report to: sunmap commercial sector team rdt...

RDT Feasibility Study in Nigeria 21 March 2014

Report to:

SuNMaP Commercial Sector Team

RDT Subsidy Feasibility Study in Nigeria

(Assignment code)

Submitted by: Montrose Lead Writer: Melanie NewmanReviewed by: Rubaiyath Sarwar, Helena Vidalic

21 March 2014


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The Support to National Malaria Programme (SuNMaP) is funded and supported by the UK Department for International Development.

It is implemented through a partnership of international and national companies and

non-governmental organisations led by Malaria Consortium.

John Hopkins Bloomberg School of Public Health – Centre for Communication Programs (Nigeria) (JHU-CCP(N))

Health Reform Foundation of Nigeria (HERFON)

Federation of Muslim Women’s Associations of Nigeria (FOMWAN)

Christian Health Association of Nigeria (CHAN)

CHAN-Medi-Pharm

Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMG-MAN)

University of Nigeria, Enugu Campus

GRID Consulting, Nigeria


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Contents

Section Page No.

Section 1 Title Page 1

Table of Contents 3

Abbreviations and Acronyms 4

Acknowledgements 5

Section 2

Executive Summary (summary of findings and recommendations)

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Section 3

3.1 Background & Introduction 8

3.2 Context and Rationale 9

3.3 Approach and Methodology 9

3.4 Key Findings and Analysis 10

3.5 Key Factors for RDT Subsidy, Design, Implementation, and Exit Strategy

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4.0 Conclusions 23

5.0 Recommendations and Next Steps 25

6.0 Other Emerging Issues 28

Section 4 Annexes: Annex 1 Terms of Reference Annex 2 Work plan and list of persons met Annex 3 Operationalising the RDT Subsidy model

30 36 38


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Abbreviations and Acronyms

ACT Artemisinin Combined Therapy

AGPMPN Association of General and Private Medical Practitioners of Nigeria

AMFm Affordable Medicine Facility - malaria

AMLSN Association of Medical Laboratory Scientists of Nigeria

BCC Behaviour Change Communications

DfID Department for International Development (UKAid)

LLIN Long Lasting Insecticidal Treated Net

MC Malaria Consortium

MLSCN Medical Laboratory Scientist Council of Nigeria

MSO Market Support Officer

NAFDAC National Agency for Food and Drug Administration and Control

NMEP National Malaria Elimination Programme

POS Point of Sale

PPMV Proprietary and Patent Medicine Vendor

PSI Population Services International

SuNMaP Support to the National Malaria Programme

QARDT Quality-Assured Rapid Diagnostic Test


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Acknowledgements

Montrose would like to acknowledge and extend their appreciation to the SuNMaP project team, its partners and the broader community of stakeholders who all openly agreed to meetings and to share information by way of contribution to this study.

The contents of this report are the sole responsibility of its authors and do not necessarily reflect the views of the Partnership managing SuNMaP or the UK Department for International Development.


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SECTION 2

EXECUTIVE SUMMARY

The Support to the National Malaria Programme (SuNMaP) is a UKAid-funded project which directly supports the goals of the National Malaria Elimination Programme (NMEP) to strengthen national systems in the prevention, care and treatment of malaria. The project, which was extended in 2013 for two years through to 2015, incorporates an experimental commercial sector component, which focuses on building commercially-driven supply of long-lasting insecticidal nets (LLIN), rapid diagnostic test kits (RDT) and Artemisin combined therapy (ACT) – considered the three pillars for effectively controlling malaria. The Commercial Sector Support Strategy embraces the Making Markets Work for the Poor (M4P) approach to carry out targeted interventions to develop and strengthen commercial sector channels for the manufacture, importation, sale and distribution of these commodities.

Specific to RDT, the commercial market is hugely underdeveloped, making it difficult for SuNMaP to incentivize the promotion, sale and distribution of RDT through commercial channels. The project is thus considering use of a ‘smart’ subsidy, which will help bridge the gap between supply and demand by addressing affordability (bringing the price of RDT right down), accessibility (working with suppliers to strengthen their business capacities in the commercial sale and distribution of quality-assured RDT), and knowledge (supporting awareness raising, information and uptake of RDT across end providers and consumers).

The purpose of the feasibility study was to determine the best way to introduce a subsidy, which will help drive demand for quality-assured RDTs by reducing the end retail cost of the product, and ensuring it is priced more competitively in relation to the retail price for ACT. The subsidy should also stimulate supplier interest in market-led sale and distribution of quality-assured RDT.

The team Making the Market Work for the Poor (M4P) expert led the study and worked with various members of the Commercial Sector team to gather information from the field. This was done primarily through interviews with the Commercial Sector team field staff, and visits to actual and potential partners (as indicated in the work plan in Annex 2). Discussions with potential partners focused on assessing levels of interest for participating in a subsidy scheme, understanding of the concept, and operational capacities. This report presents the findings, conclusions, recommendations and next steps with respect to the project’s interests to explore the feasibility of introducing such a subsidy.

Findings and Conclusions

The project does not have a wide selection of partners to choose from, and strict application of DfID’s procurement policy would restrict the project to one partner option only, which is Codixpharma. However, to achieve desired momentum and scale more than one partner is desirable. Furthermore, end provider and end consumer awareness, information and confidence levels in RDT as a diagnostic test for malaria are very low. The project would need to heavily front-load these activities to ensure demand creation is gaining traction as the RDT subsidy is introduced.

Whilst an RDT subsidy could potentially address constraints linked with affordability, accessibility and knowledge, it will not directly address current policy and regulatory constraints such as the ban on


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Proprietary and Patent Medicine Vendors (PPMVs) administering RDT; so separate interventions will need to be implemented to address key constraints in the area of policy and regulation.

Ultimately, the project (or its supplier partners) will not be able to dictate end provider pricing, but partners can work together to introduce mechanisms that can help prevent supply chain actors profiteering from the subsidy. A subsidy scheme needs to be positioned within a robust strategic framework; the Commercial Sector team will need to urgently address gaps and/or weaknesses in its RDT intervention strategies to ensure adequate support for supply chain strengthening and demand creation. In particular, the project needs to articulate its strategy of bundling RDT with ACT and agreeing with partners how this will work in practice, and how it will work with the PSI/MC UNITAID project, which plans to introduce a manufacturer subsidy.

Finally, the project should not underestimate the time and resources needed to effectively manage and monitor the scheme, and to track and account for the use of subsidy funds in collaboration with partners. The project team itself has to be sure it has adequate personnel and resources in place to manage a subsidy scheme, as it will require ramping up of project technical support and field monitoring. The team should also be realistic in what can be achieved in the remaining lifetime of the project with respect to impacting partners’ capacities, behaviours, and market systems.

Recommendations and Next Steps

The following recommendations and next steps are proposed for the project team:

1. Define the strategic framework and bolster support for RDT interventions, and a subsidy scheme in particular.

Assuming the project opts to launch an RDT subsidy scheme the following recommendations for action are proposed:

2. Map out a critical action plan. 3. Develop comprehensive partnership agreements. 4. Develop detailed budgets and costings for partners and for the overall subsidy scheme. 5. Heavily front-load capacity building and demand creation activities. 6. Link back RDT interventions to M&E requirements.


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SECTION 3 3.1 Background & Introduction Though preventable, malaria remains one of the major public health problems in Nigeria. The country bears up to 25 per cent of the malarial disease burden in Africa, and accounted for over 40% of the estimated total of malaria cases and deaths globally in 2010 (WHO, 2012). While everyone is at risk, some categories of people are at the highest risk of infection. These include children aged less than five years, pregnant women, visitors from non-malaria regions, people living with HIV, and those with sickle cell anaemia. Malaria overburdens the already weakened health system and has been reported to contribute to 60 per cent of outpatient visits and 30 per cent of hospitalisations among children under five years old (MIS, 2010).

The Support to National Malaria Programme (SuNMaP) is a UKAid Department for International Development (DFID) funded programme in Nigeria, which provides support to the National Malaria Elimination Programme1 (NMEP) and participating States to deliver quality malaria control services (both prevention and treatment), while putting in place systems to ensure sustainability through a number of initiatives, which include behavioural change communication, net campaigns, as well as sustained advocacy and public enlightenment on measures for malaria prevention and treatment. The focus of SuNMaP’s malaria control initiative is supporting both public and private sector to reach the entire population - especially the poor and vulnerable - with different interventions aimed at building capacity and strengthening service delivery to reduce the burden of malaria. Given current high demands on Federal- and State-level health budgets, and on-going reliance on donor support, SuNMaP specifically incorporated an experiential project component, which focuses on the development of the private sector LLIN, ACT and RDT markets. The Commercial Sector Support Strategy embraces the Making Markets Work for the Poor (M4P) approach to carry out targeted interventions to develop and strengthen commercial sector channels for the manufacture, importation, sale and distribution of LLIN, RDT and ACT. Montrose, in partnership with Innovision, has been providing technical and advisory support as the Market Development Partner to SuNMaP Commercial Sector Component since 2011. SuNMaP, including the Commercial Sector component, was recently extended through until August 2015.

The presumptive treatment of suspected symptoms of malaria and consumption of mono-therapies is high among most households in Nigeria. One of the goals of Nigeria’s anti-malaria treatment policy is to encourage rational drug use to prevent or delay the development of antimalarial drug resistance. This can only be achieved through confirming all presumed malaria cases through either microscopic examination of blood smear - which remains the gold standard in malaria diagnosis - or use of a quality-assured rapid diagnostic test (QARDT) kit, and treating all confirmed cases of malaria with Artemisinin Combination Therapy (ACT) drugs as opposed to mono-therapies. Access and demand for diagnosis for all suspected malaria cases before treatment will foster proper malaria case management, which will in turn reduce the huge resources wasted on presumptive treatment by households and public sector health facilities in Nigeria, and will pre-empt potential wastage in the private sector.

This report presents the findings, recommendations and next steps with respect to SuNMaP Commercial Sector’s interests to explore the feasibility of introducing a subsidy on RDTs sold commercially. The Terms of Reference (TOR) for the assignment are contained in Annex 1. The context and rationale for 1 Formally called the National Malaria Control Programme.


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applying an RDT subsidy are presented in section 3.2 below. The key findings and analysis are presented in section 3.4, key factors for consideration in section 3.5, with concluding remarks and recommendations and next steps in sections 3.6 and 3.7 respectively. 3.2 Context and Rationale for an RDT Subsidy The commercial market for RDT is hugely underdeveloped (see section 3.4.1 for an overview of the RDT market and commercial sector constraints) and makes it difficult for SuNMaP to incentivise the promotion, sale and distribution of RDT through commercial channels. The project is thus considering use of a ‘smart’ subsidy, which will ‘kick start’ demand by driving the commercial sale and distribution of quality-assured RDTs. It is envisaged that positioning of the RDT subsidy would incentivise the supply side – so RDT importers and distributors market RDT through commercial channels, and the demand side - so those suspecting malaria make use of RDT before undergoing treatment for malaria.

However, positioning the subsidy – deciding how much, for whom, for how long, and most critically the exit strategy for withdrawing what should be a time-bound intervention - requires sound understanding of the market dynamics, the players, and the anticipated outcomes. There will also likely to be other related input costs to factor in, including training, product marketing, and promotional incentives. Moreover, operationalizing and managing a discount once it is in the market place, including how results will be monitored, monitoring for and managing unintended outcomes, and ensuring transparency and accurate reconciliation of the funds used, are also key to successful implementation. It will also be important for the Commercial Sector team to have clear strategies for buy-in and engagement of key regulatory authorities, and industry representatives that oversee the use of testing kits, drugs and medical practices.

3.3 Approach and Methodology The purpose of the feasibility study was to determine the best way to introduce a subsidy, which will help drive demand for quality-assured RDTs by reducing the end retail cost of the product, and ensuring it is priced more competitively in relation to the retail price for ACT. The subsidy should also stimulate supplier interest in market-led sale and distribution of quality-assured RDT.

The study investigated the capacity of SuNMaP to monitor the distribution and use of subsidised RDT through commercial channels so that potential leaks and misuse of the subsidy fund by commercial sector partner(s) could be averted. The study also produced a preliminary assessment of the capacity of the commercial sector distributors and importers of WHOPES, and/or NAFDAC certified RDT, to operate and comply with a subsidy scheme.

Lastly, the study draws conclusions on how the subsidy scheme could address the constraints related affordability, accessibility, knowledge and policy and regulations of RDT supply through commercial channels. In addition, it will provide further situational analysis for SuNMaP as it defines the systemic outcomes in the market once the subsidy is withdrawn.

The M4P expert led the study and worked with various members of the Commercial Sector team to gather information from the field. This was done primarily through interviews with the Commercial Sector team field staff, and visits to actual and potential partners (as indicated in the work plan in Annex 2). Discussions with potential partners focused on assessing levels of interest for participating in a subsidy scheme, understanding of the concept, and operational capacities.


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The feasibility study was conducted in three short consecutive phases:

1. Phase One: • preparation of a feasibility study plan, and draft work plan; • internal review and agreement of plans, including team members’ participation and support

needs (preparing, during and post-study) and logistical movements; • internal review of relevant documentation;

2. Phase Two: • field visits to discuss and negotiate options with potential commercial sector partners; • team sessions to brainstorm the design, operationalization, and exit strategy for the

intervention; • preparation of draft design and implementation plan, including draft partner contract

agreements (.i.e. scope, performance monitoring and enforcement);

3. Phase Three: • Production and submission of a draft final report on feasibility of RDT subsidy, including core

design elements for review and feedback; • production of final report on feasibility of RDT subsidy design document, including core

design elements. The detailed work plan for the assignment, including a list of firms and people consulted is contained in Annex 2. 3.4 Key Findings and Analysis 3.4.1 Overview of the RDT Market and Commercial Sector Constraints Several early-stage, as well as more recent market, analyses have highlighted many of the key constraints that undermine RDT market development on both the supply and demand sides. These major constraints are summarised below.

Affordability: There are links between affordability and uptake of ACT and RDT: although there is a general willingness among consumers aware of RDT to pay for a test, the wide-scale availability and relatively cheap price of ACT (due to the Affordable Medicine Facility subsidy (AMFm on ACT) may be a hindrance to promoting and encouraging uptake of RDT across consumers, and poor consumers in particular. The most popular ACT brands are being sold in the range of between N 200 and N 300; whereas RDT is currently offered for the price of between N 250 and N 600. This real or perceived high cost of testing before treatment could be prohibitive in wide-scale adoption of RDT; in many cases, given the current price of RDT, the presumptive treatment of malaria is an economic necessity for many poor households.

Accessibility: Currently the vast majority of diagnostic tests and treatments are being offered through the public sector and free of cost; this in effect means that both RDT manufacturers (all of whom are located outside of Nigeria) and the lead Nigerian-based importers (who each appear to work exclusively with just one manufacturer) are focused on securing and supplying to public tenders; and whilst RDT distribution networks appear to be in place (e.g. between importer/wholesaler and hospitals, clinics, etc.) these are not used for commercial sales; as a result, importer ‘business models’ are


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unsophisticated, the bulk of sales are secured through large volume public tenders, which negates the need for traditional marketing (i.e. product, price place, promotion); markets are extremely distorted due to legitimate flows of bulked product through public channels, and a persistent supply of leaked and illegal product, which flows into the market and is predominantly mopped up again by wholesalers/retailers responding to public tenders.

Moreover, there are currently only six or seven importers offering quality-assured brands in the market, and of these only one offers World Health Organisation (WHO) pre-qualified brands. This has implications for SuNMaP as DfID current procurement policy only permits partnership contracts with suppliers of WHO pre-qualified products. It also implies that SuNMaP and the PSI/MC RDT private sector development project will be working with the same partners.

Knowledge: With some 77 per cent of consumers not having heard about RDT2, consumer awareness and understanding of RDT as a diagnostic tool is extremely limited. At the same time only 20% of consumers test for malaria before taking medication (despite clear national policy to promote use of testing before treatment); this compounds the gap between demand and supply and only a handful of commercial sector suppliers stock RDT – either as it is so slow moving, or they as suppliers are also not familiar with, or authorised to offer RDT; health care providers in general have poor knowledge of RDTs; there is also wide-spread scepticism about the efficacy of RDT (particularly in situations where storage, handling and administration are considered inadequate); in some cases, medical practitioners wrongly perceive RDT as a proposed replacement for microscopy.

Policy and Regulation: Whilst current policy supports the use of tests such as RDT, regulations limit those allowed to conduct tests, and small-scale facilities such as a Proprietary and Patent Medicine Vendor (PPMV), which are in many respects ideally located to support in more remote rural areas, are not authorised, and in fact in most cases not qualified, to offer RDT. One new development in this area has been the Society for Family Health pilot project, which has demonstrated that PPMVs can safely handle RDT; the results from this action research could help inform SuNMaP pilot initiatives to increase uptake of RDTs.

There is also a plethora of Government bodies, medical industry bodies and health sector associations, which either directly or indirectly govern and/or oversee the administration of RDTs. These include:

NAFDAC – National Agency for Food and Drug Administration and Control. In theory, RDT products need to be approved and registered by NAFDAC. In reality, there are unregistered RDT products in the market place. NAFDAC lacks the resource capacity to effectively monitor the RDT sub sector, which allows substandard product to infiltrate the market, contributing to lack of confidence in the product.

AMLSN – Association of Medical Laboratory Scientists of Nigeria. AMLSN membership consists of both public and private sector laboratories. The Association has ‘branches’ across the different States, and affiliates such as the Medical Laboratory Scientist Council of Nigeria (MLSCN) and Guild(s) of Private Medical Laboratory Directors (GPLMD), which advocate for the needs and interests of their membership. These bodies also closely protect the roles and status of technicians, and as such are potential gate-keepers when it comes to the use of RDTs outside of laboratory facilities.

AGPMPN – Association of General Private Medical Practitioners of Nigeria. AGPMPN represents the interests of private General Practitioners (GPs), who, through their interaction with actual or suspected

2 ACT – RDT Baseline Survey, November 2013.


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malaria sufferers, wholly influence consumer understanding, awareness and behaviour with respect to testing before treatment. The relationship between GPs and laboratories is self-serving, as both benefit financially from whatever testing or treatment they choose to subscribe to.

In this context, a well-designed, market-led subsidy could potentially address the constraints described above by stimulating consumer awareness and demand. Also, the subsidy could potentially stimulate the private sector to invest in the non-existent commercial channels, which otherwise might not develop since the private sector is primarily targeting public tenders. However, the subsidy will only go so far in addressing awareness and gaining buy-in amongst the laboratory scientists and medical practitioners, and it will not be able to address the policy and regulatory constraints described above; so areas of relevant policy and regulation will need to be addressed separately. Furthermore, an intervention on subsidy, if not complemented with effective interventions on policy and regulations might limit the effectiveness of the subsidy scheme since we will not be able to target service providers like PPMVs. 3.4.2 Capacity of Potential Commercial Sector Partners The following paragraphs present the key findings and analysis of potential partner importers/suppliers with respect to their current involvement with RDT sales and distribution, and their capacities in sales and distribution. Meetings with Teta, Codixpharma and the Sustainable Healthcare Initiative (SHI) took place and various informative elements were gathered. Teta, although a potential partner for the subsidy, presents some challenges which are detailed below. Codixpharma and SuNMaP appear to have a good relationship, and the company is well positioned to support a subsidy programme, although various elements (listed below) will need to be reviewed carefully. Finally, SHI may be a new potential partner for the scheme, as the meeting was introductory, further working meetings will be needed to map out the possible partnership.

Teta

A meeting was held with the senior management of Teta to assess their involvement in the RDT sector overall, and its level of business in the commercial sector; the concept of the RDT subsidy and SuNMaP scoping for potential partners was intentionally not mentioned. As Teta management confirmed, it currently focuses on the institutional sale of RDT through public sector channels. It is the sole importer/supplier of quality-assured RDT brands ICT Malaria and ICT Malaria combo3, both of which it imports and sells in packs of 25 (Teta sales prices - N3,000 and N5,000 respectively) and it currently has two or three public sector contract with a focus in Lagos, Kano (won a tender in December 2013), and Abuja. It also supplies regularly to Odo State and referred to business with some pharmacies in the East, but with slow, limited uptake and recent actual supply/sales of RDT for Abuja/Odo were given as 6,000 units. Teta plans to continue focusing on public sector tender bids, and to increase its participation in bids. It currently does not offer single pack RDTs, though it is interested in the product concept. In the past, it has approached the manufacturer to supply packs of five RDT, but the price quoted was too high (according to the Manager between two and four times the cost of 25 pack unit).

In discussions on commercial sector business development, Teta explained that the costs of market entry, in particular the costs of marketing, were an uphill struggle as was awareness raising. For example, Teta felt that participating in and presenting at industry forums was key to breaking into markets, but it considers the costs too high.

3 Approved by WHO and on the Global Fund Quality Assurance listing dated January 2014.


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In conclusion, there is an underlying element of ‘neediness’ on the part of Teta that is likely to hold the project back with regard to the RDT subsidy scheme; the firm is not particularly commercially minded, and would most likely struggle with delivering on sales and marketing functions (even if support was accorded), and in operationalizing the subsidy; the door was left open though for Teta to come forward with ideas for partnership with SuNMaP generally; the team provided examples of what types of partnership / support SuNMaP was more likely to consider (in an M4P context of shared risk), as well as examples of what the programme will not do. Codixpharma

A first meeting was held with Senior Management to progress on earlier discussions between the Commercial Sector team and Codix on a proposed RDT subsidy scheme. Clearly there has been previous discussion between SuNMaP and Codix, even in so far as what the subsidy scheme should look like. Codix management is very keen to partner, and sees the opportunity to introduce SD Bioline single RDT pack, which it believes is the future of RDT. A second meeting went into more detailed discussions to explore capacities of the company’s field representatives, and how Codix will track and report on discounted sales in order to receive reimbursement under the subsidy scheme. Codix4 is the sole importer/supplier of quality-assured SD Bioline Malaria which it imports in packs of 25 (with single buffer), and in single unit packs (with buffer included). Whilst Codix has a team of field representatives (the bulk of which are salaried employees) and confirmed that it has representatives in the project target States, it did not confirm how many representatives it has on staff, although it emerged that some sales representatives cover more than one state. It is also willing to look at positioning new representatives if the partnership goes well – though realistically the volumes of sales would need to be large-scale to cover such cost. Codix considers RDT to be in its words ‘a hard sell’ for its representatives, furthermore as it is not a prime product pushed by the company, it is low on the priority list for representatives. The company confirmed that its representatives would need strong orientation on the subsidy programme, and training in sales and marketing. Other capacity building needs (such as knowledge of RDT and capacity for product detailing) still need to be verified as it was not possible during the field visits to actually sit and discuss with sales representatives (though this was requested). Although Codix maintains the single pack RDT is the same as the bulk pack product, it will be critical that its representatives are strong in product detailing, marketing and promoting the product – and that there is clear messaging to end providers, and end users (issues such as explaining the use of the single measure buffer for accurate testing, quality assurance, waste management, building consumer confidence, etc.). Codix is also willing to go back to the manufacturer and negotiate a better price if it can show volume sales; which is exactly the type of behaviour we want to see the business partners adopting. Codix is also willing to build in other incentives such as commission on sales for its representatives, and end buyer (e.g. for medical professionals, PPMVs etc., selling and/or administering RDT) promotional offers such as order and pay for one pack, and get a free box of surgical gloves, and sell 50 boxes (of 25 units) and receive a free lab coat. In discussion, it came out that Codix is expecting SuNMaP to provide a

4 See www.codixpharma.com.


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list of end providers to be targeted by its sales representatives, as well as details of SuNMaP marketing plan. In conclusion, SuNMaP appears to have a good relationship with Codix who is interested and relatively well positioned to support a subsidy programme; however there are important factors to be addressed in the partnership (which, where appropriate, should be spelled out in the partnership agreement). There was a significant amount of discussion with Codix around practicalities of tracking and reconciling sales as it had not fully grasped the implications of this aspect and had underestimated what is involved. Currently the company considers a sale ‘closed’ once the product is passed/sold to its representatives – SuNMaP would want to track sales at end provider level. Codix seems open to ensuring there is a system of allocating batch numbers and tracking of purchase orders, sales, and receipts along the supply chain, and even had its finance person join the meeting to be part of discussions on how this could work in practice. Codix will very likely also be a partner under the PSI/MC RDT private sector development project, which includes plans for a subsidy positioned with manufacturers, in practical terms this means that product will be imported by Codix, which is intended for sale under the PSI/MC project as well as under SuNMaP. The projects in dialogue with Codix will need to ensure an effective means of differentiating between manufactured/imported RDT products intended for the PSI/MC project and that which is agreed for sale under SuNMaP (to assist reconciliations on product subsidies and sales volumes and amounts). Buy-in and capacity of representatives themselves will also be key and the project needs to strike up direct dialogue with Codix representatives to fully gauge levels of commitments and needs for those representatives that will take part in a pilot and scale-up phase. Previous discussions had indicated that RDT would be supplied by piggy-backing on SuNMaP’s current ACT network (i.e. along the commercial supply chains SuNMaP has been working to strengthen for ACT sales). However, there are policy and regulatory challenges, which effectively prohibit PPMVs from administering RDT – the project will need to develop an intervention that tackles this current blockage. There is also a risk that Codix representatives focus on urban-based end suppliers (i.e. as an easier sales target, due to lack of resources to work rural markets, or due to end supplier capacity issues in rural areas). Therefore, representatives’ performance targets should include specific targets for rural areas to support SuNMaP goals for inclusiveness. Codix is keen to combine the subsidy with a range of ‘softer’ incentives, which will also have costs to bear. It will be important for the partnership to include an equitable agreement for cost share on additional inputs attached to the subsidy programme, including softer incentives, keeping in mind that Codix has a vested interest in seeing a growing market for RDT, and stands to benefit in the long-term from its/SuNMaP short-term inputs. Furthermore, the agreement with Codix will include the cost of the product discount over an agreed timeframe, together with a package of orientation, training, incentives and targets - the costs per representative and overall costs need to be fully developed and agreed. Sustainable Healthcare Initiative (SHI)

According to SHI website5, Sustainable Healthcare Initiative (SHI) is a non-governmental organisation (though in our meeting it stated it was a private firm so further clarification is needed) and is currently a

5 www.shinigeria.org.


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sub-recipient of the Global Fund/NMEP (formally the NMCP), Round 8 Phase 2. It is carrying out Behavioural Change Communication (BCC) activities in 18 states, as well as the supply and distribution of ACTs under the same programme. It indicated it has some 110 staff, including field workers in 36 States, which carry out monitoring and evaluation exercises of primary healthcare centres and support the distribution of ACT in communities. An introductory meeting was held with the Chief Oversight Officer and Director, Supply Chain System as the Commercial Sector team had not met SHI before and it is new on the radar as far as partnership goes. SHI demonstrated high levels of interest for partnering with SuNMaP on a subsidy programme, and it appears to have a strong framework in place to support medical supplies distribution. Supply chain management is one of SHI’s core areas of expertise (BBC being another) and the opportunity to bundle ACT and RDT using SHI’s existing distribution channels was discussed. This appears to be highly feasible given the organisation’s apparent management capacities, current network of field representative and logistical capacities – though these capabilities have to be looked into more deeply as part of due diligence and deeper insight into partner suitability. Positive discussion also took place on the opportunity for placing a promotional discount on RDT - though further meetings are required to go into detail on costs and pricing, level of discount, capacities and willingness of SHI to track and report. There was no chance to meet SHI field representatives (though this was requested), therefore the SuNMaP team will need to follow-up to explore SHI field-level capacities for product detailing, sales and marketing, as well as levels of buy-in; as in the case of Codix (or any partner supplier) this will be key to promoting RDT, and managing and monitoring application of the subsidy along the supply chain.

In conclusion, as SHI is a ‘new development’ with respect to partnership on an RDT subsidy programme, there is a need for the project to engage with SHI over several meetings to explore areas such as how and from where SHI would source RDT given that it does not appear to be linked to a sole manufacturer (e.g. as is the case with Teta and Codix), how the application of a subsidy would work if SHI is not a buyer and seller of RDT, and if and how the project could leverage SHI supply chain management network and knowledge to boost efforts to reach rural private providers. 3.4.3 Meetings and Interviews with Other Supply Chain Actors The following paragraphs present the key findings and analysis following meetings and interviews with other supply chain actors including local wholesalers and retailers in the open market and with executives from the AMLSN. The open market interviews provided useful information on the existing sales, volumes and brands of RDT retailing landscape available at that market level (more details are provided below). The meeting with the AMLSN was building on an on-going relationship SuNMaP has with the organisation and a previous attempt to partner on RDT programme. It would appear that there is a possibility to re-engage AMLSN on RDT scheme if a strong strategic approach is used. Visits to informal market players Visits were made to open markets to hold ad hoc interviews with local wholesalers and retailers in Anambra and Lagos to get a feel for RDT wholesale and retail supply in those markets where market vendors were open and willing to share information on products, pricing, and sales. It emerged that prevalent brands in the market place were Carestart and Micropoint (p.f. / p.v.) in packs of 25 with


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single buffer; prices ranged from N 2500 – N 3000 for these brands6 but went as low as N 800 for product that was nearing its expiry date and volumes on show were relatively small, ranging from four to eight packs in most cases. These interviews highlighted the ad hoc nature of supply with respect to brands, availability, and pricing, as well as quality control and quality assurance issues (since product past, or nearing expiry date, was also readily available at significantly reduced prices). However, also notable was the large scale of business behind the apparent informal façade of open market suppliers as many of these market sellers are also bidding for tenders and supplying bulk orders of drugs to public and private health facilities – though they are not dealing in RDT to any noteworthy degree. These traders work informally buying or mopping up local supply of drugs (some of which is leaked product from public sector distribution channels) to respond to purchase orders from public and private health facilities, they differ from the lead suppliers such as Codix and Teta in that they do not deal directly with manufacturers but only other local suppliers. Those interviewed also own and run their own laboratory or pharmacy though not in direct competition with lead suppliers with respect to wholesale of drugs and some suppliers appear to have capacity to bulk orders on request. Meeting with executives and members of AMLSN A meeting was held with a large group of AMLSN executives and representatives that were attending microscopy training. The main outcomes from the meeting were that there is a need for the project to re-visit strategies for buy-in and feasibility of plans for pilot RDT testing hubs. In March 2013, SuNMaP reached out to the Executive Committee of AMLSN with a proposal for partnership to raise awareness, market and promote the uptake of RDT as a complement to microscopy. The partnership focused on working through AMLSN to increase the knowledge base and information flow to its members on the RDTs, in tandem with partnering with RDT distributors to facilitate the supply of quality RDTs to healthcare facilities and laboratories. The set up and management of testing hubs around clusters of PPMVs was proposed as key to activating proper case management and the proposal laid out the mandate/expectations of AMLSN including support to plan and organise awareness raising and training events, members trialling the use of RDT and post-sale surveillance. In June 2013, further to discussions, AMLSN submitted a budget for proposed workshop, testing hubs, and quality assurance activities. However the budget was wholly unrealistic and included coverage of rentals, purchase of generators, water supply tanks and medical equipment such as a microscope, in addition to costs related to ethical review, AMLSN participation in trainings, venue costs, etc. The unrealistic expectations of AMLSN and the start-up of the PSI/MC RDT private sector development project has understandably resulted in SuNMaP taking a step back from initial plans with AMLSN. In conclusion, whilst initial efforts to engage AMLSN may have backfired, further dialogue is required at high-levels within SuNMaP and AMLSN to agree on strategy and way forward for collaboration with AMLSN with respect to policy reform, awareness raising, training, and monitoring use of RDT. Re-engaging AMLSN should be at a high-level to ensure strategic objectives and opportunities are well articulated as ultimately the group’s buy-in will be a prerequisite for credibility and scale-up of RDT market development initiatives.

6 A comprehensive analysis of available brands, pricing and private sector providers is contained in the MC-UNITAID

Value Chain Analysis Final Report, Montrose and Innovision, January 2014.


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3.4.3 The Potential for Synergies or Conflicts with Other Developmental Projects This section will focus on the potential for synergies and conflicts with other RDT developmental projects, in particular with the ‘UNITAID project’ and its quality-assured RDT programme. Discussions between the SuNMaP and UNITAID teams opened up a space for dialogue on the two projects’ common goals and where and how these could be aligned. Challenges are also explained in more detail below. The second part of this section further investigates the strategies and capacities that will be required for managing an RDT subsidy scheme for the SuNMaP team. PSI/MC Project ‘Creating a Private Sector Market for QARDTs in Malaria Endemic Countries’ Referred to by SuNMaP as the ‘UNITAID project’, led by Population Services International (PSI), with Malaria Consortium (MC) as its collaborating partner in Nigeria, the UNITAID-funded project has similar goals to SuNMaP with respect to using a market-led approach to shape local markets to improve RDT quality, access, demand, and the regulatory environment to encourage and support appropriate use of RDTs, and the rational use of ACTs – ultimately moving good quality case management of malaria closer to the most vulnerable populations. Several meetings and discussion sessions took place with the project coordinators in Abuja (see Annex 2 for work plan and list of persons met). The project plan requires complete control of procurement, direct negotiations with manufacturers to agree on manufacturer subsidy and ‘bundling’ of products and services, which includes end price negotiations, training, supply chain management, and waste management. The focus is on driving consumer and provider demand for single unit/use RDT, in this regard, plans may extend to umbrella or retrofit branding to drive awareness and uptake of quality assured RDT. The project plan proposes using importers/suppliers existing distribution networks for AMFm ACT, manufacturers and importers/suppliers will be responsible for shipment and stock management respectively, support to apply a recommended retail price (RRP) and close monitoring are proposed as means for ensuring the subsidy is passed down the supply chain to the end retailer. The initial aim is for an end retail RDT price to be below the price of ACT and the project targets three States – Anambra, Ogun and Cross River. The initial phase has experienced significant delays whilst tender and recruitment of partner manufacturers is underway, it is not yet confirmed how many partners the project will work with, what the subsidy (and hence end-retail price) will look like, or manufacturers’ capacities to deliver required ‘bundled’ products and services and technology solutions for tracking. It is clear that both SuNMaP and the PSI/MC RDT private sector development projects will inevitably be working with the same importer/supplier partners even though geographic focus may be different. In conclusion, on the surface the scope for cross fertilisation between the PSI/MC project and SuNMaP work in RDT market strengthening is self-evident and could be mutually beneficial. However, the prospect of two projects running simultaneously, whereby both focus on introducing and managing pricing subsidies along extremely under developed private sector supply chains, in addition to other demand creation incentives, has huge implication on the incentives, motives and operational requirements of the prospective partners for SuNMaP – importers/suppliers (where there is likely to be overlap of both projects), and also partners (sales representatives, local wholesalers, laboratories, PPMVs, etc.) along the supply chain. Even if the two projects propose different approaches for positioning and packaging a subsidy and opt to focus on different locations, the various market players might opt for one project instead of the other because of the terms and conditions that they perceive to be more attractive. Moreover, the commercial market for RDTs is wholly under developed and currently


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not an attractive proposition, early stage market opportunities may not be sufficient for partners to engage with multiple projects at the same time. Lastly, core aspects of the PSI/MC project were still at a formative stage when compiling this report (e.g. the list of partners, agreements on subsidised pricing, and content and partner capacities with respect to bundling services) and SuNMaP also had various strategic areas to follow up on regarding partner due diligence, scope for bundling ACT and RDT, and DfID decision on whether SuNMaP can partner with non-WHO pre-qualified RDT manufacturers/suppliers (current DfID procurement policy restricts SuNMaP to working with Codix only). These factors need to be urgently addressed in the coming weeks in order to make final decisions on a SuNMaP – led RDT subsidy scheme, and what synergies can work in practice given the two projects’ differing timelines, approaches and incentive frameworks. SuNMaP Commercial Sector Strategies and Capacities for Managing an RDT subsidy scheme

Several discussions were held throughout the assignment with field-based Market Support Officers (MSOs) and the Commercial Sector project management to assess current thinking, progress and capacities with respect to an RDT subsidy scheme. The team has developed intervention strategies (and a set of intervention logics) for engaging the following professional associations and businesses: AMLSN, the MLSCN, PPMVs, and AGPMPN and their memberships (medical laboratory scientists, medical doctors, PPMVs, and community pharmacists) and to link them with lead suppliers for sale and distribution of RDT. This will take place alongside a generic marketing campaign to raise consumer awareness of RDT. For an RDT subsidy scheme to be effectively framed within this broader set of intervention strategies requires the buy-in of the various professional associations and their membership. However, the project’s partnership strategies need to be better articulated and in some cases re-visited (e.g. how SuNMaP will engage and work with AMLSN) to strengthen the dialogue and linkages between the large-scale RDT distributors like Teta or Codix and professional association membership, and between RDT and ACT suppliers to progress on plans for bundling ACT and RDT for wholesale and retail. These last points on articulating plans for professional association buy-in and for bundling ACT and RDT are particularly relevant as they will have implications for the RDT subsidy scheme and the type of support SuNMaP provides its partners with respect to orientation, training, and incentive structures and hence what partner agreements and support costs will look like. Once RDT interventions strategies have been re-visited and/or fully articulated, then the CS project team will need to develop or refine its set of RDT intervention logics, as well as its plans for monitoring results. A major consideration for the Commercial Sector team will be synchronising the introduction of a subsidy with supplier and consumer demand creation efforts i.e. awareness raising, gaining professional buy-in, training and capacity building efforts will pave the way for a successful RDT subsidy scheme. Ultimately well-informed end consumers and end providers will drive demand for RDT, therefore the project needs to ensure its interventions to generate understanding, awareness, buy-in and capacities for usage are timely and having positive impact. This in turn links to regularly re-visiting the project’s intervention logics and testing the assumptions made. Another critical factor in considering a SuNMaP RDT subsidy scheme is the team’s capacities and resources for operationalizing and managing the scheme once it is launched in the market place. The scheme will require a dedicated team that can effectively communicate and sell the subsidy concept, support in operationalizing the subsidy across lead suppliers, representatives, and targeted end


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providers, and monitor results, including how effectively the subsidy is passed on to end consumers, other operational responsibilities include managing unintended outcomes, ensuring transparent use, and accurate reconciliation of the fund.

In conclusion, the Commercial Sector team will need to urgently address gaps and/or weaknesses in its RDT intervention strategies to ensure adequate support for supply chain strengthening and demand creation as these are the foundations on which it can launch an RDT subsidy scheme. Whilst the team has the technical capacities and resources to commit to operationalizing the scheme, the project should not under-estimate the time and resources needed to effectively manage and monitor the scheme, and to track and account for the use of subsidy funds. The team should also be realistic about what can be achieved in the remaining lifetime of the project, in particular the project must commit adequate time and resources to raising awareness, gaining buy-in, and ensuring capacities of end providers in promoting and handling RDT correctly, and supporting proper malaria case management. 3.5 Key Factors for RDT Subsidy Design, Implementation and Exit Strategy Based on the findings and analysis presented in section 3.4, the Commercial Sector team should consider key factors with respect to the design, implementation and exit strategy for an RDT subsidy scheme. These are presented in table 1a, 1b and 1c. Figure 1 presents a sketch of the subsidy scheme. Should the subsidy scheme go ahead, please refer to Annex 3 ‘Operationalizing the RDT subsidy model’ which fleshes out core design elements for an RDT subsidy in partnership with one or more suppliers.

Figure 1: Sketch of the subsidy scheme

Supplier Tracking and reporting on product sales,

volumes and amounts

Project support • Stakeholder buy-in; • demand creation; • relationship

building; • capacity building; • material support; • problem solving;

Project Reconciling/Reimbursing

for discount owed based on sales reports

Wholesalers/End Retailers

Sales Representatives

Importer/Supplier

KEY

Product Flows and Promotional Marketing


Table 1a - Design Stage Key Factors Support Requirements Implications for SuNMaP

• Finalising how SuNMaP will coordinate and/or work with the PSI/MC UNITAID project;

• Appropriate checks with DfID on procurement, use of funds, reconciliation and audit requirements;

• Finalising which partners to support, and the timeline, the actual amount of the subsidy, and which product(s) it applies to (i.e. single pack or multi-pack) and agreeing sales targets;

• Finalising strategies and partnering requirements for bundling RDT with ACT;

• Positioning the subsidy as a promotional discount so it is not perceived as donor-led, but rather a special offer introduced by lead suppliers and passed on down the supply chains;

• Developing and signing off partnership agreements which include key elements such as roles and responsibilities, performance targets, detailed cost-sharing arrangements, how unanticipated costs will be handled, tracking and monitoring arrangements; financial management and reconciling use of funds, including financial reporting;

• It will be near to impossible for the project partners to control the end retail price and/or the behaviour of supply chain actors, even sales representatives;

• Develop and agree a range of initiatives around an ‘end retail pricing policy’

• Agreeing equitable cost-share arrangements with lead suppliers on additional promotional marketing costs;

• ‘Front loading’ training and capacity building for participating partners / actors in the supply chain;

• Planning sequencing of activities for end consumer and end provider awareness raising

• Further discussion with partners to ensure mutual win-win with regard to partner and project priorities (applies to RDT and ACT partners);

• On-going discussions and coordination with PSI/MC UNITAID project management to identify synergies, possible areas of conflict and mitigation strategies;

• Support partners to develop projections for sales volumes and amounts, as well as reimbursement amounts;

• Developing detailed cost scenarios with each partner, with monthly and quarterly breakdowns, and an overall budget to calculate the amount of subsidy required;

• Support the design and trial of a system for tracking sales, including paper trial for financial reconciliation and eventual audit;

• Collaborating with partners to develop a ‘package’ of performance-based incentives for the other actors in the supply chain, including end retailers that actively participate in the scheme; Could include sales reps commissions, free product to reward achieving sales targets, promotional items such as surgical gloves, lab coats, training and/or award certificates;

• Support to partners to design and label products indicating promotional offer, recommended retail price;

• Assessing partner sales reps training needs and providing a series of orientation and training sessions in areas such as product detailing, RDT promotional marketing, and selling;

• Assessing end retailer / provider training needs and providing a series of orientation and training sessions in areas such as building consumer awareness, RDT administration, and

• Conduct due diligence based on agreed criteria to assess partners financial and operational management capabilities;

• Deciding what products the project actually wants to encourage in the market place;

• The subsidy represents the differential between importer/supplier normal wholesale price and agreed discounted wholesale price;

• Financial resource and allocation of funds; Of the total budget of £200,000 how much is then required to cover costs of subsidy across sales targets, partners and timeline;

• Identifying and selecting sales reps and end retailers willing/capable to participate fully in the scheme, including not exploiting the subsidy through excessive mark-ups;

• Identifying partners and costs related for orientation and training requirements;

• Ensuring adequate resources and time for demand creation as it will ultimately drive sales;

• Clear and workable strategies for gaining buy-in and support of key industry professional bodies


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Table 1b - Implementation Stage

Key Factors Support requirements Implications for SuNMaP • Have two key phases – a pilot phase of some

12 weeks, and a ‘scale up’ phase; With very regular plenary partner and field staff reviews during the pilot, and a formal pilot review to address challenges, refine the model, and partner agreements (e.g. addendums to agreements if need be) before transitioning into the scale-up phase;

• Agree geographic coverage, sales reps, and targeted end providers (POS), and sales targets for each phase;

• Tracking sales of subsidised products; • Monitoring partner, sales reps, and end

provider performance; • On-going demand creation activities and

events; • Developing brand awareness; • Close coordination, synergies and cross

learning between SuNMaP and PSI/MC UNITAID project;

• Support sales reps to develop field work plans for pilot phase and then subsequent scale up phase;

• Support the set up of clear division of roles and responsibilities between SuNMaP project management in the field, the MSOs and partners’ field managers and sales reps;

• Organise and oversee regular meeting sessions with importers/suppliers to review sales, paperwork, and reconciliation / reimbursement amounts due to suppliers of subsidy;

• System checks to ensure partners are accurately recording and accounting for sales from supplier through end retail POS;

• Reimbursement of subsidy to importers/suppliers is based on documented records of sales volumes and amounts – to be regularly tracked and reconciled by suppliers;

• Designating capable CS team members to manage the subsidy across different partners and geographic areas – it would be better to have a small team overseeing all partners and all sites; this would also help coordination with PSI/MC UNITAID project;

• Ensuring project field team is able to adequately monitor activities in the field, including gathering and checking of sales data, random checks at POS, regular meetings with sales reps, early identification and reporting back on irregularities/challenges in the field;

Table 1c - Exit Strategy Key Factors Support Requirements Implications for SuNMaP

and confidence building. malaria case management.


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• Actually design and agree the exit strategy from day one across partners, and actors in the supply chain;

• Allowing importer/supplier sales reps to lead on product detailing, promotional marketing to their clients;

• How will the project measure results/ success, including key M4P factors such as setting indicators and measuring systemic change, attribution, and robustness of supply chain (players, product flow and sales) to indicate potential for sustainability, and demonstrating Value For Money.

• Continued efforts to build consumer and end provider demand through incentives, awareness raising, training and information;

• Building the internal organizational capacity of importers/suppliers and their reps in areas such as product detailing, promotional marketing, stock management, RDT business modelling (e.g. costing, profit and viability analysis), and planning for scale-up.

• ‘The way you enter is the way you exit’; • Ensuring everyone is on the same page

with respect to the timeline, how the subsidy will be withdrawn, and expectations (of SuNMaP, the partners and other supply chain actors after subsidy is withdrawn;

• Maintaining a light touch approach with respect to management of product flows, promotional marketing efforts, and internal performance management;

• Balanced with intensive and quality orientation, training and awareness rising.


4.0 Conclusions

This section highlights the key elements reviewed during this study, based on the analysis of the findings. Starting from the appropriates and rationale for the scheme, areas of importance are summarised briefly including policy constraints, design, implementation and exit strategy but also the supply chain elements and the importance of a well-designed work plan and timeline. Taking these key points into account as a basis, the next section proposes key recommendations and next steps.

• Appropriateness and rationale: An RDT subsidy in the current market context could potentially address key systemic constraints (particularly around affordability, accessibility, and knowledge) by stimulating consumer awareness and demand, and awareness, understanding and uptake of RDT amongst laboratory scientists and medical practitioners; At the same time, the subsidy could potentially stimulate the private sector to invest in the non-existent commercial channels, which otherwise might not develop since the private sector is primarily targeting public sector tenders. However, the subsidy will not be able to address the policy and regulatory constraints, which need to be addressed separately. Moreover, an intervention on subsidy if not complemented with an intervention on policy and regulation might limit the effectiveness of the subsidy scheme since we will not be able to target service providers like PPMVs.

• Policy-level constraints: The fact that current DFiD procurement policy restricts the project to working with pre-qualified RDT suppliers only, effectively means there is only one partner option for an RDT subsidy; the project team should continue dialogue with DfID on this issue as ideally more than one partner is needed to achieve outreach, and objectives for systemic market change.

• Design, implementation and exit strategy: The amount of work around an RDT subsidy should not be underestimated; table 1 presents the known factors, support requirements and implications for the project based on a brief period of investigation; there are bound to be other factors that come to light as plans evolve.

• End provider and consumer awareness: Understanding and buy-in will ultimately be the driver of sales and will be critical to success; it will be critical to have buy-in and widespread support of key regulatory authorities and industry representatives, including key professional associations, which are effectively ‘gate-keepers’ with respect to meaningful collaboration with laboratories, doctors, pharmacists and PPMVs will also be vital for success; so clear workable strategies for engaging and gaining traction with these different players is needed for a subsidy to succeed.

• Supply chain:


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Whilst a price subsidy could stimulate supplier and consumer demand the project will also need to make concerted efforts to strengthen: 1) supplier capacities in areas such as business modelling, product detailing, and promotional marketing; 2) market linkages along commercial channels and the relationships between players; and 3) appropriate incentives along the supply chain to promote RDT.

• Unanswered questions: These need to be addressed quickly and resolutely; so decisions around most appropriate partners (possibly starting with one and then adding others), strategies for working with targeted associations, and partners and approaches for bundling RDT with ACT – these strategies need to be well articulated (and effectively communicated for operationalization in the field); likewise on a framework for coordination with the PSI/MC UNITAID project.

• Phased approach to implementation: The project should adopt a phased approach to implementation; focusing first off on a simple trial, which allows time for assessing capacities of partners, and testing the model, with a formal review to refine the model, and scale up (adding new target markets, and new partners if possible).

• Work plan and timeline: The project team will also need to develop a detailed work plan with timeline for the various phases of the subsidy scheme (design, piloting, refining and scale-up, and exit); table 1 provides the framework for a detailed work plan. Ideally the project should dedicate a smaller sub team to manage the subsidy scheme, this would assist coordination with partners and other projects, focus capacity building needs, and streamline support in the field. A detailed work plan will also help focus the need for synchronising introduction of a subsidy with supplier and consumer demand creation efforts.

• Possible additional support: In the same vein, the project should consider if it needs additional/dedicated support to drive the intervention and give it additional focus and momentum.

• Available financial resource and best use of funds: SuNMaP has earmarked a total fund of GBP 200,000 for the proposed RDT subsidy intervention; how far the project budget can go depends on number of partners, and what the project agrees to pay for. The project team has developed basic cost calculations that examine the projected cost of a price subsidy based on volumes and amount of subsidy. However, this is based on one partner only (Codixpharma), there will be various other subsidised input costs to factor in, including orientation and training costs, promotion marketing materials and activities, additional field monitoring, and partner review meetings. The project team will need to develop a detailed


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budget, which includes projected subsidy needs and additional input costs for each partner, and for the subsidy scheme overall.

• Time issue/further funding: The design of such a subsidy scheme, testing the model and providing the levels of support needed across the areas highlighted in this report to facilitate scale-up will take time. The project could explore if there is scope for pursuing additional funding beyond the timeframe of the current project to continue work on the RDT subsidy intervention (i.e. taking the project to the scale of the AMFm, for example).

• Broader strategies for market development: As part of its broader strategies for RDT market development, the project team needs to engage with and bring together policymakers, regulators and industry-level decision-makers together with importers/suppliers to facilitate high-level discussions and solutions in area such as policy reform, behaviour change, supply chain strengthening, quality assurance, and malaria case management.

• Reaching rural populations: The project partners would need to set specific targets (and possibly introduce specific incentives) to drive outreach in rural areas; the pilot phase will also need to include testing the model in rural areas; the project could also use results from the SFH project to guide support needs and implementation plans in rural areas (in particular the choice of PPMV partners).

• Fulfilling the TOR: The fieldwork undertaken to develop this report was generally adequate to fulfil the terms of the TOR. However, as indicated above, there are strategic questions still to be answered, which impact on the timing for roll out of an RDT subsidy scheme and will in turn have implications for what is feasible in the remaining lifetime of the project.

5.0 Recommendations and Next Steps This final section provides the project team with recommendations and immediate follow-up activities in order to finalise decision-making for an RDT subsidy intervention. Seven steps are presented with the aim to provide a broad framework for the decision process. These include the strategic elements that should form the basis of the scheme; the development of partnership agreements; budgets and costing considerations; the capacity building and creation activities; the marketing aspect and the M&E requirements. Should the subsidy scheme go ahead, please refer to Annex 3 ‘Operationalizing the RDT subsidy model’ which fleshes out core design elements for an RDT subsidy in partnership with one or more suppliers.


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1. Define the strategic framework o Hold a series of high-level meetings, involving project management and executive committees /

decision-makers of professional bodies that are key to reaching end providers in order to frame the basis of those partnerships, and how the project and required professional bodies can support each other to kick start end provider demand creation activities;

o Host a series of round table discussions (or a one-off formal gathering) to engage high-level decision-makers (i.e. policy-makers, regulators, importer/suppliers and industry professionals to gather feedback, assess buy-in, and develop joint strategies for promoting and supporting RDT interventions and a subsidy scheme in particular;

o Meet with identified potential partners to a) define strategies for bundling RDT with ACT, b) narrow down what actual products a subsidy would support, c) target areas and target end providers, and d) define practical measures for partners would take to ‘control’ the end retail price as best as possible;

o Map out a critical action plan, which defines timelines for a pilot, formal review, and scale up, and hold a team meeting to discuss the draft and how the CS team will manage the subsidy scheme (i.e. who, where, additional resources support needs).

These steps are needed to ensure a robust enough strategic framework to support an RDT subsidy (i.e. the basic foundations on which it can be launched) and to support a definitive decision on how the project moves ahead. Assuming the project opts to launch an RDT subsidy scheme the following recommendations for action are proposed:

2. Develop comprehensive partnership agreements o Commence formal due diligence on selected potential importer/supplier partners, which

focuses on operational and financial management capacities to handle the RDT subsidy scheme on behalf of the project, including capacity to track end sale of discounted product (volumes and amount of sales) against which reimbursement would be due;

o The project should explore the possibility to frame partnerships under MOU agreements rather than formal contracts; partner due diligence should still be carried out, but the pace and flexibility required for signing up partners is more likely to be achieved under MOU arrangements than current formal partner procurement processes;

o A clear framework for support activities should be contained in individual partner agreements, with clear indications of project’ and partner’ respective roles and responsibilities, including who will do what, who will pay for what, and by when, in areas such as:

o Orientation and training of supplier sales representatives; • Agreed plans for additional incentives such as sales reps commissions, promotional items for

end providers, etc.; • Promotional activities and materials.

o Partner agreements should include process for discussing and agreeing unforeseen activities and/or costs, so there is no assumption that the project pick these up;


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o Agreements should also contain specific references to if and how intellectual property of both the project and the partner will be handled – and in the case of knowledge generated through the subsidy scheme, who this belongs to, and how it is likely to be used.

3. Develop detailed budgets and costings for partners and for the overall subsidy scheme o As soon as partnership and RDT subsidy and support activities become clearer, the project

should re-visit overall budget needs, with breakdowns for each partner, per quarter, and showing cost share arrangements with partners.

4. Heavily front-load capacity building and demand creation activities o Selecting and building the capacity of sales representatives, end provider awareness raising,

orientation and training, supply of promotional materials, as well as campaigns to raise consumer awareness should be heavily front-loaded (and reflected as such in budgets and work plans).

5. Ensure provision for regular review sessions o As regularly as every three to four weeks in the first 12 weeks of partnerships, the project

should pull together professional association representatives, suppliers, participating sales representatives, and end providers for review meetings; these sessions should be plenary (involving all partners) in order to share challenges, find joint solutions and continue to build capacities in sales, marketing and promotion of RDT.

6. Ensure a balanced approach in promotional marketing activities o Include a proposed list of marketing and promotion activities, material costs, and cost share

arrangements in the partner agreement, and have a good balance between what the project pays for, and what partners pay for – with the understanding that the project is covering other costs related to consumer demand creation, as well as building the long term capacity of lead suppliers (and their distribution networks) to market and supply RDT;

o Softer promotional costs such as free gloves, laboratory coats or similar - the recommendation would be that these soft costs are wholly covered by partners;

o Project support should go beyond planned generic marketing campaigns and should contribute to strengthening company-led marketing and promotion capabilities, including generating brand awareness.

7. Link back RDT interventions to M&E requirements o The project should map out intervention logics (and update existing logics) and expected end

results for its eventual portfolio of RDT interventions, and link this back to M&E requirements with respect to field monitoring, evidence gathering, and reporting.

6.0 Other emerging issues


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Capacity of field staff: field visits highlighted that there are still gaps and support needs with respect to field management and SuNMaP Marketing Support Officers (MSOs) capacities to grasp intervention strategies, articulate these plans well to stakeholders and potential partners, and to translate these into effective delivery on the ground; another related challenge is simultaneously managing ACT, RDT and LLIN intervention strategies, and ensuring all areas have the required momentum.

Tools and planning: there are signs the team would benefit from more frequent plenary planning sessions to review and re-affirm strategies, priorities and challenges in the field – especially given the remaining timeframe for the project and the need to maximise output from partnerships and interventions.


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ANNEXES


ANNEX 1: Terms of Reference, dated 22 January 2013

Contents 1 Background .......................................................................................................................................... 30 2 The Support to National Malaria Programme ..................................................................................... 30 3 Market and Strategic Overview ........................................................................................................... 31 4 The Use of ‘Smart Subsidy’ to Drive Market Development ................................................................. 32 5 The Objectives of the RDT Subsidy Feasibility Study ........................................................................... 32 6 Key Considerations for the Design Study and Implementation .......................................................... 33 7 Timing – Schedule ................................................................................................................................ 34 8 Deliverables ......................................................................................................................................... 34 9 The Team and Key Contacts ................................................................................................................ 34

Background

Though preventable, malaria remains one of the major public health problems in Nigeria. It bears up to 25 per cent of the malarial disease burden in Africa, hence contributing significantly to the one million lives lost per year in the region, which consists mostly of children and pregnant women. Malaria in Nigeria is endemic and constitutes a major public health problem resulting in about 300,000 childhood deaths annually. Malaria is the most common cause of outpatient attendance across all age groups. It overburdens the already-weakened health system and contributes up to 60 per cent of outpatient visits, and 30 per cent of admissions.7

While everyone is at risk, some categories of people are at the highest risk of infection. These include children aged less than five years, pregnant women, visitors from non-malaria regions, people living with HIV, and those with sickle cell anaemia. The national malaria control strategy revolves around an integrated approach, which prescribes long lasting insecticidal nets (LLIN) for the prevention of malaria, and testing with rapid diagnostics test kits (RDT) before the use of artemisinin combination therapy drugs (ACT) for treatment.

The Support to National Malaria Programme

The Support to National Malaria Programme (SuNMaP) is a UKAid Department for International Development (DFID) funded programme in Nigeria; operating at the national level and in nine states, namely; Anambra, Enugu, Jigawa, Kaduna, Kano, Katsina, Lagos, Niger and Ogun. SuNMaP is managed by a consortium of international agencies led by Malaria Consortium, Health Partners International, and GRID Consulting. The programme provides support to the National Malaria Control Programme (NMCP) and States to deliver quality malaria control services (both prevention and treatment) while putting in place systems to ensure sustainability through a number of initiatives, which include behavioural change communication, net campaigns, as well as sustained advocacy and public enlightenment on measures for malaria prevention and treatment. The focus of SuNMaP’s malaria control initiative is supporting both public and private sector to reach the entire population - especially the poor and vulnerable - with different interventions aimed at reducing the burden of malaria. 7 National Population Commission (NPC) [Nigeria], National Malaria Control Programme (NMCP) [Nigeria], and ICF International (2012): Nigeria Malaria Indicator Survey 2010. Abuja, Nigeria.


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Given current high demands on Federal- and State-level health budgets, and on-going reliance on donor support, SuNMaP specifically incorporated an experiential project component, which focuses on the development of the private sector LLIN, ACT and RDT markets; the Commercial Sector Support Strategy embraces the Making Markets Work for the Poor (M4P) approach to carry out targeted interventions to develop and strengthen commercial sector channels for the manufacture and/or importation, sale and distribution of LLIN, RDT and ACT. Montrose, in partnership with Innovision, has been providing technical and advisory support as the Market Development Partner to SuNMaP Commercial Sector Component since 2011. The Commercial Sector Component was recently extended through until August 2015.

Market and strategic overview

One of the goals of national anti-malaria treatment policy is to encourage rational drug use to prevent or delay the development of antimalarial drug resistance. This can only be achieved through confirming all presumed malaria cases through either microscopic examination of blood Smear - which remains the gold standard in malaria diagnosis - or use of a quality-assured rapid diagnostic test (QARDT) kit, and treating all confirmed cases of malaria with Artemisinin Combination Therapy (ACT) drugs as opposed to mono-therapies.

The presumptive treatment of suspected symptoms of malaria and consumption of mono-therapies is high among most households in Nigeria. Over-prescription and presumptive consumption of ACT may result in substantial unnecessary use of this class of drug and the risk of developing resistance if it is not discouraged. Access and demand for diagnosis for all suspected malaria cases before treatment will foster proper malaria case management, which will in turn reduce the huge resources wasted on presumptive treatment by households and public sector (and in reality private sector) health facilities in Nigeria.

Several early-stage, as well as more recent market analyses have highlighted many of the key constraints that undermine RDT market development on both the supply and demand sides. Some of these major constraints are captured below.

Affordability: there are links between affordability of ACT and RDT; whilst the high price of ACT makes them unaffordable (particularly for the poor) – and makes mono-therapies more attractive – the even higher cost of diagnosis makes presumptive treatment an economic necessity for many households (see also knowledge below).

Accessibility: currently the vast majority of diagnostic tests and treatments are being offered through the public sector and free of cost; this in effect means that both RDT manufacturers (all of whom are located outside of Nigeria) and the lead Nigerian-based importers (who each appear to work exclusively with just one manufacturer) are focused on securing and supplying to public tenders; and whilst distribution networks appear to be in place (e.g. between importer/wholesaler and hospitals, clinics, etc.) these are not used for commercial sales; another factor is that importer ‘business models’ are unsophisticated; markets are extremely distorted due to large volume legitimate flows through public channels, and to a lesser extent leaked and illegal ones.


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Knowledge: with some 77 percent of consumers not having heard about RDT8; consumer awareness and understanding of RDT as a diagnostic tool is extremely limited. At the same time only 20% of consumers test for malaria before taking medication (despite clear national priority to promote use of testing); this compounds the gap between demand and supply and only a handful of commercial sector suppliers stock RDT – either as it is so slow moving, or they as suppliers are also not familiar with, or authorised to offer RDT; health care providers in general have poor knowledge of RDTs. Health care providers are also sceptical of the efficacy of RDT and wrongly perceive it as a proposed replacement for microscopy.

Policy and Regulation: whilst current policy supports the use of tests such as RDT, regulations limit those allowed to conduct tests, and small-scale facilities such as a Proprietary and Patent Medicine Vendor (PPMV), which are in many respects ideally located to support in more remote rural areas, are not authorised, and in fact not qualified, to offer RDT.

The use of ‘smart subsidy’ to drive market development

The constraints highlighted above have made it difficult for SuNMaP to incentivise the sales and administration of RDT through commercial channels. The project is thus considering use of a smart subsidy that could incentivise the supply side – i.e. so RDT importers and distributors in Nigeria market RDT through commercial channels, and the demand side, i.e. so those suspecting malaria make use of RDT before undergoing treatment for malaria. However, positioning a subsidy – deciding how much, for whom, for how long, and most critically the exit strategy for withdrawing the subsidy require sound understanding of the market dynamics, the players, and the expected outcomes; operationalizing and managing a subsidy, including how results will be monitored (and monitoring for and managing unintended outcomes), are also key to successful implementation. A proposed intervention area for SuNMaP is to design and introduce a subsidy for RDTs, which will focus on driving the commercial sale, and distribution of quality-assured RDTs. SuNMaP has therefore planned and budgeted for a feasibility study in order to inform decision-making around use of an RDT market-placed subsidy.

The Objectives of the RDT Subsidy Feasibility Study

The reason for the feasibility study is to determine the best way to introduce a subsidy, which will help drive demand for quality-assured RDTs by reducing the end retail cost of the product, and ensuring it is priced more competitively in relation to the retail price for ACT. The subsidy should also stimulate supplier interest in market-led sale and distribution of quality-assured RDT.

The study will investigate the capacity of SuNMaP to monitor the distribution and use of subsidised RDT through commercial channels so that potential leaks and misuse of the subsidy fund by commercial sector partner(s) could be averted. The study will also assess the capacity of the commercial sector

8ACT – RDT Baseline Survey, November 2013.


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distributors and importers of WHOPES, and/or NAFDAC certified RDT, to operate and comply with a subsidy scheme.

The study will lead to conclusions on how the subsidy scheme could address the constraints related affordability, accessibility, knowledge and policy and regulations of RDT supply through commercial channels. In addition, it will provide further situational analysis for SuNMaP as it defines the systemic outcomes in the market once the subsidy is withdrawn.

The results of the study will be used to finalise the design of the subsidy, and the agreement between SuNMaP and competent RDT importers and distributors in Nigeria willing to invest in the subsidy scheme. The project should therefore aim to review the capacities of about three to four prospective partners.

The implementing team will have the responsibility of obtaining and analysing detailed information from the field. This will include:

Suggested approach & research target

It is envisaged that the feasibility study will be conducted in three short consecutive phases:

1. Phase One: • the preparation of the feasibility study plan; • internal review and agreement of plan, including team members and support needs

(preparing, during and post-study) and logistical movements (see also key considerations below);

• internal review of relevant documentation (e.g. relevant market analyses, partner profiles, etc.);

2. Phase Two:

• field visits to discuss and negotiate options with potential commercial sector partners; • team sessions to brainstorm the design, operationalization, and exit strategy for the

intervention; • prepare the draft design and implementation plan, including draft partner contract

agreements (.i.e. scope, performance monitoring and enforcement);

3. Phase Three: • revision and finalisation of subsidy design and implementation plan, including proposed

partners and agreement templates; • production of final RDT subsidy design document and draft agreements.

Key considerations for the design study and implementation

• The study will focus on non-UNITAID states so that as much as possible the study and intervention plans do not to conflict with UNITAID’s work.

• It will also be important to analyse the current and future scope of the RBM partners, including UNITAID, so that the subsidy can be positioned in line with their strategies.


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• The proposed geographic focus for the study: Busuyi to advise on feasible geographic spread / field locations to focus on given team resources, timeline and security issues.

• Discussion with SUNMAP should include feasibility and benefits of a multi-partner approach - even though not all would be WHO approved yet (i.e. focus only on Codix or expand).

• The study should also explore the option that the subsidy element of the intervention be reduced and combined with other elements such as training of suppliers, supply chain development, and/or marketing.

• Discussions will be held with two main types of stakeholders: 1. The Roll Back Malaria (RBM) partners who are engaged in distribution and promotion of RDT through public health channels; and 2. The commercial sector importers, distributors, wholesalers and retailers. Are there others we need to consider?

• There will be no formal sampling given the nature of the study; instead preparatory discussions will include developing a set of basic criteria for determining who the study should focus on (including core business, likelihood of corporate buy-in, understanding and working with the concept, integrity, scope for scale, and two-way partnership). The aim will be to line up the project with multiple partner agreements as feasible. Busuyi - Does this make sense in the circumstances or do we have to lower the bar given market realities?

Timing – schedule

Various activities are planned in addition to the RDT subsidy feasibility study. The planned sequence of activities for the period, including the study is as follows:

• Week of 27th and 3rd February – RDT in-country activities:

Tuesday 28th morning– discussion with MC and SuNMaP Commercial Sector team; Field interviews - Wednesday 29th January through Sunday 9th February; RDT activity final report: first week of March, exact date TBC.

• Week of the 10th February - SuNMaP monitoring review/planning meeting: Initial RDT findings to be discussed with MC and SuNMaP team; SuNMaP planning meeting: - 11th through 14th February;

• DFID meeting: 17 February De-brief with MC 18 February; Melanie Newman departs on 19th Feb

Deliverables

1. Final feasibility study plan; 2. Preliminary findings to be presented to MC and SuNMaP team prior to planning meeting dates; 3. Final report presenting a design, implementation plan and proposed partnership agreement

templates to be presented by – TBC.

The team and key contacts

This activity will be led by Montrose Technical Consultant Melanie Newman. Team members will comprise of: Busuyi to advice on who will be available to support throughout the planned feasibility study. Key contacts during the study will include:


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Contact name Telephone Email Role

Melanie Newman

Nigeria: phone will be provided by MC on arrival Zambia: + 260 977 578796

[email protected] Technical Consultant

Dr Maxwell Kolawole

+234 80 6007 7143 [email protected]

MC: Country Director

Busuyi Okeowo +234 80 3343 4010 [email protected] MC: Commercial Sector Manager (SUNMAP)

Tina Obande +234 80 6711 2801 [email protected] MC: Acting Operations Officer

Nandi Chetden +234 80 3632 6977 [email protected] MC : Logistician Helena Vidalic +256 772 765 689 [email protected] Project Manager

(Montrose)

mailto:[email protected]

mailto:[email protected]


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ANNEX 2: Assignment work plan and list of persons met

Work Plan for RDT Subsidy Feasibility Analysis / SUNMAP Workplanning Montrose and Innovision for Malaria Consortium

Date Task Place Responsibility Monday - Friday, 20th - 24th January Preparation and feedback on TOR Lusaka MN, HV, BO

27th January - 7th February RDT Subsidy Feasibility Analysis Monday, 27th January Fly to Lagos, Nigeria MN

Tuesday - Friday , 28th - 31st January

Meeting with Codix MD and ED; Brief discussion with Buyusi on Codix meeting; Visit to various RDT wholesale/retail outlets, open market, Lagos; Meeting with Teta GM; Meeting with SuNMaP Anambra team and UNITAID - Remi; Visit to PPMVs in open market Anambra; Meeting with Teta Rep Anambra; Meeting with AMLSN Chairman and leadership, plus key representatives

Lagos, Anambra, Enugu

MN, BO, SuNMap CS

Saturday - Sunday, 1st - 2nd February

Write-up and email on emerging issues, options; Call with Rubaiyath; Review and feedback on recent outputs; Develop report outline

Abuja MN

Monday - Friday, 3rd - 7th February

Meeting with Busuyi to discuss emerging issues (see email), agree additional information needs/additional field work; Meetings/analysis re UNITAID, SFH, SHI Logistics; F/Up meeting with Codix; Draft report and partnership agreement;

Abuja, Lagos

BO, MN, HV, RS

Saturday - Sunday, 8th - 9th February

Work on draft report and partnership agreement; Abuja MN

Monday - Friday, 10th - 14th February SuNMaP Work Planning Abuja SuNMaP CS,

MN Monday 10th Share drafts and solicit feedback Abuja MK, BO, MN Tuesday - Friday, 11th - 14th February SuNMaP work planning Abuja SuNMaP CS,

MN Saturday - Sunday, 15th - 16th February

Revise draft design report; Preparation for DFID meeting Abuja MN

Monday, 17th February DfID Meeting Abuja SuNMaP CS, DfID, MN

Tuesday 18th February SuNMaP Debrief/Next Steps Abuja MK, BO, MN Wednesday 19th February Flight to Lagos; Departure for Lusaka MN Key dates and deadlines: 11-14th February - SuNMaP work planning; 17th February - deadline for draft RDT subsidy feasibility report and agreement; 17th February - DfID meeting;


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List of persons met

Name Designation Organisation Sammy Ogunjimi Managing Director Codixpharma Kinglsey Aguoru Executive Director (Operations) Codixpharma Mike Omotosho Chief Oversight Officer SHI Adedayo Fatoke Director, Supply Chain Systems SHI Clement O. Ogunleye Manager Teta Pharmaceuticals Makinde Oludepo Manager, Marketing Teta Pharmaceuticals Christy Igwe Zonal Head (ex- official) MLSCN Obi A. A. Chairman AMLSN; NAUTH AMLSN Ikegbue Henry C Secretary NAUTH Onitsha Eze Chinedu RBM state committee secretary NAUTH, Nnewi Ifediata Francis PRO AMLSN Ndukwu M. V. (Sr) Chairman, QA committee; HOD OLLH, Ihialla Ibeh, Nancy C. Secretary QA committee NAU, NNewi Ekejindu, Ifeoma M. Chairman RBM committee NAU, Nnewi Hon. Emeka Ifediba State treasurer Specialist Med Lab Awad- Obosi Ezekwuene Evelyn Nkechi State Fin Sec AMLSN Dept of MLS NAUTH Nnewi Ezegwuna D. A. Member RBM committee NAUTH Newi Dr Folake Olayinka Programme Director SuNMaP Dr Maxwell Kolawole Country Director MC / SuNMaP Buyusi Okeowo Commercial Sector Manager SuNMaP Basil Nwankpa Market Facilitator SuNMaP Mary Aki Market support Officer SuNMaP Nnahiwe, Pius Market Support Officer SuNMaP Lawal Kabir Commercial Sector Analyst SuNMaP Aderemi Olawole T.O. Marketing MC / UNITAID Muhammad Basheer Project Coordinator MC / UNITAID


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ANNEX 3: Operationalizing the RDT subsidy model

The following paragraphs flesh out core design elements for an RDT subsidy in partnership with one or more suppliers. The design is based on partnership with Codix as this is with whom project discussions have gone furthest. However, the core elements could easily be adapted for other importer/supplier partners. Lastly, these design elements can also feed in to what should be articulated in partnership agreements.

Pricing, sales and distribution

1. Refer to and position the subsidy as an ‘introductory promotional discount’ being offered by Codix, and promote it as such to all players in the value chain;

2. Agree discounted wholesale price with the contracted supplier, and work through selected supplier representatives to pass on the promotional discount to their customers;

3. Articulate an ‘end pricing policy’ with partners (along the supply chain) and introduce practical mechanisms for ‘controlling’ end retail pricing;

4. SuNMaP needs to recognise that it cannot control the wholesale and/or retail price of the RDT once it is sold on by Codix representatives; however, well planned and well executed awareness raising, product detailing, marketing and promotion on the part of Codix Head Office and its representatives will help get the buy-in of end providers (see also sections on the role of SuNMaP and promotional marketing below);

5. Agree overall sales targets for RDTs to be subsidised under the terms of the agreement – note this is not volumes supplied by Codix, but sale of product by end providers – this ensures Codix plays an active role in strengthening end providers’ capacities;

6. Individual Codix representatives will have their targets for sales; additional incentives will be built in to motivate the representatives; who pays will be articulated in partner agreements; however, ideally Codix should pay for its reps incentives as this is basically part of their business model (not the programme) and they likely have commission schemes and/or rep incentives in place for other products;

7. Where feasible, work through established and well-functioning ACT supply chains, which SuNMaP is already monitoring; this requires synergies between where Codix reps currently operate and the project target areas; expansion into new areas by Codix would have cost implications for the supplier, which may not be recoverable in the short-term;

8. However, do not restrict supplier representatives to these distribution channels, but (based on agreed parameters) allow supplier representatives to also target customers, which represent strong potential for growth (this can be agreed and finalised during orientation);

Logic around the discount – based on single pack RDT

9. The minimum retail RDT price currently found in the market is NGN 250, the subsidy will need to support in bringing this back to approximately NGN 150 per single unit; i.e. making the RDT on a par or cheaper than current ACT;

10. Codix normally sells to its representatives at between NGN 180 and NGN 200, which it claims covers its operational costs and margin; According to Codix its landed cost is NGN 120; Based on


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these figures, the subsidy would be reimbursing Codix between NGN 60 – 80 on each single pack;

11. The project will need to work closely with Codix to verify these figures and finalise the price subsidy;

A phased Approach

12. The subsidy scheme will have two phases: o Phase 1 – Pilot phase, which will focus on Kano, Lagos, Enugu, and Niger; non-UNITAD

project States and where, according to Codix, it has a presence. Phase 1 will span two quarters (8-10 weeks depending on results);

o Phase 2 – Scale-up phase, where the scheme will be expanded to additional States as agreed between the project and suppliers; Phase 2 will span five quarters, with the scheme closing out by end of July 2015;

13. A formal review of the scheme will be done at the end of the pilot phase to review performance, feasibility, challenges at management - and field-levels, and to make changes to the model (fundamental changes would be reflected in an addendum to partner agreements);

Tracking and Financial Reconciliation

14. The supplier and project develop a register of end providers (to be maintained by Codix), which can be used as a monitoring tool by Codix and SuNMaP (e.g. for market assessment activities, mystery shoppers, spot checks on end providers, random checks of registered end providers against supplier representatives’ sales invoices and receipts of payment);

15. The end providers’ register will belong to Codix, but as a condition of the contract, Codix will share the list monthly for programme purposes as above;

16. Codix submits monthly to SuNMaP – signed originals of registered end providers (regularly updated);

17. Codix will track sales volumes and amounts using: reps invoices, purchase orders and purchase invoices, and end customer proforma invoices and receipts (these various documents were proposed by Codix); Codix is also considering set-up of reps codes and customer codes (in its internal accounting system) and separate sub bank accounts into which customers would pay to more easily track sales;

18. The project will reimburse Codix based on calculations of overall discount it passes on to sales reps, tallied against actual sales to end providers – though the reimbursable amount will be based on Codix discount and not the end retail discount since this cannot be easily controlled nor will it be uniform across end providers;

Promotional marketing

19. The end providers listing is also a source for marketing and introducing new product, and for introducing additional promotional and marketing activities (this could be Codix itself or through expanding the partnership);


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20. Codix will have the lead role in the market place and be responsible for driving sales through promotional marketing (even if SuNMaP is paying some or all of the cost in the background – see below);

21. Selected RDT products will be clearly labelled (on outer packaging, and individual RDT packs) as a promotional discount product (this will help prevent end providers profiteering from the promotional discount) and will feed into demand creation/promotional marketing activities; Codix has in essence agreed to labelling product, and should work with SuNMaP to agree how this will happen in practice (e.g. the label could indicate Codix and a catch phrase such as ‘in partnership with SuNMaP’ if need be);

The Role of SuNMaP – Facilitator Only

22. SuNMaP remains in the background (a robust partnership contract underpinning the terms and conditions of the agreement), offering support as needed to strengthen Codix capability in sales and marketing of agreed RDT product;

23. SuNMaP will develop a basic projections model as part of the contract agreement, which will indicate agreed RDT volumes required (i.e. to support supplier purchase ordering from the manufacturer), and projected sales volumes, amounts and corresponding reimbursements; Actual reimbursements will be based on reconciled proof of sales;

24. SuNMaP will heavily front-load activities as planned to lobby, raise awareness, and get buy-in of key stakeholders – industry regulatory bodies, associations, guilds, etc.; SuNMaP will also take a lead role in managing these stakeholders’ expectations through its communication strategies;

25. SuNMaP will heavily front-load activities for demand creation at end provider and consumer level, ensuring clear synergies between broader programming interventions for consumer education and awareness with the introduction of the RDT subsidy intervention;

26. SuNMaP will heavily support the orientation and training of supplier reps, and support to ensure suppliers have the systems and capacities in place to manage its role and responsibilities under the subsidy scheme;

27. SuNMaP may agree to an equitable cost-share arrangement on additional incentives for sales reps, and others in the supply chain;

28. SuNMaP will arrange and cover the costs of financial and operational audits as required during the partnership, and post-intervention as required;

29. SuNMaP will help broker and strengthen direct relationships between industry professional bodies and suppliers;

The Role of Codix – Lead Firm/Supplier/Market Player

30. Codix will lead in and be responsible for ensuring timely availability of RDT product under the terms of the agreement (both type of product, and volumes as agreed);

31. Codix will lead in all aspects of frontline marketing and promotion; 32. Codix will be fully responsible for managing its reps, including encouraging and incentivising

performance on day to day basis; 33. Codix will be fully responsible for tracking sales amounts and volumes and for reporting to the

project on the same;


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34. Codix will be proactive in assessing and strengthening end provider capacities in consumer information, administering RDT, and waste management, and will employ additional incentives as need be to drive end provider performance.

report to: sunmap commercial sector team rdt...

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