Economic Growth

This is how markets have improved global health

This article is published in collaboration with The Bill & Melinda Gates Foundation.
A team from UNICEF (Ivory Coast) vaccinates children against polio at St. Ambrose church in Angree, Abidjan March 9, 2011, a temporary refuge for people fleeing from clashes between forces loyal to incumbent leader Laurent Gbagbo and his rival Alassane Ouattara.

When commodity and other health markets function smoothly and work in favor of the poor, we have seen dramatic changes in product access. Image: REUTERS/Thierry Gouegnon

Susan Nazzaro
Senior Program Officer, Bill & Melinda Gates Foundation
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Future of Global Health and Healthcare

We are on the edge of an unprecedented achievement in global health: we may live to see a world where a child born in sub-Saharan Africa has the same life expectancy as a child born in the US or Europe. Pause and consider what a huge success this is. For most of our lives and the lives of generations before us, where you were born was the single biggest determinant of the length of your life. In the span of our lifetimes and if current trends continue, that may no longer be the case.[1]

This remarkable change has come about thanks to an array of factors, not the least of them increases in access to health products. One of the central needs for any functioning health system is availability of medicines and other health products. Systems that suffer from stock-outs, low quality products, prices too high for patients, or slow access to the best products on the market will see poor outcomes in the health of poor and vulnerable populations. On the other hand, when commodity and other health markets function smoothly and work in favor of the poor, we have seen dramatic changes in product access and ultimately the health status of the poorest and most vulnerable populations in the world.

These changes have been realized by partnerships that have been forged due to common goals, persistence, and a relentless creativity that has changed how markets work for diseases that primarily affect the poor. In over ten years of working on global health markets, it is inspiring for the foundation to look back at the incredible success of our partners and peers.

The Clinton Health Access Initiative (CHAI) tackled a problem that at the time was seen as impossible by many fighting the HIV epidemic – make the newest HIV medicines affordable to patients in sub-Saharan Africa which was being devastated by the disease. Through a combination of encouraging generic companies to enter the market, lower pricing of inputs needed to make the medicines, and improved process chemistry, CHAI played a key role in contributing in bringing prices for a key HIV medicine – tenofovir – down from over $200 to $54 over a 7 year period. This is only one example; CHAI’s work on multiple HIV medicines has reduced prices and increased access across the board, making health markets more reliable and predictable and thus enabling ongoing innovation.

Another challenge successfully addressed by global health partners dealt with access to medicines for children with HIV. UNITAID – a funding partnership between France, Brazil, Chile, the UK, Norway, and communities living with the diseases (among others) - saw markets failing sick kids. They intervened – in partnership with CHAI – to systematically uncover the root causes of and solve the market failure leading to low access. Foul-tasting syrups, small uncoordinated orders to multiple manufacturers, and low diagnosis were hindering access to medicines, meaning most HIV-positive children died before their first birthday. UNITAID and CHAI worked to consolidate orders around improved formulations for children and increase access to early infant diagnosis. As a result, a UNITAID investment of $4.1MM between 2006 and 2014 resulted in over 500,000 children being put on treatment.

Markets can also fail when information about quality is not clear or thorough. For years, long-lasting insecticide bednets used to prevent malaria have been tested for the quality of the insecticide, but not as rigorously for the durability of the netting fabric. A partnership between the World Health Organization (WHO), Results for Development (R4D), and textile experts has developed a new set of durability tests that will give users a better picture of how long their net should last, and help funders know which are the highest value nets to buy. The R4D analysis also showed that consolidating volumes around standard size nets and reducing purchasing of extra-large nets could drive savings. The Global Fund to Fight AIDS, TB, and Malaria adopted this recommendation and were able to save approximately $30 million in a single procurement, allowing malaria program leaders in Uganda and Tanzania to cover more children with bednets and prevent more malaria.

In many cases, markets don’t work because they are opaque; access to information can improve access and pricing. Coordinated demand forecasting and sharing that data with manufacturers has now happened across multiple product areas. A consortium of partners worked together in malaria to share forecasts for malaria drugs which have helped suppliers plan production to prepare for increasing volumes of orders. This approach has been taken up by the family planning community, where the Coordinated Supply Planning group has been coordinating forecasts on injectable contraceptives and implants, as well as coordinating shipments of contraceptive implants to minimize stock-outs. Information on where people seek treatment has also been transformational. Population Services international (PSI) has managed ACTWatch, a program that has shed light on where malaria patients seek treatment. This data has informed multiple investments, including the Affordable Medicines Facility - funded by the Global Fund, UNITAID, the UK, and the foundation- that drastically increased access to medicines in countries that have a high burden of malaria. PSI has expanded this work to family planning, and hope to use data on where women seek contraceptives to help the global community achieve ambitious targets for reaching new users of modern contraception by 2020.

Markets are complex and dynamic structures. Their functioning well underlines all that we are aiming to do to increase access to health products and ultimately reach a great convergence in child mortality. As a result, we must make markets work for the poor. There is no one silver bullet to fix failing markets or increase access; each market is different, requiring deep understanding and tailored solutions. That said, in the past decade we have seen incredible progress in access due to a market dynamics approach that is nuanced and goes beyond a sole focus on price reductions to supply chains, process chemistry, procurement strategy, information, and strong forecasts. But most of all it relies on the creative energy and action of groups working together across the globe to harness the power of markets to serve the most vulnerable.

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