1. Global ACT Subsidy Role of RBM Partnership Dr Awa Marie Coll-Seck Executive Director, RBM Partnership APPMG London July 2007

2. The Roll Back Malaria Partnership Endemic countries Donor countries WHO UNICEF World Bank NGOs Private Sector Foundations Global Fund for AIDS, TB & and Malaria Research & Academia UNDP Brought together around a shared vision – country level scale up resulting in 50% burden reduction by 2010

3. 3 Patients suffering from fever seek medicine from both the public and private sectors Public Health Clinic Drug shop Licensed pharmacy Public facilities are not always accessible 30-40% access Public facilities are not always accessible 30-40% access Formal private outlets are more widely accessible 40-50% access Formal private outlets are more widely accessible 40-50% access A range of informal outlets are nearly always available 80-95% access A range of informal outlets are nearly always available 80-95% access Licensed pharmacy “In coastal Kenya, 87% of rural households live within 1km of a shop, but only 32% within 2 km of a government dispensary or private clinic” “shops and vendors selling drugs are often a much more convenient source of drugs than public clinics” C. Goodman (2004) Drug seller

4. 4 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 manufacturer 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 The situation today- malaria treatments

5. 5 ACT prices are too high for most in the private sector – cheaper alternatives are ineffective 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

6. OBJECTIVE of the Global ACT Subsidy: Increase overall uptake 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 those for proper use of ACTs

7. 7 Design of a Global ACT Subsidy Global ACT Subsidy unit Medicines Money Information Multiple ACT Manufacturers Public Channel Buyers Private/ NGO Channel Buyers Retailers/ Providers (USD ~0.2 for majority of patients) Co-payment In-country supporting interventions National distributors (USD ~0.1)

8. Design principles Consensus reached on 6 broad principles 1.Measurement of success 2.Pricing & availability 3.Management 4.Eligibility – products, supplier, buyers 5.Importance of in-country supporting activities to ensure success of subsidy 6.Monitoring & evaluation Note: These are broad guidelines for moving forward. The translation of these principles to operational considerations will be defined in the detailed technical plan

9. 9 A Global ACT Subsidy will : Lower factory-gate price quickly to encourage uptake of ACTs Enable introduction into private sector market Delay resistance by undercutting the price of artemisinin monotherapies Undermine counterfeit market Improve predictability and sustainability for countries and for manufacturers Public health clinicPharmacy

10. More affordable prices would triple the uptake of ACTs Available willingness- to-pay, 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

11. What has been the role of RBM Partnership ?  Consensus building  Design  Fund raising  Launch preparation

12. Build consensus on concept IOM rationale for ACT subsidy (2004) Amsterdam Partnership Meeting RBM Board endorses Global ACT Subsidy Task Force Consult Countries & Donors Consensus on design RBM Working Group submits LOI to Gates for feasibility Identify suitable hosts for Subsidy Technical Proposal July 07

13. Thank you !

14. BACK-UP

15. 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 Principle: Measurement of success

16. 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 Principle: Pricing & Availability

17. 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 Principle: Management

18. 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 Principle: Eligibility – products, suppliers, buyers

19. Principle: Importance of in-country activities to ensure success of subsidy 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 The roles and responsibilities of endemic country governments, supported by partners, in the subsidy process and use of subsidized ACTs are significant and include:

20. 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) Principle: Monitoring & Evaluation

21. Risks identified 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

22. Hosting arrangements – identify suitable organization willing to host the subsidy and able to deliver on management performance measures to be agreed as part of the detailed proposal Governance arrangements – define form and structure of the subsidy oversight arrangements Funding – identify the amount of funds necessary for the subsidy; establish a sustainable and reliable long-term source; define an exit strategy Outstanding design components