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Tanzania Pilot ACT Subsidy: Baseline Data Collection Results

September 28, 2007

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Today’s discussion

Background and objectives

Methodology

Preliminary results

Limitations of the study

Issues for further exploration and implications for the Global ACT subsidy

Next steps

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The pilot ACT subsidy project aims to both provide data for policymaking as well as to increase access in the target areas

Objectives:

1. Inform policymaking at both the national and global levels, particularly related to the introduction of an ACT subsidy, by providing evidence on the impacts of a top-level subsidy of medicines through the private sector

2. Substantially increase access to affordable, effective, high-quality malaria treatment in the targeted intervention areas

Key questions:

1. What is the final price paid by patients for subsidized drugs?

2. What is the effect of a package of accompanying interventions (e.g., SRP, repackaging, social marketing) on end-user price and uptake?

3. What is the impact of the subsidy on the purchase and use of ACTs compared to other anti-malarials?

Principles:

1. Maximize benefits to patients 2. Ensure rapid initiation and implementation3. Work at the behest of and in close collaboration with the government and other partners4. Replicate normal supply chain processes and behavior5. Minimize leakage

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The pilot project is jointly implemented by the Ministry of Health and Social Welfare, PSI – Tanzania and the Clinton Foundation

• Manage procurement of drugs and implementation of supporting interventions

• Lead communication to global partners

• Lead partners: TFDA and NMCP• Manage relations with local

government• Conduct dispenser training

• Implement in-country social marketing and repackaging

• Build on lessons learned from ACT repackaging/subsidy experiences in other countries

Tanzania Pilot ACT Subsidy

Project

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The project has three key components running simultaneously

Pilot ACT subsidy project

Procurement and distribution

Monitoring & evaluation

Supporting interventions

Key activities• Baseline survey of duka la dawa baridi and

public/NGO health facilities• Ongoing monitoring of metrics including end-

user price and anti-malarial volumes sold

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3 • Social marketing/behavior change communication activities focused solely in target districts

• Placement of suggested retail price• Repackaging of drugs into Tanzania-specific,

user-friendly Kiswahili package• Training of drugstore dispensers on proper

administration of Coartem and improving malaria knowledge

• Quantification of quarterly uptake of ACTsthrough duka la dawa baridi in target districts

• Procurement of ACTs and resale to national wholesaler at a subsidized price

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Today’s discussion

Background and objectives

Methodology

Preliminary results

Limitations of the study

Issues for further exploration and implications for the Global ACT subsidy

Next steps

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The project focuses on tracking price and volume, and the factors that influence those outcomes

Principal research questions:•What is the final price paid by consumers for subsidized drugs?•What is the impact of the subsidy on the purchase and use of ACTs compared to other anti-malarials?

Additional research questions:•What impact does the inclusion of a suggested retail price (SRP), the use of Kiswahili repackaging, and associated social marketing have on price and volume?•How do the price and volume differ based on the characteristics of the drug purchaser, including factors such as socioeconomic status and level of education?•How do the primary outcomes differ based on the age of the patient for whom the drugs are purchased (i.e., children under 5 vs. children over 5 and adults)?•How do price and volume differ based on the location of the retailer (e.g., proximity to competitors and public facilities)? •What are the primary factors driving patient choice of a particular anti-malarial?•Are anti-malarials sold to drug purchasers in the original packaging or in other forms?

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Three rural districts were selected as representative of socioeconomic and malaria conditions in Tanzania and sub-Saharan Africa

District selection criteria:

• High burden of stable, endemic malaria

• Malaria-related DHS indicators in line with national averages

• Significant number of local drug shops (duka la dawa baridi)

• Socioeconomic indicators indicative of rural, poor population

• Low opportunity for leakage across borders or to large cities

• Absence of Accredited Drug Dispensing Outlets (ADDOs)Kongwa:

price intervention

Maswa:subsidy control

Shinyanga Rural:control

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Wholesaler

Regional Distributor“Indirect”

Regional Distributor“Indirect”

Clinton Foundation

Drug Shops

DrugShops

ACTsprocured at

public sector price

ACTs sold to wholesaler at 90% subsidy

ACT Manufacturer

Kongwa DistrictMaswa District

Regional Stock Point

“Direct”

Regional Stock Point

“Direct”Shops pick up

drugs from distributors

Trucks/bikes deliver direct to shops

Trucks/bikes deliver direct to shops

Drugs will be distributed through two existing channels to the districts – via a regional distributor or direct to retailer

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Four different data collection methods are being employed to ensure robust data capture

Mystery shopper

Public/NGO sector audit

Exit interview

Retail auditMetric

• Types/brands of anti-malarials sold/stocked (incl. subsidized product)

• Volume of subsidized ACT and other anti-malarial sales

• Sale price per dose• Package conditions – loose, original, etc. • Availability and stocks of Coartem in nearby

public/NGO sector health facilities

• Intended recipient of drugs • Age and gender of patient• Socioeconomic status of purchaser’s

household • Reason for purchase

• Location (peri-urban vs. rural) and clustering

GPS

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Today’s discussion

Background and objectives

Methodology

Preliminary results

Limitations of the study

Issues for further exploration and implications for the Global ACT subsidy

Next steps

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Data was collected across four major categories

Stocking and volume

• Types/brands of anti-malarials sold/stocked (incl. subsidized product), broken out by branded originator, branded generic and unbranded generic

• Volume of subsidized ACT and other anti-malarial sales

Drugstore characteristics

• Impact of competition (e.g., number of other stores within given radius)

Consumer characteristics

• For whom drugs were purchased - self or other• Age and gender of patient• Socioeconomic status of purchaser’s household (per Tanzania

2004 AIDS Indicator Survey categories)• Education level of purchaser• Reason for purchase – e.g., price, seller recommendation, etc.

Sales-related characteristics

• Sale price per dose• Package conditions – loose, original, etc. • Availability and stocks of Coartem in nearby public/NGO sector

health facilities

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Nearly all stores stocked SP and AQ, while only one reported stocking any ACT

Percent of duka la dawa baridi stocking particular anti-malarials% of 200 stores audited

85%

84%

33%

12%

1%

SP

AQ

Quinine

Artemisinin monotherapy

ACT

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The products purchased varied significantly between adults and children under 5, but SP and AQ were by far the most popular

Breakdown of products purchased % of exit interviews

ACT + monotherapy

SP

Amodiaquine

QuinineOther

1% 0%

64%

8%

26%

4%

5%

90%

1%1%

458100% = 79

Adult Children U5

15

800 800

400

600 600

800

The median price paid for the most popular products ranged from US$ 0.32 to 0.64 per complete adult dose, with little differencebetween branded and generic products

Branded originator SP

Exit interviews

Mystery shoppers

Branded generic SP

Unbranded generic AQ

Median price paid per full adult dose by exit interviewees and mystery shoppersTanzanian shillings

US$ 0.64 US$ 0.48-64 US$ 0.32-48

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14% 18%36%7%

29%

23%

79%

53%41%

~80% of purchases were intended for adults, which does not reflect the census breakdown or fever prevalence by age

Under 5

5-15

Adult

608100% = 829,451

Exit interviews

2002 census of target districts

~ 2.1 million

2002 census adjusted by fever prevalence

Comparison of intended recipient of exit interview purchases vs. census age breakdown and fever prevalence by age

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Previous use and shopkeeper recommendation were the largest reported drivers of patient choice, not price

Most important reason cited for purchase of selected anti-malarial% of 608 exit interviews

29%

26%

14%

13%

10%

6%

Previous use

Shopkeeper recommendation

Prescription

Most effective

Price

Only one available

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35%

28% 26%

17%

34%

50%

23%

43% 43%

28%

35%39%

Customers from higher SES categories tended to pay more for anti-malarials

0-499 TSH

Quintile 2

Quintile 3

Quintile 4

Price paid for anti-malarials

500-799 TSH 800+ TSH

Quintile 5

Price paid for adult anti-malarials by SES% of 458 exit interview customers purchasing for adults

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A third of health facilities reported a stockout in the previous three months, and most frequently for the infant dose

Percent of health facilities reporting a stockout in the past three months, by dose% of 105 public/NGO health facilities audited

24%

11%

14%

15%

Infant (5-<15 kg)

Child (15-<25 kg)

Juvenile (25-<35 kg)

Adult (35+ kg)

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GPS mapping demonstrated that drug stores and health facilities tend to cluster together – the impact on key outcomes is still being analyzed

Cluster of 15 stores around 1 health facility

Cluster of 9 stores around 3 health facilities

90% of stores are within 1 km of at least one other

store

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Today’s discussion

Background and objectives

Methodology

Preliminary results

Limitations of the study

Issues for further exploration and implications for the Global ACT subsidy

Next steps

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It is important to recognize the inherent limitations of this project in interpreting the results

Specific limitations of project

• Covers relatively small sample(population of 3 districts = 830,000) in country of 40 million

• Subnational scale puts results at risk for skewing by leakage and inefficiencies

• Results subject to seasonality of malaria in Tanzania, as baseline data collection occurred during low transmission season

General study biases and mitigation

• Hawthorne effect: minimize interactions between study team and businesses

• Social desirability bias: ensure data collection tools and methods are free of any leading questions

• Recall bias: conduct monthly data collection for retail audits

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Today’s discussion

Background and objectives

Methodology

Preliminary results

Limitations of the study

Issues for further exploration and implications for the Global ACT subsidy

Next steps

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The initial findings highlight potential implications for the global ACT Subsidy and areas for further exploration

Area Implication

Socioeconomic status • No consumers from lowest SES quintile implications for equity through global ACT subsidy

Access for children U5 • Drug shops seem not to be the preferred access point for caregivers of children under 5

Drivers of product choice

• The importance of shopkeeper recommendation how to ensure appropriate knowledge and incentives?

Pricing • Consumers paid more on average for pediatric doses, and for less-than-complete adult doses

Branded vs. generic differences

• Preferences differ significantly for branded vs. generic products between SP and AQ, although prices of branded vs. generic products show little difference

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Today’s discussion

Background and objectives

Methodology

Preliminary results

Limitations

Issues for further exploration and implications for Global ACT subsidy

Next steps

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The project will run for one full year, with quarterly procurement, data collection and reporting

June

2007

July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug.

2008

Baseline data collection

Month 1 data collection

Q2 data collection

Q3 data collection

Q4 data collection

Selection + contracting of M&E and social mkting orgs

Selection + contracting of wholesaler partner

Month 2 data collection

Month 3data collection

Sept.

Q1 ACT procurement + distribution

Q2 ACT procurement + distribution

Q3 ACT procurement + distribution

Q4 ACT procurement + distribution

Supporting interventions – social marketing, marking of SRP

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ASANTE SANA!

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APPENDIX

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Difference in products purchased, adult exit interviews vs. mystery shoppers

SP

Branded originator

Branded generic

Unbranded generic

Amodiaquine

Branded generic

Quinine

ACT

Artemisinin monotherapy

64%69%

24%24 %

36%40 %

4%5 %

25%19 %

1%4 %

25%16 %

4%2 %

1%5%

0%1%

Exit interviewsMystery shoppers

Unbranded generic

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Difference in products purchased, exit interviews vs. mystery shoppers for children under 5

SP

Branded originator

Branded generic

Unbranded generic

Amodiaquine

Branded generic

Unbranded generic

Quinine

ACT

Artemisinin monotherapy

8%25%

2%3%

16%10%

1%10 %

0%3%

0%3%

Exit interviewsMystery shoppers3%

9%

3%13%

90%58 %

73%48 %

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800

600

800

600

Difference in price paid by number of pills

Branded originator SP

2 tablets

3 tablets (full adult dose)

Branded generic SP

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20

7

13

60%

80% of anti-malarial purchases were intended for adults

Child 5-15

Child under 5

Adult purchasing for themselves

Another adult

Intended recipient of all anti-malarial purchases % of 608 exit interviews

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No consumers from the lowest SES quintile were captured, although the distribution across the remaining 4 varied significantly by district

Anti-malarial purchasers by SES category (per 2004 Tanzania AIDS Indicator Survey categories)% of 608 exit interviews

4 825

11

27 24

48

33

3143

17

28

3825

1128

100% = 63 354 191 608

Kongwa Maswa Shinyanga Rural

TotalQ2

Q3

Q4

Q5

34

150

2000

600

2250

8000

25001800

150

1800

400

1800

3000

Range in price paid by adult exit interviewees

SP

Minimum

Median

Maximum

Range of prices paid for anti-malarials

AQ Artemisinin monotherapy

ACT

35

71

51

9195

647475

52

85

The target districts are similar across most key characteristics

# of DLDBs

Population/ DLDB(‘000)

Population/ health facility(‘000)

Literacy rate(%)

Employment in agriculture(%)

Shinyanga Rural (control)

Maswa (subsidy control)

Kongwa (price intervention)

3.93.2 3.3

9.99.8

8.6

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The packaging template, developed by PSI for Rwanda, contains key elements for effective and responsible ACT distribution

• Cover photos and color schemes differentiate doses• Compelling, high-quality presentation attracts demand• National brand is prominent; manufacturer brand included

• Simple, clear instructions in both local language and pictures• Timing of doses clearly indicated

• Prepackaged drug from manufacturer slides into package; ensures quality and removes risk of contamination during repackaging• Overbrand approach enables use of any manufacturer; sustainable communication• Expiration date on original packaging visible

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…including

• Clear IMCI danger signs• Importance of referral to health professional if signs persist – alignedw/ IMCI• Summary of key contraindications(e.g., first trimester of pregnancy)

• Agreement of inclusion of technical information w/ manufacturer• Alignment of packaging w/ national drug regulatory requirements• Reinforcement of key messages & branding

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…resulting in important differences in the final packaging, though use of the template led to design efficiencies

Instructions modified &translated into Kiswahili

Number of pictogramsreduced to align w/

existing communications

Branding aligned w/national campaign

Color scheme per dosealigned w/ guidelines

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A “cost-plus” method examining costs and profit margins at each level was used to arrive at the SRP in Tanzania

Sale price to national wholesaler

Operating costs

Freight cost

Profit margin

Sale price to regional distributor

Reg. distributormarkup

Sale price to retailer

Variable costs

Fixed costs

Profit margin

Sale price to consumer

Markups through supply chain per dose(Weighted average price across weight bands, assuming indirect distribution)US$

0.160.02 ~0 0.01 0.19

0.07 0.260.02

0.16

0.13 0.57

86% subsidy

from total cost

price

45% of total cost price