What Can We Do When Markets Fall Short? Mini-U Session, March
2014
Slide 2
To maximize global health benefits, what do we want in a health
product? Lower prices, expanding reach to end users Product is in
stock and end users/providers have usage information Product is
tailored to user/provider needs and low-income settings Sufficient
global volumes and stable supply base AFFORDABLE AVAILABLE
APPROPRIATE DESIGN ACCESSIBLE ASSURED QUALITY Product is
consistently safe and effective
Slide 3
What are possible market shortcomings? AFFORDABLE AVAILABLE
APPROPRIATE DESIGN ACCESSIBLE ASSURED QUALITY High, unaffordable
prices or high price variance Cyclical swings in prices Stockouts
at end user access points Low awareness of product or condition,
common misdiagnoses Overuse (leading to resistance) Ill-adapted
designs for low-income settings Too many or too few product
variants Volumes: Shortages, excess, or cycles of shortage and
excess Supply Base: Few suppliers; supplier exit or failure
Substandard products Counterfeit products
Slide 4
How can market shaping address these shortcomings? (1/2) Market
Shaping Interventions are time-limited, catalytic activities that
reduce supply and demand inefficiencies in 3 ways: 1) increase
supply-side incentives, 2) increase market information and/or 3)
balance risk between supply and demand actors AFFORDABILITY
AVAILABILITY APPROPRIATE DESIGN ACCESS ASSURED QUALITY
Slide 5
How can market shaping address these shortcomings? (2/2)
Optimal Health Outcomes INCREASE SUPPLIER INCENTIVES Current State
INCREASE MARKET INFORMATION BALANCE RISK PROGRAMMATIC INTERVENTIONS
Optimal Health Outcomes Current State Market Shortcomings from
supply and demand inefficiencies AFFORDABLE AVAILABLE APPROPRIATE
DESIGN ACCESSIBLE ASSURED QUALITY AFFORDABLE AVAILABLE APPROPRIATE
DESIGN ACCESSIBLE ASSURED QUALITY
Slide 6
Causal Pathways Framework for assessing market shaping
opportunities 1. Diagnose Root Causes of Shortcomings 2. Assess
Market Shaping Options 3. Implement Customized Intervention 4.
Measure Results How does the market compare to an optimal, healthy
market? Which analytical tools can provide a better understanding?
What interplay of supplier incentives, market information, and risk
could be used? Theory of change, benefits, drawbacks and
implementation constraints for market shaping options? Who should
be engaged and how? How to ensure the results are ongoing and
sustainable? How will changes be tracked in market variables,
health outputs and health impact? What feedback loops will enable
real-time adjustments?
Slide 7
Mini Case Study: ACT Market Context Intervention context
Concern that traditional antimalarials (e.g., quinine) were losing
their efficacy by early 2000s Malaria remained one of the diseases
with the highest rates of mortality and morbidity worldwide
Artemisinin-based combination treatments (ACTs) offered promise,
but the market was slow to reach scale Picture credits to Roll Back
Malaria and PATH/Laura Newman
Slide 8
Mini Case Study: ACT Market Market Shortcomings Market
TraitStrengthNotes Affordable ACTs only cost generally $1.50 per
adult course However, ACT prices at retail ~10x those of
ineffective quinine- based products Available Multiple suppliers
(both originators and generics) competed in the market However,
arteminsin prices were extremely volatile, leading to cycles of
global product shortages and surpluses Assured Quality Products
generally considered very effective Appropriate Design Products
generally considered easy to use Accessible Public markets
Providers generally knew about benefits of ACTs Private markets
Consumers had little awareness of ACTs and their benefits versus
ineffective quinine-based remedies WEAK STRONG WEAK = Focus of
following slides STRONG
Slide 9
Mini Case Study: ACT Market Root Causes for Poor Availability
What would you do to address these root causes? Lopsided risk
allocation: -ACT manufacturers and artemisinin growers bore
disproportionate share for unsold inventories -Resulted in supplier
exits Information asymmetry between supply-side and demand-side
actors: -Buyers have more data on expected demand and donor budgets
-Long lead times for production and manufacturing ramp up
Artemisinin Price (US$/kg) ROOT CAUSES
Slide 10
Mini Case Study: ACT Market Assess Market Shaping Options
Potential options: Increase market information Consolidate demand
forecasting system and share with suppliers Increase supplier
incentives Make volume commitments to extractors and farmers to
ensure artemisinin supply Increase supplier incentives and balance
risks Create an artemisinin stockpile to smooth swings in supply
and demand
Slide 11
Mini Case Study: ACT Market Increase Information with Demand
Forecasting Increase Market Information: Consolidated and
publicized demand forecasting for ACTs Theory of Change Aggregate
data to create and disseminate a demand forecast Provides market
information for all actors May create incentives for suppliers
Benefits More accurate forecasts Higher demand predictability
Suppliers can better plan capacity to align with demand May
increase incentives for suppliers to enter or expand Drawbacks
Greater information alone does not address disproportionate risk
allocation Forecasting, especially long-term forecasting, may not
accurately predict actual demand Implementation Constraints
Information from key funders and countries Team with analytical
forecasting skills Commitment to maintain forecast
Slide 12
Next Session Room Numbers: Please fill out an evaluation by
going to this sessions page on your mobile app OR by filling out a
paper evaluation in the back of the room. Thank you! Integration of
Family Planning Services into MNCH Programming in Liberia301 The
Realities of Integration: NCDs and TB in Ethiopia (Continued)302
Integrating Family Planning with Obstetric Fistula Services:
Achieving Reproductive Intentions307 Operational Research Training
in the 21st Century308 Constant Contact: Reinforcing Provider
Training with Mobile Messages and Supervision in Ghana
(Continued)310 Indoor Residual Spraying: A Weapon in the Fight
Against Malaria311 Increasing District Level, Evidence-Based
Decision Making in Cote d'Ivoire405 Making Every Life Count:
Strengthening Civil Registration-Vital Statistics Systems407 How
Strengthening Medicines Regulatory Authorities Can Increase Access
to Medicines (Continued)413 Child TB: No More Crying, No More
Dying?414 Creating the Next Condom: TPPs for Next Generation
MPTsBetts Theatre Sustainable Health Gain from Smart Governance of
Hospitals and Health Systems Continental Ballroom Gender,
Medicines, and the Road to Equity #AreWeThereYet? Grand
Ballroom