Digital Cure For Drug Shortages Struggles to Reach Hospital Shelves

May 17 , 2026. By DAGIM SEIFE ( FORTUNE STAFF WRITER )

The Ethiopian Pharmaceutical Supply Services (EPSS) has proposed a "multi-vendor" procurement system designed to address ongoing sourcing challenges. The federal agency would manage tenders on behalf of public hospitals, acting as an intermediary between individual health facilities and private suppliers. The multi-vendor arrangement has yet to be rolled out, leaving the third procurement pathway inactive for dependent facilities. Consequently, hospitals must continue to seek private tenders to manage inventory shortfalls independently.

The federal agency in charge of imports and distribution of medicines launched “Project SMILE,” a programme intended to integrate procurement, inventory, warehousing, and distribution into a single system.

In public hospitals and health centres across the country, the search for medicines still runs through the Ethiopian Pharmaceutical Supply Service (EPSS). It is the principal channel for pharmaceuticals, medical supplies, laboratory reagents and equipment. For patients and clinicians, its performance is measured by whether essential medicines are on the shelf.

That test has become harder as shortages continue to pressure facilities and procurement systems, even while EPSS attempts a broad digital overhaul. It followed an internal assessment that uncovered deep operational waste. A 2019 review found that 42pc of EPSS business processes added no operational value, while 60pc of workflows depended on repetitive manual handoffs, delaying procurement and inventory management.

The fragmented system also weakened visibility over the movement of medicines and health commodities. For the institutions, the promise of reform is judged against invoices, credit terms, stock cards, tenders and the next delivery, more than by software.

According to Abdulkedir Gelgelo, director general of EPSS, the platform now launched is intended to improve coordination and oversight.

“The system was introduced to create end-to-end visibility, to strengthen the reliability of pharmaceutical supplies reaching public health institutions,” Abdulkedir said.

During the current fiscal year, 5,038 health institutions requested medicines from EPSS, while 4,971 signed contracts and received supplies at different points in the year. Only 170 institutions collected medicines once, primarily due to budget constraints. The agency carried out pharmaceutical procurements worth 13 billion Br, including 5.8 billion Br from domestic manufacturers and 7.7 billion Br from international suppliers. Availability of essential and life-saving medicines in its stock was 79pc.

“EPSS has sufficient capacity and input to supply medicines to any public health institution willing to enter into a contractual agreement with the agency,” Abdulkedir said.

That assurance is being tested by dependent facilities. Since the beginning of the fiscal year, public institutions have been signing agreements through the Committed Demand Supply-Chain System (CDSS). The platform requires facilities to assess and quantify demand against available budgets before entering into contracts. EPSS then supplies medicines in accordance with agreed quantities and delivery schedules.

Officials believe the model is meant to improve planning and align demand with supply. Yet facility-level gaps show how a new system can coexist with old shortages.

At Yekatit 12 Hospital, on Weatherall St., EPSS is still the main supplier. According to Adugnaw Mulu, head of the pharmacy department, the Hospital submits medicine requests to EPSS up to four times a week. Deliveries are usually completed within five days when stock is available.

The Hospital's administrators signed a procurement agreement worth 168 million Br this fiscal year, excluding medical equipment. Of that amount, 112 million Br worth of medicines have already been supplied and used. But EPSS currently supplies only 314 of the nearly 1,000 items required by the Hospital. The shortfall has pushed Yekatit 12 into the private market for items EPSS cannot provide.

“The remaining medical items weren't bought from private suppliers by choice, but because they're unavailable from EPSS,” Adugnaw said.

When stock-outs occur, the Hospital procures unavailable medicines through private tenders through importers, exposing it to price volatility, delays and quality concerns. It also relies on donations and resource mobilisation. Adugnaw disclosed that Yekatit 12 Hospital received medicines worth nearly 19 million Br through donations and mobilised resources, and redistributed excess stock worth about five million Birr to other facilities. Some supplies now in use were carried over from earlier stock balances.

Adugnaw saw EPSS's proposed “multi-vendor sourcing” procurement system as a way to ease sourcing challenges. Under the arrangement, EPSS would manage tenders on behalf of hospitals and serve as an intermediary between facilities and suppliers. Although the model was expected to be rolled out this fiscal year, it has yet to be.

"EPSS is expanding both the volume and variety of medicines supplied for the next fiscal year, with procurement agreements already being prepared under the revised framework," he said.

At Ferensay Health Centre, the same dependence appears in smaller form. According to Mesfin Eshete, head of the pharmacy department, the facility relies mainly on EPSS, though supply gaps and tight budgets shape procurement. The Centre was allocated a pharmaceutical budget of 9.05 million Br this fiscal year. It spent 5.28 million Br on medicines and supplies from EPSS.

The Health Centre signed agreements with EPSS covering 112 medicine items, 29 laboratory reagents, six imaging supplies and three general-use items. According to Mesfin, the agreement operates through direct supply from EPSS stock under contract, private procurement when EPSS has shortages, and a still-pending mechanism under which EPSS would float tenders for items it cannot supply. The third pathway had been planned for the third quarter of the fiscal year but remains inactive.

“EPSS provides medicines through a two-month credit system, which helps facilities continue operations despite financial constraints,” Mesfin said.

Ferensay Health Centre owes EPSS 2.6 million Br, of which 700,000 Br has been repaid. Mesfin described the collection process from EPSS as generally efficient, with deliveries received every three months.

The drift toward private suppliers worries specialists such as Asayehegn Tekeste. Facilities that turn to private importers for unavailable medicines face inflated prices and potential entry points for unregulated pharmaceutical channels, raising concerns about quality assurance.

“The biggest concern is quality,” Asayehegn said. "Risks can emerge from importation and regulatory approval to distribution."

According to Asayehegn, stronger domestic pharmaceutical manufacturing could reduce dependence on imports and improve supply stability. A properly implemented “multi-vendor sourcing” model could improve bargaining power, reduce medicine prices and widen access by expanding supply options for health facilities. But he warned that weak oversight could expose the system to corruption and compromise the quality of medicine.

PUBLISHED ON May 17,2026 [ VOL 27 , NO 1359]