ACT subsidy- operational
pitfalls and opportunities
Christopher Whitty
Evidence to All-Party Parliamentary
Malaria Group 2007
Parasitological failure for antimalarials by
day 28, Tanzania
80.0
% infections
70.0
60.0
50.0
recrudescences
40.0
new infections
30.0
20.0
10.0
AQ
AQ+SP
AQ+AS
treatment group
CoArtem
Many of children with malaria come nowhere
near formal healthcare
Nigeria. Home 11%, traditional healer 12%, patent
medicine dealer 36%, community health worker 2%,
private clinic 2%, health centre 13%, hospital 4%.
(Uzochukwu BS, Onwujekwe OE Int J Eq. Heal 2004)
Uganda. 45% of mothers seek any care for their children
with fevers (Mbonye, SciWorldJ 2003). Of those that do 53%
drug vendors/shops, 31% government health facilities.
(Tumwesigire & Watson. Afr Health Sci 2002)
Mali. 76% mothers treat child's malaria at home (Thira et al
TM&IH 2000)
Kenya. Only 32% of patients with fevers made at least one
visit to a health care facility. (Guyatt & Snow Trans RSMH 2004)
Indirect cost of care is the major barrier to
accessing formal healthcare, then transport
•
Over half of the cost of a
treatment episode is
indirect cost (Wiseman et al
PLOS Medicine 2006)
•
Opportunity cost,
childcare, transport,
information all barriers
• The poorest will go to the
closest care.
• This will almost always be
the private sector.
Ability and willingness to pay
• Tanga region- average person
gets malaria 3-5x a year
• May have 10 people
dependent on a single income
of $20 a month
• Cost of ACTs in the market $711
• Willingness to pay for ACT at
public health facilities- $0.8
(Wiseman et al, Bull WHO)
Fake drugs and Veblen goods- further reasons the
price of ACTs in the private sector must come
down
(Newton et al PLoS Medicine 2006; CDC warning sheet 2006)
Those involved in antimalarial drugs policy
have sometimes made optimistic economic
assumptions.
• “If the quantity [of a good] should …fall short of
the effectual demand… its price must rise” (Adam
Smith, 1776)
• “As orders for the drug increase, the price of ACT
will go down” (ACT Now Campaign 2003)
• “[it’s] created a major wave of shock in our
organization ” RBM spokesman, NY Times
14/11/2004 when 6 months after almost every country
in Africa adopted ACTs as policy simultaneously the
price of raw material quadrupled
Can we leave it to the market?
• Limited range of competitors- but this is
improving
• Substitution cost- alternative cash crops,
high barriers to entry- cost of chemical
plant for extraction.
We are paying for risk and inefficiency.
• Immature market; poor demand and
supply forecasting.
• Possibility of synthetics makes return on
capital uncertain.
• Shelf-life short- need good stock control
or significant wastage.
• Price elasticity not certain- but non-linear
Access is one problem, which the subsidy
will help with. Overprescription is another.
Need
malaria
treatment
Receive
malaria
treatment
Over-diagnosis of malaria- a major problem
Syndromic management without tests common.
Where microscopy available negative tests widely ignored.
Between 30% and 99% of those prescribed antimalarials do not have
malaria parasites
Cost-effectiveness of ACTs falls rapidly as misdiagnosis occurs.
Serious alternative diagnoses missed.
Prescription does not change with changing risk.
Tanzania- ratio treated with positive test to negative test 1:3 (Reyburn et al BMJ)
Febrile patients recruited
2,416
Blood slide
1,214
RDT
1,202
Positive
174 (14%)
Negative
1,031 (86%)
Positive
190 (16%)
Negative
1,008 (84%)
Antimalarial
171 (98%)
Antimalarial
523 (51%)
Antimalarial
188 (99%)
Antimalarial
543 (54%)
Low transmission ratio treated with positive test : negative test 1:116 (Reyburn)
Recruited
824
RDT 406
Blood slide 418
Positive 1
Negative 417
Positive 3
Antimalarial
1
Antimalarial
227 (54%)
Antimalarial
3
Negative 403
Antimalarial
235 (58%)
Over-diagnosis of malaria is a threat, but
also an opportunity
• We have to accept that there will be waste of drugs- there already is.
• The worst that can happen is that the situation starts bad and stays
bad
• It is more likely that the situation starts bad and gets better.
• This could have an impact not just on malaria, but on the other
causes of febrile illness- which also kill children.
There is a realistic hope for artemisinins to
come down in price in the medium term
What evidence there is suggests a reduction
of malaria, and certainly not an increase
• Good evidence from South
Africa, Zanzibar
• Indirect evidence from
Tanzania, Gambia, Kenya,
Uganda
• Major impact in some areas
from PMI, and long lasting
ITNs
There are reasonable grounds for thinking a
subsidy is necessary, and would taper down over
time.
ACTs are needed, they need to be provided outside the formal sector,
including the private sector, and the market will not in itself get the
prices low enough to achieve this.
• We have to accept there will be waste, and this will be slow to
correct.
• All the long term trends are likely to favour the subsidy tapering
away, including
-greater competition with more ACTs
-new sources of raw product, and reduction in risk pricing
(-probably reduction in overprescription and in malaria incidence
reducing demand)