Saving Lives, Buying Time Economics of Malaria Drugs in an Age of Resistance (2004) / Chapter Skim
Currently Skimming:
3 The Case for a Global Subsidy of Antimalarial Drugs
3 The Case for a Global Subsidy of Antimalarial Drugs
Pages 79-111
The Chapter Skim interface presents what we've algorithmically identified as the most significant single chunk of text within every page in the chapter.
Select key terms on the right to highlight them within pages of the chapter.
From page 79... ...
This chapter presents the pros and cons for a global antimalarial drug subsidy, using the specific case of ACTs, the only family of drugs that 79
|
From page 80... ...
The fact that no country in Africa has adopted ACTs as first-line treatment without external funding indicates that widespread coverage will not be achieved across the continent without a global plan and a subsidy available to all countries. Currently, not enough money is available through the Global Fund or bilateral agencies to accomplish this.
|
From page 81... ...
A visible, global subsidy would provide the security needed for private concerns to ramp up for African demand. Maintaining the Impetus to Develop New Antimalarial Drugs The push to develop new and better antimalarial drugs is not driven by profitability but largely by a sense of public and private sector responsibility to address a major health need that otherwise would likely be neglected.
|
From page 82... ...
The following discussion proceeds through the arguments that lead to this report's central recommendation: a supranational, broad subsidy of ACTs (a "global subsidy") near the top of the distribution chain.
|
From page 83... ...
1Inappropriate treatment of a person with another cause of fever, who happens to have coincident asymptomatic malaria, does not encourage resistance. Even what are considered inadequate doses may be sufficient to eradicate asymptomatic parasitemias, and will contribute little or nothing to drug pressure.
|
From page 84... ...
The subsidy arrives in each country in the form of lower prices for antimalarial drugs (prices that should be similar to prices for chloroquine and SP in recent years) , not as currency.
|
From page 85... ...
If economic conditions in endemic countries are substantially unchanged when that time comes and the new product meets appropriate cost and cost-effectiveness criteria, it would be difficult to exclude it from subsidies. On the other hand, the possibility that a global subsidy for ACTs would lead to pressure to subsidize drugs for treatment of other diseases should be a lesser concern.
|
From page 86... ...
In theory, broad subsidies can reach into the private sector; however, they often are made available only through the public sector, which deters some people from taking advantage of them. Targeted subsidies are designed to benefit particular groups within society.
|
From page 87... ...
If there were no administrative costs to delivering subsidies and/or negative effects of targeted subsidies, it would always make sense to target, but this is not the case. Not surprisingly, it is difficult to estimate the proportion of the population in endemic countries that would find ACTs financially inaccessible, either at current prices or at the somewhat lower prices projected over the next few years, because information is limited.
|
From page 88... ...
Country-specific, but Direct subsidy of public Same as above covering total population sector from central within subsidized government to reduce drug countries (national) costs in clinics and other facilities Sale of ACTs at highest levels of private sector, including NGOs (by government?
|
From page 89... ...
. Poorest of the poor still would be excluded by cost; additional coverage would require additional targeted programs Greatest potential for overuse of drug and increased drug selection pressure for resistance Same as above, and: Same as above Potential for diversion to neighboring countries without subsidized ACTs Continued
|
From page 90... ...
Lower drug selection Public sector through pressure for resistance clinics and other public facilities If private sector is included, through vouchers Age under 5 years and Public or public and Targets those most likely to pregnant women private sectors gain access and benefit AND unable to afford market Public sector through Lowest drug costs of all price of ACTs clinics and other public options (at risk and economic facilities targets) Lower drug selection If private sector is pressure for resistance included, through vouchers SOURCE: Based in part on Derriennic and Mensah, 2003.
|
From page 91... ...
THE CASE FOR A GLOBAL SUBSIDY OF ANTIMALARIAL DRUGS 91 Disadvantages ACT-Specific Issues High administrative burden and costs to develop and monitor program, particularly private sector involvement If public sector only, poor coverage in many countries and public sector could be overwhelmed with demand High risk of leakage to adult population Misses adults at risk in lowertransmission or epidemic-prone areas Subsidizes some who could afford ACTs without subsidy High administrative burden and Depending on how the target group is defined, costs to develop and monitor it could be a very large proportion of the program, particularly private sector population -- possibly greater than half in many involvement sub-Saharan African countries. The number will be large if the target is to achieve access If public sector only, poor coverage at least equivalent to historic access in many countries and public sector to chloroquine.
|
From page 92... ...
At the same time, it does not preclude national decisions about how subsidized antimalarials will be made available through the public sector. A country could, for instance provide antimalarials free in public sector facilities (with an additional subsidy)
|
From page 93... ...
We have already seen that the quality of drugs obtained from drug peddlers and small shops can be low -- sellers are willing to sell partial doses, and drugs may be poor quality. These conditions are conducive to the development of drug resistant malaria strains, and most important, lack of cure for those who use these services.
|
From page 94... ...
, but the proportion of general stores that stocked antimalar ials was low and falling, with the result that 85 percent of retail antimalarial sales were through drug stores. Drug stores were competing with the public sector on drug availability, stock ing effective antimalarials when government facilities had only chloroquine (when it was no longer effective)
|
From page 95... ...
· It would allow all countries to adopt the malaria treatment policies best for their populations, including ACTs as first-line treatment, without concern about the sustainability of country-level external funding for purchase. · It would not force countries to choose between effective antimalarials and spending on other measures to enhance malaria control.
|
From page 96... ...
The fact that not even one country in sub-Saharan Africa adopted ACTs as first-line treatment without first having secured funding from the Global Fund suggests a problem of considerable breadth and depth. Even in countries with funding, thus far, ACTs will be distributed only through the public sector (and possibly NGOs)
|
From page 97... ...
To raise health spending, including spending on antimalarial drugs, in those poorer countries will require an increase in public health spending that, in turn, will demand either increased government revenues, a marked reordering of government spending priorities, or an increase in external aid designed to reach the ultimate consumer. Potential for Increased Tax Revenues In Africa, tax revenue as a proportion of GDP can range from below 10 percent (Burkina Faso, Cameroon, the Democratic Republic of the Congo, the Republic of the Congo, Madagascar, Rwanda, and Sierra Leone)
|
From page 98... ...
98 SAVING LIVES, BUYING TIME TABLE 3-2 Annual Per Capita Health Expenditures in Sub-Saharan Africa (purchasing power parity, US$) Total Health Public Out of Spending % Total Sector Pocket Share of GDP Angola 62 30 32 4.1 Benin 27 13 14 3.1 Botswana 220 155 24 3.4 Burkina Faso 32 22 10 4.0 Burundi 12 5 7 2.1 Cameroon 44 15 23 3.0 Cape Verde 87 62 24 2.6 CAR 25 13 9 2.4 Chad 25 20 5 3.1 Comoros 53 36 17 4.5 Congo, Rep.
|
From page 99... ...
The worldwide thrust, through the World Trade Organisation, to lower tariffs means that countries cannot rely on import duties as a way to increase revenue in the future and such taxes are not a desirable base on which to increase social expenditures. Nevertheless, increasing taxes is a sensitive issue in every country.
|
From page 100... ...
, and such things as lotteries also are potential sources of revenue for governments, but they are not promising as ways to raise monies that could consistently and reliably fund ACT subsidies. External Funds Directed toward a Global Subsidy Most African countries are unlikely to be able to contribute large amounts directly to a global antimalarial subsidy, but they should be able to mobilize external resources to contribute to such a subsidy.
|
From page 101... ...
Where the funds come from also dictates, to varying degrees, how they can be used. Potential sources of additional money for antimalarial drugs are the World Bank, and its asso
|
From page 102... ...
An issue that arises with all of these sources is whether funding can be pooled in some way into the "global subsidy" outlined earlier in this chapter given the usual practice of country-specific funding, discussed below. Country-Specific versus Global Funding The World Bank and Affiliated Institutions Aid and lending institutions have a variety of instruments for transferring funds to recipients (Box 3-2)
|
From page 103... ...
The Emergency Multisector Rehabilitation and Reconstruction Project in Democratic Republic of Congo, e.g., committed more than US$450 mil lion from the Bank against total program costs estimated at US$1.7 billion. Health services accounted for an estimated US$154 million, with IDA financing of US$49 million planned.
|
From page 104... ...
The allocation among diseases and countries is a matter for the Global Fund, its board, and its advisors to determine. Support of a global subsidy for antimalarial drugs would be consistent with the goals of the Global Fund, even if the type of funding mechanism required does not exist at present.
|
From page 105... ...
, the Global Fund, and the larger foundations, such as the Gates Foundation. Estimating the amount of funding currently being provided for malaria control (or specifically, antimalarial drugs)
|
From page 106... ...
Elmendorf and Finn estimated that approximately US$500 million per year are currently available,3 or somewhat more than US$800 million are potentially available4 to support malaria programs in Africa. Approximately US$160 million per year are estimated to be currently available for financing of antimalarial drugs, and about US$300 million to be potentially available.
|
From page 107... ...
HIPC resources available on an annual basis for purchase of antimalarial drugs are estimated currently to be US$96 million, and potentially to be US$125 million. This, however, is the most optimistic estimate.
|
From page 108... ...
The main reasons for a supranational (as opposed to national) approach are: · To ensure that ACTs can flow easily into both the public and private sector supply chains with the least disruption of current distribution patterns · To ensure access in every malaria-endemic country -- rather than only those able to act quickly to organize sufficient external funding to pay for them -- and internal supply systems to deliver them to the widest possible number of consumers · To minimize the attractiveness of artemisinin (or other)
|
From page 109... ...
And second, the world's manufacturers of ACTs -- who also would be the manufacturers of artemisinin monotherapies -- would be dissuaded from producing artemisinin monotherapies in order to benefit from the global ACT subsidy. In this way, the subsidy produces a positive externality: the protection of artemisinins (and other currently effective antimalarials)
|
From page 110... ...
Potential Sources of Funding The prospects are poor for greatly increased funding for antimalarial drugs from existing budgets of endemic countries in sub-Saharan Africa. At the same time, one of the potential objections to a global subsidy is that international development funds will benefit every country with malaria, including some with more robust economies, where the government might be able to afford a larger contribution to a subsidy for its own population.
|
From page 111... ...
2003. Estimated external financing of antimalarial drugs in sub Saharan Africa.
|
Key Terms
This material may be derived from roughly machine-read images, and so is provided only to facilitate research.
More
information on Chapter Skim is available.