Developing and Implementing Revolving Drug Funds in Nigeria

Timeline: January 2019 – October 2020 | Status: Completed

Bauchi, Kebbi, and Sokoto States, Nigeria

Project Overview

Reliable access to affordable, quality medicines is one of the cornerstones of an effective health system. Yet across many low-resource settings, frequent stockouts, weak supply chains, and unsustainable financing mechanisms continue to limit the availability of essential medicines at primary healthcare facilities.

To address these challenges, the Health Strategy and Delivery Foundation (HSDF), in partnership with USAID and McKinsey & Company, implemented the Developing and Implementing Revolving Drug Funds in Nigeria project between 2019 and 2020.

The project focused on supporting the establishment and strengthening of Revolving Drug Funds (RDFs) as a sustainable mechanism for financing and managing medicine supply. Under the RDF model, revenues generated from the sale of medicines are reinvested into replenishing stock, helping facilities maintain continuous availability of essential drugs while reducing dependence on irregular funding flows.

Working with stakeholders in Bauchi, Kebbi, and Sokoto States, HSDF supported efforts to strengthen governance, operational systems, and accountability mechanisms required for effective RDF implementation.

Medicine stockouts remain a persistent challenge within many health systems. Weak inventory management systems, fragmented procurement processes, and limited financing mechanisms often result in interruptions in the supply of essential medicines, affecting the quality of care patients receive.

For many primary healthcare facilities, ensuring a consistent supply of medicines requires systems that are both operationally efficient and financially sustainable. Without these systems, facilities struggle to maintain adequate stock levels and respond to patient needs.

HSDF worked alongside government stakeholders and partners to strengthen the systems required for effective Revolving Drug Fund implementation. The project focused on:

Supporting the design and operationalisation of Revolving Drug Fund models.
Strengthening governance and accountability mechanisms for medicine management.
Improving inventory management and stock monitoring processes.
Supporting sustainable financing approaches for essential medicines.
Building stakeholder capacity to manage and oversee RDF systems.
Promoting practices that improve medicine availability and reduce stockouts.

The project recognised that access to medicines is not only a supply chain issue but also a governance and sustainability challenge that requires strong institutional systems.

The initiative contributed to efforts to build more reliable and sustainable pharmaceutical supply systems within participating states. By supporting stronger management structures, financial sustainability mechanisms, and accountability processes, the project helped lay the groundwork for improved medicine availability at the primary healthcare level.

The lessons generated through this work continue to inform discussions on sustainable approaches to pharmaceutical financing and supply chain management within Nigeria’s health sector.