1. Investigating Competition & Regulation in the Retail Market for Malaria Treatment in Rural Tanzania Goodman C 1, Kachur SP 2,3, Abdulla S 2, Bloland P 3, Mills A 1 1 London School of Hygiene & Tropical Medicine 2 Ifakara Health Research & Development Centre, Tanzania 3 US 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 1 st line in health facilities in 2006 ACT has high efficacy & provides rapid relief, but will increase factory gate price of 1 st 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. Part II Drug Store Typical Drug Retailers General shops & stalls

7. Does the retail market ensure high 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stocking antimalarials fell from 29% of those stocking drugs in mid- 2000 to 14% in late-2001, as chloroquine was withdrawn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? Source for IRP: International Drug Price Indicator Guide, 2001, Median supplier price Ratio of Median Retail Price to International Reference Prices (Nov/Dec 2001) Persistence of high & variable retail markups 1 st & 2 nd line unaffordable to many

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 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 Drug policies are changing now!

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