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Parallel systems are a thing of the past. For years, global health has relied on disease-specific programs, creating separate supply chains for conditions like HIV/AIDS or malaria. While these efforts saved lives, they often left health systems fragmented, especially in low- and middle-income countries (LMICs). With recent USAID cuts threatening essential services, integrated supply chains in global health are now more critical than ever.

In early 2025, the Trump administration slashed USAID funding, terminating over 90% of contracts and halting services for millions, from Sudan to South Africa. This has left global health efforts reeling, with programs for HIV treatment, malaria care, and maternal health at risk. The cuts, part of a broader “America First” agenda, have sparked protests and raised fears of increased illness and death in vulnerable regions.

This moment is tough, but it’s also an opportunity. Integrated supply chain systems, where all health commodities are managed together under one government-led framework, could be the answer. They promise better efficiency, fewer stockouts, and fairer access to medicines.

Survey Note: Detailed Analysis of Integrated Pharmaceutical Supply Chain Systems

This note provides a comprehensive examination of the shift from parallel to integrated pharmaceutical supply chain systems in global health, focusing on recent developments as of March 12, 2025.

Background

For decades, global health donors and implementers have prioritized vertical, disease-specific programs, creating parallel supply chain systems that bypass government-led health supply chains. While these approaches have delivered results, such as reducing the burden of HIV/AIDS, malaria, and tuberculosis, they have contributed to fragmentation, inefficiencies, and inequities, particularly in LMICs. The reliance on parallel systems has often undermined the development of resilient, government-led supply chains capable of addressing the full spectrum of health needs.

Recent developments, however, indicate a significant shift. The global health landscape is changing, driven by funding cuts from major donors. As of early 2025, the Trump administration has implemented sweeping cuts to USAID programs, terminating funding for HIV, malaria, and maternal health initiatives, among others. According to Services to millions of people collapse as USAID cuts contracts worldwide | Reuters, these cuts have led to the cancellation of over 90% of USAID contracts, affecting lifesaving care in countries like Sudan and South Africa. The KFF Health Tracking Poll highlights public concern, with 67% believing these cuts will increase illness and death in low-income countries.

Source: KFF Tracking Poll on Health Information and Trust (Feb. 18-25, 2025)

The impact is profound, with programs for biosecurity, vaccines for polio, mpox, and Ebola, and food supplies for famine-stricken regions being hit, as noted in Disease outbreaks and starvation deaths will increase as a result of USAID cuts, officials say. This has created a sense of urgency, with the global south encouraged to become self-reliant, as suggested in Nature Medicine on US aid cuts.

Why Integrated Supply Chains in Global Health Are the Future

The shift to integrated supply chains in global health ensures that medicines and health commodities are managed efficiently under a unified framework, reducing stockouts and operational costs. This approach aligns procurement, warehousing, distribution, and last-mile delivery under a single, government-led system, ensuring coherence, transparency, and efficiency. Research and global evidence underscore the benefits, with a 2021 Global Fund study highlighting that integrated supply chains can reduce stockouts by up to 30% and lower operational costs by 15–20% through economies of scale (Global Fund progress reports). The World Health Organization (WHO) has long advocated for integrated systems as a cornerstone of health system strengthening, emphasizing their role in improving access to medicines, reducing wastage, and enhancing accountability (WHO report on strengthening pharmaceutical systems).

Practical examples illustrate these benefits. Rwanda’s integrated health supply chain system, supported by a robust digital backbone, has achieved a 98% availability rate for essential medicines at health facilities, a stark contrast to fragmented systems in many other LMICs. Ethiopia, too, has made strides through its Pharmaceutical Supply Agency (EPSA), reducing inefficiencies and ensuring that both donor-funded and government-procured medicines are managed under one system. These successes demonstrate that integration is not just a theoretical ideal but a practical, achievable solution with transformative potential.

The Urgent Need for Supply Chain Integration After USAID Cuts

The current funding landscape has created a perfect storm for change. With USAID’s cuts affecting disease-specific programs, LMICs are grappling with reduced resources to sustain parallel systems. The COVID-19 pandemic exposed the vulnerabilities of fragmented supply chains, as countries struggled to procure and distribute essential commodities like vaccines, PPE, and diagnostics, underscoring the need for supply chain resilience. Duke Global Health Institute on aid freeze impacts cites examples like the sudden end of Global Fund support in Romania, leading to a surge in HIV transmission rates, illustrating the risks of funding disruptions.

Moreover, the push for universal health coverage (UHC) and the Sustainable Development Goals (SDGs) demands a shift toward systems that prioritize equity and sustainability. Integrated supply chains ensure that no disease or population is left behind, as resources are allocated based on need rather than donor priorities. For governments, this means greater ownership and control over their health systems, reducing dependency on external funding. For donors, it offers a more sustainable investment, as funds are channeled into strengthening national systems rather than temporary, parallel structures.

Overcoming Challenges in Global Health Supply Chain Reform

Transitioning to an integrated supply chain system is not without challenges. Resistance from stakeholders accustomed to vertical programs, limited technical capacity, and the need for robust governance structures are common hurdles. However, these barriers can be overcome with the right strategies. Strong political will and leadership are critical—governments must champion integration as a national priority and align stakeholders around a shared vision. Investments in digital tools, such as electronic logistics management information systems (eLMIS), provide real-time visibility into stock levels, demand, and distribution, enabling data-driven decision-making. These digital health solutions are essential for modernizing supply chains.

Capacity building is also vital to ensure that supply chain professionals have the skills to manage a unified system effectively. Global best practices offer a roadmap for success. For instance, Kenya’s integration efforts through the Kenya Medical Supplies Authority (KEMSA) involved harmonizing procurement processes, strengthening governance, and engaging donors to align funding with national priorities. Similarly, Nigeria’s National Product Supply Chain Management Programme (NPSCMP) has worked to integrate supply chains across states, with notable success in improving the availability of essential medicines.

The time for integrated supply chain systems is now. Donors must redirect investments toward strengthening national systems, ensuring sustainable impact. Governments should seize this opportunity to take ownership of their health supply chains, building a foundation for universal health coverage and resilience. Implementers should partner with PSA to drive this transformation, leveraging our expertise to make integration a reality.

At PSA, we support the transition to integrated supply chains in global health, helping organizations build resilient, government-led systems that ensure equitable access to essential medicines. Schedule a free consultation with our experts to discuss how we can support your supply chain transformation.