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Analysis of the upstream supply chain for Artemisinin Combination Therapy (ACT) treatments for malaria Student: Song Lijie Advisor: Prashant Yadav Santiago.

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Presentation on theme: "Analysis of the upstream supply chain for Artemisinin Combination Therapy (ACT) treatments for malaria Student: Song Lijie Advisor: Prashant Yadav Santiago."— Presentation transcript:

1 Analysis of the upstream supply chain for Artemisinin Combination Therapy (ACT) treatments for malaria Student: Song Lijie Advisor: Prashant Yadav Santiago Kraiselburd

2 Malaria & ACT Malaria  Transmitted disease- by mosquito bite  Symptom: Mild flu to death in a few hours  1B cases every year, 1.2 million deaths  Hardest hit region: sub-Sahara, 80% of the world deaths  Preventable and curable- ACT

3 Malaria & ACT (con´t) ACT  Artemisinin-based Combination Therapy  Artemisinin derivative (eg. artesunate) + partner drug (eg. lumefantrine)  The only effective antimalarial drug  $1.00 at public sector

4 Background Global Subsidy  Subsidize the price of ACT at global level in public as well as private sectors  Lower the ACT price paid by first-line buyers such as private national wholesalers or ministries of health  AMFm-Affordable Medicines Facility for Malaria

5 Source: RBM Task Force/Dalberg

6 Background Upstream Supply China of ACT  Planting, harvesting and drying of A. annua  Seeding in December to January, harvesting in August  Extraction and purification of artemisinin  Done by extractors located close to growing area  Production of artemisinin derivatives  Disconnected from the previous phase  Production of ACT  Prequalified ACT manufacturers  Total lead time = 18 months

7 Research Question  What will be the impact of subsidy on te upstream supply chain of ACT?  What subsidy structure will lead to optimal outcomes in the upstream supply chain?

8 Modeling Approach Global Subsidy (AMFm) ACT1 (P1) Manufacturer Y1 =P1-SP1 Y 2=P2-SP2 SP 1 SP 2 Before Subsidy After Subsidy ACT2 (P2) Manufacturer 1.SP1= k * P1; SP2 = k * P2 2.SP1=SP2 3.Y1=Y2 Upstream Supply Chain

9 Modeling Approach Intermediate supplier 2 Intermediate supplier 1 Manufacturer A Drug A (AM+LF) Component A1 Component 2Intrermediate 2 Intermediate 1

10 Modeling Approach  1 player in one market (Monopoly)  2 players in one market (Cournot Equilibrium)  2 players in 2 markets  Multiple players in multiple markets  Equilibrium prices and supply quantities for different ACTs and intermediates in the above scenarios under different subsidy structures


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