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Global Fund prepares new to plan to subsidise malaria treatment cost

31 Jul 2008

Tatum Anderson

Source: TropIKA

The Global Fund for AIDS, TB and Malaria, is currently putting together the precise rules on how it might run an ambitious project to subsidise malaria drugs for the poorest people in the world.

The project, called the Affordable Medicine Facility – malaria (AMFm), is intended to subsidise the cost of artemisinin combination therapies (ACTs), the most effective anti-malarial treatment available currently, to ensure more people can afford drugs that will cure them of malaria. AMFm’s proponents estimate that it could save 174,000 to 298,000 lives per year.

The Global Fund has been tasked with turning this idea into reality. In April, it agreed in principle to manage the AMFm, although the final go-ahead will only be given in November, if its board members agree to the detailed implementation plan now being put together.

The implementation plan is thought to include details on how the Fund will be run on a day-to-day basis; how many people will run the scheme internally, how countries will apply and companies will be paid, which countries will form an initial year-long pilot and how an independent panel will evaluate whether that pilot has been successful.

The AMFm is being developed to address the reality faced by consumers, that anti-malarial treatments from local, small private retailers can be prohibitively expensive – on average US$6. In the public sector, where there is more regulation, ACTs are often free or already subsidised by donors like the Global Fund, but harder to access.

As a result, many people opt for cheap older malaria drugs like chloroquine and sulfadoxine-pyrimethamine (SP), which do not work in many countries. Others buy cheaper single-drug artemisinin treatments – or monotherapies – that weaken but do not kill the malaria parasite. The danger with monotherapies is that they hasten development of resistance to all anti-malarial drugs –including ACTs – and could result in many more deaths in future. Worryingly, according to the team behind the AMFm, only about 5% of the drugs sold by the private sector are ACTs.

Prices will be affordable even after mark-ups

The AMFm was the brainchild of the US Institute of Medicine (IOM), but has been honed by a specially-created group of international institutions, donor and endemic countries, called the Roll Back Malaria (RBM) AMFm Taskforce, with the help of experts from around the world.

The basic idea is this: the AMFm will negotiate with pharmaceutical manufacturers to lower their prices for drugs sold to the private sector to public sector levels of around US$1 per dose. It will then pay manufacturers 95% of this price so that, even when wholesalers and small-scale pharmacies in developing countries add mark-ups, the drugs will still be affordable to the poorest consumers.

But crucially, the AMFm has been designed to wipe out the monotherapies market by undercutting them, according to Ramanan Laxminarayan, senior fellow at Resources For the Future, a Washington think tank, who helped the taskforce with the design.

Other incentives have been built-in to the AMFm to prevent the supply-chain adding huge mark-ups to subsidized drugs, he says.

Firstly companies will receive less revenue per drug so there is more incentive to sell large volumes. (Indeed small-scale studies from Tanzania carried out by the Clinton HIV/AIDS Initiative suggest consumers paid US $0.42 for subsidised ACTs, the same price as for SP).

Secondly, the subsidy will be accompanied by an education campaign that will inform ordinary consumers and retailers exactly how much drugs should cost (as well as which drugs to take and the right way to take them). That should prevent price rises.

Now at the closing stages of creating the AMFm, the Global Fund has engaged the expertise of many other specialist agencies. An RBM Working Group is looking at what local manufacturers might need in the way of technical assistance, for instance, and WHO is addressing buyer and seller education in endemic countries.

More work to be done

But there are still some outstanding issues to be cleared up before November. For instance, the WHO, Global Fund and UNICEF – each have different lists of recommended ACTs and have pledged to harmonise them, based on WHO standards.

And inevitably, another hurdle is likely to be raising funds for a scheme that requires up to US$1.9 billion over five years. The Global Fund has stated its intention to raise the money separately from its normal funding activities but no donors have been announced.

Pharmaceutical manufacturers have welcomed the AMFm, but say certain safeguards still need to be included.

George Baguma, marketing director at Quality Chemicals, a Ugandan manufacturer, thinks the scheme could be very successful but warns that there must be the right level of education. ‘It has to be matched by a very powerful media campaign on how the product should be taken. Communities should be continuously reminded about the availability of ACTs in those outlets,’ he said.

Dr François Bompart, vice-president, medical at the Access to Medicines division within ACT supplier Sanofi Aventis says several different ACTs should be available within countries to prevent the build-up of resistance to a single ACT.

He’s also concerned about whether there will be sufficient volumes to make up for the reduction in prices and the risk to retailers. ‘ Clearly the ideal is to say because the drug will be so much cheaper, there will be so many more customers but no one has done the true calculations on whether this will boil down to the same [revenues] for the pharmacist,’ he said.

Rival Novartis, which has issued an opinion paper on AMFm, says subsidised drugs may leak into countries are not running the scheme.

According to Olusoji Adeyi, the coordinator of public health programmes at the World Bank and secretary of the RBM AMFm Taskforce, the design is still being fine-tuned to address many concerns including leakage and quality control. However, he argues that small retailers have survived for years selling low-cost chloroquine and SP before ACTs arrived.

What’s certain is that the status quo cannot continue said Adeyi. ‘The AMFm is a novel idea, it’s large-scale and it is understandable that there are questions about how it might work and what the risks are,’ he said. ‘But the only way to know is to go out there and try it.’

  • The Clinton Foundation has also recently announced actions intended to stabilise the fluctuations in the cost of artemisinin as reported in News.


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