Nov 13, 2007

The Pervasive Role of Markets in Malaria Treatment

by Laura Starita

There is constant and ongoing tension in charity circles about the role of markets, profit and asking the poor to pay for items that many believe should be given away for free. For example, a recent New York Times article about the importance of bed nets in the fight against malaria highlighted a group of villages in Kenya where the use of bed nets increased three-fold once the nets were given away—this after efforts to promote bed net use through commercial sales and social marketing produced a usage rate of only about 20 percent. Dr. Arata Kochi, director of the World Health Organization’s malaria program, was quoted in the article as saying the debate “was over” and free nets have won.

The article neither asks nor answers whether the free net campaign would have resulted in such dramatically higher rates of use had bed net sales and social marketing not first exposed the community to the role of bed nets in malaria prevention. Yet it should have, because the reality is that even when things such as bed nets or hydration salts or medications are given away for free, there are still market dynamics at work. This can be seen in how they are packaged, how they are priced, and even in how incentives are built in to ensure they are used properly.

A recent Economist article about a proposed plan to subsidize artemisinin-combination therapy (ACT) pills as a treatment for malaria highlights the reality of the role of markets in interventions for the poor. Artemisinin is a malaria treatment alternative to chloroquine, the current preferred malaria treatment that is now less effective due to drug resistance. Experts are promoting the use of combined arteminisin pills (as opposed to arteminisin-only treatments) as a way to treat malaria while delaying resistance—but ACTs are expensive. As a result, a group of donors and agencies are working on a subsidy plan that would fill the malaria medications market with subsidized ACTs that, for the end buyer, would be priced competitively to chloroquine. Arteminisin-only medications would not receive the subsidy, which would theoretically keep their cost sky-high and effectively price them out of the market.

Should the end-buyer of ACTs be innocent to this market maneuvering? Actually no. In Africa—especially in rural regions—there is often little competition between drug retailers, along with counterfeit drugs and other corruptions. This creates a dynamic whereby a drug retailer could receive the subsidy but never pass the savings along to the end user, rendering the scheme ineffective. Efforts to counteract this possibility, the article indicates, include consumer education to tell them what drugs do and what they should cost. In short, make the end buyer an active participant in the market. Failing to do so can be both condescending and counter-productive to making available effective treatments, a goal shared equally by those who think drugs should be free and those who think they should be priced.

New York Times: Distribution of Nets Splits Malaria Fighters

Economist: Money v Mosquito