News Releases

New Framework on Malaria Drugs to Save $100 Million

24 June 2014

GENEVA – In a major initiative that fundamentally changes how anti-malaria drugs are procured, the Global Fund is entering into new framework agreements with suppliers of artemisinin-based combination therapy (ACT) that are aimed at improving delivery and having a bigger impact, both in value for money and in lives saved.

Working closely with the UK’s Department for International Development, partners achieved a way to maximize transition funding for a private sector co-payment mechanism for ACTs, the driving factor in projected savings of over US$100 million through price reductions over two years. World Health Organization, the President’s Malaria Initiative, UNICEF, UNITAID and the Clinton Health Access Initiative all aligned their efforts in the process.

The agreement establishes framework contracts of two years with allocated and committed volumes of ACTs with a group of nine selected suppliers. In addition to the financial benefits, the framework will bring improvements in pipeline visibility, delivery performance and market sustainability, and also encourage local production.

“A smarter approach to procurement of high-volume medicines means more lives can be saved,” said Mark Dybul, Executive Director of the Global Fund. “This is a great case of creating value for money, and increasing impact.”

Under the direction of Christopher Game, the Chief Procurement Officer, the Global Fund is setting a more proactive approach to sourcing and procurement tools to fight AIDS, tuberculosis and malaria. Each step is devised with partners, so that improvements and savings can broadly benefit global health efforts.

Overall, long-term contracts and large-scale purchasing power improve visibility, production, capacity planning, and competitive pricing. This procurement will further increase the effectiveness of the private sector co-payment mechanism, formerly operated as the Affordable Medicines Facility-malaria, which provides high-quality medicines at reduced prices to people with malaria in low income countries, through the private sector.

In developing the initiative, the Global Fund’s Sourcing team took time to develop a deep understanding of the manufacturing and chemistry of ACTs. Working closely with partners, they developed a strategy that allows more effective delivery by all organizations in the response to malaria.

“This ACT procurement strategy addresses the serious short-comings in the previous approaches including price volatility, delivery performance and market sustainability,” said Mr. Game. “By engaging in long-term relationships with suppliers and by providing an integrated approach to the market, we can invest more strategically, maximize the Global Fund’s commercial position and increase value for money.”

Artemisinin-based combination therapy is the mainstay of treatment for malaria. Expanding ACTs in malaria-endemic countries has been key to the recent success in reducing the global malaria burden, which included a 49 percent drop in mortality rates in Africa since 2000.

There are approximately 200 million cases of malaria each year, of which 80 percent occur in sub-Saharan Africa. Malaria, a preventable and treatable infectious disease transmitted by mosquitoes, causes 660,000 deaths each year, the majority of them children under 5. In countries where malaria is prevalent, the average life span can be as low as 30.