Transcript Document
Update on work on the
Global ACT Subsidy
Roll Back Malaria
Global ACT Subsidy Task Force
Presentation to RBM Board
10 May 2007
Update on work to date
• Institute of Medicine (IOM) Report outlines economic rationale for ACT
subsidy (2004)
• RBM Finance & Resource Working Group (FRWG) takes on the task of
developing the concept
• The World Bank (co-chair of FRWG), with funding from Bill & Melinda Gates
Foundation, engages Dalberg to develop a detailed design
• FRWG leads a Partnership meeting on the topic in Amsterdam in January
2007
• RBM Executive Committee creates a Global ACT Subsidy Task Force to
forge consensus
3
•
Task Force Meetings + informal discussions
•
Dalberg research, country visits, consultations with stakeholders
•
Contributions from many institutions and individuals
Why a Global ACT Subsidy? To increase the
availability of ACTs and substitute monotherapies
across all sectors
Total = 546
2006 Antimalarial Treatment volumes (M)
100%
406
140
Other
CQ
80
SP
CQ
60
40
ACTs
20
SP
ACTs
0
4
Mono-artemisinin
Private
Note: Estimates of actual malaria treatments (vs. fever) are between 25%(BCG) and 40%(WHO). Other
category includes MQ, AQ, etc.. P. Vivax treatment included (90M CQ treatments). ACT numbers
updated after manuf. Interviews from 82M (WHO) to 90M public sector, and from 8M to 10M in private
sector.
Source: Biosynthetic Artemisinin Roll-Out Strategy, BCG/Institute for One World Health, Dalberg
Public
But ACT prices are very high and affordable to only
few in the private sector - major barrier to usage
Average Prices (USD)
10.0
8.0
8.0
6.5
6.0
4.0
2.0
0.0
Range
(USD)
5
0.5
0.3
ACT
Mono-Artemisinin
SP (Generic)
CQ (Generic)
6-10
5-8
0.4-0.7
0.2-0.4
Note: Ranges indicate variance across countries and products excluding outliers; N (observations):
(ACT, 222); (AMT, 227) ; (CQ, 37) ; (SP, 118). Source: Dalberg field research (Kenya, Uganda, BF,
Cameroon), Observations by World Bank and Research International (Nigeria). Smaller pricing
observations were also performed in Ghana, Rwanda, Burundi, Niger and Zambia), but due to low n
not included. SP and CQ data complemented with HAI and IOM observations
OBJECTIVE: Increase overall use of ACTs
Promote the use of ACTs and drive mono-therapies and
ineffective drugs from the market by:
• reducing end-user prices to an affordable level through a
properly supported global subsidy of ex-manufacturer
prices (CIF basis) - in line with IOM recommendation
• Introducing supporting interventions including for proper
use of ACTs
6
The Global ACT Subsidy will offer ACTs to first-line
buyers at a similar price range as CQ and SP
through existing channels (illustrative)
Co-payment
Multiple ACT
Manufacturers
Private
Channel
Buyers
NGO
Channel
Buyers
Public
Channel
Buyers
Global ACT
Subsidy
National
distributors
(USD ~0.1)
Medicines
Money
Information
Retailers/
Providers
(USD ~0.2-0.4
for majority of
patients)
In-country supporting
interventions
7
What the subsidy will not do
• Subsidize raw material suppliers
• Subsidize manufacturers
•
•
•
•
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Subsidize only middle class patients
Limit competition
Discourage innovation
Undermine country ownership
Design principles
Consensus reached in Task Force on 6 principles
1.
2.
3.
4.
5.
6.
Measurement of success
Pricing & availability
Management
Eligibility – products, supplier, buyers
Importance of in-country supporting activities to ensure
success of subsidy
Monitoring & evaluation
Note: These are broad guidelines for moving forward. The translation of these
principles to operational considerations will be defined in the path forward
9
Principle: Measurement of success
The success of the global subsidy will be measured to
the extent that it contributes to RBM Partnership’s Strategic
Targets for 2015, through:
• Lowering the consumer price towards the current chloroquine and
SP levels (USD 0.20 / treatment)
• Increasing access to effective treatment in all market sectors (public
and private)
• Driving mono-therapies out of the market focusing in particular on
the private sector
• Ensuring that the effective lifespan of ACTs is maximized through
responsible introduction and use
10
Principle: Pricing & Availability
The subsidized ACTs would be available:
• To the buyers of the private, public and NGO sectors
• At a CIF (landed) cost that makes them competitive to chloroquine
and SP, i.e. less than USD ~0.10
• To malaria-endemic countries, as reasonably possible in view of
global production capacity
11
Principle: Management
The partners do not want to see another costly
bureaucracy built up to manage the subsidy. The ACT
subsidizing process would be managed by a small Subsidy
Secretariat, hosted by an existing organization or
organizations, that:
• Runs the product and supplier selection mechanisms
• Informs and registers the buyer accreditation mechanisms
• Manages the payment of the subsidy to the suppliers in line with the
principles of the subsidy and in a timely fashion
12
Principle: Eligibility – products, suppliers, buyers
Product, supplier and buyer eligibility would be guided by
clear quality and price standards:
• Only ACTs recommended in WHO treatment guidelines – as well as new
WHO-approved non-ACT combination classes – will be eligible
• Only fixed-dose combination products will eventually be eligible. However,
for the first 2 years of the subsidy, co-blistered products will also be eligible
•
Products meeting internationally recognized product quality standards
• The price setting mechanism of the CIF price will be as open and
competitive as possible in each submarket and in a way that encourages price
reduction, pre-qualification and innovation efforts
• Buyer eligibility will be guided by transparent country-led accreditation
mechanisms
• Order eligibility will be defined by a clear set of rules established in
collaboration with the countries
13
Principle: Importance of in-country
activities to ensure success of
subsidy
The roles and responsibilities of endemic country governments,
supported by partners, in the subsidy process and use of subsidized
ACTs are significant and include:
Core in-country activities
linked to subsidy
• Regulatory preparedness (drug status, retailer status)
• Alignment of national malaria programs
• Public-focused media campaigns to promote ACTs
• Mechanism to control markups in local supply chain
• Subsidy-specific M&E (incl price) and pharmaco-vigilance
• Provider training re prescribing and dispensing ACTs
Additional activities
linked to subsidy
• Promotion of supply chain discipline e.g. : Sell-through systems;
Incentive schemes for wholesalers; Social marketing programs;
Community-based programs
• Promotion of more appropriate use of ACTs; e.g. proved diagnostic tools
External to ACT subsidy
• Malaria interventions distinct from subsidy scope
• General malaria programme M&E
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Principle: Monitoring & Evaluation
For a responsible introduction the subsidy roll-out will be informed
and monitored by concomitant subsidy-specific and subsidy co-paid
operational research and M&E of:
• Retailer prices
• Access
• Drug quality
• Drug resistance
• Market dynamics
In at least 6 sentinel countries in Africa (4), Asia (1) and Latin
America (1)
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Outstanding design components
• Hosting arrangements – the need to find a suitable organization(s)
willing to host the subsidy and able to deliver on the management
performance measures to be agreed as part of the detailed proposal
• Governance arrangements – the form and structure of the subsidy
oversight arrangements and to whom the subsidy is ultimately
responsible
• Funding – the size of the funds necessary for the subsidy and
establishing a sustainable and reliable long-term source of these funds,
as well as definition of an exit strategy
• Supporting activities – define linkage and costing of activities
supporting the subsidy
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Additional research prior to launch
Questions requiring further analysis:
• Will the subsidy be passed on to the patient at the point of sale?
• What will the uptake be if prices drop? What is the elasticity of demand?
• To what extent will the ACT subsidy contribute to the diminishing use of monotherapies?
Types of operational research prior to launch:
• Analyze case studies demonstrating uptake of other medicines
• Assess experience of existing subsidy-type antimalarial programmes:
– Public sector sales of low-cost ACTs to private sector with stringent controls of
mark-ups, e.g., Global Fund grantees in Cameroon, Senegal, Benin
– Social marketing programmes, e.g., PSI programmes in Cambodia, Rwanda
• Studies linked to additional demonstration projects, e.g., Tanzania
• Baseline surveys
17
Next steps
• June: submission of draft detailed technical proposal to
the RBM Executive Committee
• July - October: finalize arrangements for governance,
hosting, funding and supporting activities
• July – October: further research to support introduction
of subsidy
• November: submit final detailed technical proposal to the
RBM Board
• November: announce the subsidy
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Requested Board action
Endorse the subsidy objectives and design principles
Express continued support for the introduction of a global
subsidy for ACTs according to those principles and
objectives
Approve the continuation of the RBM Global ACT Subsidy
Taskforce:
– As the only RBM mechanism to forge consensus on;
– To guide the finalization of a detailed technical proposal including
governance and hosting arrangements, funding requirements,
formal linkage with and costing of supporting activities, and any
other outstanding operational issues;
– To submit for approval a detailed technical plan for the launch of
the subsidy to the November 2007 RBM Board.
19
BACK-UP
20
Risks identified
•
•
•
•
•
•
•
•
•
21
Failure to sustain competition & price reductions
Failure to maintain innovation
Insufficient scale-up of manufacturer capacity
Subsidy not passed on to patient
Slow consumer uptake
Fraud or over-ordering
Failure to implement supporting interventions
Insufficient funding
Scope creep
Without a Global ACT Subsidy, the price of ACTs
will not fall low enough to be affordable
Costs and Prices (USD)
$10.0
~8
8.0
Local Distribution
6.0
International Distribution
4.0
~ 2- 4
MSP
2.0
0.0
22
ACT price (current)
ACT-price
(2013, no subsidy)
With a Global ACT Subsidy, ACTs would cost
between 20 and 70 cents in the private sector
Costs and Prices ($)
10
8
~8
Local Distribution
6
International Distribution
4
~2 - 4
2
MSP
~0.2 - 0.4
0
23
ACT price
(current)
ACT price
(2013,
no subsidy)
ACT price
(post-subsidy,
competitive)
~0.4 - 0.7
ACT price
(post-subsidy,
non-competitive)
More affordable prices would triple the
uptake of ACTs
Treatment coverage (doses)
546
100%
Other
546
Other
546
•
Available willingness-topay, demand curve and
affordability studies have
been used for
penetration estimates
•
Overall, a penetration of
~55% in the private
sector and ~90% in the
public sector is estimated
CQ
80
CQ
60
CQ
40
20
SP
SP
SP
ACTs
Mono
ACTs
0
24
ACTs
Treatment
doses (2004)
Treatment
doses (current)
Treatment doses
(post-subsidy)