The private commercial sector distribution chain for antimalarial drugs in Cambodia - Findings from a rapid survey

In November 2008, the Global Fund to Fight AIDS, Tuberculosis and Malaria launched the first phase of a new global subsidy on ACT, known as the Affordable Medicines Facility‐malaria (AMFm). The primary objectives of the AMFm are: 1) To make ACT available and affordable to all patients through both the public and private sectors, and   2) To delay the onset of artemisinin resistance by displacing artemisinin monotherapies from the market. Through a co‐payment applied at the manufacturer level, the AMFm will enable public and private (both for profit and not‐for‐profit) suppliers in approved countries to purchase high‐quality ACTs at a fraction of current prices. As a result, it is expected that ACT will be sold through private shops at a price similar to that of older and less effective drugs, thereby dramatically increasing patients’ capacity to purchase and use ACT.   The AMFm has been designed to ensure that primary suppliers – who operate at the top of the distribution chain and are the first point of entry for drugs into the country  ‐  maintain any pre‐ existing purchasing relationships with manufacturers, and to minimize disruption to the operation of the distribution chain. Gaining a comprehensive understanding of public and private sector ACT distribution channels is therefore needed to ensure successful implementation of the AMFm, and ultimately to maximize ACT access in each country. Cambodia is one of the 11 countries eligible to apply for the first phase of the AMFm that will operate for 18 months. The AMFm country application form requests a description of the current distribution chain for antimalarials across the public and private sectors. The description will serve as a key input into the selection and design of supporting interventions to ensure safe and effective distribution of co‐paid ACTs under the AMFm.  While there is information available on the public and NGO distribution chains, little is currently known and understood about the actors and operations of the private commercial sector distribution chain.   The objective of the rapid distribution chain survey was therefore to assist Cambodia in the development of an effective AMFm implementation plan, by providing an understanding of the current private commercial sector distribution chain for antimalarials. This report presents the findings of a series of semi‐structured interviews conducted with government officials and private importers and wholesalers of malaria treatment.   Four private commercial importers were identified to regularly serve the private commercial sector distribution chain for malaria treatment.   There was some indication that their number may have been higher, notably from looking at the range of antimalarial drugs available in the retail market.  In Cambodia, there is no legal distinction between retail and wholesale pharmacies and a total of 1213 businesses are registered to stock pharmaceutical drugs in general. Estimates of the number of wholesale pharmacies operating in the distribution chain for malaria treatment were not available at II the time of this rapid survey, a knowledge gap that will be addressed by the ACTwatch Supply Chain Study report which is due at the beginning of 2010. In the relatively highly concentrated import market for malaria treatment, each company supplied most provinces, with wide‐reaching and well‐organised distribution and promotion systems. In the capital city, wholesalers always purchased antimalarials from local importers and in turn also served the provincial market.    Wholesale suppliers reported applying between 3% and 45% mark‐up, with importers adding somewhat higher markups than wholesalers in the capital city or provincial towns. This situation might have reflected their limited number as well as the relatively higher distribution and promotion costs they reported facing. Yet in the retail sector where more numerous medicines sellers are expected to operate, mark ups could be higher, ranging from 26% to 88%.   Uptake of co‐paid ACT was discussed with respondents who all welcomed the AMFm initiative. Barriers to the distribution of ACT have also been identified, mainly around the regulatory environment, the costs of distributing and promoting antimalarials and the risk associated with entering a relatively small and concentrated antimalarial market reported to be, in some instances, dominated by cheaper substandard or counterfeit drugs.