Appl Health Econ Health Policy 2005; 4 (1): 5-8 1175-5652/05/0001-0005/$34.95/0

CURRENT OPINION

© 2005 Adis Data Information BV. All rights reserved.

Untangling the Debate Surrounding Strategies for Achieving Sustainable High Coverage of Insecticide-Treated Nets Warren Stevens MRC Laboratories, Banjul, Gambia

Abstract

On the question of how to achieve the goal of long-term high utilisation of insecticide-treated nets (ITNs), most protagonists fall into one of two camps: free distribution or market development. The ‘free distribution’ camp argue that given the health benefit to be gained and lives saved, not to mention the relative cost effectiveness of ITNs, such an intervention should be provided free and paid for by governments or donors. In addition, they argue that it is unrealistic to ask the poorest of the population, who are often the ones at most risk, to pay for an ITN, and this risks producing greater inequalities in health. The market advocates counter that free distribution compromises sustainability, both in terms of demand and supply. Firstly they argue that, without a price, people will be less inclined to value ITNs. In turn this could mean lower utilisation, and a lower inclination to replace such an asset at the end of its useful life. In addition, on the supply side, without a price there is little chance of a local market developing for ITNs, although this would be the surest way to ensure a sustainable supply. It is hard to argue with either viewpoint, as both have merit. This article considers three major issues in the debate, and attempts to draw policy conclusions.

Malaria is still one of the largest causes of morbidity and mortality in the poorest areas of the world, especially in sub-Saharan Africa, which witnesses 300 million episodes of disease a year, leading to approximately 1 million deaths.[1] The burden of this disease is further complicated by the increasing resistance to first-line drugs – such as chloroquine and sulfadoxine/pyrimethamine[2,3] – and the impact on severity of outcomes from dual infection of HIV and malaria in many areas.[4,5] The primary method of prevention in malaria control is the use of insecticide-treated nets (ITNs), for which both the efficacy and cost effectiveness has been regularly demonstrated across the continent. Their use has been recognised as a sound investment, with estimates of cost-effectiveness ratios in the range of $US8–38 per disability-adjusted life-year (DALY) averted.[6-9] The difficulties lie in both translating these figures, which are often from controlled studies, into large-scale programmes, and in finding someone to foot the bill. The Abuja target of having 60% of vulnerable populations sleeping under an ITN by 2010 is still a long way off, with estimates of coverage in most countries where malaria is a burden still in single figures.[1] One thing that has not helped the widespread scaling up of the intervention has been a lack of consensus on a unified strategy for getting ITNs into

people’s homes. The situation is a complex one, as it involves the problems of multiple donors, multiple decision makers and a fragmented field of ‘experts’, and because of this multiplicity, the additional problem of a lack of an agreed strategy. 1. Background The background to this debate can best be seen in recent contributions to the literature, with the ‘free distribution of nets’ and the ‘developing the commercial market’ camps trading blows. A paper by the ‘free net’ camp[10] suggested that ITNs should be treated like a public good and delivered ad infinitum from available donor funds for all rural areas of malaria-endemic sub-Saharan Africa. It compared this approach with childhood vaccination through the Extended Programme of Immunisation (EPI) in terms of goals, relative cost effectiveness and success. In addition, the paper argued that it was unrealistic to ask the poorest of the population, who are often the ones at most risk, to pay for ITNs, as this risks producing even greater inequalities in health. The market development camp[11] believe that the cost of scaling up a vertical system of ITN delivery across sub-Saharan Africa is often grossly underestimated, and the logistics have not been properly considered. They also delivered a more realistic

6

Stevens

view on the likely availability of donor funding for such a venture both now and in the future, and a long list of competing priorities for any such funding. Alternative uses ranged from essential medicines for treatment, to non-health priorities such as education and water. Finally, they argued that, without the sustained support of a domestic ITN market, supply would eventually dry up. The free camp could be considered the idealists and the market camp the realists. However, the arguments of both camps are based on a mix of empirical and anecdotal evidence. It is true that ITNs are a highly cost-effective public health intervention on a par with some vaccines, and recent evidence suggests they do have some public good characteristics. It is also highly likely that the only way to ensure high coverage (80% plus) of ITNs in subSaharan Africa in the short term, and possibly in the long term, is to actively deliver them to people at a low or zero price. On the other hand, the cost of undertaking such a programme may be difficult to predict,[12] and the likelihood of sustained donor funding overestimated. Donor funding, as well as government spending, will have many competing priorities. Inevitably this means that the costs of increasing coverage of ITNs will need to be shared with users. Also, future sustainability of supply will depend as much on sustained demand as on any protection of markets in the short term. The main reason why both groups have arguments in support of their preferred methods is that their goals are not expressed in the same way. The free camp put a premium on immediate health impact; they show a strong and laudable determination not to lose more lives than necessary now that the technology has been proven. On the other hand, the market camp are more circumspect, their goals being not only health impact now but, equally, ensuring continued future access to ITNs through the development of domestic markets. They argue that, in a world of competing alternatives for the donor dollar, the future sustainability of such an intervention will inevitably require a reliance on the commercial sector. Some progress in the debate should be achievable through distinguishing the facts from the myths. As the efficacy of the intervention is proven and undisputed, the areas of contention are primarily economic or political. 2. Assumptions Alongside those points that are empirically justified, there are a number of assumptions that merit closer attention. In this article we attempt to address what we think are the three key assumptions that underlie the debate. The free side assumes, contrary to the market side’s view, that: • ITNs are a public good; • we can anticipate a steady state in available funding from donors and governments for the continued public provision of ITNs; © 2005 Adis Data Information BV. All rights reserved.

•

the long-term development of local markets for ITNs relies on protectionism. If ITNs are a public good, this provides a strong comparative argument for public provision. However, the case would be heavily reliant on the likely availability of long-term funding.[13] If markets are to develop, supply-side policies alone are not enough. The only way to ensure the continued existence and sustainability of a market is through demand creation.[14,15] 3. Debating the Assumptions 3.1 Insecticide-Treated Nets as a Public Good

A pure public good is non-rival (one person’s consumption does not affect the amount available for others) and non-excludable (it is not possible to exclude people who do not pay). As with immunisation, ITNs are not public goods. ITNs are rival, as consumption by one person leaves less for others. They are also excludable, as it is possible to require payment. Free net protagonists may be thinking about a mixed good, or a good with positive external benefits. External benefits have public good characteristics. Goods with these characteristics are often termed quasi-public goods, social goods or mixed goods. In this case, there is an additional marginal social benefit (over and above private benefits) from high levels of ITN ownership. The additional social benefit means that the value of ITNs to the community as a whole is greater than the sum of the values of each net value to its owner. Hence, the optimum level of ITN ownership is unlikely to be achieved under market conditions. This is a valid argument. The existence of external benefits can justify government intervention, often in the form of a subsidy. There is evidence that high levels of ITN use can produce a ‘community effect’, where a mass killing of mosquitoes protects even those not using an ITN.[16] However, to be effective, this might require very high coverage,[17] so the external benefits may not be particularly large. An argument against charging for ITNs is the risk of ‘freeriding’, where people, aware of their own protection from disease due to the compliance of others, feel no need to purchase the product themselves. It would be difficult to justify this argument for free ITNs, as the additional social benefits from ITN use are small in relation to the direct value to users. Nevertheless, the existence of any additional social benefit does mean that market prices will not produce optimal provision, and as such it does justify a level of subsidisation. An intervention with greater external benefits may be the widescale change from monotherapy to combination therapy as a firstline treatment in sub-Saharan African countries. The future longterm costs of not shifting to combination therapy are thought to be considerable.[3] Appl Health Econ Health Policy 2005; 4 (1)

Strategies for Increased Use of Insecticide-Treated Nets

Another factor to consider is the distribution of income. The poor and vulnerable are least able to afford ITNs, but the external benefits still exist. As such there may be particular gains to be obtained from targeted subsidies. 3.2 Long-Term Availability of Donor and Government Funding

Most people in the field are aware that this is a boom time for donor funding to health sectors in developing countries for infectious diseases. The main reason for this is probably the HIV epidemic of the past 20 years. Other infectious diseases have also been covered, and there has been an increasing awareness of the enormous health and economic impact of these. A recent review suggests both that donor priorities shift in waves and that, with the introduction of the Global Fund to fight AIDS, tuberculosis and malaria, aid monies for health investment have witnessed a slight increase in total donor funds available for health investment.[11] It is unlikely that the Global Fund and other donors are ever going to be in a position to indefinitely fund any initiative, no matter how cost effective it is. The Global Fund, for example, has had trouble raising its promised funding, and it may be nearing the end of its useful life as contributions from governments start to fall.[18,19] Even if ongoing funding were possible, high ITN coverage would result in a fall in the burden of malaria relative to other diseases, and a subsequent lowering in its priority. There is a need for a functioning market with informed demand and domestic suppliers of ITNs, otherwise the ownership of ITNs would quickly fall away and we would be back to square one, waiting for the burden of malaria to rise until it once again becomes a priority. The intention of all donors and governments is to maximise the total benefits accrued per dollar invested. Donors and governments are set the task of making funding and resource allocation decisions based on opportunity cost. How much benefit is there from a dollar in this use compared with the best alternative use? If widescale introduction of ITNs was successful, regardless of how that goal was achieved, this success would result in reprioritisation. As such, available donor funding for ITNs will at some point fall away. The current position on the availability of donor funding for malaria interventions was reviewed by Narasimhan and Attaran.[20] They estimated that total donor funding for malaria from the 23 richest donor countries and the World Bank has not exceeded $US100 million per annum, with almost one-quarter in the form of loans. The study was completed just before the first year of Global Fund spending. However, even with malaria-specific Global Fund money, all the resources available worldwide are still less than one-third of the most conservatively quoted annual cost of providing ITNs for sub-Saharan Africa.[10,13] In addition, there are calls for extra funding to help endemic countries to move more swiftly towards artesimin-based combina© 2005 Adis Data Information BV. All rights reserved.

7

tion therapy.[21,22] This would require in the region of $US1.6–3.4 billion,[23] further squeezing funds for malaria. How may these scarce resources best be utilised? The choices are (i) to use the funds for free nets in just a fraction of the areas they are needed; (ii) to use cost sharing to allow greater coverage from less available donor money; or (iii) a strategy in between the two. 3.3 Developing Markets and Protectionism

It is commonly believed that the key to long-term utilisation of ITNs is the development of a strong local market. From the previous discussion on reliance on the commercial sector for ITN availability, the development and strengthening of the market should then be a high priority. The best way to ensure the continued existence or growth of these markets is less certain. The market camp lists demand creation as a key component in the development of the commercial sector. The Roll Back Malaria partnership (RBM) strategic framework for scaling-up ITNs[24] states: “… partnering with the commercial sector, donors and NGOs [non-governmental organisations] can focus more on behaviour change, leaving the commercial sector to handle product procurement, distribution and brand advertising. If properly negotiated, collaborative efforts with the commercial sector can result in the leveraging of significant resources.” This suggests that demand is important, but that it must be generated. Attempts to generate markets for ITNs solely from supply-side interventions sidelines the demand creation role, possibly underestimating it as a force for change. Examples of scaling up through social marketing seem to have considerable success in the short term,[9] but at the expense of developing a domestic market. This could be a problem, but there need not be a contradiction between these two goals. One of the central pillars of demand creation is personal experience of the product and the development of ‘informed value’.[25] This can be achieved through increased access to ITNs in the short term through a highly subsidised product, in conjunction with interventions that target those most likely to benefit, such as pregnant women and young children. This can lead both to high coverage rates and also to much greater experience, therefore increasing appreciation of the product. As the international market for ITNs grows, costs will fall, as will the required level of subsidy. As both informed demand increases and costs reduce over time, greater segments of the domestic market may function effectively. If so, then subsidies could fall, or become more heavily targeted, and competition with the subsidised product should grow. 4. Conclusions This article has examined some of the factors surrounding the strategic debate on scaling-up ITN use across sub-Saharan Africa, addressing three key areas related to the positions of the free and Appl Health Econ Health Policy 2005; 4 (1)

8

Stevens

the market perspectives. There are flaws on both sides, but these are mainly due to differing views on the relevant approach. However, the two camps may not be so far apart. Even the most ardent supporters of the market development approach would most probably welcome an increase in available funding for malaria control. The strongest supporters of free nets would probably welcome the development of a local market for high-quality ITNs to ensure the long-term continuation of any levels of coverage achieved through donor-funded net distribution campaigns. The main differences between the camps are in their belief in the likelihood of change in levels of donor funding in the near future, and in the ways in which that funding should be directed. The public good argument is questionable, but the existence of external benefits, and the fact that the bulk of the burden of the disease falls on the poorest and most vulnerable, mean that ITNs should be subsidised, at least for these groups. Subsidies are not new, and there has been donor funding of ITNs for some years. Unfortunately, a long-term reliance on donors for 100% funding for any such strategy may be misguided. Although the current position is favourable, the strategy should be to invest not just for short-term health impact, but also equally importantly to ensure long-term sustainability of both demand and supply of ITNs in sub-Saharan Africa. This article indicates that demand creation is an important factor for ensuring the long-term sustainability of domestic ITN markets. Integral components of this are education and promotion, as well as the generation of widespread experience of ITNs by vulnerable groups. Targeted subsidised methods of distribution are a necessary component of the development of current and future markets for ITNs, and for achieving high coverage in the short term. The level of subsidy and degree of targeting would depend on available funding,[26] but, if managed imaginatively and appropriately, they could be valuable for demand creation and the longterm development of the domestic market.

5. Ticconi C, Mapfumo M, Dorrucci M, et al. Effect of maternal HIV and malaria infection on pregnancy and perinatal outcome in Zimbabwe. J Acquir Immune Defic Syndr 2003 Nov 1; 34 (3): 289-94 6. Aikins MK, Fox-Rushby J, D’Alessandro U, et al. The Gambian National Impregnated Bednet Programme: costs, consequences and net cost-effectiveness. Soc Sci Med 1998 Jan; 46 (2): 181-91 7. Hanson K, Kikumbih N, Armstrong Schellenberg J, et al. Cost-effectiveness of social marketing of insecticide-treated nets for malaria control in the United Republic of Tanzania. Bull World Health Organ 2003; 81 (4): 269-76 8. Wiseman V, Hawley WA, ter Kuile FO, et al. The cost-effectiveness of permethrintreated bed nets in an area of intense malaria transmission in western Kenya. Am J Trop Med Hyg 2003 Apr; 68 (4 Suppl.): 161-7 9. Stevens W, Wiseman V, Ortiz J, et al. The costs and effects of a nationwide insecticide-treated net programme: the case of Malawi. Malar J 2005 May 10; 4 (1): 22 10. Curtis C, Maxwell C, Lemnge M, et al. Scaling-up coverage with insecticidetreated nets against malaria in Africa: who should pay? Lancet Infect Dis 2003 May; 3 (5): 304-7 11. Michaud C, Murray CJ. External assistance to the health sector in developing countries: a detailed analysis, 1972-90. Bull World Health Organ 1994; 72 (4): 639-51 12. Johns B, Baltussen R. Accounting for the cost of scaling-up health interventions. Health Econ 2004; 13 (11): 1117-24 13. Kumaranayake L, Conteh L, Kurowski C, et al. Preliminary estimates of the cost of expanding TB, malaria and HIV/AIDS activities for sub-saharan Africa. CMH working paper no. WG5: 26. Commission on Macroeconomics and Health [online]. Available from URL: http://www.cmhealth.org/docs/ wg5_paper26.pdf [Accessed 2004 Jul 13] 14. Krueger AO. Trade policy and economic development: how we learn. Am Econ Rev 1997; 87 (1): 1-22 15. Kong N, Salzmann O, Steger U, et al. Moving business/industry towards sustainable consumption: the role of NGOs. Eur Manage J 2002; 20 (2): 109-27 16. Hawley WA, Phillips-Howard PA, ter Kuile FO, et al. Community-wide effects of permethrin-treated bed nets on child mortality and malaria morbidity in western Kenya. Am J Trop Med Hyg 2003 Apr; 68 (4 Suppl.): 121-7 17. Bradley D. The Biological and epidemiological basis of global public goods for health. CMH working paper no. WG 2: 15. Commission on Macroeconomics and Health [online]. Available from URL: http://www.cmhealth.org/docs/ wg2_paper15.pdf [Accessed 2004 Jul 13] 18. Kapp C. Struggling global fund approves grants for HIV, TB, and malaria: but board meeting is marred by warnings about shortfalls and accusations of political manoeuvering [letter]. Lancet 2003 Oct 25; 362 (9393): 1381 19. Nelson R. Financing to global fund slashed by the Bush administration [letter]. Lancet 2004 Feb 7; 363 (9407): 461 20. Narasimhan V, Attaran A. Roll back malaria?. The scarcity of international aid for malaria control. Malar J 2003; 2 (1): 8-16

Acknowledgements This article was written in the author’s own time, while on sabbatical as an advisor to Population Services International, an international NGO specialising in social marketing and targeted distribution of health products in developing countries.

21. Attaran A, Barnes KI, Curtis C, et al. WHO, the Global Fund, and medical malpractice in malaria treatment. Lancet 2004 Jan 17; 363 (9404): 237-40 22. Whitty CJM, Allan R, Wiseman V, et al. Averting a malaria disaster in Africa: where does the buck stop? Bull World Health Organ 2004; 82 (5): 381-4 23. Snow RW, Eckert E, Teklehaimanot A. Estimating the needs for artesunate-based combination therapy for malaria case-management in Africa. Trends Parasitol 2003 Aug; 19 (8): 363-9 24. WHO/Roll Back Malaria Working Group report [online]. Available from URL: http://www.who.int/malaria/cmc_upload/0/000/015/845/itn_programmes.pdf [Accessed 2004 July 13]

References 1. World Health Organization (WHO)/UNICEF. The Africa malaria report 2003. Report no. WHO/CDS/MAL/2003.1093. Geneva: WHO/UNICEF, 2003 2. Ringwald P, Sukwa T, Basco LK, et al. Monitoring of drug-resistant malaria in Africa. Lancet 2002 Sep 14; 360 (9336): 875-6 3. Duffy PE, Mutabingwa TK. Drug combinations for malaria: time to ACT? Lancet 2004 Jan 3; 363 (9402): 3-4 4. Cohen J. Epidemiology: mothers’ malaria appears to enhance spread of AIDS virus [letter]. Science 2003 Nov 21; 302 (5649): 1311 © 2005 Adis Data Information BV. All rights reserved.

25. Krahmer D. Entry and experimentation in oligopolistic markets for experience goods. Int J Ind Organ 2003; 21 (8): 1201-13 26. Lines J, Lengeler C, Cham K, et al. Scaling-up and sustaining insecticide-treated net coverage. Lancet Infect Dis 2003 Aug; 3 (8): 465-6

Correspondence and offprints: Dr Warren Stevens, MRC Laboratories, PO Box 273, Banjul, Gambia. E-mail: [email protected] Appl Health Econ Health Policy 2005; 4 (1)