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Student: Song Lijie Advisor: Prashant Yadav Santiago Kraiselburd

Analysis of the upstream supply chain for Artemisinin Combination Therapy (ACT) treatments for malaria. Student: Song Lijie Advisor: Prashant Yadav Santiago Kraiselburd. Malaria & ACT. Malaria Transmitted disease- by mosquito bite Symptom: Mild flu to death in a few hours

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Student: Song Lijie Advisor: Prashant Yadav Santiago Kraiselburd

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  1. Analysis of the upstream supply chain for Artemisinin Combination Therapy (ACT) treatments for malaria Student: Song Lijie Advisor: Prashant Yadav Santiago Kraiselburd

  2. Malaria & ACT Malaria • Transmitted disease- by mosquito bite • Symptom: Mild flu to death in a few hours • 1B cases every year, 1.2 million deaths • Hardest hit region: sub-Sahara, 80% of the world deaths • Preventable and curable- ACT

  3. Malaria & ACT (con´t) ACT • Artemisinin-based Combination Therapy • Artemisinin derivative (eg. artesunate) + partner drug (eg. lumefantrine) • The only effective antimalarial drug • $1.00 at public sector

  4. Background Global Subsidy • Subsidize the price of ACT at global level in public as well as private sectors • Lower the ACT price paid by first-line buyers such as private national wholesalers or ministries of health • AMFm-Affordable Medicines Facility for Malaria

  5. Source: RBM Task Force/Dalberg

  6. Background Upstream Supply China of ACT • Planting, harvesting and drying of A. annua • Seeding in December to January, harvesting in August • Extraction and purification of artemisinin • Done by extractors located close to growing area • Production of artemisinin derivatives • Disconnected from the previous phase • Production of ACT • Prequalified ACT manufacturers • Total lead time = 18 months

  7. Research Question • What will be the impact of subsidy on te upstream supply chain of ACT? • What subsidy structure will lead to optimal outcomes in the upstream supply chain?

  8. SP 1 Y1 =P1-SP1 ACT1 (P1) Manufacturer Global Subsidy (AMFm) Before Subsidy After Subsidy Y 2=P2-SP2 ACT2 (P2) Manufacturer SP 2 Modeling Approach UpstreamSupply Chain • SP1= k * P1; SP2 = k * P2 • SP1=SP2 • Y1=Y2

  9. Manufacturer A Intermediate supplier 1 Component A1 Intermediate 1 Drug A (AM+LF) Intermediate supplier 2 Component 2 Intrermediate 2 Modeling Approach

  10. Modeling Approach • 1 player in one market (Monopoly) • 2 players in one market (Cournot Equilibrium) • 2 players in 2 markets • Multiple players in multiple markets --------------------------------------------- • Equilibrium prices and supply quantities for different ACTs and intermediates in the above scenarios under different subsidy structures

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