Academic journal article Bulletin of the World Health Organization

How Important Are Airfreight Rates and Vaccine Packaging in Cost-Saving Efforts for the Expanded Programme on Immunization?

Academic journal article Bulletin of the World Health Organization

How Important Are Airfreight Rates and Vaccine Packaging in Cost-Saving Efforts for the Expanded Programme on Immunization?

Article excerpt

Introduction

Immunization is perhaps one of the most effective and efficient ways of protecting the health of the world's children and women against a number of specific diseases (1, 2). Since the end of the 1970s an increasing percentage of children have received vaccinations against poliomyelitis, tuberculosis, measles, diphtheria, pertussis, and tetanus. The impact of these efforts is mainly reflected in the control of epidemics and the decline of disease incidences, or even potential disease eradication.

The cost of vaccine determines to a great extent the cost of vaccination programmes, as it accounts for up to 35% or even more of total expenditure (3, 4). It is expected that this proportion will increase as a result of new disease-control initiatives, intensified strategies for the eradication of poliomyelitis, and improvements in the quality of vaccines. The demand for vaccines is now more than 10 times higher than it was halfway through the 1980s.

Mechanisms to control the cost of vaccines can be divided into two main groups:

-- initiatives to control the cost of production plus the cost of transport of the vaccine to the programme: and

-- efforts to reduce the cost of storage, transport. and wastage at different levels in the programme, by stock-control systems, reducing the number of vaccination sessions, or maintaining open vials of vaccine between sessions.

In this article we will discuss mechanisms in the first of these groups, in particular the impact of airfreight rates and the type of packaging used on the cost of vaccines.

Vaccine procurement

Because of price, experience, and efficiency, the Expanded Programme on Immunization in Mozambique procures its vaccines through UNICEF Copenhagen. Orders are placed twice yearly, and all vaccines are shipped by air to Maputo, the capital. The total annual EPI expenditure on vaccines in Mozambique is currently about US$ 800 000, including production costs, airfreight to Mozambique, and handling fees.

Vaccine prices are negotiated by UNICEF with suppliers, The terms and conditions of delivery are stipulated in UNICEF's standard purchase order. which specifies, for example, gross weight and dimensions of shipments and their number of packages. According to standard practice, prepaid insured airfreight is arranged by the supplier.(a)

Costs of airfreight

The cost of airfreight is determined by the rate per kg and the weight of the shipment, as discussed below.

Airfreight rates

During the second half of 1993, EPI in Mozambique received a total of nine vaccine shipments, originating from Japan, Canada, and Australia, as well as various European countries. Average airfreight was US$ 11.68 per kg, with the lowest rate being US$ 7.02 per kg (origin, Germany) and the highest. US$ 20.56 per kg (origin, Japan).

Thus, airfreight rates are, in general, very high. but individual rates exhibit substantial variations.

In an attempt to explain these variations, we first tested whether there was a direct relation between cost and distance shipped. This could, however, not be confirmed.

We then investigated the airfreight market by negotiating airfreight rates with the airlines. As a result we were able to obtain better rates than had been offered previously. We informed UNICEF of this and agreed with them to arrange vaccine shipments to Mozambique independently.

After 1 January 1994 EPI in Mozambique received vaccine shipments only on the basis of independently negotiated airfreight rates. The effect of this change is shown in Fig. 1. Rates were reduced from an average of US$ 11.68 per kg to an average of US$ 4.35 per kg. Not only were the rates lower but they also became much more stable. In 1995 the average airfreight rate increased to US$ 5.5 per kg. This was partly the result of a devaluation of the US$ and partly because one airline stopped flying to Maputo, reducing both competition and capacity. …

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