Red tape slows initiatives against disease

Richard Tren & Philip Coticelli | 25 Apr 2007
Business Day (South Africa)

Malaria kills more African children than any other disease. Today marks Africa Malaria Day — to raise public awareness of malaria, commemorate lives lost and gauge progress against the disease. Many African countries are developing indoor residual spraying programmes, some with DDT, a highly effective and safe insecticide. Insecticide-treated mosquito net distribution, however, continues to dominate efforts. Our analysis shows that slow approvals for new net technologies have limited competition and wasted public funds for malaria control. Qualified cost-effective alternatives exist and competition should be encouraged.

Hung properly and used every night, nets can protect people from mosquitoes that carry malaria. Long-lasting insecticidal nets (LNs) are expected to remain effective for several years. The Roll Back Malaria (RBM) Partnership and its constituent foreign donors adopted LNs as a priority intervention against malaria and in 2004 urged various companies to develop new LNs.

To establish guidelines for safety and efficacy, the World Health Organisation Pesticide Evaluation Scheme (Whopes) reviews and recommends new LN technologies.

Successful companies aggressively market a Whopes recommendation. It has become a "gold standard" because donors purchase Whopes-recommended LNs.

Between 2001 and last year, only two products received a Whopes recommendation, creating an effective duopoly. Between 2004 and last year, Vestergaard-Frandsen and Sumitomo Chemical were awarded the vast majority of government contracts for net distribution. Sumitomo sold about 30-million Olysets, and Vestergaard sold more than 100-million PermaNets. Vestergaard manufactures 75% of all available LNs and maintains 60% of global production capacity. Nearly all (95%) of its business comes from government contracts.

Due to limited test centre capacity and infrequent meetings, new net reviews take more than two years on average. During this time, LN developers pay for Whopes testing and other independent evaluations and production costs, but cannot compete for contracts specifying Whopes recommendation. As a result, Whopes delays in approving new net technologies have unintentionally restricted competition, limited product options and kept prices and distribution costs high.

The President's Malaria Initiative, run by the US government, recently bucked the system. In January it signed a contract with a non-Whopes approved LN producer, Tana Netting, to deliver its Dawa Plus net to districts in Uganda for $4,93. This cost is on average about 50% lower than what Unicef charges to procure and deliver PermaNets and Olysets. Independent studies confirm that Dawa Plus nets are safe and effective, and so the President's Malaria Initiative should be commended for encouraging competition. New private initiatives such as Malaria No More have fund-raised for LNs but opted to buy only Whopes-recommended LNs through Unicef, costing them on average $8 per net delivered. This is a waste. They should instead source qualified new products.

They should not, however, expect existing suppliers to appreciate competition. Insiders told us that Mikkel Vestergaard-Frandsen, the company's CEO, flew to Washington to protest about the contract with Tana Netting and convince senior personnel to choose PermaNet instead. His efforts that day failed, but his tactics have long paid off. Since Whopes recommended PermaNet in 2004, governments without regulatory capacity for LNs have increasingly specified "Whopes recommendation" in their tenders. This is understandable, but many have incomprehensibly outlined the precise specifications for PermaNets.

One supposedly competitive public tender published in the Kenyan Daily Nation last year specified "PermaNet 2, Polyester net treated with deltamethrin". Competitors protested and the tender was republished but the contract inevitably went to Vestergaard.

Open competition is the best remedy for high prices and limited choice, as is evident in the provision of antimalarial treatments. Malaria treatment guidelines call for new Artemesinin-based combination therapies (ACTs) and there are now an increasing number of manufacturers bringing new products to the market at lower cost. For several years, the Swiss drug company Novartis dominated the market with its ACT, Coartem. However the company never enforced its patent and provides Coartem at zero profit through the World Health Organisation (WHO) and has its accounts independently audited to prove this.

Given the lack of competition in the LN market, the incumbents could take a leaf out of Novartis's book and open themselves up for an independent audit. This would help taxpayers to better understand how their money is being spent in the fight against malaria.

Tens of millions of dollars have been invested in developing effective alternative LNs. NetMark, a USAid partnership for commercial net development, provided seed funding to new producers, but has been frustrated by the World Bank, Global Fund, Red Cross and other RBM partners' adoption of policies to only buy Whopes-recommended LNs.

Kept out of contracts and unable to sell nets, some companies are likely to shut down this year, threatening jobs in low-income countries and potentially denying African children new LNs. The WHO and RBM partners have urged these companies on since 2004, and they must act now to let them compete.

?Tren is director and Coticelli is research and communications manager for Africa Fighting Malaria. Coticelli is the author of Whopes and Its Impact on Long-lasting Insecticidal Net Availability.

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