Scandinavian Working Papers in Economics
DaCHE discussion papers,
University of Southern Denmark, Dache - Danish Centre for Health Economics
No 2013:8: Incentivising appropriate malaria treatment-seeking behaviour with price subsidies
Kristian Schultz Hansen (), Tine Hjernø Lesner () and Lars Peter Østerdal ()
Additional contact information
Kristian Schultz Hansen: Department of Global Health and Development, London School of Health and Tropical Medicine,, Postal: 15-17 Tavistock Place, London WC1H 9SH, UK
Tine Hjernø Lesner: COHERE, Department of Business and Economics, University of Southern Denmark, Postal: Campusvej 55, DK 5230 Odense M
Lars Peter Østerdal: COHERE, Department of Business and Economics, University of Southern Denmark, Postal: Campusvej 55, DK-5230 Odense M
Abstract: One of the most serious problems in the fight against malaria, especially in Africa, is the fact that many individuals suffering from malaria do not have easy access to effective antimalarials while at the same time a large proportion of people receiving antimalarials do not suffer from malaria. In order to improve access, a global price subsidy of 95% has been proposed for the most effective antimalarial, artemisininbased combination therapy (ACT). The objective of this proposal is to lower the consumer price on effective malaria medicine to increase access for, in particular, poor consumers. However, treatment of patients not suffering from malaria with antimalarials including ACTs has been proven widespread and a subsidy is likely to increase this overtreatment. This means waste of resources and will result in inflating the subsidy funds required. In addition, as has happened with older types of malaria medicine, treating nonmalarial fevers with malaria medicine may increase the risk of artemisinin resistance development. Diagnostic tests for malaria may have the potential for reducing overtreatment, but tests are expensive for the typical malaria treatmentseeking individual. In order to both increase access and reduce overtreatment we propose a subsidy on rapid diagnostic tests (RDTs) together with the ACT subsidy. The main objective of the paper is to investigate the optimal combination of subsidies that incentivises individuals suspecting themselves to have malaria to always test before buying an effective drug. We present a model that describes the health seeking behaviour of a representative individual using an expected utility framework. Based on numerical simulations of our model we find that a price reduction on RDTs is necessary to incentivise testing while at the same time, the subsidy on ACT can be lower than the proposed 95% without compromising access. The leastcost policy of the health policy maker is to subsidise both ACT and RDT, redirecting some of the subsidy money from ACT to RDT.
Keywords: Health and economic development; public health; medical subsidy programmes; malaria; drug resistance
32 pages, September 10, 2013
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