Applicable product ranges: Pharmaceuticals, Medical Devices
Why don’t hospitals/clinics buy directly from AdvaCare?
Hospitals and clinics are a major distribution channel for AdvaCare Pharma’s products. However, hospitals are not the direct buyer of AdvaCare Pharma products, instead having to purchase our products from our distributors, for the following reasons:
● A single hospital or clinic usually does not have the demand to order large quantities of each product, meaning a single hospital cannot meet our MOQ (Minimum Order Quantity) per product.
● Hospitals and clinics are strictly in the business of patient care and handle only local compliance. Hospitals do not have the capacity or interest in dealing with product registration or importation, both of which are further up the supply chain, the role which our distributors fill.
● Hospital and clinic procurement relies on on-demand fulfillment, meaning smaller quantities are ordered and delivered quickly because hospitals generally require a very wide range of products in smaller quantities.
Hospitals vs District/Community Hospitals vs Clinics
Hospitals are generally larger than district/community hospitals in both size and scope, and therefore will purchase a greater quantity and range of products. Most of our distributors focus their resources and efforts on larger hospitals to sell larger volumes, but every hospital despite size is a customer. Given that district hospitals are more community based, they are more numerous than larger general hospitals that are more likely to be regional.
Clinics are technically not considered hospitals and are considerably smaller than district/community hospitals. Given that clinics are more numerous and might be easier to obtain orders from given less competition for sale, distributors will focus on both hospitals and clinics. Smart distributors will build both channels as hospitals will move larger quantities faster, hence larger revenue, but clinics will provide more stability and might have higher margins given less buying power.
Public vs Private
Both hospitals and clinics can be public (government owned) or private (privately owned). In lower to middle income countries, there will be a higher concentration of public hospitals which are owned by the government. Private hospitals do exist and in some countries are more numerous than public, but in most cases public hospitals account for a larger share of healthcare services. Generally, higher income countries have more private hospitals as a share of the total number of hospitals when compared to low-middle income countries. On the other hand, clinics can more often be privately owned given that the costs for opening and operating a clinic is must less than a hospital. However, public clinics are still common to fill the need for less urgent or severe care, providing healthcare in more rural areas and providing lower cost care that is accessible to a broader population. Ultimately, the public vs private mix depends on the respective healthcare infrastructure of each country.
Some common types of hospitals that our distributors supply our products to include:
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TYPES OF HOSPITALS
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General Hospitals
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- These are the most common type of hospitals that provide a broad range of medical services and treatments. They are equipped with departments such as emergency, surgical, maternity, pediatric, and intensive care units.
- Larger hospitals such as regional hospitals and tertiary care hospitals are less common in developing countries due to limited resources and funding.
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District/Community Hospitals
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- These hospitals are typically located in smaller communities and provide a wide range of medical services to the local population.
- These hospitals generally have basic medical facilities and are designed to serve the healthcare needs of the surrounding community. They may also serve as referral centers for patients who require specialized care that is not available at the community level.
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Clinics
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- Clinics are healthcare facilities that provide medical care and treatment for patients, but they are generally smaller and offer a more limited range of services compared to hospitals.
- Clinics can be owned and operated by different entities, such as private individuals, government agencies or non-profit organizations.
- They can be specialized, such as doctor’s offices, dental clinics or provide general medical services.
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Long-Term Care Hospitals & Nursing Homes
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- These hospitals provide care to patients who require extended hospitalization, such as those with chronic conditions or severe injuries.
- Nursing homes are much less common in developing countries given lower income of general population, but these are have significant growth in developing countries as the middle class increases in size, income and the boom in elderly people as the population grows older.
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Children’s Hospitals
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- These hospitals specialize in treating children and providing pediatric care.
- These hospitals vary in size, but in general are less common in developing countries as such services will be included in general and district/community hospitals.
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Specialty Hospitals
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- These hospitals focus on treating a specific type of medical condition or providing a specific service. Examples include cancer hospitals, orthopedic hospitals, and psychiatric hospitals.
- These hospitals are less common in developing countries given limited income of general population and most of these services will be provided by general hospitals.
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Challenges facing Hospitals in Developing Countries
In estimated order of priority from most impactful challenges to least that our distributors face:
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CHALLENGES OF HOSPITALS
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Limited Infrastructure and Resources
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- Developing countries may have inadequate healthcare infrastructure, including storage facilities, transportation networks, and cold chain systems.
- This can pose challenges for distributors in ensuring timely and proper delivery of medical and pharmaceutical products to hospitals and clinics.
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Supply Chain Complexity
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- Managing a complex and diverse supply chain is a significant challenge.
- Distributors must coordinate with multiple suppliers, handle a wide range of products, and ensure efficient inventory management and distribution to meet the varied needs of hospitals and clinics.
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Financial Constraints
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- Hospitals and clinics in developing countries often face financial constraints, leading to delayed or irregular payments.
- This can impact distributors' cash flow and their ability to maintain sufficient stock levels and invest in logistics and distribution infrastructure.
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Product Quality and Authenticity
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- Ensuring the quality, authenticity, and integrity of medical and pharmaceutical products is crucial.
- Distributors must navigate the risk of counterfeit or substandard products in the supply chain, especially in developing countries with less stringent regulatory oversight.
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Access to Remote Areas
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- Hospitals and clinics in developing countries are often located in remote and underserved areas.
- Distributors face challenges in reaching these locations due to poor road infrastructure, limited transportation options, and geographical barriers.
- This can lead to delays and difficulties in supplying essential medical and pharmaceutical products.
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Demand Planning for Forecasting
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- Accurately forecasting demand for medical and pharmaceutical products in hospitals and clinics can be challenging due to factors like population dynamics, disease outbreaks, and changing healthcare needs.
- Distributors must navigate these uncertainties to avoid stockouts or excess inventory.
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Health Worker Capacity and Training
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- Inadequate healthcare workforce capacity, including limited training and knowledge, can impact the efficient utilization and proper handling of medical and pharmaceutical products.
- Distributors may need to provide training and educational resources to healthcare professionals to ensure optimal use of the products.
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Weak Health Information Systems
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- Inadequate health information systems and limited access to comprehensive patient records can hinder effective healthcare delivery.
- Challenges in data collection, management, and interoperability can hamper communication and coordination among healthcare providers, leading to fragmented care and decreased patient safety.
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Quality of Care
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- Ensuring and maintaining high-quality care can be challenging in resource-constrained settings.
- Limited training opportunities, inconsistent adherence to clinical guidelines, and a lack of quality assurance mechanisms can impact patient outcomes and satisfaction.
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