THE ARTEMISININ ENTERPRISE - GHDonline

Funding Artemisinin and ACTs
The majority of ACT procurement has been financed by international donors with minimal
financing (purchase) by the private sector due to the relatively high price of ACTs vis‐à‐vis
the more commonly used monotherapies ‐ CQ and SP. The three major funders of ACTs are
Global Fund, World Bank and US Presidentʹs Malaria Initiative (PMI), which have jointly
funded the procurement of over 200 million treatments since 2005.
In 2004, the Institute of Medicine published a report § that proposed a new funding
mechanism to finance the procurement of ACTs. The Affordable Medicines Facility for
malaria (AMFm) will subsidize the cost of the ACTs by providing a co‐payment to
manufacturers for every treatment they sell such that the cost to the first‐line buyer incountry
is around US$0.10 cents per treatment, resulting in a cost to the patient that is
roughly the same as the cost of CQ and SP. This mechanism of subsidy would make ACTs
far more affordable for patients, and so is expected to drive out counterfeit and substandard
ACTs as well as artemisinin monotherapies. The AMFm will be launched in 2009 with
Phase 1 being implemented in 11 countries with a total ACT budget of approximately
US$ 225M ** . The AMFm is expected to fund majority of additional procurement of ACTs,
and over the next few years could become the largest funder of ACTs.
Although a mechanism for subsidizing ACTs exists, there is no such co‐payment or
ʺadvance market commitmentʺ mechanism for payment to extractors and farmers. It is
expected (or even hoped) that market mechanisms and contracts between ACTs
manufacturers and extractors/farmers will ensure continued and uninterrupted supply of
artemisinin. Based on discussions during the AE Conference, the extractors highlighted
their concern that the current market environment of unpredictable demand, potential entry
of new technology, sudden drop in prices and competing agricultural products has started
to erode the number of farmers and extractors; and unless the global community intervenes
rapidly, the next planting season could result in drastic reduction in artemisinin leading to a
severe shortfall of ACTs in 2010. This concern is re‐visited in the sections under ʺImpactʺ
and ʺRecommendationsʺ.
§
ʺSaving Lives, Buying Timeʺ, Institute of Medicine. Washington, 2004
**
McKinsey analysis for UNITAID
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