Investigating Competition & Regulation in the Retail Market for Malaria Treatment

1. IMPACT Interdisciplinary Monitoring Project for Antimalarial Combination Therapy TANZANIA Investigating Competition & Regulation in the Retail Market for Malaria Treatment in Rural Tanzania Goodman C1, Kachur SP2,3, Abdulla S2, Bloland P3, Mills A1 1London School of Hygiene & Tropical Medicine 2Ifakara Health Research & Development Centre, Tanzania 3US Centers for Disease Control & Prevention

2. Tanzanian Antimalarial Drug Policy • 1st line drug changed from Chloroquine to SP in 2001 • Plan to introduce Antimalarial Combination Therapy (ACT) as 1st line in health facilities in 2006 • ACT has high efficacy & provides rapid relief, but will increase factory gate price of 1st line 10-20 fold High Use of Retail Sector Of those with fever, 29% visited a facility, 61% visited a shop

3. Objectives Use an economic framework to assess: • The operation of the retail market, & its impact on accessibility, price & quality of fever/malaria treatment • The capacity for regulation to counteract market failures • Potential points for policy intervention • Implications for the implementation of ACT

4. Data Collection Methods • Census of all drug retailers • Semi-structured interviews • Structured survey • Antimalarial retail audits

5. IMPACT Study Sites

6. Typical Drug Retailers Part II Drug Store General shops & stalls

7. Does the retail market ensurehigh treatment accessibility? Population ratios demonstrate relative accessibility of retailers, especially general stores: 1 facility / 5416 people 1 drug store / 4570 people 1 general retailer selling drugs / 273 people • Important antimalarial source • Retailers accounted for 39% of antimalarial volumes • But % general stores stocking antimalarials fell from 29% of those stocking drugs in mid-2000 to 14% in late-2001, as chloroquine was withdrawn

8. Does the retail market ensure low drug prices? Ratio of Median Retail Price to International Reference Prices (Nov/Dec 2001) • Persistence of high & variable retail markups • 1st & 2nd line unaffordable to many Source for IRP: International Drug Price Indicator Guide, 2001, Median supplier price

9. Does the retail market ensure high treatment quality? • Quantitative & qualitative evidence indicate that: • General stores compete on convenience: • On average open 98 hours/week (cf 40 in Gov facilities) • 62% of population within 15 mins (cf 26% for Gov facilities) • Drug stores compete on drug availability: • Stocked effective AMs when Gov facilities only had chloroquine • Fewer stockouts of shorter duration than Gov facilities • Important quality problems persist: • Over 30% SP samples of poor quality • 78% of tablets from retailers sold loose (not packaged) • 94% drug stores stocked prescription-only antimalarials • SP child’s dose incorrectly specified by 58% drug store staff & all staff in general stores stocking SP

10. Why are Markets Failing? Weak price competition due to: • High concentration • Strong geographical market segmentation • Implicit collusion to avoid antagonising fellow traders? Competition won’t ensure high quality if: • Quality is imperfectly observable • Drug quality • Staff expertise • Quality doesn’t reflect patient preferences • Demand for inappropriate prescription-only medicines • Consumers lack ability to pay • Demand for sub-therapeutic doses • Demand for antipyretics/painkillers only

11. Why is Regulation Failing? General shops • Minimal drug-related inspection • Confusion over whether AMs are permitted Drug Stores • Regular inspections consume scarce resources but have little impact on stocking of prohibited products or staff qualifications • Divergence between official regulations & locally legitimised practice • Lack of positive strategies to increase knowledge or access to essential drugs

12. Widespread Retail Sector Malaria Treatment Introducing Artemisinin-based Combination Therapy (ACT) ?

13. Implications for ACT If only subsidised through facilities: • Retail sector will still be widely used • Majority of customers will use monotherapy or no antimalarial • Powerful incentive for leakage of ACT from the public sector If subsidised through the retail sector: • Potential to double coverage? • Cost would dramatically increase • Cannot rely on retail competition to keep prices low, nor ensure good drug quality & appropriate advice

14. A Potential ACT Retail Sector Intervention • Pre-packaged ACT for OTC sale with clear labelling & locally tested instructions • Single overbranded product, or limited number of quality-marked brands • Subsidised at national or global level • Retail price maintenance by price labelling & consumer campaign • For sale in drug shops, & general stores in remote areas • Mass media communication campaign • Positive role for regulators in improving knowledge & encouraging regular stocking

15. Research Priorities Drug policies are changing now! Ensure systematic evaluation of • Impact of ACT in facilities on operation of the retail market • Impact of retail sector strategies on retailer & consumer behaviour • Comprehensive costing of retail sector interventions

16. The Retail Sector Important drug source High risk for quality Carefully consider the implications of ALL drug policy decisions for retail sector outcomes