-Governmental Organizations, World Vision, Global Fund, Jhpiego, Chemonics, PEPFAR/USAID,
Public-Private Partnership
The Ministry of Health has a Public-Private Partnership (PPP) arrangement with Christian Health Association of Lesotho (CHAL) that covers service delivery, supply chain and hospitality services (2).
Target Locations
Lesotho: Maseru District
Lesotho: Leribe District
Lesotho: Mafeteng Dstrict
Lesotho: Qacha's Nek District
References
- (1) United Nations, Sustainable Development Report, 2022
- (2) Government of Lesotho, National Health Strategic Plan 2017 – 2022
- (3) Government of Lesotho, National Health Policy 2011
- (4) World Bank, Lesotho - Health sector reform program phase
- (5) Governments of Lesotho and United States of America, Millennium Challenge Compact, 2022
- (6) Government of Lesotho, National Strategic Development Plan: Strategic Focus, 2023/24 - 2027/28
- (7) World Health Organization Country Cooperation - Lesotho Strategy, 2014-2019
- (8) Health workforce supply, needs and financial feasibility in Lesotho: a labour market analysis. https://gh.bmj.com/content/7/Suppl_1/e008420
- (9) United Nations, Global indicator framework for the Sustainable Development Goals and targets of the 2030 Agenda for Sustainable. https://unstats.un.org/sdgs/indicators/Global%20Indicator%20Framework%20after%202023%20refinement_Eng.pdf
- (10) World Health Organization, Addressing climate change in health care settings. https://www.who.int/docs/default-source/climate-change/healthy-hospitals-healthy-planet-healthy-people.pdf?sfvrsn=8b337cee_1
- (11) SDG Investor Map Stakeholder Validation Workshop Report 2023
- (12) Government of Lesotho, Budget Speech, 2023/24
- (13) Government of Lesotho, Lesotho Medicines and Medical Devices Control Authority Act 2023
- (14) Government of Lesotho, Medical, Dental and Pharmacy Order No. 13 of 1970
- (15) Government of Lesotho, Good Manufacturing Practice Guidelines
- (16) Government of Lesotho, Drugs of Abuse Act 2008
- (17) Government of Lesotho, Licensing of Pharmaceutical Outlets Guidelines
- (18) Government of Lesotho, National Drug Services Orgnization Legal Notice Number 19 of March 2007
- (19) SDG Investor Map National Drug Services Organization Stakeholder Consultations October 2023
- (20) World Health Organization, Health data overview for the Kingdom of Lesotho, 2020 -https://data.who.int/countries/426
- (21) World Health Organization, Health data overview for the Kingdom of Lesotho, 2020. https://data.who.int/countries/426
- (22) Public Expenditure Tracking Survey and Service Delivery in the Health Sector 2017. https://www.unicef.org/esa/sites/unicef.org.esa/files/2019-04/PETS-of-Health-in%20Lesotho-%282017%29.pdf
- (23) Statista, Health Financing - Lesotho, 2023. https://fr.statista.com/outlook/co/health-indicators/health-financing/lesotho#:~:text=In%202023%2C%20the%20estimated%20spending,be%20%E2%82%AC5.85%20by%202023
- (24) Mesfin G. Zbelo, at al, Assessing Lesotho's Financial Burden of Household Payments and Access to Healthcare, 2022. https://assets.researchsquare.com/files/rs-2043986/v1/ded957c2-cc76-49a5-a85d-148d87797001.pdf?c=1665400474
- (25) United Nations, Sustainable Development Report 2023 - Lesotho Score Card
- (26) United Nations, Global indicator framework for the Sustainable Development Goals and targets of the 2030 Agenda for Sustainable - Development. https://unstats.un.org/sdgs/indicators/Global%20Indicator%20Framework%20after%202023%20refinement_Eng.pdf
- (27) Government of Lesotho, Mapping
- (28) World Bank, Lesotho Systematic Country Diagnostic Update, 2021
- (29) Government of Lesotho, Mapping Subnational Poverty, 2021
- (30) SDG Investor Map Ministry of Health Stakeholder Consultations, July and November, 2023
- (31) National Multi-Sectoral Integrated Strategic Plan for the Prevention and Control of Non-Communicable Diseases, 2014-2020
- (32) Partners in Health Lesotho, 2023. https://www.pih.org/country/lesotho
- (33) United Nations, Sustainable Development Indicators. https://unstats.un.org/sdgs/indicators/Global%20Indicator%20Framework%20after%202023%20refinement_Eng.pdf