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OVERVIEW OF PRIVATE ACTORS IN THE MOZAMBICAN HEALTH SYSTEM AND RAPID ASSESSMENT OF THE SUPPLY CHAIN
TECHNICAL REPORT
APRIL 2019 This publication was produced for review by the United States Agency for International
Development. It was prepared by ThinkWell for Management Systems International (MSI), A Tetra
Tech Company
MOZAMBIQUE MONITORING AND EVALUATION MECHANISM AND SERVICES
MSI Agreement No: 6110000.01.18001.BPA.02
ThinkWell Prime Contract/Task Order #: AID-656-c-17-00002
Mozambique Monitoring and Evaluation Mechanism Services (MMEMS)
DISCLAIMER
The authors’ views expressed in this report do not necessarily reflect the views of the United States
Agency for International Development or the United States Government.
OVERVIEW OF PRIVATE ACTORS IN THE MOZAMBICAN HEALTH SYSTEM AND RAPID ASSESSMENT OF THE SUPPLY CHAIN | i
ii | OVERVIEW OF PRIVATE ACTORS IN THE MOZAMBICAN HEALTH SYSTEM AND RAPID ASSESSMENT OF THE SUPPLY CHAIN
CONTENTS
ABBREVIATIONS ................................................................................................. III
EXECUTIVE SUMMARY ........................................................................................ 1
INTRODUCTION AND OBJECTIVES OF THE REPORT ................................ 6CONTEXT ................................................................................................................................................................. 6REPORT OBJECTIVES ............................................................................................................................................ 6
METHODOLOGY AND LIMITATIONS .............................................................. 7METHODOLOGY ................................................................................................................................................... 7LIMITATIONS ........................................................................................................................................................... 9
HEALTH SYSTEM CHALLENGES AND OPPORTUNITIES FOR THE PRIVATE SECTOR ................................................................................................ 10
LANDSCAPE OF HEALTH SECTOR ACTORS IN MOZAMBIQUE ............ 12PUBLIC SECTOR ACTORS................................................................................................................................. 13DEVELOPMENT PARTNERS .............................................................................................................................. 14PRIVATE SECTOR ACTORS .............................................................................................................................. 14PUBLIC-PRIVATE DIALOGUE: STATUS AND OPPORTUNITIES .......................................................... 15
PUBLIC-PRIVATE HEALTH SERVICE DELIVERY .......................................... 17PUBLIC-PRIVATE DISTRIBUTION OF HEALTH FACILITIES ................................................................... 17USE OF HEALTH SERVICES ............................................................................................................................... 18
MARKET SYSTEM ANALYSIS OF THE MOZAMBICAN SUPPLY CHAIN 24PUBLIC-PRIVATE MIX IN MOZAMBICAN SUPPLY CHAIN .................................................................... 24MARKET SYSTEM ANALYSIS OF MOZAMBICAN DRUG SUPPLY CHAIN ........................................ 28
WAY FORWARD .................................................................................................. 38CATALYZE PUBLIC-PRIVATE DIALOGUE .................................................................................................... 38STRENGTHEN THE COLLECTION, ACCESS AND USE OF STRATEGIC INFORMATION ......... 38PROFESSIONALIZE PUBLIC PROCUREMENT ............................................................................................. 39STRENGTHEN THE TRANSPORT MARKET ................................................................................................ 40
ANNEX 1: MARKET-BASED ANALYTICAL FRAMEWORK ......................... 41
ANNEX 1I: CATEGORIZATION OF HEALTH FACILITIES ......................... 43
ANNEX 1II: DATABASE INFORMATION ........................................................ 44
ANNEX IV: PERSONS INTERVIEWED ............................................................. 45
ANNEX V: WORKSHOP ATTENDANCE LIST ............................................... 46
ANNEX VI: BIBLIOGRAPHY .............................................................................. 48
OVERVIEW OF PRIVATE ACTORS IN THE MOZAMBICAN HEALTH SYSTEM AND RAPID ASSESSMENT OF THE SUPPLY CHAIN | iii
ABBREVIATIONS
A2A Assessment to Action
AES Anuário Estatístico de Saúde (Health Statistical Yearbook)
AMTRAMO alternative and traditional medicine
ANAFP Associação Nacional das Farmácias Privadas
(National Association of Private Pharmacies)
ANC antenatal care
ARV antiretroviral
CIF cost of insurance and freight
CIP Center for Public Integrity
CMAM Central de Medicamentos e Artigos Medicos (Central Medical Store)
CSO civil society organization
CSR corporate social responsibility
CTA Confederação das Associações Económicas
(Confederation of Economic Associations)
DAF Direção de Administraçao e Financas
(National Directorate for Administration and Finance)
DDC delivery duty contract
DHIS District Health Information System
DHS Demographic Health Survey
DNAM Direcção Nacional de Assistencia Me dica (National Directorate for Medical Care)
DNF Direcção Nacional de Farmácia (National Directorate for Pharmacies)
DPC Direcção de Planificação e Cooperação
(National Directorate for Planning and Cooperation)
DPS Direcção Provincial de Saúde (Provincial Health Directorate)
EPI Expanded Program on Immunization
FBO faith-based organization
FP family planning
GAVI Global Vaccine Initiative
GFF Global finance facility
GFTAM Global Fund to Fight Tuberculosis and Malaria
GHSC-PSM USAID Global Health Supply Chain Program – Procurement and Supply
Management
iv | OVERVIEW OF PRIVATE ACTORS IN THE MOZAMBICAN HEALTH SYSTEM AND RAPID ASSESSMENT OF THE SUPPLY CHAIN
GRM Government of the Republic of Mozambique
HRH Human resources for health
ICAP International Center for AIDS Care and Treatment Programs
IMASIDA Inquerito de Indicadores de Imunizacao, Malaria e HIV/SIDA
(Survey on Indicators of Immunization, Malaria and HIV / AIDS)
IMR Infant mortality rate
INE Instituto Nacional de Estatística (National Statistical Institute)
INGO international nongovernmental organization
IOF Inquérito sobre Orçamento Familiar (Family Budget Survey)
MCH Maternal and child health
MCTESTP Ministério da Ciência e Tecnologia, Ensino Superior e Técnico Profissional
(Ministry of Science, Technology, Higher and Technical Vocational Education)
MEF Ministério da Economia e Finanças (Ministry of Economy and Finance)
MISAU Ministério da Saúde de Moçambique (Mozambican Ministry of Health)
MM4H Managing Markets for Health
MMEMS Mozambique Monitoring and Evaluation Mechanism Services
MOH Ministry of health
NCD Noncommunicable disease
NGO Non-governmental organization
OECD Organization for Economic Cooperation and Development
PELF Plano Estrategico da Logistica Farmaceutica
(Pharmaceutical Logistics Strategic Plan)
PEPFAR U.S. President’s Emergency Plan for AIDS Relief
PESS Plano Estrategico do Sector da Saude (Health Sector Strategic Plan)
PFP Private for-profit
PHC Primary health care
PLASOC-M Plataforma da Sociedade Civil Para Sau de (Platform of Civil Society for Health)
PMI President’s Malaria Initiative
PNFP Private not-for-profit
PPD Public-private dialogue
PPM Public-private mix
PPP Public-private partnership
PSA Private sector assessment
OVERVIEW OF PRIVATE ACTORS IN THE MOZAMBICAN HEALTH SYSTEM AND RAPID ASSESSMENT OF THE SUPPLY CHAIN | v
RMCH Reproductive maternal and child health
SADC Southern African Development Community
SDSMAS Serviços Distrital de Saúde, Mulher e Acção Social
(District Services for Health, Women and Social Action)
SHOPS Strengthening Health Outcomes through the Private Sector
SKU Stock-keeping unit
SWOT Strengths, weaknesses, opportunities and threats
THE Total health expenditure
UK-DFID UK Department for International Development
UN United Nations
UNFPA United Nations Population Fund
UNICEF United Nations International Children's Emergency Fund
USAID United States Agency for International Development
WHO World Health Organization
usaid.gov OVERVIEW OF PRIVATE ACTORS IN THE MOZAMBICAN HEALTH SYSTEM AND RAPID ASSESSMENT OF THE SUPPLY CHAIN | 1
EXECUTIVE SUMMARY
With a rapidly expanding population and the specter of decreasing external assistance for health on the
horizon, Mozambique needs to consider new ways to provide health services and products. Progress in
coverage and health outcomes may be at risk, and the predominantly public system still struggles to provide
quality health services to the whole population.
Despite the absence of a public sector strategy to engage the private sector in the health system,
businesses are increasingly active in various health-related markets including service delivery, retail
pharmacies and transport of health commodities for government entities through public tenders.
Simultaneously, interest in the private sector is increasing, as evidenced by USAID’s recent Private Sector
Engagement Strategy and by the call of the Ministry of Health (MISAU) for a public-private framework in
the Health Sector Strategic Plan (PESS). This evolving landscape provides opportunities for USAID, MISAU,
other partners and private sector representatives to engage more deliberately and consistently, while
pursuing shared interests that align with the needs and goals of the Mozambican health system.
The purpose of this report is to share findings about the private sector in Mozambique’s health system
based on a rapid assessment conducted by Mozambique Monitoring and Evaluation Mechanism Services
(MMEMS). The report presents information and insights drawn from interviews of key stakeholders, focus
group discussions, survey data and review of documentation. These data were analyzed using a market
analysis framework that considers suppliers, buyers, government regulation and market bottlenecks.
Preliminary findings from the rapid assessment informed a MMEMS workshop about supply chains in
December 2018. This report includes stakeholder input from that meeting.
The report presents a landscaping of the health system as it relates to the private sector, including issues
related to public-private engagement. It then focuses on the service delivery market and, to a greater
extent, on the supply chain markets.
Key Findings: Landscaping
Private sector representatives are active in all areas of the health system, including
service delivery, human resource training and production and distribution of drugs. They also
provide key support functions such as finance, transportation and information technology services.
The table that follows lists challenges from the PESS and poses possible points of entry for the private sector based on the MMEMS stakeholder interviews, focus group discussions, the December workshop and regional experiences.
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Health System Challenges and Opportunities for Private Sector Role
Challenges Possible private sector contribution
Low investment in urban health
facilities
Can private health facilities in urban areas be leveraged to address MISAU
investment constraints? Can government prioritize public investments
to focus on the poorer segments of the population while
incentivizing wealthier segments to seek care with a private
provider?1
Noncompliance of quality
standards in both public and
private health facilities
Can MISAU bring together private provider groups to agree on simple
quality tools to establish minimum standards and a process for adherence?
High costs for management and
administration of public health
facilities and programs
Can the private sector share its expertise in efficient management process
and cost-reduction strategies? Can MISAU outsource nonmedical activities
to the private sector to reduce cost and improve efficiency?
Low productivity of public health
staff and inefficient delivery of
primary health care (PHC)
Can MISAU contract private providers to deliver cost-efficient PHC
services? Can the private sector share its expertise with MISAU to deliver
more efficient PHC services?
Limited access to health facilities,
particularly in rural areas
Can private sector providers deliver PHC closer to underserved
population groups?
Poor quality data produced for
policy and planning
Can private sector actors report data more frequently to MISAU? Can
MISAU provide the private sector with data not only on the public sector,
but also on the private sector? Is there a role for an entity outside of
MISAU to consolidate and analyze data to inform public and private actors?
Capacity to train health
professionals
Can government open MISAU or donor-sponsored clinical training2 to
private providers to improve the quality of care in the private sector?
Capacity in planning and in
monitoring and evaluation
Can government encourage the private sector to organize into private
sector representative groups? Can MISAU systematically include private
sector representatives in health policy and planning to strengthen
regulation and oversight of all health actors?
Conducive context for favorable
partnerships
Can private sector representative groups work with the government
to identify partnerships that will help address health challenges and
system gaps?
1 World Bank data show that public health systems disproportionately benefit middle- and upper-income groups compared to the poorest income quintiles. In response, many countries are prioritizing public health spending to benefit the poorest of the poor, leaving wealthier segments of the population to seek care in the private system. 2 Donors invest heavily in training public health staff in a variety of clinical and health delivery areas (both pre-service and in-service trainings). As a first step to improve quality in the private sector, several health ministries in East Africa have opened donor training to include private providers in the same catchment areas as public providers that are being trained. These ministries allocate a number of slots for private providers who meet certain eligibility criteria (e.g., reaching underserved populations, expanding key health services like family planning, HIV/AIDS, etc.).
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Status of public-private dialogue
MISAU has not yet defined its strategy to engage with the private sector. However,
the head of the National Directorate for Planning and Cooperation (DPC) expressed interest in
better understanding the private sector to support its objectives and the PESS strategy, and to
engage senior leadership from various departments (Permanent Secretary, Public Health and the
National Directorate for Medical Care, as well as DPC).
MISAU collects limited information on private practices, mainly restricted to licensing.
Even when MISAU consults the private sector for decision-making, it does so in a non-structured
way. Private sector actors perceive a more inclusive process as essential, especially to design the
decrees and diplomas that implement new laws.
Initial dialogue across private actors working in the supply chains during the December workshop
catalyzed interest for improved communication and structuring of the sector.
Key Findings: Service delivery market
Use of private health facilities and providers is low, even for such high-priority
services as reproductive, maternal and child health. Among the surveyed population who
visited a health facility, more than 90 percent visited a public health facility and 4 percent visited a
private facility.
Supply and demand for private health services is present in all provinces but
concentrated in urban areas. Maputo City is home to 141 of the nation’s 224 private facilities.
Highest demand for private health services is in Maputo City (12 percent), Maputo Province
(11.3 percent) and Cabo Delgado (8.0 percent).
Use of private services is greater in high-income groups, but is still very low compared to
neighboring countries.
Oversight of the private provision of services is limited. The current regulation of private
practice in Mozambique is from 1992 and is considered outdated. The Private Medical Unit based
in the National Directorate for Medical Care (DNAM) is small and lacks capacity to properly
monitor and supervise private practice.
Key Findings: Drug Supply Chain Market
Two parallel drug supply chains are active in Mozambique; one serves the public sector
and one serves private clinics and pharmacies. No coordination exists between the two.
Private actors are active in the three sub-markets of the drug supply chain:
1. Production: Two local manufacturers produce drugs in the country.
2. Wholesale: 183 private importers represent or buy from international manufacturers and
sell to the public and private sector buyers, and 87 private companies handle transport.
3. Retail: More than 845 retail pharmacies operate throughout Mozambique.
Private transportation of drugs and commodities is evolving rapidly. The Central de
Medicamentos e Artigos Medicos (CMAM, the Central Medical Store) contracts out all
4 | OVERVIEW OF PRIVATE ACTORS IN THE MOZAMBICAN HEALTH SYSTEM AND RAPID ASSESSMENT OF THE SUPPLY CHAIN usaid.gov
transportation to provincial warehouses. Some provinces and implementing partners also contract
private companies to reach “last-mile” distribution points.
Several factors constrain the growth of retail pharmacies, especially in rural areas,
including regulation requiring at least 7,000 people in the catchment area; the limited number of
licensed pharmacists, even in urban areas; and public sector supply of low-priced drugs to all
consumers, regardless of income.
Insufficient information about and regulation of private transport companies hampers
public and private buyers’ ability to evaluate and manage suppliers (transport companies); this
includes pricing information, as well as a list of transport companies and their capabilities, such as
cold chain. No regulation sets the standards for health commodities transportation.
The National Directorate for Pharmacies (DNF) has limited capacity to enforce its current
regulation. With limited resources and staff, the DNF is not able to conduct necessary
supervision of the pharmacy sector.
Key Findings: Bottlenecks relevant to both service delivery and drug supply chain
Complex public tendering processes and delays in payment constrain private sector
engagement with the public sector and limit entry of new companies, as larger companies are
better able to cope with delayed payments from the government.
All private actors struggle to access capital to expand their business due to high
interest rates in the banking sector. High interest rates also compound the risk of delayed
payment because they raise the cost of financing accounts receivables. Banks also typically require
a financial guarantee to extend credit.
The rate of poverty is declining, but consumers’ ability to pay for private services or
products is limited, as the poverty rate stands at 48 percent of the population.
WAY FORWARD
Ideas generated by key stakeholders and MEMMS illustrate a range of areas where USAID, government,
businesses and other partners can harness the private sector to improve health system performance and
outcomes.
Catalyze public-private dialogue: Moving forward on any ideas will require dialogue and coordination.
1. Support the private sector to continue to form membership organizations.
2. Establish an umbrella organization that brings private sector segments together; for instance, a
health market group in the Confederation of Economic Associations (CTA).
3. Increase understanding within MISAU’s leadership on the private sector and facilitate the
creation of a cross-department task force to build government capacity to engage.
4. Form a technical advisory group, including public and private stakeholders, to define and steer
further research and dialogue on public-private partnerships for health.
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Strengthen strategic information: Accurate data on both the public and private sectors, insightful
analysis and easy access will inform dialogue and coordination, as well as strategies for actions.
1. Support market actors to collect and share market information among themselves.
2. Facilitate a discussion between public and private sectors to improve data sharing:
a) Identify constraints to private sector reporting; make it easier for businesses to share data.
b) Support MISAU to analyze and present data on the private health sector.
c) Support government units to better communicate with the markets they most affect. For example,
it was suggested that MISAU/CMAM develop an annual plan for the drug supply chain.
d) Conduct analysis on market scope, size, concentration, trends and constraints to growth.
3. Conduct a deeper market analysis of the drug supply chain to build on this rapid assessment and
the momentum of the MMEMS workshop.
Professionalize public procurement: Stakeholders engaged in the drug production and wholesale
markets all cited challenges in responding to government procurement of drugs.
1. Act together to reduce payment times and government compliance with contractual
terms.
2. Work with the banking sector on options to facilitate lines of credit to cope with late
payments.
3. Engage the private sector in tender design through a bid conference.
4. Engage the private sector to update the catalogue of equipment, medicines and other supplies.
5. Enhance capacity within MISAU to design tenders to reflect the precise requirements of the
end user.
6. Conduct market assessments prior to writing the terms of reference for tenders.
7. Establish external audit procedures to verify compliance with public procurement regulations.
Strengthen the transport market.
1. Build the capacity of private transporters and of logistics and customs companies to address special requirements of pharmaceutical logistics to ensure protocols are followed (cold chain, security, insurance).
2. Improve access and transparency of information about suppliers of transport and logistics services by developing a registry of companies and their capacities (e.g., cold chain, storage).
3. Support the DNF to develop policies and balanced approaches to regulate the transportation market for health.
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INTRODUCTION AND OBJECTIVES OF THE REPORT
CONTEXT
Mozambique faces a complex set of public health challenges, including a widespread HIV epidemic
(13 percent prevalence), a high incidence of malaria and unacceptably high maternal mortality rates
(489/100,000). To respond to these challenges, the Government of the Republic of Mozambique (GRM)
receives significant support from several international donors, including the Global Finance Facility (GFF),
Global Fund to Fight Tuberculosis and Malaria (GFTAM), the Global Vaccine Initiative (GAVI) and the U.S.
President’s Emergency Plan for AIDS Relief (PEPFAR) and President’s Malaria Initiative (PMI). Indeed,
international donors fund almost half (48.9 percent) of total health expenditures of the Mozambican public
health system and contribute a higher level of funds than the GRM does (46.35 percent).
Heavy reliance on development partners to finance the Mozambican health system has prompted the
GRM, the United States Agency for International Development (USAID) and other stakeholders to
examine domestic resources, including the private health sector. In recent years, the private sector
generally and its health segment specifically have grown rapidly, especially in urban areas. To date, the
USAID, GRM and other actors have not fully tapped into the private sector to complement existing efforts
to deliver health care to the Mozambican population.
To assist the GRM, USAID, the private sector and other stakeholders in exploring this option, USAID
contracted Mozambique Monitoring and Evaluation Mechanism Services (MMEMS) to facilitate a
preliminary public/private workshop on engaging the private sector in health care provision. To provide a
conceptual foundation for that event, MMEMS was also asked to conduct a rapid assessment of the
landscape of private health sector actors and gather preliminary information on the private actors in the
drug supply chain, an area of specific interest to the Mozambican Ministry of Health (MISAU). The analysis
was conducted in the months before the December 10 workshop.
Historically, the government has appeared to take a cautious approach to market development, perhaps
because health care in Mozambique has been considered a basic right that many believe should be free.
The hope is that information and dialogue will help private and public stakeholders identify opportunities
to engage so they can address health system challenges and improve health outcomes in Mozambique.
REPORT OBJECTIVES
The primary purpose of this report is to provide an overview of the private health sector, some of the
challenges it faces and situations when the private health sector has a comparative advantage to help
MISAU address some of its most longstanding and pressing health issues. The report also identifies
opportunities to improve dialogue between public and private health actors and their partners. The
information is intended to ensure that USAID, MISAU and other actors can have informed and productive
discussions on the engagement of the private sector in the health system.
The information and insights presented are drawn from interviews of key stakeholders, focus group
discussions, review of documentation and survey data and the MMEMS workshop on December 10, 2018.
The report presents a landscaping of the health system as it relates to the private sector, including issues
related to public-private dialogue. It then focuses on the service delivery market and, to a greater extent,
the drug supply chain markets.
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METHODOLOGY AND LIMITATIONS
METHODOLOGY
The team employed a mixed-methods approach to collect information on the Mozambican health sector,
using both quantitative and qualitative approaches. The team used two complementary platforms to
organize and analyze the data collected:
An adaptation of USAID’s Assessment to Action (A2A) approach3 to assess the private health
sector. This approach describes how to conduct a comprehensive private sector assessment (PSA).
The market-based Managing Markets for Health4 approach developed by the World Bank in
partnership with GFF.
The qualitative information was collected only from actors from the supply chain, while the quantitative
information was collected for all private actors.
ASSESSMENT TO ACTION (A2A)
USAID’s Strengthening Health Outcomes through the Private Sector (SHOPS) project developed the
Assessment to Action Guide to gauge the private health sector’s potential in a given health system. The
handbook describes how to carry out a comprehensive PSA and suggests strategies to encourage greater
buy-in for the PSA’s recommendations to engage relevant stakeholders. By providing key data on the size,
scope and activities of the private sector, the PSA assists local stakeholders and development partners to
devise strategies, make decisions and design programs to maximize private sector contributions to health.
Figure 1 shows the five steps of a comprehensive PSA process; the handbook asserts that this process
requires approximately one year to engage health system stakeholders. A wide-ranging PSA often entails
original data collection and analysis of existing population-based data sets. As this was only the first step
in a much longer process, the team reduced the scope of the PSA process to fit the planned timeframe.
FIGURE 1: ASSESSMENT TO ACTION STEPS
To plan the rapid assessment, the team identified data sources and selected public and private
stakeholders to be interviewed.
To learn about the private health sector, the team reviewed the literature and conducted stakeholder
interviews. The team met with a diverse range of public and private sector individuals, mostly from Maputo.
The team used semi-structured interview guides in focus groups or one-on-one settings, interviewing a total
of 27 stakeholders. Annex III lists the sources of information, data collected and stakeholders interviewed.
3 https://assessment-action.net4 https://m4h.sps.ed.ac.uk/
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MARKET-BASED ANALYTICAL FRAMEWORK
To analyze the information on the public and private sectors in Mozambique and present main findings,
the team used a market-based analytical framework, synthesized in Figure 2.
FIGURE 2: MARKET-BASED ANALYTICAL FRAMEWORK
The report gathers preliminary barriers of the three sub-markets of drug supply chain: production, wholesale
and retail, though the majority of the information is on the wholesale market. Specifically, this approach:
Frames situation analysis in a market (e.g., buyers and sellers interacting).
Draws attention to the range of actors influencing market operation.
Compels a search for underlying (potential) root causes of performance problems associated with
market operation.
Emphasizes the multiplicity of causes and interventions.
Boils down key factors influencing market operation, including supporting functions and regulation.
Following the market-based analytical framework, the team was able to define the health market, the range
of market actors involved and their interactions, and to examine the systems—policies, market conditions,
institutional arrangements—that influence a market’s operations. The general factors above are categories
that were examined within the specific Mozambique context to better understand opportunities and
constraints to private sector engagement in the country’s health sector. A more detailed discussion of the
main factors examined when analyzing market systems and market dynamics is in Annex I.
DATA COLLECTION
The team used secondary sources to map private sector entities operating in the health sector and
compiled an extensive database registering stakeholders’ names, locations and activities, clustered into
usaid.gov OVERVIEW OF PRIVATE ACTORS IN THE MOZAMBICAN HEALTH SYSTEM AND RAPID ASSESSMENT OF THE SUPPLY CHAIN | 9
activity categories. It was an extensive two-month effort to access the information and triangulate when
possible. Annex II lists the categories of stakeholders reviewed under the mapping exercise, information
collected and main sources of information. The team also reviewed current regulation and strategic
documents, as well as national statistics and surveys.
After assessing the policy context and mapping and clustering private actors, the team conducted separate
focus groups with importers, transporters and private companies engaged in the health sector. The focus
groups helped the team understand an important dimension of opportunities and barriers for inclusion of
the private sector in health. Additionally, the team conducted semi-guided interviews with 10 individuals
from the public and private sectors. The list of persons interviewed is in Annex III.
To analyze the information, the team triangulated data from the literature review, the data set on private
actors and stakeholder interviews, using a market systems lens.
The preliminary analysis informed the keystone dialogue, a workshop with key stakeholders operating
in the public and private health care supply chain. The workshop included a total of 39 participants,
including government, importers, transporters, private health care service providers, MISAU, development
partners supporting the supply chain both technically and financially, the banking sector and private not-
for-profit (PNFP) organizations (see Annex III). Challenges emerging from the landscape analysis were
presented, and participants were invited to further discuss them in groups and provide their insights on
bottlenecks and key recommendations that could boost the private sector role in the supply chain in the
short term. The composition of each working group was designed to gather representatives from the
supply chain stages, with the objective of providing a comprehensive and integrated overview. Challenges
and recommendations identified during group discussions for both the private and public supply chains are
integrated across the analysis provided in this report.
LIMITATIONS
DATA QUALITY: The rapid assessment highlighted large gaps and low data quality related to the private
health sector. Since MISAU does not have a standard definition for the private health sector, inconsistencies
exist in how data on non-state actors are collected and reported. Moreover, MISAU regulations classifying
health facilities are out of date and do not entirely capture private sector activities. MISAU does not regularly
receive information, nor does it consistently report on the private sector, leaving information gaps. The main
source of data on the private sector—facility and pharmacy registration—is incomplete; it is not updated
regularly and does not provide an accurate picture of all players who are active in the private health sector.
To fill gaps, the team used Whitepages, websites and stakeholder inquires.
ACCESS TO MISAU REPRESENTATIVES: The team experienced some limitations in accessing key
stakeholders for interviews or focus group discussions. The team interviewed representatives from
CMAM, DNF and DPC, but MISAU required the Permanent Secretary’s approval for the team to meet
with other MISAU officials, which they did not receive in time. As a result, the team was unable to
interview some key public officials, such as the heads of the MISAU Reform Unit and the National
Directorate for Medical Care (DNAM). Limited responsiveness from the public sector was also reflected
in the workshop participation, which included only one MISAU representative.
10 | OVERVIEW OF PRIVATE ACTORS IN THE MOZAMBICAN HEALTH SYSTEM AND RAPID ASSESSMENT OF THE SUPPLY CHAIN usaid.gov
HEALTH SYSTEM CHALLENGES AND OPPORTUNITIES FOR THE PRIVATE SECTOR
Reviewing health challenges and system gaps helps identify opportunities for the private sector (broadly
defined) to contribute. As stated in USAID’s Private Sector Engagement Strategy:5
From improving health outcomes to providing access to commodities in complex emergencies, private-sector
entities have a vital role in achieving development and humanitarian outcomes as a direct or indirect
byproduct of their businesses and investments.
Therefore, it is useful to first delineate some ways the private sector can contribute to health system
goals and performance:
Growth of the private economy generates jobs that lift families out of poverty and generates tax
revenue that the government can allocate to the health sector.6
Private employers can pay for private health insurance for employees and their dependents and/or
pay taxes for social health insurance.
Private health providers can be contracted and paid by private or public payers (such as a private
insurance company or the government) to deliver health services.
Private companies supply private or public health facilities with support services (supply chain,
security, laundry).
Private companies and their investors can launch financially viable health-related products and
services targeting low-income markets; examples include BIMA7 for insurance, Living Goods for
community health workers,8 JEEON9 for drug sellers and PSI for health products.
The private sector can drive innovation and the adoption of new technologies that improve
productivity and even social inclusion (e.g., Vodafone and M-Pesa).
Private businesses can adopt the “triple bottom line” and pursue social and environmental as well
as financial goals. This includes companies that directly donate resources as a form of corporate
social responsibility.
The challenges confronting the Mozambican health system are well documented in various assessment and
policy documents produced by MISAU and development partners.10 Despite progress, the Mozambican
health sector is still struggling to respond to its population’s needs. Looking ahead, the threat of declining
foreign assistance and rising population growth risks erosion of its gains to date.
5 https://www.usaid.gov/work-usaid/private-sector-engagement/policy6 Reeves, A. et al. Financing Universal Health Coverage—Effects of Alternative Tax Structures on Public Health Systems: Cross-National Modeling in 89 Low-Income and Middle-Income Countries. Lancet 386, 274–280 (2015) 7 http://www.bimamobile.com/about-bima/about-us-new/8 https://livinggoods.org/9 https://www.jeeon.co/10 PESS 2014-2019; PELF 2014; World Bank 2014.
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Mozambique’s health sector is still challenged by the burden of communicable diseases and malaria, as well
as poor maternal and child health outcomes. HIV prevalence is one of the highest in the region, and
Mozambique is among the 20 highest TB burden countries globally (WHO 2017). At the same time,
noncommunicable diseases are on the rise, such as a 4.6 percent prevalence of diabetes.
MISAU’s National Strategic Plan 2014-19 outlines the critical system gaps as well as the strengths,
weaknesses, opportunities and threats (SWOT) of the Mozambican health system.11 Table 1 lists several
challenges from the National Plan and poses possible points of entry for the private sector to contribute.
The ideas are drawn from the MMEMS key stakeholder interviews, focus group discussions, the December
workshop and regional experiences.
TABLE 1: PRIORITY SYSTEM CHALLENGES AND OPPORTUNITIES WITH POSSIBLE PRIVATE SECTOR ROLE
Challenges Possible private sector contribution
Low investment in urban health facilities
Can private health facilities in urban areas be leveraged to address MISAU investment constraints? Can government prioritize public investments to focus on the poorer segments of the population while incentivizing wealthier segments to seek care with a private provider?12
Noncompliance of quality standards in both public and private health facilities
Can MISAU bring together private provider groups to agree on simple quality tools to establish minimum standards and a process for adherence?
High costs for management and administration of public health facilities and program
Can the private sector share its expertise in efficient management process and cost-reduction strategies? Can MISAU outsource nonmedical activities to the private sector to reduce cost and improve efficiency?
Low productivity of public health staff and inefficient delivery of primary health care (PHC)
Can MISAU contract private providers to deliver cost-efficient PHC services? Can the private sector share its expertise with MISAU to deliver more efficient PHC services?
Limited access to health facilities, particularly in rural areas
Can private sector providers deliver PHC closer to underserved population groups?
Poor quality data produced for policy and planning
Can private sector actors report data more frequently to MISAU? Can MISAU share not only data on the public sector but also data on the private sector with the private sector? Is there a role for an entity outside of MISAU to consolidate and analyze data to inform public and private actors?
Capacity to train health professionals
Can government open up MISAU and/or donor-sponsored clinical training13
to private providers to improve quality of care in the private sector?
11 Health Strategic Plan: 2014-2019. Mozambique Ministry of Health 12 World Bank data show that public health systems disproportionately benefit middle- and upper-income groups compared to the poorest income quintiles. In response, many countries are prioritizing public health spending to benefit the poorest of the poor, leaving wealthier segments of the population to seek care in the private system. 13 Donors invest heavily in training public health staff in a variety of clinical and health delivery areas (both pre-service and in-service trainings). As a first step to improve quality in the private sector, several ministries of health in East Africa have opened donor training to include private providers working in the same catchment areas as public providers being trained. These ministries allocate a number of slots for private providers who meet certain eligibility criteria (e.g., reaching underserved population, expanding key health services like family planning, HIV/AIDS, etc.).
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Challenges Possible private sector contribution
Capacity in planning and in monitoring and evaluation
Can government encourage the private sector to organize into private sector representative groups? Can MISAU systematically include private sector representatives in health policy and planning to strengthen regulation and oversight of all health actors?
Conducive context for favorable partnerships
Can private sector representative groups work with the government to identify partnerships that will help address health challenges and system gaps?
Many important challenges cited in the National Strategic Plan would not be considered appropriate for
private sector attention. For example, the private sector may not be willing or able to deliver health services
in rural areas or to populations with little or no ability to pay, unless the government paid the private sector
to serve such populations, making it financially feasible. The government also typically performs key public
health functions, such as disease surveillance and public health campaigns, as a public good.
With these challenges and possible entry points in mind for the private sector, the next section presents
the landscape of key health sector actors in Mozambique.
LANDSCAPE OF HEALTH SECTOR ACTORS IN MOZAMBIQUE
Traditionally, when people speak of “the Mozambican health system,” they’re referring to the National
Health System, and most health policies and strategies focus on government organizations. While the
public sector clearly predominates, like almost every health system in the world, Mozambique has a mix
of public and private actors, and the role of external donors is significant. MMEMS did a landscaping of
health system actors working in or related to the Mozambican health sector, based on information
gathered during the stakeholder interviews and data from MISAU. This landscape was presented and
validated at the December workshop. As Figure 3 shows, private health sector actors include private not-
for-profit organizations (faith-based and community-based), private for-profit organizations, and informal
providers such as traditional healers. Each group of actors is described below. However, for the purposes
of this MMEMS exercise, the focus is on for-profit organizations to reflect USAID’s Private Sector
Engagement Strategy.
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FIGURE 3: MOZAMBICAN HEALTH SECTOR LANDSCAPE
PUBLIC SECTOR ACTORS
Public sector actors are grouped and discussed in terms of their role related to the private sector.
STEWARDSHIP AND REGULATION: MISAU is the steward of the Mozambican health sector and
oversees all public and private health facilities in the country. Decree 9/1992 regulates the private health
sector, including the private facilities. Despite passage of the more recent Law No. 24/2009, no updated
decree regulates private sector practice, so Decree 9/1992 is still in use. Ministerial Decree No. 98/94
(July 27) establishes the fees that private providers must pay to the State to maintain their license to
practice. The fees constitute state revenue and are reimbursed to the Ministry of Health to cover the
costs associated with regulating the private health sector, such as printing documents and facility inspection
(transportation and fuel). It remains to be validated if the fee revenue is indeed transferred from the
national treasury account to MISAU’s account.
The following MISAU bodies are responsible for regulating the private health sector:
The National Directorate for Medical Care
(DNAM) sets the standards and licensing
requirements for private health facilities at the
national level. The Private Medical Unit
oversees collection of information for licensing
of private health care facilities and private
professional practices and presents them to the
ministry for final approval.
The Provincial Health Directorates (DPS) and
the District Services for Health, Women and Social Action (SDSMAS) are the decentralized
agencies that license private facilities and health professionals, respectively.
PUBLIC SECTOR PRIVATE HEALTH SECTOR
President Office Prime Minister
Ministry of Economy and Finance (MEF)
Ministry of Health (MISAU)Minister & Permanent Secretary
DPC, DAF, DNAM, QI&H, PNSP, Teaching
Hospitals
Central and Regional warehouses (CMAM)National Directorate of Pharmacies
Local GovernmentProvincial and District Health Office (DPS &
SDSMAS)
Donor Basquet Fund Prosaude (Ireland, Switzerland, Denmark,
Belgium, Italy, Spain, UNICEF, UNFPA GFF (World Bank, DFID, Netherlands)
Private not-for-profit sector
Private for-profit sector
FBOs / CBOs/ CSOs / International NGOs
Professional Health AssociationsDoctors (AMM, OrMM), Nurses (ANEMO), Midwifes, Paediatricians,
Gynaecologists, Pharmacies (ANAFP), Private health care providers (APROSAP), manufacturers and importers (AIPROMEM)
Pharmacies & Laboratories
Supply Chain ActorsLocal Manufacturers,
Importers/Distributors/ Wholesalers, Transporters
Health FacilitiesHealth posts, Clinics,
Medical centers & rooms, Hospitals
Health Financing Health Plan,
Private Insurers, Banks, MFIs
Private Training Institutes
Traditional M
edicin
eA
lternative m
edicin
e (A
MET
RO
)
Info
rmal Se
ctor
(No
n-lice
nsed, un
trained
pro
viders-q
uacks)
CabinetPPP Unit
Development Partners in Health PEPFAR, USAID, CDC, Global Fund, GAVI, DFID, EU, World Bank, UN Agencies, Irish
AID, Italian Cooperation, SDC
Private Companies(IT, Technologies, etc)
Health ConsumersCivil Society Organizations (CSOs) representing health, gender, equity and poverty issues, PLASOC-M
Ministry of Science and Technology, Higher and Technical Vocational
EducationMedical Universities
OBSERVATIONS FROM KEY
INFORMANTS
The unit in charge of overseeing private facilities
is small and marginalized, lacking independence.
Key informants report that the capacity of the
unit is too limited to ensure strategic use of
information and proper oversight of the sector.
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The National Directorate for Pharmacies (DNF) is responsible for approving new medicines,
ensuring the quality of existing drugs circulating in the health system, licensing all actors in the
supply chain and ensuring compliance with quality standards.
The Ministry of Science and Technology, Higher and Technical Vocational Education (MCTESTP)
licenses and supervises public and private medical training institutions.
PUBLIC HEALTH FINANCING: The Ministry of Finance (MEF) allocates funds to MISAU. International
donors subsidize government funds to MISAU through direct budget or vertical funding. With ongoing
decentralization of services, MEF directly allocates funds to provincial and district health offices to manage
PHC facilities, as well as district and provincial hospitals.
GOVERNANCE: A public-private partnership (PPP) unit within the MEF is responsible for enacting the PPP
Law, which currently does not include health care services. However, as highlighted by interviewed
stakeholders, upcoming revisions to the law could enable inclusion of health care. Parliament does not have
a committee or commission dedicated to health sector issues or to drafting health policy and legislation.
DEVELOPMENT PARTNERS
Donor funds account for 49 percent of the health budget, with government contributing 46 percent.14
Two basket funds provide direct, on-budget funding to support improvement in maternal child health:
ProSaude (including Belgium, Denmark, Ireland, Italy, Spain, Switzerland, UNICEF and the United Nations
Population Fund) and the Global Finance Facility (GFF), funded by the World Bank, the Netherlands and
the U.K.’s Department for International Development. U.S. Government funding is through bilateral
agreements. The United States’ PEPFAR program is the major health financer in the country, providing
approximately $300 million annually to eradicate HIV/AIDS.
PRIVATE SECTOR ACTORS
PRIVATE FOR-PROFIT actors in service delivery include private health professionals and
facilities. Private for-profit actors in the commodity supply chain include manufacturers,
importers/wholesalers, transportation/logistics companies and retail pharmacies. In training and
education, 15 private medical training institutions are available to various cadres of health workers.
Many private companies provide functions that are relevant to the health sector, such as insurance,
information technology, security, laundry and other nonclinical services. Private health insurance
is still limited in Mozambique, with only 3 percent of adults insured. No mechanisms exist for
government to contract private facilities.15
NONPROFIT ACTORS include the many local nongovernmental organizations (NGOs) and
international nongovernmental organizations (INGOs) active in health. The above-referenced Law
24/2009 stipulates that the government will prioritize licensing of not-for-profit providers and
providers serving rural areas. However, this rapid assessment found almost no nonprofit actors
directly involved in service delivery. NGOs focus mainly on technical assistance to the public
health sector and communities.
14 Health Financing Profile: Mozambique (2016) 15 CENFRI, Making Access Possible Report (2014)
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PROFESSIONAL ASSOCIATIONS exist for each health care profession (e.g., doctors, nurses,
midwives, gynecologists) and nascent associations representing private health facilities such as the
National Association of Private Healthcare Providers (APROSAP) and the National Association
of Private Pharmacies (ANAFP). Currently, no single organization or association represents these
professional associations to unite the private sector’s perspective on health policy and planning.
However, a broad and relevant association is the CTA, which represents private business
associations across all sectors. The CTA is the official partner of dialogue with the government.
INFORMAL HEALTH PROVIDERS include traditional healers and the Traditional and
Alternative Medicine Practitioners association (AMETRAMO).
CIVIL SOCIETY engagement in health and representation of patients/consumers are limited in
Mozambique.16 Civil society organizations involved in health care are represented in the Platform
of Civil Society for Health (PLASOC-M), which aims to ensure civil society participation in
planning, operationalization and monitoring and evaluation of health care activities. PLASOC-M is
not affiliated with any professional or business associations (e.g., CTA). The Center for Public
Integrity has done work on tracking stock-outs in public health facilities.
PUBLIC-PRIVATE DIALOGUE: STATUS AND OPPORTUNITIES
As part of the landscaping exercise, MMEMS includes information about the current state of collaboration
and dialogue between public and private sector actors.
Despite the call to develop a public-private engagement framework in the current PESS, MISAU
has not yet defined its strategy to engage with the private sector. There is still no clear
definition of the private sector in Mozambique, nor a platform for dialogue. However, the head of
the National Directorate for Planning and Cooperation (DPC) expressed an interest in better
understanding the private sector to support its objectives and the PESS strategy and to engage
senior leadership from various departments (Permanent Secretary, Public Health and the National
Directorate for Medical Care, as well as DPC).
MISAU collects limited information on private practices, mainly restricted to licensing. It
does not conduct strategic analysis of the private sector provision of services, prices or growth,
16 Health Sector Strategic Plan 2014-2017
THE PRIVATE SECTOR IN THE PESS 2014-2019
“The importance of the private sector may grow in the future, both in the form of public-private partnerships
(PPPs) and in the impact of large private investment projects on the sustainability of the public health sector”
(PESS 2014-2019).
The National Health Sector strategy identifies the “poor coordination between the public and private sectors”
as a barrier to better engagement, acknowledges that “existing coordination mechanisms do not take into
account the diversity of the private sector and calls for the development of a PPP frame under the health sector
reform agenda” (PESS 2014-2019).
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leaving room for the private sector to develop without public sector engagement. CTA and
professional membership associations are seen as ways to efficiently engage and consult the sector.
Even when MISAU consults the private sector for decision-making, it does so in a non-structured
way. A more inclusive process is perceived as essential by private sector actors, especially for the
design of decrees and diplomas aimed at implementing the new law.
Initial dialogue during the December workshop across private actors within the supply chains
catalyzed interest in improved communication and structuring of the sector, and
development partners are looking into ways to provide further support.
Several ideas emerged from the workshop and interviews for opportunities to improve public-private
collaboration and dialogue:
Establish a private health sector platform for coordination, dialogue, and data sharing
between the private sector and the government. A possible convener is the Confederation of
Economic Associations (CTA). The platform should ensure adequate representation of all private
actor groups and enhance communication and data collection, including business opportunities for
private companies, market information on sub-sectors, and consultation regarding new policies
and regulations.
Develop an annual ministerial plan on supply chain operations to allow private actors to
better prepare for demand.
Engage the private sector in policymaking processes to design flexible tools and regulations
that better match the market needs (e.g., special registration processes for innovative or
specialized pharmaceutical products, regional registration system with neighbor countries).
Share findings and recommendations from the December workshop with government
representatives.
The discussion above indicates that private actors are active in all areas of the health system, from service
provision to human resource training, to production and distribution of drugs. They also provide key
support functions, such as insurance, information technology and other nonclinical services. The next two
sections of this rapid assessment present more detailed data on two of these areas: service delivery and
supply chain.
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PUBLIC-PRIVATE HEALTH SERVICE DELIVERY
This section presents data on the distribution of public and private health facilities by level and province
based on MISAU data, and patterns of service use of public and private providers based on two
household surveys.
PUBLIC-PRIVATE DISTRIBUTION OF HEALTH FACILITIES
Law No. 24/2009 regulates private health care provision.
Among other regulatory issues, Decree 9/199217 outlines the
categories and definitions for different private facilities (see
Annex I). Although MISAU health facility data are imperfect,
they provide a sense of the scale of the private health sector
and the scope of its activities. As Table 2 shows, the National
Health System (MISAU) continues to be the largest provider
of health services. Considering health facilities at all four levels,
private health care businesses own and operate only 224 out
of 1,852 facilities (12 percent); see the last row of Table 2. The
public sector manages most health facilities across all facility
levels (1 through IV). However, the private health sector manages a significant percentage (37 percent) of
Level II facilities, which include gynecology and general medicine (14 clinics), general surgery (13 clinics)
and pediatrics (13 clinics).
In absolute numbers, private health facilities are mainly concentrated in Level I (194 medical rooms and
medical centers). However, with 25 clinics and five hospitals, the private health sector covers 37 percent
of Level II facilities.18
High barriers to market entry, such as capital costs and more rigorous regulatory requirements to open
a hospital, may explain why the private sector invests in lower-level facilities.
TABLE 2: HEALTH FACILITY OWNERSHIP BY LEVEL
Facility Type Public Private Subtotal % Private
Level I 1,563 194 1,757 11.0%
Level II 51 30 81 37.0%
Level III 7 0 7 --
Level IV 7 0 7 --
Total 1,628 224 1,852 12.1%
17 Decree 9/92, May 26: Regulation of service provision by private entities including registration of facilities and professionals, conditions to open a private practice, complementarity with the public system (SNS), technical standards for private facilities.18 MISAU facility categories only apply to public facilities. No similar classification exists for private facilities. The team matched similar private facilities to the levels for comparison.
HEALTH FACILITY DEFINITIONS
Level I: Urban and rural health centers; health posts
Level II: General, rural, and district hospitals
Level III: Provincial hospitals
Level IV: Central, military, and specialized hospitals
Source: Ministry of Health, Decree 9/1992
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Figure 4 shows the distribution of public and private health facilities by province. Maputo City has the
highest total (public and private) number of health facilities (179), followed by Niassa (177), Gaza (147)
and Tete (145). Maputo Province (129), Cabo Delgado (129) and Manica (122) have the lowest number
of health facilities.
Although private health care providers operate in every province, most are in Maputo City (63 percent).
FIGURE 4: DISTRIBUTION OF HEALTH FACILITIES BY OWNERSHIP AND LEVEL
USE OF HEALTH SERVICES
USE OF PRIVATE HEALTH SERVICES IN MOZAMBIQUE IS LOW. The Mozambican government
conducted a survey on household expenditures in 2014/15 (Inquérito ao Orçamento Familiar—IOF) that
included utilization of health care services. As Figure 5 illustrates, more than 90 percent of the Mozambican
population seeking care visited a public health facility. The next most utilized source of care is traditional
healers (5.2 percent). MISAU and health partners have made efforts to engage traditional healers since the
1990s. In 2016, their professional association AMETRAMO asked for better regulation.19 A use rate of
5.2 percent is lower than the rates of traditional practitioner use found throughout sub-Saharan Africa, as
reported in the literature (12 percent to 29 percent).20 Still, it is higher than use of all types of formal
professional private services by Mozambicans (4 percent). Of these types of private services, 1.6 percent
19 https://clubofmozambique.com/news/africa-natural-medicine-day-mozambican-traditional-healing-seeks-regulation/20 James PB, Wardle J, Steel A, et al. Traditional, complementary and alternative medicine use in sub-Saharan Africa: a systematic review BMJ Global Health 2018;3:e000895. https://gh.bmj.com/content/3/5/e000895
usaid.gov OVERVIEW OF PRIVATE ACTORS IN THE MOZAMBICAN HEALTH SYSTEM AND RAPID ASSESSMENT OF THE SUPPLY CHAIN | 19
visited a private health professional (including a doctor, nurse, or health worker), followed by private clinic
(0.9 percent), private hospital (0.7 percent) and private pharmacies (0.7 percent).
FIGURE 5: PERCENT DISTRIBUTION OF POPULATION WHO CONSULTED A HEALTH FACILITY, BY FACILITY TYPE, 2014/2015 (IOF 2014/2015)
USE OF THE PRIVATE HEALTH SECTOR IS HIGHER IN URBAN AREAS compared to rural in
Mozambique is attributed to several factors: (1) higher concentration of private providers in urban centers,
(2) a more educated population demanding and seeking health services in general and (3) greater ability
to pay for private healthcare. Figure 6 shows the distribution of health consumers seeking care in the
private health sector. Behind the national figure (4 percent of the total population surveyed visited a
private provider), huge geographical disparities can be observed. The provinces with greater use of private
providers are Maputo City (12 percent) and Maputo Province (11.3 percent), followed by Cabo Delgado
(8.0 percent). Rural populations go to a private health facility at much lower rates, ranging from
5.6 percent in Inhambane to 0.3 percent in Niassa. When examining the type of private health provider
visited, health consumers seek care primarily at private hospitals and clinics.
20 | OVERVIEW OF PRIVATE ACTORS IN THE MOZAMBICAN HEALTH SYSTEM AND RAPID ASSESSMENT OF THE SUPPLY CHAIN usaid.gov
FIGURE 6: PERCENT DISTRIBUTION OF POPULATION WHO CONSULTED A PRIVATE HEALTH FACILITY, BY FACILITY TYPE AND PROVINCE: 2014/2015
(IOF 2014/2015)
USE OF PRIVATE SERVICES FOR PRIORITY HEALTH AREAS IS LOW. In preparing for the Global
Financing Facility, the World Bank conducted a secondary analysis of the Mozambican Demographic Health
Survey (DHS) in 2011 to examine the public-private mix of the priority health area of maternal and child
health (MCH). The authors state that patterns of health service-seeking behavior for the treatment of
childhood illnesses is a proxy for health service-seeking behavior for other illnesses.21
As Figure 7 illustrates, overall use of the private health sector for MCH services is low, particularly
compared to other East and Southern African countries such as Kenya, Malawi, Tanzania and Uganda.22
Only 1 percent of women visited a private health care provider for an antenatal care (ANC) check-up,
and an even lower percentage (0.2 percent) delivered their children in a private health facility. Only
3 percent of women who sought treatment for a child with diarrhea visited a private provider. This is a
lower rate of private sector use compared to neighboring countries: Tanzania (29 percent), Malawi
(10 percent), Zimbabwe (36 percent) and Swaziland (32 percent). Only 2 percent of mothers with a child
with fever visited a private health provider, much lower than other countries: Malawi (10 percent),
Tanzania (28 percent), and Zimbabwe (39 percent). Finally, 10 percent of women of reproductive age
obtained a modern family planning method through the private sector.
21 Dominique Montague (2011) 22 Source: private sectors analyses www.shops.org
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FIGURE 7: PERCENT OF WOMEN WHO USED A PRIVATE HEALTH FACILITY, BY SERVICE TYPE, 2006-2011 (DHS 2011)
USE OF PRIVATE SERVICES IS GREATER IN HIGH-INCOME GROUPS, BUT IS STILL VERY LOW.
The World Bank’s secondary analysis of the DHS further examines the use of MCH services by income
groups. The pattern is consistent across key MCH services such as delivery and treatment of cough and
fever. As Figure 8 shows, most women across all income groups seek care for these high-priority MCH
services in a public facility. As expected, a larger percentage of higher-income groups (Q4 and Q5) visited
a private health facility to treat a fever and cough (less than 5 percent), compared to no women in the
lower-income groups (Q1, Q2 and Q3). This pattern changes for treatment of diarrhea. A small
percentage (less than 5 percent) of all income groups use a private provider to treat their children for
diarrhea. An even smaller percentage (less than 3 percent) of women in the higher-income group (Q5)
delivered a baby in a private facility.
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FIGURE 8: USE OF PRIVATE HEALTH FACILITY, BY SERVICE TYPE AND INCOME GROUPS, 2011 (DHS 2011)
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The service delivery market analysis (Figure 9) summarizes preliminary information on the actors and
potential bottlenecks. Unlike the next section on supply chain, the rapid assessment of this market did not
benefit from a stakeholder workshop.
FIGURE 9: SERVICE DELIVERY MARKET
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MARKET SYSTEM ANALYSIS OF THE MOZAMBICAN SUPPLY CHAIN
This section is a preliminary analysis of the public-private mix of the Mozambican supply chain using a market
system lens to understand the dynamics and relationships between public, private, and donor-driven supply
chains. First, this section analyzes the Mozambican public-private mix (PPM) supply chain, looking at the three
interconnected submarkets of production, wholesale and retail. The primary focus is on the wholesale
market. Bottlenecks for each market have been identified through focus group discussions with transporters
and importers, and further refined during the multi-stakeholder workshop in December 2018.
PUBLIC-PRIVATE MIX IN MOZAMBICAN SUPPLY CHAIN
As in many low-income countries, Mozambique has two distinct public and private supply chains, which
function in parallel with little interaction. Market actors in the private supply chain serve private service
delivery points (private hospitals, pharmacies and clinics), while the public supply chain aims to serve all
public health facilities with essential medicines, consumables and medical equipment.
The private supply chain is a simple, flexible model and is structured like a supply chain found in an
Organization for Economic Cooperation and Development (OECD) country. International and domestic
pharmaceutical manufacturers provide medicines to Mozambican importers and wholesalers, who
distribute health products to their customers, private facilities and retail pharmacies. In the case of
Mozambique, several private companies combine and perform multiple supply chain functions:
importation, wholesale and distribution, including warehouses. Respondents representing importers and
wholesalers say a majority of them contract private transportation companies to distribute their products,
especially for remote places. The parastatal Medimoc purchases its products from the same sources as
other private importers.
As Figure 10 illustrates, the public supply chain is a more complex, multi-tiered system. The Central Medical
Store (CMAM) is responsible for the procurement of almost all essential drugs. Like the private supply chain,
CMAM procures many of its drugs, including generics, from international pharmaceutical manufacturers.
However, CMAM also receives many drugs and health products from international development agencies
to supply MISAU’s health programs. For example, USAID Global Health Supply Chain Procurement and
Supply Management program purchases bed nets, insecticides, HIV/AIDS drugs and other products. GAVI
supplies vaccines to MISAU.
The public supply chain, however, is fragmented from procurement to distribution. Several MISAU
departments are responsible for procuring and distributing the drugs related to their health programs.
For example, the Expanded Program on Immunization (EPI) is responsible for all vaccines related to
MISAU’s immunization program. EPI manages its own warehouse and distribution network to deliver these
vaccines. Similarly, the malaria control program stores and distributes bed nets and insecticides. In parallel
with program-specific supply chains, CMAM is responsible for procuring and distributing all other
commodities (including HIV/AIDS pharmaceuticals), but only to the provincial level. As part of
decentralization, authority switches to the provincial health offices, which are responsible for the “last
mile” in the public supply system. At all levels of the public supply chain, CMAM and provincial authorities
use a patchwork of their own transport and contracted private transport companies to deliver
government-purchased commodities to public health facilities.
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FIGURE 10: OVERVIEW OF MOZAMBICAN SUPPLY CHAINS
The fragmentation in the public supply chain resulting from this multi-tiered system, along with other
challenges, contribute to stock-outs in public facilities and inefficiencies. MISAU and CMAM are aware of
this problem and have proposed in the new Pharmaceutical Logistics Strategic Plan (PELF) to streamline
the public supply chain by reducing the number of tiers and creating intermediate warehouses to directly
serve health facilities. Already, five intermediary warehouses are under construction in Zambezia,
Villanculos and Tete.
Figure 10 also illustrates the limited formal interactions between actors from the public and private supply
chain. The public-private interactions mainly occur when a public entity contracts a private transport
company. Informal interaction—where public facilities buy commodities at private outlets to address stock-
outs—may occur, but the rapid assessment did not capture data on these potential informal transactions.
MARKET ACTORS
The public sector regulates both the public and private supply chains (see Figure 11). In 2017, Law
No. 12 established the National Medicines Regulatory Authority (ANARME) as the public institution with
administrative, financial and government autonomy, responsible for the regulation, supervision, inspection
and sanctioning for all aspects of the pharmaceutical sector (see text box).
26 | OVERVIEW OF PRIVATE ACTORS IN THE MOZAMBICAN HEALTH SYSTEM AND RAPID ASSESSMENT OF THE SUPPLY CHAIN usaid.gov
LAW NO. 12/2017 OBJECTIVES
• Regulate manufacturing, distribution and commercialization of medicinal products, vaccines and other products of biological origin for human use.
• Establish a national system to guarantee the quality of medicinal products.
• Establish a system of pharmacovigilance.
• Guarantee alignment of local production to international recommendations.
• Simplify the drug registration system.
• Frame the system of pricing.
• Create a juridical framework of sanctions related to fraud, counterfeiting and smuggling.
• Align current regulations to World Health Organization recommendations.
Interviews with stakeholders and discussion during the workshop indicate that the new law is aligned with
international recommendations and current practices. The National Directorate for Pharmacies
(DNF) is still responsible for many functions outlined in the 12/2107 until the National Medicines
Regulatory Authority is fully operational.
FIGURE 11: MARKET ACTORS IN THE MOZAMBICAN SUPPLY CHAIN
The DNF is responsible for licensing pharmaceutical-related health professionals and facilities
(pharmacies). Updated decrees and diplomas are still under discussion, as the law has recently been passed
and previous decrees are still in use. The law allows non-pharmacy professionals to own a retail pharmacy;
however, each pharmacy requires a full-time, licensed pharmacist as technical director. Private entities
that own pharmacies are not allowed to own health facilities.
S DProviders
Civil Society§Center for Public
Integrity (CIP)
Pharmaceutical Regulatory Authority§National Directorate of Pharmacies
Membership Orgs§Importers association (AIPROMEM)§Pharmacy association (ANAFP)§Clinics Association (APROSAP)
Private supply chain actors§Pharma manufacturers§Importers / Wholesalers§Transporters§Retail pharmacies / clinics
Consumers
Gov’t Supply Chain Actors§CMAM§DPS / SDSMAS§EPI, Malaria
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Since the 1977 break-up of the government-owned Medimoc, the end of the monopoly for importation
and distribution of drugs has created space for the private sector to grow. Currently:
Two registered private companies manufacture drugs and health products for the local market.
183 Mozambican private importers represent or buy directly from international manufacturers
and serve both the public and private markets.
Of 87 existing private transport companies, some distribute drugs and other commodities in public
and private supply chains.
More than 845 retail pharmacies located throughout Mozambique complement pharmacies in the
public health system (see Figure 17).
The private supply chain actors are organizing themselves in membership groups: the Association of
Importers and Manufacturers of Medical Products (AIPROMEM), the National Association of Private
Pharmacies (ANAFP) and the National Association of Private Healthcare Providers (APROSAP). These
associations are members of the Confederation of Economic Associations (CTA), which includes 79
members from sectoral federations, trade chambers and business associations throughout the country
across a variety of economic sectors. CTA is the official partner of dialogue with the government in private
sector representation and works toward a better business environment in Mozambique through
promotion of economic and regulatory reforms.
Few civil society and patient rights groups exist in Mozambique. The Center for Public Integrity (CIP)
is well represented in various health forums and has conducted modest work on tracking stock-outs at
the public health facilities level.
PPM OF SUPPLY CHAIN
Table 3 illustrates the public-private mix of the supply chain in Mozambique. There is one parastatal
manufacturing drugs and health commodities and one private manufacturer. CMAM and the parastatal
Medimoc are the primary purchasers and importers for the public supply chain, while there is a growing
number of private importers/wholesalers. As noted earlier, at times CMAM procures from these private
channels. Finally, the private sector owns and operates the majority (94 percent) of the retail pharmacy
market, with an increasing number of public patients spending out-of-pocket at private pharmacies.
TABLE 3: PUBLIC-PRIVATE MIX IN THE SUPPLY CHAIN, BY LEVEL
Supply Chain Level Public Private % Private Subtotal
Manufacturers 1 1 50% 2
Importers/ Wholesalers 2 183 98% 184
Transport -- 87 100% 87
Retail pharmacy 49* 845 94% 894
*The number does not included pharmacies located in public health facilities.
28 | OVERVIEW OF PRIVATE ACTORS IN THE MOZAMBICAN HEALTH SYSTEM AND RAPID ASSESSMENT OF THE SUPPLY CHAIN usaid.gov
MARKET SYSTEM ANALYSIS OF MOZAMBICAN DRUG SUPPLY CHAIN
Several supply chains are relevant to the health system, including equipment, drugs and consumables. This
market analysis focuses on the drug supply chain market. It was conducted through research and intensive
consultations with actors of both the public and the private sectors. Although most see bottlenecks in the
supply chain as a function of demand or supply, the root cause may lie in policies shaping markets.
INTERCONNECTED MARKETS
Figure 12 presents the supply chain as a series of interconnected markets. In a demand-driven market, the
process starts with demand from health care providers issuing prescriptions and from consumers seeking
health products that do not require a prescription (also known as over-the-counter products). The patient
fills the prescription (or buys the product) at a retail or health facility pharmacy. These pharmacies are
supplied by distributors/wholesalers, which replenish stock according to demand. The distributors and
wholesalers are supplied by either domestic or international manufacturers, which then refill stock according
to demand from the distributors/wholesalers. In the kind of supply-driven system often found in public health,
procurement may begin with health program planning based on projected needs (e.g., immunization coverage
targets), and commodities are distributed to the final destination based on the plan.
FIGURE 12: RELATIONSHIP BETWEEN INTERCONNECTED MARKETS IN A HEALTH SUPPLY CHAIN
Interconnected markets underscore two important characteristics to consider when applying market
system analysis to a supply chain. First, the “buyers” and “sellers” differ in each market. Second, it is
important to examine the relationships between interconnected markets because it may be necessary to
act in one market to generate desired change in another.23
PRODUCTION MARKET
Figure 13 illustrates the production market in Mozambique, described in detail in this report.
23 Pradav, MMRH presentation. To address stock-outs of bed nets, the Tanzanian government entered into a PPP to manufacture nets for the Tanzanian and East African market. Within a few years, the private company was up and running and producing bed nets; however, stock-outs persisted. The Tanzanian government realized it had to also intervene in the distributor/wholesaler markets to effect desired changes in the retailer-consumer market.
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OVERSIGHT OF THE DRUG MARKET: As outlined in Law No. 12/2017, DNF is responsible for several
oversight functions related to international importation and domestic manufacturing. Key among them are
(1) elaborating and updating the National Drug Formulary, (2) approving international importers who can
sell in the Mozambican market, (3) licensing domestic manufacturing companies, (4) ensuring alignment of
local production to international standards and (5) simplifying the drug registration system. Per
consultation with DNF, as well as private actors, there is consensus that the current capacity of DNF is
limited to fulfilling all those roles, with restricted budget and human resources.
FIGURE 13: OVERVIEW OF THE DRUG PRODUCTION MARKET
Suppliers:
International manufacturers, represented by importers, are the primary source for brand and
generic drugs as well as other health commodities. Mozambique’s manufacturing capacity for
pharmaceutical products is limited. Despite a growing need for drugs, currently only two relevant
manufacturers operate in-country; one is a parastatal and the other a private-for-profit (PFP).
In July 2018, the Mozambican government officially launched the Sociedade Mocambicana de
Medicamentos, SA (SMM) as a parastatal, located in Matola. After a 15-year start-up, SMM produces
eight stock-keeping units (SKUs) of antiretrovirals (ARVs) and such essential medicines as
amoxicillin. A Brazilian company, Instituto de Tecnologia em Fármacos (Farmanguinhos/Fiocruz),
supports this state-owed entity through technology transfer. The Brazilian mining conglomerate,
Vale, present in Mozambique in the coal sector, provided 80 percent of the financing through its
corporate social responsibility program, Fundação Vale.
The second pharmaceutical manufacturer, Strides Pharma Mozambique, SA, is a subsidiary of the
Indian Strides Company, a for-profit international entity.
Buyers:
The government, through CMAM, is the largest purchaser of drugs in Mozambique. CMAM
purchases directly from international and domestic manufacturers. The GRMs’ central budget
30 | OVERVIEW OF PRIVATE ACTORS IN THE MOZAMBICAN HEALTH SYSTEM AND RAPID ASSESSMENT OF THE SUPPLY CHAIN usaid.gov
funds MISAU, which, procures drugs and health commodities. International development partners
also donate large quantities of drugs and supplies.
The parastatal Medimoc and private sector importers also purchase drugs and health
commodities from both international and local manufacturers. Private importers supply the private
market but also play an important role in supplying the public market (see next section). Private
importers can bring in drugs that are not on DNF’s essential drug list (EDL). The private importer
is responsible for submitting the application to DNF to register a new product. Per the regulation,
if it successfully registers a new product, the importer has an exclusive license to import it. The
DNF, however, has limited capacity to register new drugs and technologies; DNF is understaffed
and the registration process is still manual, taking up to a year to register a new drug. Under-capacity
and exclusivity have resulted in limited access to new technologies and drugs in the private market.
BOTTLENECKS: The bottlenecks listed below were reported by importers during focus group discussions and are considered to exist mainly in the public production market. The team did not capture specific information on the barriers for domestic manufacturing growth, as no manufacturers were included in the focus group discussion or workshop participation.
Delays in government payments in public contracts limit the number of companies
able to bid on public tenders. All respondents said the recurrent delays in government payments
put their businesses at risk. Despite the contractual obligation to pay 25 percent in advance (Decree
15/2010), the clause is almost never enforced. Instead, the government reportedly pays 100 percent
after delivery. Payments are delayed, and only importers with a large and diverse client base are able
to bear the risk of delayed payment associated with government contracts.
High interest rates in the banking sector are a major barrier for companies to invest
and expand their businesses. High interest rates also compound the risk of delayed payment
because they raise the cost of financing accounts receivable. Banks also typically require a financial
guarantee to extend credit.
Sales contracts are made in the local currency, while importers must pay manufacturers in hard
currency. Consequently, importers bear the risk of currency fluctuation. For example, the
exchange rate against the U.S. dollar was especially volatile from 2016 to 2017 but was more
stable in 2018.
Participants reported a lack of transparency in the selection process, which limits the
motivation of new players to participate. Additionally, there is a perception that the selection is
mainly driven by low prices, limiting the entry of smaller companies trying to compete on quality
or other factors.
MISAU needs to build its capacity to develop efficient and effective tenders. Some said
that the technical requirements do not match purchasers’ needs (e.g., purchase of medical
equipment does not fit the client’s space or maintenance capacity). The process is perceived as
cumbersome, with importers reporting that they had to resend information and documents that
were misplaced.
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WHOLESALE MARKET
As noted, among the three sub-markets of production, wholesale and retail, MMEMS was able to focus
more on the wholesale market.
FIGURE 14: OVERVIEW OF WHOLESALE DRUG MARKET
OVERSIGHT OF WHOLESALE MARKET: DNF is responsible for government oversight of the
wholesale market. Law No. 12/2017 authorizes DNF, soon to be ANARME, to register drugs, set pricing
and enforce sanctions related to fraud, counterfeiting and smuggling. DNF licenses wholesalers to ensure
compliance with sound importation practices, storage, conservation, safety and distribution. The law also
establishes a simplified registering procedure, to be authorized by the MISAU, for importing
pharmaceuticals in case of emergencies, stock-outs or need for specialized products that, due to low
profitability, are not usually available in the country. However, no current decree specifies how the
simplified procedure will be operationalized.
WORKSHOP PARTICIPANTS’ IDEAS TO IMPROVE THE PUBLIC TENDER PROCESS
Establish external audit procedures to verify the compliance of public entities (e.g., CMAM) with public procurement regulations.
Encourage joint action among private sector actors to reduce payment times and government compliance with contractual terms.
Engage the private sector in tender design through a bid conference to improve the procurement process and develop an updated catalogue of equipment, medicines and other supplies.
Enhance capacity within MISAU to design tenders to correctly reflect what is intended and the precise requirements of the end user.
Conduct market assessments prior to writing the terms of reference for tenders, to identify potential responders and prices and align requirements to capacity to respond.
32 | OVERVIEW OF PRIVATE ACTORS IN THE MOZAMBICAN HEALTH SYSTEM AND RAPID ASSESSMENT OF THE SUPPLY CHAIN usaid.gov
SUPPLIERS: The wholesale market in Mozambique is dominated by private companies who
provide various functions such as importation, warehousing, and distribution (transportation). In 2009,
approximately 30 companies were registered in Mozambique. Currently, DNF has registered 184, of which
90 percent have head offices in Maputo or Matola. Nonetheless, not all 184 importers are active, and DNF
does not keep updated information on importers’ activity post-registration.
Private importers supply both the public and private sectors, but the core of their business is with the
public sector. According to stakeholder interviews, only 20 to 30 of the 184 importers serve the private
market, which includes private retail pharmacies and private clinics.
CMAM and subnational-level MISAU share responsibility for public warehousing and distribution.
Both CMAM and MISAU provinces operate warehouses at every level of the public health system.
Distribution from warehouses to point of care in the public system, however, is highly fragmented between
different public and private entities. CMAM contracts private transporters to deliver commodities to
public health facilities in Maputo, Beira and Nampula. CMAM for essential medicines and USAID’s Global
Health Supply Chain Program-Procurement and Supply Management project (GHSC-PSM) for HIV/AIDS-
related products are responsible for storage and distribution of these commodities to the provincial levels.
However, both GHSC-PSM and CMAM contract private transport companies to deliver these
commodities from central/regional warehouses to provincial ones.
Once commodities are stored in provincial warehouses, DPS and SDSMAS are responsible for distribution
to facilities and public pharmacies. Some provinces (Zambézia and Tête) also contract private transport
companies to deliver products from the provincial warehouse (e.g., for Vaccines in Tête, all products in
Zambézia under the Last-Mile Supply Chain program) to health facilities.
This mixed and fragmented delivery system has evolved due to challenges associated with delivering
products to points of service for patients, known as the “last mile.” Stakeholders referred to multiple
studies that indicate MISAU lacks the resources to buy and maintain trucks to efficiently deliver
commodities throughout the public health system. As a short-term solution, all PEPFAR’s implementing
partners (EGPAF, CCS, FGH, FHI 360 and ICAP) provide financial and in-kind support to provinces to
distribute essential medicines and HIV/AIDS-related commodities to most Mozambican provinces.
Although the public supply chain has been exclusively a public function, CMAM’s recent experience of
contracting private transporters is changing the government’s approach. Recently, CMAM stopped
transporting commodities and instead contracted private transport firms for this purpose, using the
authority granted under the national procurement process (Decree 54/20015). Recently, CMAM moved
from a single transporter to several: Frigo Expresso Lda, FOSELEV Moçambique, NTS Transportes e
Serviços Lda and Transcrane Logistics. By contracting with multiple companies, CMAM seeks to create
competition and pressure to improve quality. CMAM is also actively considering different contracting
modalities. For example, CMAM and its partner GHSC-PSM have recently used delivery duty contracts
(DDCs) to distribute reagents. GHSC-PSM uses indefinite quantity contracts (IQCs) with private
transport companies to deliver its commodities.
As a result, the distribution of pharmaceutical commodities by private transport companies has evolved
rapidly, but with little regulation and oversight. MMEMS identified 87 private transportation companies
across the country, 10 of which having branches in multiple locations according to the map in Figure 15.
Although concentrated in Maputo City and Maputo Province, the private transport companies have
nationwide reach.
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FIGURE 15: DISTRIBUTION OF PRIVATE TRANSPORT COMPANIES
More information is needed about private transportation companies to adequately assess the private
transport sector. It is unknown how many companies are active in the health sector. Workshop
participants noted that despite growing interest in using private transport services, regulation and
oversight of companies transporting pharmaceutical products is weak. Moreover, there are no data on
the capacity of these companies to handle pharmaceutical transport (cold chain availabilities, security
measures, insurance) and comply with other requirements. In some cases, responsibilities are split across
more than one transportation company. Buyers may be expected to absorb the cost of any problems
related to mishandling of products.
BUYERS: Both public and private buyers operate at the wholesale level. Public buyers are the full range
of MISAU health facilities at the national, provincial and district levels. They do not literally buy from the
wholesalers, but instead provide inventory data to get new supplies or simply take receipt of commodities
allocated to them according to a health program plan. In some cases, public and private providers refer
their patients to a private facility or pharmacy with a more stable supply of drugs and other health
commodities. These patients pay out of pocket to purchase medicines at full market price.
Private buyers are retail pharmacies and private facilities. The private retail market is small and concentrated
in urban areas, likely due to the smaller number using private facilities and retail pharmacies but also because
the regulation of pharmacies requires a certificate of need stating that a pharmacy can only be licensed if at
least 7,000 people live in the catchment area. The small number of retail pharmacies and private facilities
outside of urban centers discourages investment by private wholesalers and transportation companies to
reach remote areas. As a result, private retailers must arrange transportation themselves. Private pharmacies
use their own vehicles or group with other pharmacies to contract a private transport company to obtain
supplies from a central location (e.g., provincial or district capitals).
34 | OVERVIEW OF PRIVATE ACTORS IN THE MOZAMBICAN HEALTH SYSTEM AND RAPID ASSESSMENT OF THE SUPPLY CHAIN usaid.gov
Recently, the fixed-percentage mark-ups previously regulated by a 1990 decree were updated by the
Diploma 21/2017. Government-updated regulations on cost have created further tensions between
private importers and private retailers. Government-regulated margins increased from 13.5 percent to
23.5 percent of cost of insurance and freight (CIF) for importers and decreased from 76.3 percent to
66.3 percent for retailers.
TABLE 4: DISTRIBUTION OF DRUG MARK-UPS AND INCIDENCE ON FINAL PRICE TO CONSUMER
Stage of distribution Statutory mark-up
Free on board (FOB) Value at the port of origin
Insurance and freight (CIF) Value at the port of shipment
Warehousing costs 9% on CIF
Importer profit 23.5% on CIF
Internal distribution 5% on CIF
Retailer profit 66.3% on CIF
BOTTLENECKS: Private sector actors participating in the wholesale market identified several
bottlenecks, many of which also affect the production and retail markets.
Related to decentralization, authority over the distribution/transport of commodities is split
between the central level and provincial levels; they can make some independent decisions without
coordination with the other level, such as the decision to contract with a private transportation
company. This fragmentation may limit opportunities to analyze the supply chain holistically to
identify and roll out initiatives to increase efficiency and economies of scale and better serve demand.
In comparison to the private supply chain, the public distribution system is seen as more rigid and
not allowing for a quick response to changes in demand.
Government regulations on mark-ups work as a disincentive for importers to distribute in rural
areas because those regulations do not account for the variable cost of transport to remote
locations. Moreover, the pricing structure creates tensions among different supply chain
actors (e.g., wholesaler and private retailers).
Insufficient information about and regulation of the private transport companies
(including cost of services and lists of transport companies and their capabilities, such as cold chain
logistics) hampers the ability of public and private buyers to evaluate and manage suppliers.
Quality enforcement along the value chain is challenging, due to poor regulation,
fragmented logistics and uneven capacity across logistic actors to handle pharmaceutical
distribution.
The small size of the private retail pharmacy market discourages investment by private
wholesalers and transportation companies to expand to remote areas.
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RETAIL PHARMACY MARKET
Figure 16 illustrates the dynamics in the retail pharmacy market.
FIGURE 15: OVERVIEW OF THE RETAIL DRUG MARKET
OVERSIGHT OF RETAIL PHARMACY MARKET: The government agency DNF is the lead regulatory
authority overseeing this market. Decree 21/1999 sets standards governing private pharmacies. It is being
revised to address many of the shortcomings in the current regulations. DNF issues facility licenses and
conducts facility inspections and supervisory visits to ensure that private pharmacies comply with
regulations. Only one level of retail facility license exists, irrespective of size, location or scope. A
certificate-of-need requirement states that a pharmacy can be licensed only if at least 7,000 people live in
the catchment area and no other pharmacy operates within a 400-meter radius. Additional regulations
WORKSHOP PARTICIPANTS’ IDEAS TO STRENGTHEN THE TRANSPORTATION MARKET
1. Build the capacity of public buyers to use their purchasing power to improve the quality of pharmaceutical transportation and logistics. This strategy should include building the technical skills of the procurement team at MISAU to ensure that bids are adequately designed to reflect the needs of beneficiaries and demand.
2. Build the capacity of private transporters, logistics and customs companies on special requirements of pharmaceutical logistics to ensure protocols are followed (cold chain, security, insurance).
3. Improve access and transparency of information about suppliers of transport and logistics services by developing a registry of companies and their capacities (e.g. cold chain, storage).
4. Given late payments by the government, work with the banking sector on options to facilitate lines of credit, account receivables financing, trade insurance, and other financial products to enable companies to cope with late payments.
5. Support DNF to develop policies and regulation to regulate the transportation marketfor health.
36 | OVERVIEW OF PRIVATE ACTORS IN THE MOZAMBICAN HEALTH SYSTEM AND RAPID ASSESSMENT OF THE SUPPLY CHAIN usaid.gov
limit pharmacy staff to conducting simple tests, such as blood pressure or glucose and cholesterol testing.
Finally, DNF also regulates the mark-ups and has set the maximum percentage mark-up for all drugs at
66.3 percent of the CIF price.
DNF is also in charge of issuing professional licenses to pharmacists, but the government is considering
transferring this function to a professional pharmacists association. By law, pharmacies must have a
pharmacist present in the outlet, but this is not happening in practice, and licensed pharmacists work in
various pharmacies. Access to qualified staff is even more difficult in rural areas. With a limited number of
qualified staff, DNF is reluctant to expand the scope of services pharmacies may provide to customers.
SUPPLIERS: Private pharmacies are a fast-growing business in Mozambique. Between 2015 and 2018,
the number of licensed pharmacies grew at an annual growth rate of 19 percent, increasing from 540 (INE
2015) to 845 (MISAU 2016). Most private pharmacies are individually owned; no pharmacy retail chains
operate in Mozambique. Stakeholders are confident that the pharmacy retail market is set to grow,
especially in provincial capital cities. Growth in rural areas is still uncertain.
Figure 17 shows the geographic distribution of registered private pharmacies in Mozambique. As it
illustrates, private pharmacies are present in all provinces. However, most are concentrated in Maputo
City and Maputo Province. Stakeholder interviews revealed that the retail pharmacy market is saturated
in these areas, prompting private pharmacists to expand to other provincial capitals with strong growth,
such as Cabo Delgado and Tete. Expansion of private pharmacies to rural areas remains a challenge.
FIGURE 17: DISTRIBUTION OF PRIVATE PHARMACIES
On the public side, pharmacies operate within MISAU hospitals and health centers. In addition, a few
pharmacies (49) belong to the parastatal enterprise Farmac, whose drug prices are partially subsidized by
the government. By law, all public facilities are required to provide commodities for almost free (between
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USD $0.016 and $0.081) for all citizens without consideration of income level. Public pharmacies face
regular stock-outs of drugs and equipment. Stock management at the facility level is poor and in numerous
cases, drugs have been diverted from the public sector to private practices.24
BUYERS: Buyers are consumers who buy over-the-counter products and fill prescriptions. As mentioned,
the 2015 IOF report showed the population’s continued low usage of private pharmacies (only
0.7 percent). Outside Maputo City and Maputo Province, the market for sales is limited, as consumers
have limited capacity to pay. Another factor that key informants stressed is the perception that health
care must be free. For decades, services have been free for all citizens in the public health system, and
patients are reluctant to pay for health services from private outlets. Moreover, no demand-financing
mechanism (such as vouchers) is in place to stimulate demand for private pharmacy services.
BOTTLENECKS: As the market analysis shows, many of the bottlenecks in the production and wholesale
markets contribute to problems in the retail pharmacy market.
Private pharmacies face difficulties in accessing capital from the banking sector.
Factors limiting access to capital include (1) a lack of understanding of the sector by commercial
banks, (2) high interest rates and (3) demanding loan terms.
Several factors constrain the growth of retail pharmacies in the rural sector. The
regulation requiring at least 7,000 people in the catchment area applies to urban and rural areas.
A limited number of licensed pharmacists operate even in urban areas. The government gives no
support for catalyzing rural business development.
Public sector supply of almost-free drugs and commodities to all consumers
regardless of income may crowd out private sector actors.
Capacity to pay for private services is limited, as the poverty rate is 48 percent of the
population.25
The DNF has limited capacity to enforce its current regulation and effectively control
prices and quality. With limited resources and staff, all actors agree that DNF is not able to
conduct necessary supervision of the pharmacy sector.
24 Assessment of The HIV Rapid Test Kits’ Supply Chain in Zambezia and Maputo Provinces, ThinkWell, 2017 25 https://www.worldbank.org/pt/country/mozambique/publication/mozambique-economic-update-less-poverty-but-more-inequality
38 | OVERVIEW OF PRIVATE ACTORS IN THE MOZAMBICAN HEALTH SYSTEM AND RAPID ASSESSMENT OF THE SUPPLY CHAIN usaid.gov
WAY FORWARD
From this rapid assessment, key stakeholders and MMEMS generated ideas in four areas to strengthen the
integration of the private sector in the Mozambican health system. The ideas described for improving
dialogue and strategic information are relevant to multiple markets (service delivery, supply chain,
education). A mix of general and supply chain-specific ideas fall under public procurement. Finally, the
transportation sector ideas are specific to that sector. They illustrate the range of areas where USAID,
government, businesses and other partners can take action to harness the private sectors in Mozambique
to improve health system performance and health outcomes.
CATALYZE PUBLIC-PRIVATE DIALOGUE
Moving forward on any ideas will require dialogue and coordination. Progress on this issue is useful to
multiple markets (service delivery, supply chain, education). The time appears right to take advantage of
the interest expressed by MISAU, USAID, business representatives and other partners to facilitate a
meaningful dialogue between the public and private sectors on sector-wide issues (e.g., consultation on
policies and regulations) and potential partnerships.
1. Support the private sector to continue to organize itself into membership organizationsthat represent key segments and markets, such as private hospitals, wholesalers, pharmaceutical transporters and retail pharmacies.
2. Establish an umbrella organization that brings together the different segments of the private sector so
they can coordinate and speak with one voice in dialogue with the public sector (e.g., a health market
group in the CTA).
3. Create greater awareness and understanding among MISAU leadership on the size and
scope of the private sector and foster internal discussions on MISAU’s vision of and approach to
private sector engagement. Once awareness is raised, facilitate the creation of a cross-department task
force to build government capacity to engage with the private sector. Members of the task force should
include the National Directorate for Planning and Cooperation (DPC), the reform department and the
National Directorate for Administration and Finance (DAF). Sharing the findings from this report and
the outcomes of the private sector workshop could be a first opportunity to kickstart this initiative.
4. Form a technical advisory group, including public and private stakeholders, to define and steer
further research and dialogue on public-private partnerships for health. The technical advisory group
could set the strategic direction of further private sector assessment, validate its findings and co-
develop recommendations.
STRENGTHEN THE COLLECTION, ACCESS AND USE OF STRATEGIC INFORMATION
The rapid assessment uncovered several gaps in data that could be addressed with targeted data collection
and analysis and improved information systems, such as registries of businesses in a specific market. Better
data would benefit all markets. Businesses want more and higher-quality data about their own markets,
public procurements and policies and regulations that could affect them. Government agencies and private
associations need data to exercise stewardship functions such as quality assurance, policy, planning and
regulation. Accurate data on both the public and private sectors, insightful analysis and easy access will
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inform dialogue and coordination (see above), as well as some of the following ideas in the next section
for the drug supply chain market.
1. Support market actors to collect and share market information among themselves. As
discussed during the private stakeholder workshop, there is a strong interest in and need to better
understand the transportation market, and a first task force could be created to improve information
about this sector.
2. Facilitate a two-way discussion between public and private sectors to improve data
sharing:
a. Identify constraints to private sector reporting and collaborate on strategies to make it easier for
businesses to share data.
b. Support the MISAU to analyze and present data on the private health sector and to share the data
with not only the senior ministry of health leadership but also private sector groups to foster
greater understanding of the private sector and to discuss their possible contribution to national
health priorities.
c. Support government units to better communicate with the markets they most affect. For example,
it was suggested that MISAU/CMAM develop a ministerial annual plan on supply chain operations
to allow private actors to better prepare to meet public sector demands.
d. Conduct analysis on market scope, size, concentration, trends and the constraints to growth and
performance to generate information valued by companies, associations and the public sector.
3. Conduct a deeper market analysis of the drug supply chain to build on this rapid assessment and
the momentum of the MMEMS workshop.
PROFESSIONALIZE PUBLIC PROCUREMENT
Stakeholders engaged in the drug production and wholesale markets all expressed challenges in responding
to government procurement of drugs and related supply chain services (transport and logistics). The list
of ideas below is also relevant to the procurement of equipment and consumables, and potentially to other
markets outside the supply chain. The ideas would warrant further analysis to take forward.
1. Set up joint actions among private sector actors to reduce payment times and government compliance with contractual terms.
2. Given late payments by the government, work with the banking sector on options to facilitate lines of credit, account receivables financing, trade insurance and other financial products to enable companies to cope with late payments.
3. Engage the private sector in tender design through a bid conference to improve the quality of tenders’ specifications and to ensure the bids are adequately designed to reflect the needs of beneficiaries and demand.
4. Engage the private sector to update the catalogue of equipment, medicines and other supplies.
5. Enhance capacity within MISAU to design tenders to reflect what is intended and the precise requirements of the end user.
6. Conduct market assessments prior to writing the terms of Reference for tenders, to identify potential responders and prices and align requirements to capacity to respond.
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7. Establish external audit procedures to verify the compliance of public entities (e.g., CMAM) with public procurement regulations.
STRENGTHEN THE TRANSPORT MARKET
1. Build the capacity of private transporters, logistics and customs companies on special requirements of pharmaceutical logistics to ensure protocols are followed (cold chain, security, insurance).
2. Improve access and transparency of information about suppliers of transport and logistics services by developing a registry of companies and their capacities (e.g., cold chain, storage).
3. Support DNF to develop policies and balanced approaches to regulate the transportation market for health.
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ANNEX 1: MARKET-BASED ANALYTICAL FRAMEWORK
Supply and demand: Market systems provide a space for consumers and suppliers to come together
to carry out transactions, referred to as market operations. As the text box illustrates, there are different
“buyers” and “sellers” depending on the specific health market.
EXAMPLES OF HEALTH MARKETS
The easiest type of health market to understand is the interaction between a health care
provider and a health consumer. However, there are other health markets in a health system.
Market actors—buyers and suppliers—vary according to the specific market. For example, in the
case of local production of health products and drugs, the multiple manufacturing companies are
the suppliers, and local/regional MOH units, as well as local wholesalers, are the buyers. A
market system analysis begins by defining the market its actors.
A market system includes multiple actors (private sector, government agencies, representative
organizations and civil society) who carry out numerous functions and use different policy levers (both
formal and informal) to shape market operations. The market-based analytical framework defines a specific
health market and its corresponding market actors, and examines policies, market conditions and
institutional arrangements that influence that market’s operations.
Market actors: In a market system approach, the main categories of health actors are government, the
private sector and its representative bodies, and civil society representing consumer and marginal
populations.
Policy levers: Governments play a critical role in ensuring access, affordability and quality of health
services for their citizens. A ministry of health has several policy tools and instruments at its disposal to
achieve these sector goals. A key tool among these is financing. Some dimensions of financing and subsidies
should be considered in a landscape analysis, such as the following:
Direct free provision of health goods and services, cash grants, and subsidies are all common
financing tools used in the health sector. These demand-side financing tools can stimulate
demand in a specific health market, for example, vouchers for maternity services.
In recent years, international donors have promoted social health insurance and service contracts
to deliver specific health services or specialty care, and to perform nonclinical (e.g., waste
management, catering, security) functions. These supply-side financing tools help “crowd in”
market actors that may not have supplied services in this space before. Others include loans and
grants.
Several international agencies have pumped large amounts of money and resources (including
commodities, equipment, and staff) into specific health markets driven by their priorities (e.g.,
HIV/AIDS, malaria, child health). When applied with little regard for the market dynamics, this
form of financing and subsidies—also known as supply-side financing—can distort the market
and “crowd” out the commercial sector.
Information is another important factor to examine. Information asymmetry often contributes to a
health market’s underperformance or failure. Some ministries of health in developing countries are
42 | OVERVIEW OF PRIVATE ACTORS IN THE MOZAMBICAN HEALTH SYSTEM AND RAPID ASSESSMENT OF THE SUPPLY CHAIN usaid.gov
reluctant to share information with the private sector, particularly the PFP sector. Mistrust between the
public and private sectors, as well as suspicion and misunderstanding of the profit motive, still linger among
policymakers and ministries of health officials in some countries.26 Limited access to information on
government health priorities, epidemiological trends, and socioeconomic profiles of underserved
population groups restricts the PFP and PNFP sectors’ ability to gauge market potential and may impede
their efforts to align their activities to public health goals. Private health sector actors can also be
distrustful. They can be reluctant to share information with government for fear that they will be subject
to more taxes and fees or possibly be closed down due to noncompliance.
Other important factors to examine in a market system are the regulations governing who can deliver
what service and which products, under what conditions. These social regulations (facility licensing and
accreditation, professional certification and continuing medical education and relicensing) can improve
quality, but they also influence supply and demand in a health market. Compliance with these rules requires
a level of advanced training (medical/health-related), raising the barrier to entry into a health market.
Typically, the PFP health sector remains mostly unregulated, allowing for the growth of a sizeable informal,
illegal health sector that creates strong competition with the formal private sector.
Several economic regulations influence market operations. These include pricing policies, tax policy,
land access and so on. Ministries of health often “cap” or limit mark-up, profit margins and consultation
fees, with the goal of making health care services more affordable to the consumer, but these regulations
may instead crowd providers and suppliers out of the marketplace. Similarly, governments provide tax
relief for key economic sectors (e.g., technology, extractive) to encourage growth, but often overlook
similar tax strategies to grow the private health sector. Reducing import taxes on materials and inputs, as
well as drugs and medical devices, is an effective lever to stimulate new entrants into manufacturing and
imports.
26 Hozumi, 2008
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ANNEX 1I: CATEGORIZATION OF HEALTH FACILITIES
Category Description
General Hospitals
Health facilities providing inpatient and outpatient medical and pharmaceutical assistance for sick people, and for pregnant and parturient women. General hospitals are situated in urban areas, serving a minimum population of 200,000 inhabitants through a range of 120 to 270 hospital beds, and are required to provide, among other things, emergency services, an operating room, a laboratory, a pharmacy, and patient transport service.
Specialty Hospitals
Health facilities providing medical assistance focused on one medical or surgical specialty through a minimum of 30 hospital beds and at least 5 nurses. Specialty hospitals are required to have, among other services, a specialist per 20 hospital beds, an operating room (if surgical), a laboratory, a pharmaceutical warehouse, an X-ray department, and patient transport service. Specialty hospitals are allowed to provide medicines only to its own patients.
Clinics Health facilities providing inpatient and outpatient services to sick people, and to pregnant and parturient women. By law, clinics are required to have resources comparable to speciality hospitals.
Medical Centers
Health facilities providing primary health care services, equipped with a maximum of 24 maternity beds and 4 observation beds for urban centers, and 30 hospital beds plus 12 maternity beds for rural centers. Each medical center is required to have a laboratory and a pharmacy and is allowed to provide medicines only to its own patients.
Medical Rooms Health facilities providing outpatient general or specialty services, according to the specialty of their professionals.
Residential Area Health Posts
Health facilities providing medical assistance, preventive care, and health promotion services (vaccination programs, maternal and child health care, family planning). Health posts are allowed to have a maximum of four hospital beds for deliveries and two for medical observation.
Rehabilitation Centers
Health facilities providing outpatient care aimed to restore patient’s functions, including use of prosthetic implants.
Workplace Health Posts
Health facilities built by companies providing occupational health services to their workforce.
Nursing Centers Health establishments exclusively dedicated to outpatient nursing care.
Laboratories Health establishments dedicated to carry out medical tests, radiological examinations, or other diagnostic tests.
Health Promotion Centers
Health establishments aimed at encouraging healthy behaviors.
Health Training Institutes
Health establishments providing education for health-related human resources.
Patient and pregnant women transport services
Private services by land, air, maritime, river, and rail transport exclusively dedicated to patients and pregnant women.
44 | OVERVIEW OF PRIVATE ACTORS IN THE MOZAMBICAN HEALTH SYSTEM AND RAPID ASSESSMENT OF THE SUPPLY CHAIN usaid.gov
ANNEX 1II: DATABASE INFORMATION
Category Source and Date Information Collected
Medical Training Institutes and Universities
Ministry of Science and Technology, Higher and Technical Vocational Education, 2017/2018
Name of entity, Province, District, Courses offered
Private Health Care Providers DNAM, Ministry of Health, 2014-2016 Name of entity, Type, Province, District, Specialties offered
Pharmacies DNAM, Ministry of Health, 2014-2016 Name of entity, Province, District, Address
Laboratories Ministry of Health, 2014-2016 Name of entity, Type, Province, District, Specialties offered
Patient Transport Providers Ministry of Health, 2014-2016 Name of entity, Type, Province, District
Drugs and serums manufacturers
Ministry of Health Name of entity, Province, District, Address
Customs Brokers Camara dos Despachantes, 2018 Name of entity, Province, District
Logistic and Warehousing Whitepages, 2018 Name of entity, Province, District, Address, Activity
Freight Forwarders Whitepages, 2018 Name of entity, Province, District, Address
Transport firms (cargo) Whitepages and Cargo Terminal, 2018 Name of entity, Province, District, Address, Activity
Importers/Distributors/ Retailers
DNF, Ministry of Health Name of entity, Province, District, Address
Insurance Providers Whitepages and ISSM, 2018 Name of entity, Province, District, Address, Authorized branch
Health Plan Providers Websites and inquiries, 2018 Name of entity, Province, District, Address,
CSOs, CBOs and FBOs Ministry of Health, 2018 Name of entity, Province
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ANNEX IV: PERSONS INTERVIEWED
INDIVIDUAL INTERVIEWS
Name Designation Organization
Alberto Fanequiço Lissane Treasurer ANAFP
Dimitri Peffer Chief of Party Chemonics (GHSC-PSM)
Gilberto Pedro Manuel Head of division DNF
Juma Marde Technician at Private Medicine Department
MISAU
Luís Matsinhe Director at PPP Unit MEF
Marcia Technician DNF
Marina Karagianis National Director DPC
Dra. Pasqua Medimoc
Santana Afonso Director General Ortomédica
Sérgio Seny National Director CMAM
FOCUS GROUPS
Name Organization
Betuel Romão L Duarte dos Santos
Natalino Magaia Medimoc
Santana Afonso Ortomédica
Edson Neves Sidat Medical Solution
Mustaque Sidat Sidat Medical Solution
Alexandre Fernandes Separation Scientific
Paulo Bastos Manica Freight Services Moçambique
Nordino Ubisse Manica Freight Services Moçambique
Amina Mohomede DHL
Moisés Júnior ARNAUD
Assemane Aboobacar VELOGIC
Eurico Gonçalves Bolloré Transport & Logisyics Moçambique S.A.
Graviere Pierre Bolloré Transport & Logisyics Moçambique S.A.
Leonor Magaia Transportes e Logística
Dimsson Chambal Expresso Cargo & Serviços
Fernando Ernesto INTELLICA
Graciete Carilho STV
Miguel Cossa HCB – Hidroeléctrica de Cahora Bassa
46 | OVERVIEW OF PRIVATE ACTORS IN THE MOZAMBICAN HEALTH SYSTEM AND RAPID ASSESSMENT OF THE SUPPLY CHAIN usaid.gov
ANNEX V: WORKSHOP ATTENDANCE LIST
Name Designation Organization
Clesia Mabunda Planning officer MISAU
Hortencia Laice DAF
Nilton dos Santos Head of support & institutional development CTA
Kinsy Hood Supply Systems Strengthening Specialist USAID
Peter Cloutier Health office chief USAID
Eddie Kariisa Team Leader, Health Systems Health Systems and Commodity Security Division
USAID
Stephen Guelz Private sector officer USAID
Valdir Jethá Director Moza
Zulmira Rosaura da Silva Technical Director -IMAP Chemonics (GHSC-PSM)
Dimitri Peffer Chief of party (GHSC-PSM) Chemonics (GHSC-PSM)
Ryan Kelley Country representative PSI
Ruth Bechtel Country director VillageReach
Cecília Bilale Executive director Associação Moçambicana para o Desenvolvimento da Família
Abby Buwalda Head of resource mobilization N´weti
Joao Simbine Executive director FUNDASO
Santana Afonso Director general Ortomédica
Alexandre Fernandes Director general Separation Scientific
Ricardo Santos President of the Executive Commission Medis Farmaceutica, Lda
Miguel Sousa Brand Manager Medis Farmaceutica, Lda
Melanie Isaac Patient services Lenmed Privado
Lalutha Chellan Credit controller Lenmed Privado
Aldo Lafieri Credit controller Lenmed Privado
Irene Chin Administrator ICOR
Maria Beatriz Ferreira Director ICOR
Jessy Sitoe Executive director Expresso Cargo & Servicos
Dimsson Chambal Marketing and Commerce director Expresso Cargo & Servicos
Amina Mohomede Sales manager DHL
Sonia Freire Program manager Vamos Ler!
Paulo Bastos Public relations officer Manica Freight Services Moçambique
Flavio Transit agent
Helio Banze Social investor coordinator Anadarko
Tabita Macabur Community Health focal person MRV (Eni, ExxonMobil and CNPC)
Annegret da Silva M&E officer MMEMS
Eduarda Cipriano Deputy COP & senior collaboration advisor MMEMS
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Name Designation Organization
Luís Reves Technical deputy COP & acting COP MMEMS
Federica Fabozzi Analyst ThinkWell
Caroline Phily Program manager ThinkWell
Mauro Cuna Analyst ThinkWell
Yara Cumbi Analyst ThinkWell
48 | OVERVIEW OF PRIVATE ACTORS IN THE MOZAMBICAN HEALTH SYSTEM AND RAPID ASSESSMENT OF THE SUPPLY CHAIN usaid.gov
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