Nairobi, Kenya:
The picture above is of artemeisa annua, a plant grown in Southeast Asia and East Africa used as an ingredient in the new front-line anti-malaria treatments, called Artemisinin Combined Therapies (ACTs). Acumen Fund, where I work, has invested in a company, Advanced Bio-Extracts, to grow, process, and sell the artemisinin derived from the plants into the global market. Pictured are two of ABE’s stalwart team members demonstrating to me the features of a mature crop.
Malaria prevention is a tough business, but it is worth taking stock of how much recent progress has been made against the disease and how much promise the next five years hold. Focused efforts in Rwanda, Ethiopia, and in Tanzania to distribute long-lasting bednets, rapid diagnostic tests, and more effective anti-malarial drugs called ACTs have led to dramatic reductions in the incidence of malaria in just a few short years.
Buoyed in part by these successes, and the shame of having done so little previously, the global public health community had been poised, prior to the financial crisis, to spend billions of dollars over the next five years to further combat the disease.
Assuming the global health community doesn’t scale back on this big short-term push, we need to think about how to build long term public and private capacity to sustain these efforts after the public funding wanes. Where will a mother be able to find a replacement net for a damaged one, or an extra net for a newborn child? Will the subsidy for ACTs push prices low enough to become affordable to the working poor? And who is thinking about the next generation of products if this resilient disease resists our best efforts at containing it?
The answer depends in large part on the role that the private sector plays during this short-term “surge” to bring life-saving products to those who need them most. In Acumen Fund’s investment experience, there are three things that the global public health community can do to reach as many people in the short term while supporting sustainable solutions for the long term.
First, the public health agencies should focus not on the manufacturing costs for the products but on their delivered costs to those who need them. UNICEF, which buys millions of bednets per year, is obviously looking to find the lowest cost manufacturer for the long-lasting nets. Our partner in Tanzania, A to Z Textiles, faces higher raw material costs than its competitors in Asia, but is actually able to deliver nets to various parts of Africa for much less than any of its competitors. If UNICEF were to change its procurement policy to favor high quality local manufacturers, it could reduce total costs for commodities while stimulating significant job creation in the very regions affected by the disease.
Second, we should seek to reduce the volatility of projected demand so that private manufacturers can invest in capacity and lower costs. For example, when ACTs were first approved as a frontline treatment against drug-resistant strains of malaria, the WHO estimated an annual demand of 100 million doses. When demand turned out to be less than half of that, the ripple effects through the supply chain were nearly devastating, particularly for the low-income farmers growing artemisia annua, many of whom were located in East Africa.
More accurate forecasts, faster disbursement of funds to Ministries of Health, and financing for companies to smooth the ups and downs of demand will make investment more predictable and attractive, potentially spurring innovation of new products and technologies to address these underserved markets.
Finally, the public health community should carve out a small portion of the funding that will be used for “free distribution” programs to subsidize market-based distribution programs. There is encouraging evidence that public sector distribution programs can move nets and ACTs more cost-effectively than the market, but they often require the poor to “pay” in terms of time and travel to collect the free goods. We also know that the current products are far too expensive for the poor to pay full price, so the right answer might be a small but growing private sector strategy to complement the free distribution programs.
If smart subsidies can be used to provide incentives for retailers to carry anti-malarial products at affordable prices, corner stores across Africa might ultimately become a sustainable distribution channel to reach those passed over by the free distribution programs. Malaria is a terrible scourge and the public health community is finally rising to the challenge to prevent needless deaths throughout the world, especially in Africa.
Unless we eradicate the disease in the next five years, however, let us be careful to make sure we use the public funding to anticipate the long term needs of Africans by supporting African businesses that can sustain the distribution of essential anti-malarial products long after the giveaways have come and gone.