Center for Global Health R&D Policy Assessment

This is a joint post with Edith Han.

In the past few decades, there has been significant progress in malaria control. Coverage of bednets, spraying, and other prevention commodities has increased dramatically, but ensuring access to effective and affordable treatment has remained a challenge. In the last several decades, the malaria parasite has developed resistance to widely available and affordable treatments, such as chloroquine and sulfadoxine-pyrimthamine (SP). Although an effective alternative does exist, at $4-10USD a dose, artemisinin-based combination therapies (ACTs) are generally unaffordable to the many people in Africa and Southeast Asia who often pay-out-of pocket for malaria treatment at local drug shops. The Global Fund decided to step in and test a new approach to improving access to effective anti-malarial drugs: the Affordable Medicines Facility for Malaria (AMFm).

The AMFm is a market intervention being piloted in 7 African countries and in Cambodia. It subsidizes the cost of ACTs at the top of the supply chain and relies on existing public and private sector distribution channels to ensure the supply of cheaper drugs to patients in the shops and clinics where they seek treatment. This intervention is the first of its kind and may lead to new approaches for improving access to other health technologies. In just under a year, in November of 2012, the Global Fund’s Board will evaluate the success of the experiment and decide whether to continue the program, expand it, or look for alternatives.

With the initiative in full swing, we took the opportunity to interview Megumi Gordon, Deputy Director for Malaria at the Clinton Health Access Initiative (CHAI) who has been involved in the AMFm since 2007. Jean Arkedis and Edith Han asked Megumi about the AMFm’s current status, early lessons, and the latest in the ongoing–and sometimes contentious—debate about whether to subsidize ACTs in the private sector*.

What is the AMFm and what is CHAI’s unique role in its implementation?

The idea behind the AMFm originated from a report from the Institutes of Medicine (IOM) which proposed a global subsidy for ACTs as a way to reduce malaria mortality and delay resistance to artemisinin. Because artemisinin comes from a plant, wormwood, it’s more difficult to reduce the cost of production than synthetic compounds. At the time, malaria experts were concerned that use of the cheaper artemisinin monotherapies would result in quickly growing resistance to artemisinin. ACTs, which combine artemisinin with another compound, are less likely to spur resistance, but they are more expensive to produce and therefore unaffordable to consumers who tend to pay for them out-of-pocket in the retail sector. The IOM proposed that a new financing mechanism could make ACTs the more competitive choice for consumers by subsidizing the cost of the drugs at the top of the supply chain. In other words, by reimbursing part of the cost of importation to manufacturers, first-line buyers, the private importers and public sector purchasers, would have access to a much reduced price, which they would pass along to consumers.

Within the larger malaria community, there wasn’t consensus on whether to try this idea or how exactly it should be implemented. The Roll Back Malaria Partnership (RBM), a group hosted by the WHO which strives to facilitate a coordinated and strategic effort to control malaria among the many malaria partners, played a central role in convening the malaria community and facilitating this debate. In particular, some stakeholders questioned whether such a subsidy would work in the private sector. The private sector is less regulated than the public sector and they worried that middle men would absorb the benefits of the subsidy and that affordable drugs would not reach those in greatest need.

CHAI launched a proof-of-concept study in Tanzania to help answer this question. The study showed promising results: subsidizing the ACTs at the top of the supply chain successfully increased the stocking of ACTs in drug shops and brought down the price of ACTs significantly. After a lot more debate and with the evidence from Tanzania, RBM partners asked the Global Fund to host and manage what is now the AMFm. CHAI continues to operate under the RBM umbrella to provide in-country support and to conduct operational research. For example, working closely with the Global Fund and RBM partners such as the WHO, Population Services International, Medicines for Malaria Ventures and others, CHAI helped countries apply for the AMFm in 2009. Currently, CHAI is helping the 8 approved countries implement the program. This support has involved aiding National Malaria Control Programs and other government ministries in rolling out supporting interventions—activities to disseminate information about malaria and affordable, high quality treatment options. Additionally, CHAI has worked closely with the private sector importers and international ACT manufacturers to ensure that they understand the AMFm, are mobilized to place and fill ACT orders, and to help address any issues that arise during the pilot.

What is actually happening on the ground in participating countries?

At this point, across 7 pilot countries in sub-Saharan Africa, AMFm-subsidized ACTs have arrived and been in the market for a number of months. Zanzibar was the last place to receive its first order of AMFm co-paid ACTs, which happened in 2011.

Additionally, supporting interventions—for instance, the marketing and education campaigns to generate demand for affordable, high quality ACTs or the training programs for private sector retailers—have been launched. The extent to which these programs have rolled out varies country by country. This is because launching these activities is contingent on the Global Fund disbursing the money to fund them, and participating country governments or other partners to plan and implement the activities. There have been delays on both sides.

What lessons are emerging from this pilot?

In this first phase of the AMFm implementation, a few bottlenecks have arisen. First, the process for agreeing to the grant terms was complex and took time since it often involved Ministries of Finance, Health, or other “Principal Recipients” and counterparts in the Global Fund. Second, once countries were approved to access co-paid ACTs, the private sector ordered and received drugs rapidly while the public sector had yet to roll out related supporting interventions. In the future, there could be different ways to address this second bottleneck: for instance, the model for financing supporting interventions could change to enable faster disbursement that is aligned with the arrival and distribution of drugs.

But since AMFm countries began placing ACT orders, we’ve seen signs of expanded availability. In Tanzania, for example, there has been a dramatic increase in ACTs stocked in remote areas of some districts, which suggests that private sector distribution channels can be very efficient at achieving reach. Identifying how and when to work with the private sector delivery channels is something that I think we should continue to do and explore.

We can also see that in many settings, increasing access to ACTs in the market creates a complementary need for diagnostics. Since malarial infections cause similar symptoms to other infections, such as pneumonia, people often assume they have malaria, when they don’t. Determining where and how to enable access to reliable diagnostics—even for those seeking treatment in the private sector—is increasingly important for achieving appropriate malaria case management, resulting in better health outcomes and rational use of resources.

In some countries, you have many first-line buyers participating, and in other countries, only a few. Why does this difference exist, and what does this mean for market dynamics in different places?

Initially, stakeholders involved in the AMFm focused on raising awareness of the initiative in each participating country. According to Global Fund terms, any importer that is registered with a national regulatory authority is eligible to access co-paid ACTs through the AMFm. Many registered importers responded to this opportunity and signed agreements known as Undertakings with the Global Fund to gain access to AMFm ACTs.

However, suppliers also have a decision to take on which importers they sell products to. The AMFm was modeled on the idea of maintaining existing private sector delivery channels: many manufacturers historically sold to one or two first-line buyers in a country, and under the AMFm, have maintained these relationships. In some countries, such as Nigeria, a few buyers who did not have an existing relationship with the supplier established one through the AMFm opportunity, expanding the number of importers for that supplier.

Although general principles would suggest that having more first-line buyers would result in greater competition at the top of the chain and lower ACT prices at the bottom, it is hard to say how this dynamic plays out in practice. With all of the variables at hand demand generation efforts, strength of price regulation, volume of drugs in the market, there are numerous possible drivers of price.

Can this model be applied to other commodities? Or are there unique properties to the malaria market that make the AMFm model inapplicable to other global health products?

There are several factors that underpin the IOM’s recommendations,and later Roll Back Malaria and Global Fund Board’s decisions, to test this mechanism for increasing access to malaria treatment. First, price was a clear barrier to access and other, sub-optimal treatments remain on the market at much cheaper prices. Second, further reductions in price could not be achieved through increased competition due to the high cost of the active ingredient. Third, the private retail sector is where people often first seek care for malaria in Sub-Saharan Africa, so the prohibitively high prices for ACTs were deterring access for many. And last, there was a high risk that resistance to artemisin would have developed, because artemisin monotherapies were already on the market and cheaper than unsubsized ACTs. This added to the rationale for the international community to finance the subsidy since forestalling the emergence of resistance is a global public good, in addition to being important for individual health.

So, because two main conditions were met—a price barrier due to the cost of the inputs and treatment seeking in the private sector—this was a case where a top of the chain subsidy made sense. There has been discussion on whether the AMFm model could be relevant for increasing access to zinc and oral rehydration therapy (ORT) for diarrhea. However, it seems that price may not be the key barrier to access to zinc and ORT, pointing to the need for other interventions to drive uptake of these commodities.

What are the major limitations of the AMFm?

In terms of limitations, the AMFm is really a financing mechanism: it brings down the price of products that would otherwise be unaffordable and therefore inaccessible to many. In that sense, this financing mechanism may be able to increase access dramatically, but it alone cannot improve quality of care. For example, other technologies and programs are needed to ensure that only people with malaria receive an ACT and that other non-malarial febrile illnesses are diagnosed and treated appropriately. The rate and pathway of getting from high coverage to high quality in the private and public sectors will probably differ from country to country, but I do think that as we think about the future applicability of the AMFm mechanism, we need to consider this tradeoff and how to integrate other interventions, such as rapid diagnostic tests (RDTs) and improving treatment practices in drug shops.

One of the problems for defining research and development (R&D) priorities for governments and organizations is the lack of deep knowledge of real on-the-ground needs. Are there any R&D priorities that emerge from the AMFm such as specific improvements to existing products or a need for a new product that address other emerging challenges?

As mentioned earlier, improving use of and adherence to RDTs is becoming increasingly important. We need to change the way people currently approach fever case management, and as part of this, it will be important to build provider and patient trust in RDTs. Developing better tools to help first-line health workers, like drug shop owners better diagnose fever when it’s not malaria would go a long way to ensure proper treatment.

CHAI also conducted a study on adherence to ACTs to see whether or not people take the full course of treatment properly, twice a day for three days. As more people access ACTs, particularly at lower levels of the health system, a simplified treatment regimen, such as Medicines for Malaria Venture’s one-dose product cure currently in trials, could really improve treatment adherence.

There has been much debate surrounding the AMFm and its subsidy program—whether or not this is the best use of funds, whether or not this mechanism would lead to procurement issues, and other concerns. Can you comment a little on the current debate on the AMFm and how we can gauge its success?

At this point, the debate on the AMFm has become too polarized. Instead of thinking about questions such as where this mechanism may be most relevant, how it should be delivered, and which interventions should accompany it, too much of the discussion focuses on whether or not the AMFm should continue to move forward. There have been positive signs of progress under the AMFm from high demand for subsidized drugs from importers, to high availability and low pricing of the drugs at retail level in the private sector. That said data is still being collected and analyzed and it’s too soon to definitively tell whether or not the AMFm has achieved its objectives.

I see the AMFm as one component a larger malaria control strategy, just one tool—a potentially extremely powerful tool for expanding access—among many. There may be situations where this type of mechanism is appropriate and in which settings the AMFm model would is less appropriate. In Nigeria, for instance, where the burden of disease is high and the large majority of the people infected with malaria area treated through the private sector, this type of mechanism would make much more sense, as opposed to a place such as Zanzibar where treatment is largely through the public sector and the burden is much lower.

*Full disclosure: Jean worked for CHAI from 2009- 2011 managing the operational research