PLUS UP FUNDING: PEPFAR has supported Ethiopia's ART program with laboratory equipment, test kits (on emergency basis) and supplies for diagnosis, treatment and monitoring of HIV/AIDS patients. This support will continue and supplies will be purchased and distributed through SCMS. In addition to rapid test kits from GF, SCMS will provide kits for 110,000 tests in COP07. Because of the government's Millennium AIDS Campaign (MAC), the demand for HIV rapid test kits is increasing. In the first two- months phase of MAC, 622,000 people were tested. Review of MAC I revealed client uptake nearly doubled from MAC I targets. The campaign faced many constraints; major ones included test kit and human resource shortages. During MAC Phase 2, the government will target high risk populations, expand PHCT, and strengthen referral linkages from pre-ART care. The funds will be used to provide rapid HIV test kits for 600,000 tests and logistics management.

Procurement and Distribution of ARV Drugs and Related Commodities

The size of Ethiopia and difficult terrain require a substantial investment in logistics systems. Furthermore, Ethiopia's 2006 decision to decentralize ART services to health centers demands intensive support at National, Regional, Zonal and Woreda levels to reach the national ART targets. Under COP07, PEPFAR Ethiopia will support the provision of ARV drugs to 131 hospitals and 240 health centers, reaching 111,500 eligible patients with commodities by September 30, 2008. Ethiopia has underestimated the magnitude of logistics requirements to effectively implement decentralized ART service provision. This has resulted in repeated requests for technical assistance and funding outside of the PEPFAR- GFATM Memorandum of Understanding (MOU).

1. ARV Drug Procurement: This is a continuing activity from FY06. As of September 2006, PSCMS had received 50.4% of the 2006 funding allocations; it has worked closely with Management Sciences for Health/Rational Pharmaceutical Management Plus (RPM+) staff at headquarters and in-country to establish a country office; including a TA visit, development of a strategic concept paper and identification of key personnel. This activity is linked to PMTCT, counseling and testing, palliative care, OVC, renovation, ART and laboratory services.

Under COP06, PEPFAR Ethiopia allocated $17,872,000 to PSCMS. These funds are being used for ARV drug procurement and to strengthen the capacity of PHARMID, the agency charged with procurement and nationwide distribution. The funds will be expended by the beginning of COP07 as the current nationwide decentralization of ART treatment accelerates.

PSCMS is currently placing in-country staff and will be co-located with RPM+, PEPFAR Ethiopia's current implementer of ARV procurement and supply chain management activities. The two activities will collaborate closely this year in a phased transition, with PSCMS working under PHARMID to support all Government of Ethiopia (GOE) HIV/AIDS procurement and distribution activities by the end of COP07. Joint work planning has begun, including USG inputs into the National Health Commodities Supply System Master Plan (HCSSMP), slated to cover all commodities including ARV.

Under this Plan, PSCMS will provide TA and support to PHARMID, developing an integrated logistics management system for ARV, test kits, PMTCT supplies, drugs for the prevention and management of OI and other commodities, in close collaboration with MOH/HAPCO and other partners.

In COP07, PEPFAR Ethiopia and GFATM will further integrate their activities by working more interdependently to support the national scale-up effort. GFATM/HAPCO will continue to supply first line adult ARV drugs and PEPFAR Ethiopia will purchase second line adult ARV, all pediatric formulations and a reserve stock of first line adult ARV drugs.

PEPFAR Ethiopia plans to support the GOE to reach 10,925 children with ARV, or 10% of patients on treatment by the end of COP07.

It is estimated that 2% of adult patients on first line ARV drugs (2,010 patients) will shift to second line drugs as the result of clinical, immunological or viral failure.

Finally, PEPFAR Ethiopia will allocate funds to purchase 10% of the national first line ART requirement, as emergency safety stock for 10,925 adult patients. This safety stock is crucial given the rapid decentralization of ART services, the weak existing supply system, and the uncertainties of such a rapid expansion.

Cost of commodities: (1) Pediatric first line drugs: 10,925 patients for 18 months (Total: $8,462,454) (2) Adult second line drugs: 2,010 patients for 18 months (Total: $1,508,712) (3) Pediatric second line drugs: 225 patients for 18 months (Total: $567,000) (4) Adult first line drugs: 10,925 patients for 18 months (Total: $3,232,592).

Per the MOH/HAPCO-PEPFAR Ethiopia MOU, drugs for OI are supplied through GFATM/HAPCO. Persistent shortages of OI drugs remain a major challenge to providing

optimal services for people living with HIV/AIDS (PLWHA). To ensure implementation of the preventive care package, PEPFAR Ethiopia will also provide cotrimoxazole (CTX) tablets for 200,000 PLWHA at a cost of $1,152,000; if ARV estimates result in additional funds being available, PEPFAR Ethiopia, working under PHARMID, will also utilize available funding to support provision of other commodities, including additional CTX, other OI drugs and PMTCT supplies, as well as TA to support supply chain management, on an as-needed basis to avoid shortfalls or supply interruptions, since PEPFAR Ethiopia estimates of needs for these commodities indicate that shortages may occur. The funding deficit for OI drugs alone may reach $33.5 million in CY 2008.

Finally, PEPFAR Ethiopia will move from single dose Nevirapine to support combination therapy for 2,000 HIV positive pregnant mothers at a cost of $8,000.

The total amount required for pharmaceuticals is $14,930,757. The total cost including 10% FOB prices of the drugs for shipping and insurance ($1,493,075.70) and a 1.9% PSCMS handling charge ($283,684), is $16,707,516.70. This excludes overhead and indirect costs. The balance, $12,454,585.30, would support procurement and distribution of drugs for OIs and PMTCT commodities.

2. Inventory Management and Distribution of ARV drugs, OI Drugs, Laboratory Reagents and Equipment, Test Kits and other PMTCT products: Using the system established by RPM+ with PHARMID, PSCMS will work under PHARMID to support the clearing, warehousing and distribution of ARV drugs and related commodities purchased by PEPFAR Ethiopia and other sources. PEPFAR Ethiopia will continue its intensive efforts to strengthen the supply chain management system during COP07, with primary TA shifting from RPM+ to PSCMS. The comparative advantage of PSCMS provides economies of scale, lower unit costs, increased efficiency and improved coordination between suppliers and recipients. The transition in support to the supply chain management system from RPM+ to PSCMS will be conducted in a phased manner. During COP07, PSCMS will focus attention on strengthening PHARMID at headquarters and regional level, finalizing the transition with RPM+ and supporting the GOE's development of a fully functional, integrated supply system at all levels. To that end, both organizations are developing a transition plan under which RPM+ will transfer all responsibilities for procurement and supply chain management support to PSCMS by September 30, 2008.

RPM+ will continue its efforts to support site level supply chain management through September 2008, utilizing 23 Regional Pharmacy Associates (RPA) deployed throughout the country. Most of the RPA will be gradually absorbed by PSCMS to support PHARMID's coordination of supply chain management with PSCMS country office and regional PHARMID staff. In another transitional activity, PSCMS will support the Ethiopian Health and Nutrition Research Institute (EHNRI) in operationalizing an integrated laboratory logistics management system, in close collaboration with RPM+, the Clinton Foundation, MOH/HAPCO, CDC Ethiopia and other relevant partners. RPM+ has currently assigned a Senior Laboratory Logistics Management expert to EHNRI. RPM+ will also deploy five Regional Laboratory Logistics Associates (RLLA) using COP06 funds. They will work closely with all relevant stakeholders to ensure that the laboratory logistics management system functions smoothly and will be absorbed by PSCMS in a phased manner during COP07.

During COP07, PSCMS will primarily focus on strengthening PHARMID's HQ and regional levels. PSCMS will support PHARMID in the implementation of standard logistics practices and technologies, and in improving commodity procurement and distribution. PSCMS will also assist in upgrading PHARMID's security, fire protection and storage capacity.

Laboratory Reagents, supplies and equipments

These are continuing activities from COP05 and COP06. As of April 2006, PEPFAR Ethiopia has received 100 % of COP06 funds and is on track in terms of program implementation according to the original targets/work plan. In COP07, the funding has been increased by 100% because of increasing number of patients to be monitored and the procurement of laboratory equipments for hospitals and health centers. The demand and cost of laboratory monitoring will increase substantially. To meet the demand and provide the services to all sites, substantial amount of budget allocation was necessary.

PEPFAR Ethiopia supported the ART program by purchasing laboratory equipments, test reagents for diagnosis and treatment monitoring of HIV/AIDS patients. In FYO5 and COP06, laboratory reagents and test kits have been distributed and more than 40,000 patients on ART have been provided with the monitoring services (CD4, hematology and biochemical profiles). At the end of COP06, it is anticipated that 80,000 patient will be on ART who will require laboratory monitoring services.

In COP07, activities supported in COP06 will continue and the services will be expanded to additional hospital and health centers that support ART services. The services will expand to 131 hospital networks (131 hospitals and 240 health centers).

Laboratory monitoring (CD4, chemistry and hematology profiles) will be provided to 138,300 patients as per the "Guidelines for ARV use in Ethiopia." The supplies will be purchased and distributed through SCMS.

The following laboratory reagents, test kits and supplies will be purchased and distributed: (1) Chemistry test reagents for monitoring patients on treatment at baseline, week two, week four and eight, thereafter as directed by symptoms: ALT/GPT (907,983 tests), Creatinine (907,983 tests), cholesterol (907,983 tests), BUN (907,983 tests); and Glucose (344,000 tests); (2) Hematology test reagents for monitoring patients on treatment at baseline, week four, and week 12, thereafter symptom-directed determinations (441,763 tests); (3) CD4 test reagents for monitoring patients on treatment twice a year, staging and six months after, pre-art patients including pregnant women (852,012 tests); (4) Pregnancy test kits for 172,875 tests; (5) Syphilis tests (250,000); (6) HIV DNA PCR test kits for diagnosis of 13,830 (10%) pediatric patients less than 18 months; (7) HIV rapid test kits for 110,000 tests; (8) Reagents and staining solutions of microscopic diagnosis of OI (AFB, malaria, stool parasites; (9) Other supplies including gloves, different vacutainer tubes and tubes, pipette tips, gloves, disinfectants to all 131 ART hospitals and 240 health center laboratories. In addition, the following laboratory equipment to support ART expansion to peripheral hospitals and health centers will be purchased and distributed. Binocular Microscopes (50); Table top sterilizers (50); Water Distillers (50); Table top Centrifuges Speed 4000-6000 rpm (50); Incubators (50); General purpose laboratory Thermometers range -5 to 105 oC (200); Micropipette capacity 1-20 ul (100); Micropipette, capacity 10- 250 ul (100); Micropipette, capacity 100-1000 ul (100); Cryo Box, PC, 9 x 9 Place for 81 Tubes (20); FACS Count, flow cytometers (10); Clinical chemistry analyzers (20); Differential counter-annual counters with 9 keys (50); Automated Hematology analyzers (20); Laboratory Refrigerator/Freezers (50); ELISA readers (10); ELISA Washers (10); Vortexes (50); UPS (50); Analytical balances (50); Hematocrits (250); WBC counting champers (250); Haemoglobinometers-with two comparison standards of non-fading color glass (50); Alarm timers-With audible signal (100); Ice boxes (200).

Under the auspices of GOE-Pharmid, SCMS will work closely with PEPFAR Ethiopia to oversee the overall laboratory services. SCMS will also closely work with the local system which is in place. As part of the local capacity development and sustainability of services, PSCMS will assist in strengthening of the national and local supply chain management system.