In an era of growing interest in public- private partnerships in health care, the operation of private markets has become increasingly important for the delivery of public health interventions. Malaria treatment in the developing world is a case in point. Only 38% of African children with fever are treated with antimalarial drugs. Moreover, most receive ineffective monotherapies, with only 3% obtaining the recommended artemisinin-based combination therapy (ACT). Due to its relatively high cost, ACT is particularly rarely provided in the private retail sector, where care is sought by the majority of potential malaria cases. In 2004 a committee led by Kenneth Arrow argued that heavy ACT subsidies in the public and private sectors were required to increase coverage of effective treatment to an acceptable level, and to delay or avoid the development of drug resistance. The committee proposed that this “Global ACT Subsidy” be applied at the point of pooled supra-national procurement, with the subsidised products allowed to flow through existing public and private antimalarial distribution chains.
The Global Subsidy proposal was taken up by the international public health community under the Affordable Medicines Facility for Malaria (AMFm) and in November 2008 the Global Fund to fight HIV/AIDS, TB and Malaria announced that it would host and manage the facility. However, there continues to be controversy about the plan, with some arguing that the subsidy will largely benefit middle-men in the distribution chain, and the relatively well-off. Much of the debate centres on the nature of competition in wholesale and retail antimalarial markets. Key questions include: (i) will the subsidy have the intended impact of dramatically increasing overall ACT coverage; (ii) will lack of competition in the supply chain lead to high mark-ups meaning that little of the subsidy is passed on to consumers; (iii) will even the subsidised price remain unaffordable to the poorer groups; and (iv) what supporting interventions can increase the chance of success?

This session brings together the best information currently available to answer these questions. Edith Patouillard presents a systematic review of the existing literature on private sector antimalarial distribution chains, highlighting what is known about market structure, mark-ups and the gaps in our current knowledge. The next two presentations aim to address some of these evidence gaps. Sarah Tougher presents early data from the ACTwatch project which monitors antimalarial markets in 8 African and Asian countries. This includes the first nationally representative surveys on antimalarial providers throughout the distribution chain, using innovative sampling methods to provide robust estimates of antimalarial mark-ups and sales volumes at each level. Prashant Yadav presents a model of the supply chain for antimalarials and explores how supporting interventions on the supply side, working particularly with private wholesalers, can maximise the degree to which the subsidy is “passed through” to consumers. Finally, Catherine Goodman presents findings from a pilot of the ACT subsidy in drug shops in 2 districts in rural Tanzania, analysing the impact on retail level ACT stocks and prices, purchasing practices, and the socio-economic status of consumers.