Price subsidies, diagnostic tests, and

targeting of Malaria treatment:

Evidence from a randomized controlled
trial.

by Jessica Cohen, Pascaline Dupas, and

Simone Schaner.

Paper presentation on HEALTH

by Angela Cerqua
RESEARCH QUESTIONS

Are these subsidies enough to

reduce malaria desease over the
country?

Subsidizing malaria rapid

diagnostic tests (RDTs) sold over-
the-counter alongside ACTs can
break the trade-off between
access and targeting?
 Malaria backgrounds
• Malaria causes 600000 deaths in Africa. Since ACTs are costly, they just give to children older antimalarials to
which parasite has gained resistance. For that some countries have a policy that provide ACTs for free for
who is tested positive in public health facilities based on symptomatic patients or based on blood slide tests.
Even if are free, some fees are taken for the diagnosis. But since the public health is not always open, some
people decide to treat with medication purchased at the drug shop (52%).

• Since drug shops have large share of the antimalarials market, they ask them to reduce the price and
increase the availability of the ACTs in the retail sector. The answer was the AMFm that reduce the price by
the 95% to the first line buyers.

• Conditional in being ill, children have more chance to have malaria. The malaria rate is 54% among those
under five years old, just 14% among those considered as “adults” meaning that age is a very important
predictor of malaria status.
 Theoretical framework
The focus is made on two related outcomes of the under/over treatment: the access and targeting.
Then:

The household can do three actions:

1. Seek diagnosis at a formal health facility (receiving ACTs if positive) a=h
2. Bypass the public health and buy ACTs at drug shops a=s
3. Purchase non-ACTs drugs/nothing a=n.

The household looking at the symptoms, assess the probability π that the illness is malaria. Assessing that this probability is
accurate, the expected value of taking a specific action from the three depends on this probability, denoted by
It can be written as

An individual will seek ACT treatment at the drug shop if

 Impact of an ACT Subsidy at the Drug Shop

A decrease on the retail sector will decrease the cost of

purchasing an ACTs at the drug shop, then purchasing at
drug shops will increase. The access increases, meaning that
malaria-negative illnesses screened already will now receive
ACTs at the drug shop. The increase in access always leads to
decrease in targeting.
The panel explain how a household’s treatment decision
depends on expected malaria positivity. Buying an ACTs is
preferred at higher malaria probabilities
and going to health center is better at intermediate malaria
probabilities
And taking some other action is preferred when the illness is
very unlikely to be malaria
Impact of adding an RDT Subsidy at the Drug Shop

Supposing someone can have diagnosis for

malaria at the drug shops for some cost. This
leads to different advantages
1. If the test is negative, the individual avoid
the need to pay for an antimalarial (when
the RDT has a price less than the
antimalarial).
2. If the test is positive, the individual will
be more likely to select an appropriate
medication.
 Study design, data, and empirical background

The experiment is done in Western Kenya between

May and December of 2009. The region is rural and
poor with individuals working in farmers. In the sample
are set four drug shops in four rural market centers. It
is implemented a survey at the end of which two
vouchers for ACTs and, if possible, two for RDTs. Of the
2928 households sampled during census, 2789 (95%)
were reached to the baseline survey. Given the
sampling frame, the 82% of the households
interviewed at baseline reported that they had
patronized our drug shop partner at least ones in the
past, 72% reported that this was the drug shop they
usually use.
The study also have two different randomization. The
first one with a “surprise RDT”. The second one in the
ACT+RDT area were assigned to one of the three RDT
subsidy level. The price variation of the RDT is given in
order to understand the willingness to pay.
Baseline characteristics of study sample
 Data

Three types of data are used in this analysis.

Administrative data: drug shop transactions
are captured the details of drug shop transactions.
Endline survey:
four months after the vouchers had been distributed is implemented a survey in which is asked to recall all illness episodes
as fewer, headache or nausea. The 95% of households reported at least one illness episode over the study.
Symptoms database:
Are observed actual malaria status constructing a predicted malaria positivity index for all illness episodes, based on
symptoms database collected for the study population. This data are collected one year after the study ended during home
visits unannounced. After the visit surveyors asked if anyone was feeling ill and if yes, they collected information on
symptoms and then tested the patient for malaria with an RDT. The predicted malaria positivity measure appears to be a
useful proxy for true malaria status: the correlation between predicted positivity and actual RDT test results in our
administrative drug shop data is 0.48
 Overall impacts on ACT access
This regression is used to explain
The first thing to note is the low rate of ACT access in the control
group: only 19 percent of illnesses were treated with ACTs. The
second thing to note is that all three subsidy levels lead to a large
and significant increase in ACT access, but the 80% subsidy increase
the likelihood that an illness is treated with an ACT by 16–23
percentage points. But this ACTs appear to go to patients who
otherwise would not have taken the drug. The increase in access to
ACTs from the drug shop does not change the access to ACTs from
the health center. Column 4 shows that all three ACT subsidy levels
yield comparable and large increases in treatment seeking at the
drug shop of 16–17 percentage points. In the presence of ACT
subsidies at drug shops, the fraction of households not seeking any
care decreases by 9–11 percentage points with no decrease in the
likelihood of getting a malaria test (column 7). It is observed that the
ACT subsidies substantially reduce the share of illness episodes
treated with antibiotics (column 8).
 Overall impact on ACTs targeting
To do this analysis can be used two type of data: drug shop data and
endline data
The following regression is used

Only 56 percent of patients taking ACTs obtained with a 92 percent

subsidy voucher tested malaria positive, leading to a decrease in
targeting. The two lower subsidy levels are associated with much higher
malaria positivity rates with 18–19 percentage points. Column 2
replicates the analysis using predicted positivity as an outcome. The
results are very similar, though the coefficients are smaller in
magnitude, since the predicted positivity is an imperfect proxy for actual
malaria status. Column 3 uses the endline data to explore overall ACT
targeting. Consistent with the drug shop redemption data, these results
indicate that higher prices increase positivity among ACT takers overall.
ACT subsidy level and targeting: mechanism

Lowering the subsidy level can change the composition of ACT takers.
Since higher prices could select different set of households into
treatment seeking at the drug shop and could lead to within-
household selection.

First a reallocation from more expensive ACT doses to less expensive

ones and a reallocation within age/dose category, to episodes most
likely to be malaria, a force present only if households were willing to
pay more to treat higher-probability malaria episodes.

These results in overall suggest that higher ACT prices (compared to

the original AMFm target prices) do not significantly reduce access
among those who need ACTs most, as the children, but dissuade low-
positivity adults from purchasing ACTs in the retail sector. Over
treatment remain an issue since even at the lowest ACT subsidy level,
25% of ACTs purchased at the drug shop go to malaria-negative
patients. For that reason access to malaria diagnostics should be
improved.
 Results: Impact of adding and RDT subsidy
Provider choice and diagnostic testing
This table estimates the impacts of the RDT subsidy on where
treatment is asked and whether a malaria test is taken with
this regression:

The first 3 columns of the table suggest no impact of the RDT

subsidy on where people seek treatment, without considering
the different subsidy level. But the results are insignificant. The
results suggest that individuals start to saw some value to
taking the test since the RDT subsidy increased the share of
illness episodes tested for malaria by 15-26 percentage points.
There are no changes on use of ACTs or antibiotics, meaning
that RDT does not have real effect on ACTs targeting.
 RDTs and targeting of retail sector subsidized ACTs

The attention is on the surprise-tested households offered subsidized ACT

vouchers and then on RDT supply impacts vouchers use and malaria
positivity conditional on the ACT subsidy level.

The panel A in column 1 shows that RDT subsidy has no significant impact
on the share of households using at least one between ACT or RDT voucher
at the drug shop, in column 2 the RDT subsidy has no impact on the share
of treatment seekers who are malaria positive and column 3 shows how
malaria positivity among patients who elect to take the ACT varies with the
RDT subsidy.
The panel B suggests some positive selection into treatment seeking under
the highest subsidy.

In the pooled specification is find that ACT takers are 8 percentage points
more likely to be malaria positive in the presence of a retail sector RDT
subsidy. In panel B RDTs appear to have the largest targeting benefits when
ACTs are subsidized the most, mostly driven by the positive selection into
the drug shop.
 Compliance with RDT results

The reasons why RDT subsidies have just moderate impacts on

targeting ACT subsidies in the data are that one-half of illness
episodes are among children that have high change of needing an
ACT anyway, so RDT can less improve targeting among them

Compliance with a negative result on the tests increases as the ACT

subsidy level decreases but less than one-half testing negative
choose to forgo the ACT. While the advice is to take an ACT
regardless the test result for patients of five/less and 49% of
patients over five still took an ACT when RDT is negative.

This is because microscopy have high rate of false negative and RDTs
less, but households need time to learn that. Another explanation
for the high ACT purchase rate after negative RDT result is the
hoarding. This could be true if vouchers could have an expire date,
but in practice this not seen common.
 Conclusion
Under-treatment is a public bad for any disease, since who is not treated increase the transmission rates.
Over-treatment is also a public bad when lead to inappropriate treatment for the true cause of illness and to
drug resistance.
The global health community is searching to reduce mortality for malaria giving access to effective treatment
and limiting also resistance to the newest generation of antimalarials, the ACTs. The public sector subsidy for
ACTs falls far short of the goal to guarantee access to those most vulnerable to malaria. The demand for ACTs
appears very low at unsubsidized prices, but inelastic over a range of subsidized prices.
These results suggest that retail sector subsidies for ACTs are needed to increase ACT access to rural, poor
population, but these subsidies may not need to be as large as initially planned by the donor community.

We have three unknown:

1.The true underlying cause of an illness episode
2. The relative efficacy of ACTs compared to other
treatments/no one if sick
3. The accuracy of diagnostic tests
Do not hesitate to ask me any questions
and thank you for your attention!