Unmanned aerial vehicle UAV cost modeling for commodity

Unmanned aerial vehicle (UAV) cost modeling for commodity delivery in Malawi Charles Matemba 21 stt November 2019

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Title of Presentation Charles Matemba Village. Reach Unmanned Aerial Vehicle (UAV) Cost Modeling for Health Commodity Delivery in Malawi 2019 Global Health Supply Chain Summit, Johannesburg, S. Africa

Contents Background Cost Analysis Objectives Key Cost Analysis Inputs Methodology Findings Limitations Conclusion Recommendations 2019 Global Health Supply Chain Summit, Johannesburg, S. Africa

Background • Malawi’s High Maternal Mortality Rate: 349 deaths per 100, 000 live births • Maternal Hemorrhaging accounts for up to 35% of all maternal deaths in Malawi • Village. Reach worked with the Ministry of Health and Population (MOHP), the Malawi Blood Transfusion Service (MBTS), the Pharmacy, Medicines and Poisons Board (PMPB), and Next. Wing Corporation • Supported by Open Road Alliance and Grand Challenges Canada 2019 Global Health Supply Chain Summit, Johannesburg, S. Africa Malawi

Cost Analysis Objectives • Provide insights into costs associated with using UAVs to transport blood and oxytocin • Compare UAV transportation costs to standard ground vehicle Rationale • Urgency in maternal hemorrhaging • Weak requisite infrastructure to rapidly respond to life-threatening incidents • Weak storage in rural district hospitals and health facilities 2019 Global Health Supply Chain Summit, Johannesburg, S. Africa

Methodology Document review, key informant interviews and Survey Simulated transportation of Blood and Oxytocin from MBTS-Lilongwe to Lilongwe and Dowa Districts 7 Blood transfusing facilities included 2019 Global Health Supply Chain Summit, Johannesburg, S. Africa

Methodology Cost Modeling • A simple and easy-to-use Excel cost modelling tool was developed • The tool comprised of three main steps that facilitate estimation and comparison of operating costs: 1. System Inputs 2. Back-end Modeling Define the scenario being modeled – the design and overall context Estimate required activities and resources for execute the defined design and context 3. Cost Outputs Calculate the expected monthly cost of the resources and activities that are needed 2019 Global Health Supply Chain Summit, Johannesburg, S. Africa 8

Key Cost Analysis Inputs Key Inputs Facility Details Vehicle Details Personnel Details GPS coordinates Vehicle range Salaries Equipment costs Per diem Trip distance and time Supply requirements Useful life time Insurance, fuel, maintenance Key Assumptions Hypothetical designated ground-based transportation by road, via Land Cruiser Actual air based transport via Li. Po battery powered VTOL drone (NXT 1) Analysis covered facilities currently doing blood transfusions Good implementation quality and stable operating conditions

Health Facilities • Scenario 1 (N=7): Round -trip costs from MBTS to all 7 health facilities currently conducting transfusions • Scenario 2 (N=4): Round -trip costs to four health facilities situated greater than 30 km oneway from MBTS Facilities >35 km away from MBTS 2019 Global Health Supply Chain Summit, Johannesburg, S. Africa

Key Findings UAV vs. Motor Vehicle Cost Comparison Personnel Fuel/Energy Vehicle Maintenance Insurance Landing Device & Charger Battery Scenario 1: Land. Cruiser 1. 2. 3. 4. 5. Scenario 1: UAV Scenario 2: Land. Cruiser Scenario 2: UAV costs were 51% lower than Land Cruiser costs for Scenario 1 (7 HC) and Scenario 2 (4 HC) The most substantial cost driver was vehicle cost (UAV $16, 000 vs. Land Cruiser $59, 426) Land Cruiser fuel costs were a significant cost driver for road system (11% of total costs) Cost per km was comparable between UAV and Land Cruiser; however, UAV’s more direct path lowers its costs UAV personnel costs were greater (by factor of 2. 5) attributed to required expertise

Cost Drivers • The UAV had a lower base cost relative to Land Cruiser • UAVs takes more direct path and are not impacted by traffic jams or poor road conditions—reducing vehicle and personnel costs • The UAV used in this model was battery -operated so expensive fuel costs were irrelevant for this mode of transportation • UAV personnel costs higher than driver for the vehicle 2019 Global Health Supply Chain Summit, Johannesburg, S. Africa

Limitations • Poor data visibility – Obstetric data including data on units of blood required – Maintenance costs data • Focuses on one aspect of system bottlenecks • Estimates, assumptions and cost simulations – No dedicated maternal emergency transportation – Cost estimates • Broader impact on health system and other benefits not considered • Time efficiency not completed • Limited range and payload (max 45 km, 1 kg) 2019 Global Health Supply Chain Summit, Johannesburg, S. Africa

Conclusions • Need for responsive systems for obstetric and other emergencies • UAV has potential for efficient and cost effectiveness • Need for deeper understanding where UAV deliveries are most justified • Need for evidence for UAV technology feasibility, costs, benefits, long term business cases and system integration • It is important to acknowledge the disruptive and early stages of UAV for health commodity delivery 2019 Global Health Supply Chain Summit, Johannesburg, S. Africa

Recommendations • Further research required – Explore sensitivity analyses – How can UAVs and land transportation be leveraged to increase efficiency and reduce costs • Further understanding of the impact of UAV on health care and health systems – Impact on access to health, equity, besides feasibility and costs over time – Insights into national system design 2019 Global Health Supply Chain Summit, Johannesburg, S. Africa

Study Team • • • • Dorothy Thomas - Village. Reach Charles Matemba - Program Manager, Supply Chain, Village. Reach Diego Miralles - Founder and CEO, Next. Wing Carla Blauvelt - Director, Programs, Village. Reach Olivier Defawe - Director, Health Systems, Village. Reach Luciana Maxim - Senior Manager, Research, Evidence and Learning Susie Truog - Manager, Research, Evidence, and Learning Fanny Kachale - Director for Reproductive Health, MOHP, Malawi James Kandulu - Deputy Director, Health Systems Support Services, MOHP, Malawi Stephen Njolomole - Medical Officer, Malawi Blood Transfusion Service Mike Mkochi - Pharmacy Technician, Malawi Pharmacy, Medicines and Poisons Board Peter Makoza - Director of Health and Social Services, Dowa District Council Alinafe Mbewe - Director of Health and Social Services, Lilongwe District Council 2019 Global Health Supply Chain Summit, Johannesburg, S. Africa

Thanks to our generous sponsors 2019 Global Health Supply Chain Summit, Johannesburg, S. Africa