1. Quantification of Antimalarials PSM Workshop Nairobi, Kenya February 21, 2006

2. Presentation Outline  Introduction/definition  Quantification concepts  Quantification methods  Assumptions and special considerations for quantifying antimalarials

3. The Procurement Cycle Review Medicine Selections Determine Quantities Reconcile Needs and Funds Choose Procurement Method Locate and Select Suppliers Specify Contract Terms Monitor Order Status Receive and Check Medicines Make Payment Distribute Medicines Collect Consumption Information

4. Introduction/Definitions  Quantification is the process used “to determine the quantity” or “to express a property that is measurable”  Quantification of antimalarials involves estimating how much of a specific item is needed and what financial means are required to obtain it

5. Effect of Good Quantification  Consistent availability of supplies (no stockouts)  No over- or understocking  Adequate medicines and supplies available to service providers  Easy management of stock  Rational prescribing and use of supplies  Fulfillment of demand  Fewer expired products and less wastage  Rational adjustment to budgetary constraints

6. Symptoms of Poor Quantification  Chronic and widespread shortages  Surpluses  Inequity of supply  Inadequate cost-effectiveness  Irrational adjustment to budgetary constraints  Irrational, ineffective prescribing  Suppression or distortion of demand  Inability to respond to increased supply (e.g.epidemics)

7. Targets for medicines Disp/ CHW Health Centers Secondary Hospitals Reference Hospitals Private Sector National Level Global Level Quantification Supply according to demand

8. Illustration of Concepts of Quantification Procurement interval Delivery time Buffer stock Quantity of antimalarials required Starting point Actual need

9. Quantification Methods  Consumption  Morbidity  Adjusted consumption  Service-level extrapolation

10. Consumption Method  The consumption-based method uses historical data on the use or consumption of medicines in the past to calculate the quantities of medicines that will be needed in the future

11. Morbidity Method  Uses data on diseases and the frequency of their occurrence in the population (incidence or prevalence), or the frequency of their presentation for treatment  Forecasts the quantity of medicines needed for the treatment of specific diseases, based on projections of the incidence of those diseases  Uses standard treatment guidelines (STGs) to project medicine needs  Best approach for justifying a budget request

12. Adjusted-Consumption Method  The adjusted-consumption method uses data on disease incidence, medicine consumption or use, and/or medicine expenditures from a “standard” supply system and extrapolates the consumption or use rates to the target supply system, based on population coverage or service level to be provided.  The area from which the data are taken must be comparable in terms of morbidity, types of facilities, and prescribing habits.

13. Service-Level Extrapolation  Service-level projection of budget requirements uses the average medical supply procurement cost per attendance or bed-day in different types of health facilities.  It uses a standard or comparable system from which data can be used to project medicine costs in similar types of facilities in the target system.

14. Comparison of Methods

15. Limitations of Methods Both consumption-based and morbidity-based methods rely on data from the public system and do not take into account potential increases in demand where the public sector is underused (for example, because of ineffective medicines or poor availability of medicines or services).

16. Assumptions for Quantification  Incidence of fevers that are treated as malaria  Population and age groups vs. age-related doses  Public health facility use  Assumed losses caused by loss, expiration, or diversion  Lead times, safety stock  Percentage of treatment failure requiring second-line treatment  Percentage of case progression to severe malaria

17. Special Considerations for Quantifying Antimalarial Commodities  Preferred methods  Morbidity, particularly for new treatments  Consumption (if accurate data are available)  Population or conditions to treat  Endemic areas, epidemics, refugee populations  Women likely to become pregnant  Children < 5 years oldDepends on breakdown  Children > 5 years oldof dosage schedules

18. Special Considerations for Quantifying Antimalarial Commodities (2)  Population or conditions to treat?  Uncomplicated malaria  First-line treatment  Second-line treatment  Severe malaria  IPT  RDTs  Insecticide-treated nets  Other  Population  Need to adjust for growth

19. Peculiarities of ACTs  ACTs  Short shelf life (24 months); ordering cycle (usually 12 months) may have to be adjusted to ensure stocks do not expire before used  Flexible delivery schedule may be required  Highly effective, may affect the quantity of second-line treatments required because treatment failures are fewer  First-line treatment failures do not always receive second-line treatment immediately  Little experience with use or quantification  High cost

20. Peculiarities of ACTs (2)  Higher chance of leakage  Lack of availability in private sector may affect use of public sector  ACTs are new products; imperfect market  Supply  Supply and demand forces have not reached an equilibrium price  Few manufacturers  Few prequalified suppliers  Capacity of manufacturers to meet demand for ACTs

21. Peculiarities of ACTs (3)  Demand  Financing  Major purchasers mainly using donor funding  Public and not-for-profit sector demand is increasing relative to private sector demand  Variable user “demand” for, prescribing and use of, and response to ACTs  Inaccurate forecasting leading to insufficient production?  Lack of flexibility to increase production to meet short- term needs  Lack of incentives to manufacture with limited guaranteed markets

22. Peculiarities of ACTs (4)  Public sector is likely to continue be the main market for ACTs for most people in the short term  GFATM established to address some of the usual concerns about donor financing; however   Delays in approval of Global Fund proposals  Delays in disbursement of funds  Need to ensure supply through continued demand  Accurate forecasting needed

23. Quantification Tools Available  Quantimed (MSH)  Antimalarial Cost Estimation Tool (WHO)  Other