Effect of Supply Chain Management Practices on the Performance of the National Health Insurance Authority (NHIA) Medicine Supply Initiative (NMSI) (2020–2024)

Abstract

The performance of healthcare systems in developing economies is heavily dependent on the resilience and efficiency of medicine supply chains. This study examined the effect of Supply Chain Management (SCM) practices, specifically Strategic Sourcing (SS), Logistics and Distribution Management (LDM), Risk Management Practices (RMP), and Quality Assurance and Control Practices (QAC), on the performance of the National Health Insurance Authority (NHIA) Medicine Supply Initiative (NMSI) in Nigeria (2020–2024). Performance was measured through non-financial and operational metrics, including product availability (stock-out rates), economic efficiency (price affordability), and supply chain responsiveness. Using a descriptive survey design, data were collected from 121 valid strategic stakeholders across the NHIA headquarters, pharmaceutical partners, Drug Management Organisations (DMOs), and NAFDAC. Partial Least Squares Structural Equation Modelling (PLS-SEM) revealed that Strategic Sourcing (β = 0.360, p < 0.001), Logistics and Distribution Management (β = 0.270, p = 0.001), and Quality Assurance (β = 0.167, p = 0.038) significantly and positively affect NMSI performance. Collectively, these variables explain 82.7% of the variance in performance (R² = 0.827). Notably, Risk Management Practices (β = 0.188, p = 0.052) did not meet the threshold for statistical significance at the 5% level. The study concluded robust strategic sourcing and integrated logistics are essential drivers of success in Nigeria's universal health coverage efforts through the NHIA Medicine Supply Initiative. Recommendations include adopting AI-driven procurement analytics and centralized dashboards, accelerating eLMIS deployment with GPS tracking and SSHIS integration, strengthening quality assurance via automated verification, supplier audits, strategic reserves, and multi-sourcing, and enhancing risk management maturity with tailored identification, assessment, mitigation, and early warning tools.