The Global Fund's malaria medicine subsidy: a nice idea with nasty implications

Francois Maartens

Article Highlights

  • Major reforms must be made to the AMFm for it to be considered a success

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  • The AMFm was pushed forward too far, too fast andwith too much money

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  • The AMFm's current scheme leaves it susceptible to misuse

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The Global Fund's Malaria Medicine Subsidy: A nice idea with nasty implications

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Executive Summary

Phase 1 of the Affordable Medicines Facility for malaria (AMFm) is a $225million initiative that was launched in 2010 in an effort to increase access to safe and effective artemisininbased combination therapies (ACTs) by dramatically lowering their price with a global subsidy. The AMFm also seeks to drive out oral artemisinin monotherapies as their continued use threatens the entire class of drugs due to drug resistance.

In July 2011, Africa Fighting Malaria undertook a survey in West Africa to determine the price and availability of AMFm drugs. While we find that ACT prices have dropped and there are some positive results arising from the AMFm, we do not consider these to be sufficient to mitigate unintended, but not unforeseen, and worrying consequences that have arisen as a result of this global subsidy.

Major reforms will be needed for the AMFm to be considered a success

As of August 2011, approved AMFm orders for just four countries, Ghana, Kenya, Nigeria and Tanzania, account for around 80 percent of the total global ACT production capacity. This overwhelmingly high demand for ACTs in just four countries threatens the availability of ACTs in all other malarial countries. The prospects of ACT stockouts for non‐AMFm participants are real and imminent and the rapid increase in demand may result in a shortage of artemisinin.

Our survey and an examination of AMFm demand and supply records reveal some serious anomalies. For instance:

  • Though malaria is mainly a childhood disease, 70 percent of AMFm treatment orders are for adult doses.
  • Three ACT manufacturers are also acting as first‐line buyers in Nigeria, Ghana and Uganda with potential conflicts of interest.
  • Zanzibar, a country that has almost zero malaria transmission, has ordered over 240,000 AMFm ACT treatments.
  • Our survey in West Africa revealed AMFm products being sold in non‐AMFm countries. The threat of leakage of AMFm drugs to non‐AMFm countries is real and requires urgent action.

Though our survey was limited in scope, it revealed that oral artemisinin monotherapies remain on sale and are often sold at prices below the subsidized AMFm ACTs. No rapid diagnostic tests were offered or sold to our survey administrators nor were any prescriptions or other evidence of definitive diagnosis of malaria demanded.

In this report and on the Africa Fighting Malaria website we publicize leaked documents that confirm the scale and seriousness of the problem. In our opinion the response from the Global Fund Secretariat to the global supply problems, as evidenced in one of the leaked documents, is inadequate. The Global Fund Secretariat appears preoccupied with continuing the funding for AMFm Phase 1 and with measures to avoid 'reputational' harm.

The private sector can and should play an important role in public health, but it remains to be seen whether or not the benefits that have arisen from the AMFm could have been achieved through alternative mechanisms and potentially at lower cost. In other words, the evidence to date suggests that the opportunity costs of the subsidy have probably been considerable.

Roger Bate is the Legatum Fellow in Global Prosperity at AEI.

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