Agreements reduce prices of malaria medicines by up to 80 %
14 July 2010
Global Fund and drug manufacturers cooperate to end deaths from malaria
Geneva, 14 July 2010 – The Global Fund and six manufacturers of quality-assured malaria drugs have finalized agreements to place affordable life-saving malaria drugs within reach of millions of people in need, especially children. This public- private collaboration, a part of the Affordable Medicines Facility-malaria (AMFm) Phase 1, will benefit 8 countries in sub-Saharan Africa and Asia.
Under the agreements, private importers will now pay up to 80% less than they did in 2008-2009 for the most effective malaria drugs (artemisinin-based combination therapies – ACTs), bringing the factory gate prices down to the same level as for public sector buyers. The AMFm will then subsidize purchases made by first-line buyers, all of whom have signed an undertaking to pass the benefit of low prices down the supply chain, thereby enabling the roughly 60% of malaria patients who obtain treatment in private shops to obtain the most effective treatments at affordable prices. Currently ACTs make up only 5% of treatments provided through the private sector. Orders of ACTs at these more affordable prices have already begun.
“These agreements bring us closer to the day when all who need malaria medicines will get them at affordable prices,” says Global Fund Executive Director Michel Kazatchkine, "Thanks to the cooperation of partners, manufacturers of quality-assured malaria medicines and leadership by countries, we will make malaria deaths history.”
The six manufacturers that have signed Master Supply Agreements with the Global Fund under the AMFm are: Ajanta Pharma, Cipla, Guilin, Ipca, Novartis and Sanofi-aventis. All six pharmaceutical companies meet the Global Fund’s quality criteria for supplying ACTs to first-line buyers under the AMFm. Other manufacturers may participate in the AMFm, provided that they meet the quality criteria.
The Clinton Health Access Initiative (CHAI) negotiated the agreements, which provide the terms and conditions under which the manufacturers would sell eligible ACTs to first-line buyers, and under which the Global Fund would make co-payment to those companies for qualifying purchases by wholesalers.
“No mother should have to worry whether or not she can access the malaria medicines that will save the life of her sick child. I am pleased my Health Access Initiative, building off of our experience lowering the costs of lifesaving malaria and HIV/AIDS medicines, could negotiate the agreements that enable AMFm to ensure effective, affordable ACTs are in the reach of the mothers and children that need them most,” says former US President Bill Clinton.
The conclusion of the manufacturer agreements is one of the first significant achievements of the AMFm. In a departure from prior practices, manufacturers will sell ACTs to first-line buyers from the private sector at the same reduced prices as they sell to those in the public sector, even before the AMFm makes a co-payment.
The manufacturers have also agreed to not market any oral artemisinin monotherapy, which are undesirable because they increase the risk of widespread resistance to the artemisinin in ACTs.
The Global Fund received pro bono legal support during the negotiations with manufacturers from Freshfields Bruckhaus Deringer LLP. The Global Fund warmly thanks Freshfields Bruckhaus Deringer LLP for their valuable contributions to this success.
In developing the logo for all co-paid ACTs under AMFm, the Global Fund received pro bono support from Programme for Accessible health Communication and Education (PACE), Uganda. The Global Fund also thanks PACE for their important contributions to this success.
Malaria and the AMFm
Malaria is a potentially deadly disease that is transmitted through mosquito bites and kills more than 2,000 children every day. Children make up nearly 90 percent of the nearly 900,000 people who die from malaria every year, mainly in sub-Saharan Africa and parts of Asia.
The Global Fund is leading an innovation called the AMFm to reduce the price of effective malaria drugs so they can drive older, ineffective drugs out of the market, and help increase access to effective treatment of malaria. The proposition of AMFm is that a factory-gate global subsidy, combined with supporting activities at country level, will increase access to life-saving antimalarial medicines and also delay the onset of resistance to those medicines. Three elements constitute the AMFm: price reductions through negotiations with manufacturers of a class of malaria medicines called Artemisinin-based Combination Therapies or ACTs; a buyer subsidy in the form of a ‘co-payment’ at the top of the global supply chain; and supporting activities to promote appropriate use of ACTs.
By working through the public, NGO and private sectors, AMFm will help to expand services beyond the reach of current financing mechanisms that work mostly through the public and NGO sectors.
"The AMFm is about getting better value for money so we get closer to the goal of universal access to malaria treatment. Tackling malaria is a key priority for the UK government and the AMFm aims to deliver real value for money - and will make a huge difference to the lives of some of the poorest people and help to prevent the spread of disease," says Andrew Mitchell, UK International Development Secretary.
UNITAID, the Government of the United Kingdom and the Bill & Melinda Gates Foundation are the financiers of a US$216 million AMFm co-payment fund to be used for the global subsidy. In addition, the Global Fund will spend about US$127 million on country-level activities to support the effective implementation of AMFm.
“We are using market dynamics to improve access to life-saving medicines; this is central to the mission of UNITAID and we are pleased to work with the Global Fund to achieve universal access,” says Philippe Douste-Blazy, Chair of the UNITAID Board.
During the last few years new, effective malaria medicines have been made available for free in many public health clinics. When combined with national campaigns to provide mosquito bed-nets for every family living in areas with malaria this has led to a dramatic fall in malaria deaths in several countries in Africa. The combination of bed nets to prevent malaria transmission and drugs that cure malaria quickly has reduced malaria deaths by between 50 percent and 90 percent in areas where both are widely available.
However, because most people do not have immediate access to public health facilities they buy their drugs at local market stalls and private pharmacies. The new drugs, known as “artemisinin-based combination therapies” or ACTs, are about 10 - 40 times more expensive when sold over the counter than the old drugs which have lost their effectiveness because the malaria parasite has developed resistance to them. As a result of the high cost, many still buy these cheaper less effective drugs and currently, only one in every five patients treated for malaria has access to ACTs.
The AMFm was developed through Roll-Back Malaria – a broad partnership of public and private institutions, such as the World Bank, UNICEF, the Dutch Government, the Global Fund, WHO, the Bill and Melinda Gates Foundation and the Clinton Health Access Initiative.
Phase 1 of the AMFm includes nine pilots in eight countries: Cambodia, Ghana, Kenya, Madagascar, Niger, Nigeria, Senegal, Tanzania (mainland and Zanzibar) and Uganda. After two years, providing it is successful, a decision will be taken on whether to expand it globally.
The Affordable Medicines Facility - malaria (AMFm) was inspired by a landmark report, “Saving Lives, Buying Time”, published in 2004 by a Committee of the Institutes of Medicine (IOM) of the National Academy of Sciences, USA. Professor Kenneth Arrow, Nobel Laureate in economics, chaired the Committee. Under the umbrella of the Roll Back Malaria Partnership, and with financing from the Bill and Melinda Gates Foundation, the World Bank convened and managed an initiative that developed the principles of the IOM report into a policy that was adopted by major institutions in malaria control, and endorsed in November 2008 by the Board of the Global Fund. Many institutions and individuals contributed to the development of the AMFm, including the Ministry of Foreign Affairs of The Netherlands, UK-DFID, UNICEF, WHO, Ministers of Health and analysts from malaria-endemic countries, Resources For the Future, the William J. Clinton Foundation, scientists at think tanks, civil society groups, the private sector, academia, and others. Learn more: http://www.theglobalfund.org/en/privatesectorcopayment/
UNITAID was established to provide additional funding to support existing efforts in the fight against HIV/AIDS, malaria and tuberculosis. The additional funding comes primarily from a solidarity contribution on airline tickets. Through implementing partners, UNITAID channels its funds to purchasing tests and medicines of assured quality and ensuring fast delivery to the patients who most need them - those in low- and middle-income countries. Launched in September 2006, UNITAID was founded by the governments of Brazil, Chile, France, Norway and the United Kingdom.
The UK’s Department for International Development (DFID) is the government agency responsible for delivering the UK’s aid programme which works towards reducing poverty and achieving the MDGs. In addition to direct funding for countries, DFID is also a major contributor to the GFATM, UNITAID, the World Bank and UN agencies working for health.
Clinton Health Access Initiative (CHAI), founded in 2002 by former U.S. President William J. Clinton, is dedicated to improving access to health care for all individuals. Residents of developing countries often cannot afford and do not have access to systems that provide basic health care, including medicines for diseases that are preventable, treatable or curable. This is where CHAI intervenes - by partnering with governments and working with other NGOs to provide solutions to the biggest challenges impeding effective health care in developing countries, such as improving market dynamics for medicines and diagnostics; lowering prices for treatment; and accelerating access to life‐saving technologies. CHAI negotiated on behalf of the Global Fund the price reductions in the AMFm Master Supply Agreements, building on other work to support improved affordability and supply of ACTs.
The Roll Back Malaria Partnership (RBM) is the global framework for coordinated action against malaria. The Partnership promotes high-level political commitment and keeps malaria high on the global agenda by enabling, harmonizing and amplifying partner-driven advocacy initiatives. Founded by UNICEF, WHO, the World Bank and UNDP and strengthened by the expertise, resources and commitment of more than 500 Partner organizations, the Partnership secures policy guidance and financial and technical support for control efforts in countries and monitors progress towards universal goals.
The World Bank is a vital source of financial and technical assistance to developing countries around the world. Its mission is to fight poverty and to help people help themselves and their environment by providing resources, sharing knowledge, building capacity and forging partnerships in the public and private sectors. The World Bank is made up of two unique development institutions owned by 187 member countries: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).Their work is complemented by that of the International Finance Corporation (IFC), Multilateral Investment Guarantee Agency (MIGA) and the International Centre for the Settlement of Investment Disputes (ICSID). Together, they provide low-interest loans, interest-free credits and grants to developing countries for a wide array of purposes that include investments in education, health, public administration, infrastructure, financial and private sector development, agriculture and environmental and natural resource management.
For more information, please contact:
The Global Fund
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