What Can We Do When Markets Fall Short? Mini-U Session, March 2014

To maximize global health benefits, what do we want in a health product? Lower prices, expanding reach to end users Product is in stock and end users/providers have usage information Product is tailored to user/provider needs and low-income settings Sufficient global volumes and stable supply base AFFORDABLE AVAILABLE APPROPRIATE DESIGN ACCESSIBLE ASSURED QUALITY Product is consistently safe and effective

What are possible market shortcomings? AFFORDABLE AVAILABLE APPROPRIATE DESIGN ACCESSIBLE ASSURED QUALITY High, unaffordable prices or high price variance Cyclical swings in prices Stockouts at end user access points Low awareness of product or condition, common misdiagnoses Overuse (leading to resistance) Ill-adapted designs for low-income settings Too many or too few product variants Volumes: Shortages, excess, or cycles of shortage and excess Supply Base: Few suppliers; supplier exit or failure Substandard products Counterfeit products

How can market shaping address these shortcomings? (1/2) Market Shaping Interventions are time-limited, catalytic activities that reduce supply and demand inefficiencies in 3 ways: 1) increase supply-side incentives, 2) increase market information and/or 3) balance risk between supply and demand actors AFFORDABILITY AVAILABILITY APPROPRIATE DESIGN ACCESS ASSURED QUALITY

How can market shaping address these shortcomings? (2/2) Optimal Health Outcomes INCREASE SUPPLIER INCENTIVES Current State INCREASE MARKET INFORMATION BALANCE RISK PROGRAMMATIC INTERVENTIONS Optimal Health Outcomes Current State Market Shortcomings from supply and demand inefficiencies AFFORDABLE AVAILABLE APPROPRIATE DESIGN ACCESSIBLE ASSURED QUALITY AFFORDABLE AVAILABLE APPROPRIATE DESIGN ACCESSIBLE ASSURED QUALITY

Causal Pathways Framework for assessing market shaping opportunities 1. Diagnose Root Causes of Shortcomings 2. Assess Market Shaping Options 3. Implement Customized Intervention 4. Measure Results How does the market compare to an optimal, healthy market? Which analytical tools can provide a better understanding? What interplay of supplier incentives, market information, and risk could be used? Theory of change, benefits, drawbacks and implementation constraints for market shaping options? Who should be engaged and how? How to ensure the results are ongoing and sustainable? How will changes be tracked in market variables, health outputs and health impact? What feedback loops will enable real-time adjustments?

Mini Case Study: ACT Market Context Intervention context Concern that traditional antimalarials (e.g., quinine) were losing their efficacy by early 2000’s Malaria remained one of the diseases with the highest rates of mortality and morbidity worldwide Artemisinin-based combination treatments (ACTs) offered promise, but the market was slow to reach scale Picture credits to Roll Back Malaria and PATH/Laura Newman

Mini Case Study: ACT Market Market Shortcomings Market TraitStrengthNotes Affordable ACTs only cost generally $1.50 per adult course However, ACT prices at retail ~10x those of ineffective quinine- based products Available Multiple suppliers (both originators and generics) competed in the market However, arteminsin prices were extremely volatile, leading to cycles of global product shortages and surpluses Assured Quality Products generally considered very effective Appropriate Design Products generally considered easy to use Accessible Public markets Providers generally knew about benefits of ACTs Private markets Consumers had little awareness of ACTs and their benefits versus ineffective quinine-based remedies WEAK STRONG WEAK = Focus of following slides STRONG

Mini Case Study: ACT Market Root Causes for Poor Availability What would you do to address these root causes? Lopsided risk allocation: -ACT manufacturers and artemisinin growers bore disproportionate share for unsold inventories -Resulted in supplier exits Information asymmetry between supply-side and demand-side actors: -Buyers have more data on expected demand and donor budgets -Long lead times for production and manufacturing ramp up Artemisinin Price (US$/kg) ROOT CAUSES

Mini Case Study: ACT Market Assess Market Shaping Options Potential options: Increase market information  Consolidate demand forecasting system and share with suppliers Increase supplier incentives  Make volume commitments to extractors and farmers to ensure artemisinin supply Increase supplier incentives and balance risks  Create an artemisinin stockpile to smooth swings in supply and demand

Mini Case Study: ACT Market Increase Information with Demand Forecasting Increase Market Information: Consolidated and publicized demand forecasting for ACTs Theory of Change Aggregate data to create and disseminate a demand forecast Provides market information for all actors May create incentives for suppliers Benefits More accurate forecasts Higher demand predictability Suppliers can better plan capacity to align with demand May increase incentives for suppliers to enter or expand Drawbacks Greater information alone does not address disproportionate risk allocation Forecasting, especially long-term forecasting, may not accurately predict actual demand Implementation Constraints Information from key funders and countries Team with analytical forecasting skills Commitment to maintain forecast

Next Session Room Numbers: Please fill out an evaluation by going to this session’s page on your mobile app OR by filling out a paper evaluation in the back of the room. Thank you! Integration of Family Planning Services into MNCH Programming in Liberia301 The Realities of Integration: NCDs and TB in Ethiopia (Continued)302 Integrating Family Planning with Obstetric Fistula Services: Achieving Reproductive Intentions307 Operational Research Training in the 21st Century308 Constant Contact: Reinforcing Provider Training with Mobile Messages and Supervision in Ghana (Continued)310 Indoor Residual Spraying: A Weapon in the Fight Against Malaria311 Increasing District Level, Evidence-Based Decision Making in Cote d'Ivoire405 Making Every Life Count: Strengthening Civil Registration-Vital Statistics Systems407 How Strengthening Medicines Regulatory Authorities Can Increase Access to Medicines (Continued)413 Child TB: No More Crying, No More Dying?414 Creating the Next Condom: TPPs for Next Generation MPTsBetts Theatre Sustainable Health Gain from Smart Governance of Hospitals and Health Systems Continental Ballroom Gender, Medicines, and the Road to Equity #AreWeThereYet? Grand Ballroom