Optimizing funding for LLINs Country Briefing

Transcription

1 Optimizing funding for LLINs Country Briefing May 23, 2012

2 Optimizing Funding for LLINs Globally, an estimated 655,000 unnecessary deaths still occur annually from malaria. Long-lasting insecticidal nets (LLINs) or nets have been instrumental in reversing that trend and have contributed to a 25 percent decline in malaria-related deaths over the past decade, including prevention of over 840,000 child deaths. 1,2 Annual net distribution in Africa, where over 90 percent of malariarelated deaths occur, 3 has grown exponentially from 5 million in 2004 to 92 million 4 in 2011 given a concerted campaign to achieve universal coverage. The global LLIN field is now at a vital turning point, facing both funding shortfalls and growing resistance patterns. Based on the current net life cycle, an estimated 560 million nets 5 will be needed at a cost of $2.4 billion 6 through 2015 to maintain universal coverage. Given donor constraints, there is currently an estimated 40 percent shortfall between projected funding and need through It is imperative to maintain universal coverage gains in order to prevent epidemics and upsurges from occurring if previously protected individuals are left unprotected. Compounding this challenge, the threat of mosquito resistance to current LLIN insecticides is growing rapidly across Africa. This necessitates urgent investments in R&D to develop new net technologies that address resistance issues, ensuring that LLINs can remain effective tools in the global malaria fight. Some malaria endemic countries in Africa, have worked with Results for Development Institute (R4D) and the African Leaders Malaria Alliance (ALMA), to develop a strategy that can save up to $630 million 8 over the next five years by driving purchasing of the most costeffective LLINs while simultaneously generating market incentives for innovation and improved net performance. A global savings of $630 million can be used to purchase 150 million nets, which can offer an additional 300 million individuals malaria protection and contribute to addressing the funding gap. This work was informed by close engagement with over 140 actors, including Ministries of Health (MoH) and key partners in five high-malaria-burden countries, donors, regulators, implementing partners, and all 10 WHO Pesticide Evaluation Scheme (WHOPES) - recommended suppliers. This engagement was coupled with rigorous analysis of global net procurement and distribution data. 2 Optimizing funding for LLINs

3 Primary recommendations I. Ensure guidance and policies to procure the most cost-effective nets Global experts and country users increasingly recognize that there are differences in how long different nets last in the field (durability), 9 which is a critical component of net performance. However, currently there is no internationally reputed guidance on net performance, nor are there donor incentives in place for countries to procure the most cost-effective nets. This has led to a focus on purchasing nets on the basis of lowest price. This pricefocused approach reduces overall value for money (VFM) while creating market disincentives for manufacturers to invest in improving net performance. Shifting LLIN procurement to award orders on the basis of cost per year of net life could save up to $340 million 10 over the next five years while generating financial incentives for suppliers to develop more durable nets. DOMC (division of malaria control) officials and technical experts in Kenya saw there were significant differences among the durability of different WHOPES-recommended nets in the field. Rather than procuring solely on the basis of lowest price, the DOMC also wanted to incorporate durability in order to make more cost-effective procurement decisions. As a DOMC official stated, In Kenya, we want nets that can last as long as possible to get maximum VFM and reduce the frequency of net replacement. However, in the absence of internationally reputed guidance on net performance from WHO, Kenya was not able to incorporate durability into their decision criteria in awarding a tender. The Kenyan DOMC would like the WHO to urgently develop guidance on net durability to inform procurement decisions. Recommendations: Countries should urgently support the development of near-term Net Performance Guidance and adopt policies to purchase LLINs on the basis of lowest cost per year of net life. The WHO Global Malaria Program (GMP) has been engaging closely with R4D and a consortium of leading textile and field partners on an approach to develop near-term guidance. In parallel to supporting guidance development, donors and countries should adopt policies to consistently procure on the basis of cost per year of net life, rewarding both price and net performance. Donor policies should also allow countries to provide rigorous local analysis of net performance (i.e., to determine the denominator of net life) as the basis for procurement awards. II. Rationalize fragmentation in net specifications to optimize VFM Currently, there is a high degree of fragmentation among net specifications (200-plus listed supplier offerings across size, shape, and color, with approximately 25 commonly purchased variants). Certain product outliers, including irregularly sized or extra-tall nets and highly specialized packaging, generate significantly increased costs and lead times without corresponding benefits for usage. Reducing fragmentation in these targeted specifications could save up to $290 million 11 over the next five years. Recommendations: Donors and countries should adopt policies to purchase the most cost-effective net specifications while still ensuring a wide product selection for countries. NetWorks (funded by USAID and led by the Johns Hopkins Bloomberg School of Public Health) is partnering closely with R4D to develop Value for Money (VFM) in LLIN Specifications Guidance that uses rigorous analysis to identify 70-plus product choices that optimally balance cost and usage benefits. The guidance will also include country-level guidelines for developing rigorous local evidence on usage benefits. Donor policies should allow countries to provide this evidence as justification for alternative net specification procurements. III. Urgently build in-country monitoring and decision making capacity to address resistance threat Mosquito resistance to pyrethroids (the class of insecticides used in all LLINs available today) is rapidly emerging across Africa. It is imperative that the global community ensure access to effective insecticide resistance management (IRM) products. Recommendations: The global community, including the WHO, countries, and donors, must urgently work to develop a clear path to market to support supplier R&D investment in developing IRM LLINs. Countries specifically should continue to build capacity to collect resistance data and have a decision making body for IRM as outlined in the recently issued WHO Global Plan for Insecticide Resistance and Management in malaria vectors (GPIRM). In 2012, Uganda is planning a procurement of 10 million LLINs as part of its universal coverage campaign. Historically, Uganda had purchased nonstandard nets with 180x160x210 cm dimensions, however; based on historical procurement data this will add almost $1.25 (or 25% of the net cost) for each net purchased when compared to a standard net size. Moreover, there was no direct evidence to support that these nonstandard nets increased adoption and usage amongst the population. Given the absence of documented end-user benefits to purchasing the taller nets and the need for value for money, the Ugandan NMCP chose to procure a 180x160x170cm net size which should result in total savings of over $12 million for a single order, which could be used to purchase over 3,000,000 additional nets or to address other malaria prevention and treatment needs for the population. Optimizing funding for LLINs 3

4 Secondary recommendations IV. Employ strategic procurement practices to maintain a competitive LLIN supply base and avoid pricing and availability issues To maintain a competitive, sustainable LLIN supplier base, it is critical for purchasers, including national procurement actors, to regularly employ strategic procurement practices. These practices include splitting tenders among multiple suppliers for large orders, developing high-quality annual or multiyear forecasts to provide demand visibility, and streamlining and expediting product registration to ensure access to new products (e.g., IRM LLINs) in a timely manner and to facilitate a competitive tender process. The absence of strategic procurement practices, specifically by high-volume purchasers, inhibits suppliers ability to plan production capacity effectively and has historically resulted in LLIN price spikes of as much as 15 percent and increased lead times. In 2010, ALMA placed a mass order of 20 million nets for multiple countries, including Sierra Leone, DRC, Kenya and Zambia, in order to achieve savings and rapid delivery. ALMA partnered closely with UNICEF to manage the procurement process given UNICEF s experience as a major purchaser of LLINs that follows best practices including sharing aggregated country forecasts with suppliers and engaging in long-term agreements to improve demand visibility and production planning. Recommendations: Purchasers should strengthen strategic procurement practices in order to support efficient marketplace functioning and minimize pricing and availability issues. High-volume countries in particular should seek to split tenders for large orders, while all countries should continue to develop high-quality forecasts and streamline efforts for expedited registration of new LLINs as they enter the market. V. Build an in-country evidence base to evaluate the drivers of net use Net use (defined as use when a net is available within a household) is not currently evaluated as a core indicator in MHS and DHS surveys, though it can be calculated using a composite of household survey data. Net use rates directly correspond to health outcomes and VFM. Recent findings in the 2011 WHO World Malaria Report indicate that the net use rate is approximately 96 percent, though further efforts to both replicate these findings and undertake this analysis in a wider set of countries are required. Additionally, further work is required to build a robust evidence base around what specific factors (e.g., social, personal comfort, and preference) drive use versus nonuse at the country level. This analysis can ensure that program and commodity purchasing decisions optimize health outcomes and overall VFM. Recommendations: The RBM Monitoring and Evaluation Group (MERG) plans to issue new guidance in coming months including indicators to evaluate net use, allowing countries to monitor this critical information in routine surveys. Countries should continue to build a robust evidence base around what specific factors drive net use, particularly in areas where data indicates that net use rates are suboptimal. This evidence should also be used to support future iterations of the VFM in LLIN Specifications Guidance to ensure that program and commodity purchasing decisions optimize health outcomes and overall VFM. VI. Promote local manufacturing for LLINs In 2007, the African Union endorsed the Pharmaceutical Manufacturing Plan for Africa given the potential benefits of an increased local manufacturing of medicines used in developing countries for both public health and economic development outcomes. A 2011 study by the University of London, School of Oriental and African Studies indicated that local manufacturing of LLINs can yield similar local economic benefits. In 2003, Sumitomo Chemical provided its Olyset Net technology free of charge to the Tanzanian mosquito net manufacturer A to Z Textile Mills Limited (A to Z), beginning local production of LLINs in Africa. In 2011, production capacity reached 30 million LLINs per year and created more than 7,000 jobs and in June 2012, a new R&D facility in Arusha will also be opened for innovative vector products. In addition to the economic benefits there can also be savings on transport costs and delivery lead times. For example, in its 2010 procurement of 800,000 nets, Zambia saved an estimated $190,000 in shipping costs and 42 days of lead time when buying LLINs from Tanzania versus shipping from China. Recommendations: Local production of LLINs in Africa produces a vital public health product and simultaneously boosts economic development, toward self-sustaining enterprise in the service of public health. Countries should request the African Union to include non-pharmaceutical products in the accelerated Pharmaceutical Manufacturing Plan for Africa. 4 Optimizing funding for LLINs

5 Endnotes 1 WHO, World Malaria Report, Eisele et al, Estimates of child deaths prevented from malaria prevention scale-up in Africa , Malaria Journal, April WHO, World Malaria Report, Net Mapping Project data; Sub-saharan Africa distribution 5 John Milliner Achieving Universal Coverage presentation, November 2011.Forecast based on Net Mapping Project data, Roll Back Malaria (RBM) country roadmaps, and Albert Kilian net loss rate assumptions. 6 7 ALMA analysis of funding gap for This includes both committed funding as well as expected funding from Global Fund, PMI, DFID, World Bank, country funding, and other sources. It should be noted, however, that this excludes funding via the Global Fund Transitional Funding Mechanism (TFM) given that financing decisions had not been made at time of publication. 8 9 Among the 12 nets recommended by the WHO Pesticide Evaluation Scheme (WHOPES) About R4D Results for Development Institute (R4D) is a non-profit organization whose mission is to unlock solutions to tough development challenges that prevent people in low- and middle-income countries from realizing their full potential. Using multiple approaches in multiple sectors, including Global Education, Global Health, Governance and Market Dynamics, R4D supports the discovery and implementation of new ideas for reducing poverty and improving lives around the world. About ALMA ALMA is an alliance of African Heads of State and Government working to end malaria-related deaths. This body was founded by African Heads of State to utilize their individual and collective power across country and regional borders. Cover photo: Maggie Hallahan/Sumitomo Chemical. Optimizing funding for LLINs 5