1. Reproductive Health Supplies Coalition Meeting Washington DC November 2004

2. Coalition TM working group 3 Objective 1 Develop a common understanding of a total market approach and promote use through Coalition Action Draft paper on key concepts and disseminate Expected outcome Panel discussion around key concepts, terminology and factors

3. Coalition TM working group 3 Objective 2 Explore and develop the second tier market concept. Action Research and develop a concept paper for potential three country program including; convening meeting/s with representation of donors, industry and developing country contingent Expected outcome Development of a proposed approach to grow the second tier market

4. The total market - definitions Total market relates to all segments that make up country contraceptive markets – currently: 1 st tier – high price commercial sector products Free distribution tier – government/donor supplied free of charge/cost recovery SM segment where significant programme exists

5. The total market

6. The total market - definitions In-depth understanding of the total market is a pre-requisite for any new country intervention. Existing segmentation National policy framework/national commitment to RH supplies availability Procurement, funding and supply channel structures Regular socio-economic/demographic factors Existing or planned interventions

7. The total market - definitions Recognized in the key conclusions – DFID approach to social marketing review meeting in April 2004 Referred to as third generation model of SM – assess comparative advantage of market participants in terms of competence, value and role in delivering/facilitating access. In a total marketing approach, the potential overall market impact of interventions is addressed at the planning stage Enables closer and more structural linkages with commercial, SM and public sector actors

8. The total market - Coalition Adopting a total market approach at the international level includes most of the stakeholders in the Coalition, representing all of the main components that impact on country contraceptive markets. Governments – donors and recipients International/national NGOs SM organisations Manufacturers Advocates

9. The 2 nd tier The 2 nd tier is a sustainable commercial market segment between the high end commercial and free distribution market segments Its role within contraceptive security, is the ability to reduce some of the dependence on the free segment thus allowing donor resources to focus directly on low income groups. with a reduced cost burden A comprehensive understanding of the total market, including detailed segmentation studies is the tool for assessing the feasibility of a 2nd tier contraceptive marketing intervention The 2 nd tier exists potentially exists in many developing country markets around the world

10. The total market (with 2 nd tier)

11. The total market reproductive health supplies concept

12. Key concepts Explore possibilities relating to establishing a 2 nd commercial market segment in selected countries Research historical approaches of the SM manufacturers model Role of manufacturers Provide maximum impact at the national level

13. Approach Total market - has been adopted, and the intervention has the ability to impact on more than one market segment. –New2 nd commercial tier –Existing free distribution tier

14. Approach Partnership - ensuring the availability of sexual and reproductive health supplies can only be achieved through individual institutions reaching consensus on the main issues, with each contributing its individual strengths towards a common set of solutions. –Donors - bilateral multilateral & private –National government –NGOs –Technical agencies –Range of manufacturers Based upon the broad constituent base in Coalition

15. Goal The goal of a total market intervention is to pilot a new approach to product supply, that will result in increased and better- targeted availability of sexual and reproductive health supplies, primarily utilizing existing resources.

16. Objectives 1.To generate significant savings in the cost of a range of sexual and reproductive health supplies destined for the free-to-client market segment. 2.To develop a new sustainable market segment between the free and social marketing segments, and the commercial segment, known as the 2nd tier (T2). 3.To ensure that products for this intervention are supplied and delivered within commercial best practice and maximum efficiency. 4.To document the intervention as a model for replication in other markets.

17. Concept The total market intervention is designed to operate across a variety of market segments, with each national programme tailored to specific country circumstances. The concept is underpinned by making available a range of low-cost essential sexual and reproductive health products to two market segments, in collaboration primarily with new suppliers. Concept does not exclude existing suppliers, should they decide to consider new approaches and working practices as part of this programme.

18. Unique attributes 1.Manufacturing portfolio 2.Potential for dual-segment impact 3.Sustainability/cost reduction opportunities 4.International RH collaboration national and international

19. Manufacturing portfolio Development and use of new non-OECD contraceptive manufacturers Contraceptive manufacturing going through a process of unprecedented change –Expiry of patents –Emergence of new suppliers in developing countries – so called generics Generic suppliers not R&D or marketing focused Competing with traditional suppliers on price/volume Progress dependent upon reducing market entry barriers –Regulatory –Market penetration –QC issues

20. Dual segment impact Development of a range of hormonal contraceptive products with selected generic suppliers for free distribution in target countries Development of branded version of same products for 2 nd tier marketing in target countries –Familiarity and trust building instruments for free distribution products –Undertake regulatory complexities

21. Sustainability/cost reductions Significant opportunities for cost savings from reduced price points Availability of identical products from a range of suppliers in various locations Reduction in number of clients using freely distributed methods Enhanced and realistic possibility of full sustainability of 2 nd tier market component

22. Example Using a CPR of 7% for oral contraceptives across Africa, Asia and LAC the potential cost saving could be $74m PA Equal to 37% of the total donor contribution to supplies in 2002

23. Sample market Encouraging 20% of oral contraceptive users from the free distribution segment to the 2 nd tier over 5 years. Supplying the free segment with new product range Saving of $5m 2005-2010 –$3.5m from lower procurement cost –$1.5m from 2 nd tier marketing Investment of $2-3m

24. Role of the Coalition Procurement and supply – UNFPA, USAID & IPPF supplying new product range to target countries, as appropriate Engagement of national governments receiving direct funding for supplies from Coalition members Support and assistance of national government in piloting the approach and regulatory barriers Inclusion of national NGOs Technical – partners or associated organizations – policy QC, supply chain, research, advocacy and monitoring Contraceptive marketing

25. Scope Three country pilot National scale Methods mix – OC 3 types, ECP, condom Possible DMPA

26. Next steps Final identification of countries In-depth research –Feasibility –Dialogue with national government/Coalition partners –Segmentation studies –Review of manufacturing capacities –Review statutory/legal/QC issues –Business and marketing plan development Timeframe Jan-Oct 2005