Innovative Financing for Malaria - AFM's take on the Malaria Bond

14 Mar 2024
Africa Fighting Malaria During the last Roll Back Malaria Partnership Board meeting, the Board acknowledged the Malaria Bond Business Plan developed by the Task Force on Innovative Financing and endorsed the next phase, including outreach to key stakeholders. The basic idea of the malaria bond is to provide an alternative funding mechanism for malaria control programs.

Here is how it would work: An investor buys a malaria bond; the issuing agency transfers part of the capital to an implementing organization; the implementing organization invests in a malaria initiative; the initiative is evaluated to establish the success; the donor pays the issuing agency if the initiative is successful; the issuing agency repays the investor and the second tranche to the implementing organization if the initiative is successful.

AFM commends the malaria community for coming up with an innovative financing scheme to sustain malaria control. Previously all the 'innovative' ideas were simply attempts to find new things to tax. Taxes, which have been around since the days of the Pharaohs, are hardly innovative. A malaria bond, the process of which is described above, may hold some promise, but we have some serious concerns about the current proposal.

It isn't fully clear to us why a private entity or a donor agency would 'invest' in the malaria bond, taking on risk, rather than just funding malaria interventions as they traditionally have. Aside from losing future funding, it isn't clear that the issuing agency and implementers take on sufficient risk. When one considers the considerable problems in measuring success in malaria control, how could an investor be confident that a goal has been achieved?

Success against malaria in recent years has been achieved thanks to a comprehensive approach that includes LLINs, indoor residual spraying (IRS) as well as improved diagnosis and treatment. Yet regrettably the bond proposal attempts to turn the clock back in time to the days when donors would fund bednets, and bednets alone.

While it has been stated that the malaria bond could be used for other commodities such as those relating to IRS, ACTs and RDTs, according to the current proposal, it appears the deck is stacked in favor of LLINs.

In the Malaria Bond Business Plan, LLINs scored the highest among three key principles used to identify a suitable commodity. The principles include:
1) Interest of donors and investors for the commodity
2) Applicability and relevance of the intervention to the malaria situation and availability of implementers that can carry the risk and are willing to participate
3) Possibility to be measured by indicators

For principle 1, IRS, LLINs and RDT/ACTs scored a high for interest of donors as "different donors have different preferences and strategic priorities, but all interventions have general donor support;" however, IRS scored a medium-low for interest of investors "following negative attitudes towards spraying (linked to DDT controversy)," while LLINs scored a high "from the public for bed-nets following intense media campaigns." For principle 3, IRS scored a medium-low because "it is difficult to objectively (re-)validate the numbers of houses sprayed, and the diligence of the spraying activities," and LLINs scored a medium-high because "the distribution and usage of LLIN interventions can be adequately measured, with the possibility of revalidation."

Making these statements on IRS requires either breathtaking ignorance or a ruthless and cynical disregard of the growing evidence in favor of IRS. Consider that under the PMI, house spray rates in the IRS program routinely reach over 90%. The acceptance of IRS in communities is in fact very high, often far higher than the acceptance and actual use of bednets. It is true that some donors have not funded IRS and Global Fund allocations for IRS has been around $100million compared to around $1billion for bednets. However where IRS has been supported, the results have been very impressive. The fact that some donors have only supported LLINs is hardly an argument against using malaria bond money for IRS, in fact quite the reverse, it is a very good argument to use these new innovative funds to support an intervention that has been severely underfunded for far too long.

For the authors of the Malaria Bond Business Plan to attempt to discredit IRS by linking it to controversy over DDT is not only mischievous, but ignores the fact that DDT remains highly effective and favored by several Ministers of Health and their program officers. It also ignores the fact that during the 5th Conference of Parties to the Stockholm Convention, almost every African country as well as India voted to protect DDT for malaria control and against any deadline for its phase out. It seems the 'controversy' is only in the minds and hearts of individuals and organizations that seek controversy.

Consider also that verifying that houses have been sprayed can be done relatively easily using sampling and chemical analysis. Also, once a house is sprayed, there is no behavior change necessary - unlike with LLINs, where residents must use a net every night. Numerous studies have shown that compliance with LLINs is worryingly low. Indeed it is probably much harder to verify whether someone is actually sleeping under a net, as usually researchers simply have to take their word for it.

In addition, according to the Malaria Bond Business Plan, indicators will be used to measure the success of funded interventions. However, the plan states that "impact indicators such as mortality and morbidity take time to manifest, and may require more expensive data collection and analysis...indicators for commodity supply are promising, as they are easily measurable and verifiable, are less influenced by external events, and are easily understood by the general public and investors." Once again, it seems there will be more focus on commodity distribution as opposed to actual impact on disease. In what other sphere would it be acceptable to use orders of commodities that may or may not be distributed and may or may not be used as some sort of indicator of success?

The Report of the Taskforce on Innovative Financing states monitoring and evaluation will most likely be carried out by a third party in one of two ways. The first involves the implementing organization collecting and analyzing data with a third party validating the results. In circumstances where the implementer is identical to the manufacturer, this means that the manufacturer sells the product, distributes the product and then checks that the product and its distribution are in order. This could lead to biased results to say the least. The RBM Partnership has come under criticism for its close links with the private sector in the past. Self-serving private agendas should not determine public health policy or financing.

Perhaps this malaria bond would be most suited to investment in new tools for malaria control or treatment where there is a specific investment to be made, risk to be taken on, and a tangible product whose efficacy and usefulness can be independently measured. A malaria bond for new public health insecticides for instance might be an interesting idea.

AFM recently published a paper on the Affordable Medicines Facility malaria (AMFm) and exposed the woeful way in which this drug subsidy - another innovative financing mechanism - has wasted public funds and has probably worsened the treatment of malaria in Africa. The malaria community should therefore view new 'innovations' with added skepticism and caution. As AFM has long maintained, we need more money for malaria control, but more money spent badly can be far worse than less money spent judiciously and in a carefully and independently measured way.