Kano state has one the most robust drug revolving funds (DRF) in Nigeria, covering about 900 public health facilities with an annual turnover of about $6.3 million. However, the DRF faces several challenges, which include the absence of real-time end-to-end data visibility, bounced cheques, and a lengthy procurement process which increases the likelihood of stockouts in health facilities.
To procure medicines, the health facilities physically visit the central medical store (CMS) with a list of medicines to be procured. This entire process takes about 3-6-days, depending on the proximity of the health facility to the CMS and the availability of the signatories. These are the steps in that process. First an invoice, generated via M-supply, is issued to the health facility and submitted to the Health Facility Management Committee (HFMC) for approval and payment. Payment takes place via a bank cheque that needs to be endorsed by the HFMC (3-4 persons). The endorsed cheque goes through the accounting unit within the CMS, where a receipt is issued confirming payment, before the actual order is issued to health facilities. Furthermore, the accounting unit of DMCSA does not present the cheques to banks for payment before medicines are issued to health facilities. Thus the problem of bounced cheques is common, and this problem is identified only after medicines have been issued to health facilities.
To address these challenges, i+solutions and UnChain in collaboration with the National Product Supply Chain Management Program (NPSCMP) of Nigeria, piloted the blockchain technology in Kano state DRF. The pilot was aimed at using blockchain technology to provide an efficient, secure, and fast payment for medicines, and to show end-to-end real-time data visibility across the supply chain.
The blockchain was integrated with M-supply used at the CMS. As soon as an invoice was generated for a health facility, it was uploaded into the blockchain network. The HFMC were able to review the invoice, and approve or decline the invoice via a mobile application, regardless of their location. Once an invoice was accepted and approved by the HFMC, the blockchain network automatically generated a payment instruction, and money was transferred from the account of the health facility to that of the CMS. The accounting unit was able to confirm the transaction within five minutes, and as soon as this was done, the health facility received the medicines from the CMS. Health facilities also used the mobile application to confirm receipt of medicines from the CMS, register all dispatches of medicines from the main store in each health facility to the different dispensaries within the health facility, and from the dispensaries to patients. Each transaction was registered in the blockchain. Finally, a web-based front-end application enabled authorized users to view all medicine supply chain movements and stock levels at different locations (stores) of the medicine supply chain.
As a result of the automated procurement approval and payment functionality via the blockchain, the time taken for health facilities to complete payment for procurement and transport these medicines to their health facilities occurred amounted to less than 24 hours and eliminated risks of bounced cheques. Using the web-application, the logistics management coordinating units (LMCUs), the State Ministry of Health, and other relevant stakeholders had real-time end-to-end data visibility in the movement of medicines across the supply chain. This provided insight into commodity utilization and timely information for procurement.