Global Health Forecasting Working Group Background Paper Mapping and Realigning Incentives in the Global Health Supply Chain (original) (raw)

Poor allocation of risks among the constituents of a supply chain results in a misalignment of incentives, leading to over-reactions, unnecessary interventions, second guessing, mistrust, and distorted information – ultimately degrading its ability to match supply and demand. This study assesses the current allocation of operational risks and their impact on the incentives of different players in the global health supply chain, focusing on the case of fixed-dose artemisinin-based combination therapy for malaria as an illustrative example. Currently, there is a highly non-optimal allocation of risks in this supply chain, where constituents that have the best knowledge about demand uncertainty, or the highest ability to resolve part of this uncertainty, or have the highest potential to benefit from this uncertainty reduction, do not necessarily carry its corresponding risks. This and other improper risk allocations lead to misaligned incentives for accurate forecasting, sharing demand...

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