New treatments for malaria were developed in response to a resurgence of the disease in the 1990s. Since then, funding for these treatments has increased significantly through bilateral and multilateral aid, corporate and private assistance, and national government programs in malarial countries. Yet problems in the drug purchase and delivery processes and threats to future treatments persist. These problems are relatively easy to solve, but the international community seems reluctant to tackle them, which means the funding is not being used as effectively as it should.
In the mid-1960s, U.S. troops confined the peripatetic Vietcong (and many Vietnamese civilians) to the Ho Chi Minh Trail. This corridor was a great breeding ground for malaria-carrying mosquitoes, and one in ten travelers succumbed to the disease. Malaria was so prevalent that it killed more soldiers than combat did. In desperation, the North Vietnamese leadership appealed to their Chinese allies to assist with developing a malaria treatment. A covert Vietnamese military group convened in 1967 to search for a malaria cure identified a drug developed from the sweet wormwood plant (Artemisia annua), an herbal remedy that had existed for over two thousand years.[1] Although this medicinal discovery came too late for most of those walking the Ho Chi Minh Trail, its efficacy against malaria was astonishing.
Soon Thailand, where treatment-resistant malaria was a growing problem, began studies on combinations of mefloquine with the artemisinin derivatives, artesunate or artemether.[2] Each of the combinations proved highly effective in reducing the incidence of malaria. Vietnam saw the evidence of this breakthrough firsthand when extensive artemisinin derivative deployment in 1991 led to significant reductions in malaria rates.[3] These favorable results launched a global initiative to evaluate artemisinin-based combination therapies (ACTs) in Africa and South America.[4]
The Spread of ACTs
Artemisia annua cultivation expanded to the West in the 1980s,[5] when China's economy opened up and skepticism about traditional Chinese medicine in general--and artemether in particular--diminished. Evidence was then mounting globally of rising parasitic resistance to "monotherapies" like chloroquine and--increasingly--to its replacement, sulfadoxine-pyrimethamine, which succumbed to resistance within five years of extensive use.[6] New remedies were required--and soon.
In association with the Swiss company Novartis, the Academy of Military Medicine in China combined a long-standing but low-resistance antimalarial drug, lumefantrine, with artemisinin to make the first ACT, called Coartem. The drug worked faster than any previously available drug, and to date has had no documented clinical failures. Coartem, however, involved a three-day treatment regimen and was substantially more expensive than existing drugs--over two dollars per adult treatment compared with less than one cent for chloroquine.
Costs notwithstanding, South Africa became the first African country to use Coartem extensively in KwaZulu-Natal province in February 2001.[7] Along with DDT use, compliance with the three-day ACT regimen helped overcome an epidemic in the area. In subsequent years, several other African countries followed South Africa's lead in moving from monotherapies to ACTs (see figure 1).
In 2001, the World Health Organization (WHO) recommended that all countries experiencing resistance to conventional monotherapies, such as chloroquine against P. falciparum malaria, switch to combination therapies, preferably with artemisinin derivatives.[8] WHO commends [t]he potential value of drug combinations, notably those containing an artemisinin derivative, to improve efficacy, delay development and selection of drug-resistant parasites and thus prolong the therapeutic life of existing antimalarial drugs. Combinations that do not contain an artemisinin derivative could be a preferred option for reasons of cost and accessibility in some countries.[9]
Countries that could afford to change treatment policy adopted the new drug quickly. For poorer countries, Novartis agreed to subsidize Coartem production and distribution.[10] Given the costs of the new drugs, supply-chain management, and training for doctors and nurses, donor-dependent nations claimed to be unable to afford the transition, and donors were equally reluctant to foot the bill in a timely fashion.
When the Global Fund to Fight AIDS, Tuberculosis and Malaria was launched in 2003, many people believed it would solve the problems of inadequate funding and weak donor commitment to malaria treatment. The Fund would act as a clearinghouse for additional funding to help countries switch to ACTs. To make it responsive to developing country requirements, the Fund was designed to support country-formulated proposals and not explicitly make recommendations, so it continued to finance chloroquine and other less-effective drugs in areas where resistance rates were unacceptably high.[11] But pressure from the growing malaria advocacy community eventually compelled the Fund to change its policy and move toward meeting the huge new demand for ACTs.
To its credit, the Global Fund was the first major aid agency to authorize the purchase of ACTs as first- and second-line treatments for malaria. In the latest round of grant allocations, funds for fighting malaria were substantial ($202 million in nineteen countries)[12] and deserve commendation. The Fund has committed $30 million over the full five-year life of Fund board-approved proposals from African countries for the purchase of ACTs in three proposal rounds.[13] According to the Fund's 2005 annual report, 5.6 million people have been treated with antimalarial therapies, including ACTs for drug-resistant malaria.[14]
After a somewhat slow start, the Global Fund has become the largest financier of ACTs (see table 1), accounting for over 70 percent of the total purchased in 2006. But certain significant challenges remain.
Global Fund Procurement: Hassles and Inefficiencies
The Global Fund's procurement process is lengthy and tedious. It is plagued by bureaucratic holdups, bloated forecasting, supply chain mismanagement, and graft. A June 2005 report by the U.S. Government Accountability Office (GAO) dubbed the entire process "cumbersome."[19]
In order to submit grant applications to the Global Fund, representatives from all interests--donor countries, nonprofit and nongovernmental organizations (NGOs), academics, and disease-burdened countries--assess the needs and interests of their own constituencies. These representatives constitute the Global Fund's country coordinating mechanisms (CCMs), which involve aid-recipient countries in the decision-making process. Following the Global Fund's approval of the grant, the CCM process allows the nomination of one organization, the principal recipient, to receive the bulk of the funding in order to track the implementation of the aid. For the most part, this supervisory role is given to the recipient country's finance ministry. The ministry then transfers the funds to internal recipients responsible for placing orders with the drug procurement agent, such as WHO and the United Nations Children's Fund (UNICEF). The procurement agent contacts the pharmaceutical company with the country's drug request. The next steps involve the collection of the drug order by the procurement agent and its shipment to the country for widespread distribution. The procurement process culminates in the remuneration of the participating pharmaceutical company.[20]
Because of the length and haphazard pattern of the procurement process, funds can sometimes be held up by government bureaucracies, even further delaying the procurement process. In Ghana, according to the Global Fund secretariat, the government's slow, bureaucratic procurement processes caused delays that contributed to the grant's poor performance in helping people with HIV/AIDS and opportunistic infections.[21]
Further anecdotal and off-the-record reports show that malaria-specific financing is often stuck in ministries of finance for months without any treatments being procured for the sick. This has allegedly happened recently in Tanzania, Chad, the Democratic Republic of the Congo, and Nigeria, among other places.[22]
The Fund can choose to bypass finance ministries, which are usually the nominated principal recipients, and which give the money directly to drug manufacturers for delivery to another government ministry or NGO in the field. This happened in Zambia, where the Global Fund appointed an NGO and a faith-based body as principal recipients in 2004.[23] And as a consequence of corruption in Uganda,[24] the Global Fund procured directly through WHO, bypassing corrupt Ugandan officials altogether; drugs have since been procured more effectively. But such action is the exception, not the rule. This is partly because the Fund was established to be responsive to the needs of developing countries, and it requires delicate diplomacy to explain to a health minister that his cabinet colleagues in finance are either incompetent or corrupt. Therefore, corrupt politicians in the field usually continue to reap personal benefits from funds designated to save the lives of the sick.
To exacerbate matters, many of the drugs purchased are ineffective. An article in The Lancet noted that in East Africa, surveillance and clinical trial data show treatment failure rates of up to 64 percent in patients given chloroquine and 45 percent given sulfadoxine-pyrimethamine--and those figures are climbing.[25] At least 16 percent of drugs purchased by the Global Fund in the recent past were of indeterminate quality (this figure includes drugs for combating tuberculosis and HIV, since the Global Fund does not break it down by disease).[26] And while the Global Fund is more transparent than any other multilateral agency, there is still much room for improvement.
To address some transparency and reporting shortcomings, Senator Tom Coburn (R-Okla.), a physician, introduced an amendment in Congress in February 2007 to require the Global Fund "to post on a publicly available website all internally and externally commissioned audits, program reviews, evaluations, and inspector general reports and findings."[27] Like his successful inquest into U.S. Agency for International Development (USAID) disease-control funding,[28] Coburn now aims to expose the Global Fund to much-needed sunlight. But Congress has less oversight over the Global Fund or any of the United Nations (UN) operations based in Geneva than it does over USAID. One need look only to the 2005 oil-for-food debacle as an object lesson in how the UN's expense accounts operate. The GAO, however, has some oversight over the UN, and it has been granted access to Global Fund data. The raw data that the GAO gets to see, however, is not available to anyone else--only the reports it issues can be made public. Without those data it is impossible to do external evaluations. Since it took Senator Coburn to expose failings at USAID, something the GAO largely failed to do, one should not expect the GAO to adequately address any failings of the Global Fund.
Of grave concern to Coburn is the fact that there are no consequences for waste, fraud, or abuse, primarily because the Fund is allowed to hide them. Even when the Global Fund's inspector general (IG) issues a report, it is not available to Congress. According to an article in the Boston Globe,[29] the IG has attacked the spending of outgoing executive director Richard Feachem on items such as limousines, yachts, and entertainment. These expenses may have been legitimate, but one has to be skeptical: the Global Fund's secretariat established a bank account with Credit Suisse to bypass its normal expense reimbursement processes. Congress has been denied access to the IG report on these expenditures, even though the United States has given almost $2 billion to the Global Fund and will increase that sum to over $2.7 billion by the end of 2007. The IG report on the Credit Suisse account was prompted only after a report by Deloitte declared that the account might be inappropriate. Oddly, the IG charged with coordinating this interrogation has now resigned, citing "health concerns." Feachem claims the allegations are false. He informed me that the Boston Globe article contains "serious mistakes, inaccuracies, and false allegations--some of which are incorrectly attributed to the report of the internal auditor."[30] Coburn's amendment was blocked when Senate majority leader Harry Reid (D-Nev.) blocked all amendments in the new Congress, but informed sources indicate that there is "bipartisan interest in ensuring that similar language [to Coburn's amendment] will be adopted into the spending bill that funds the Global Fund in 2008."[31]
Roger Bate is a resident fellow at AEI. Research assistant Kathryn Boateng and editorial assistant Evan Sparks worked with Mr. Bate to edit and produce this Health Policy Outlook.
Health Policy Outlook
No. 4, March 2007
By Roger Bate
American Enterprise Institute
1. Adam Luck, "Remedy Used in Vietnam War Rediscovered as Cheap Malaria Cure," Daily Telegraph (London), November 15, 2003.
2. Nicholas J. White, "The Malaria Medicine Chest, Part 2," Wellcome Trust, January 10, 2002, available here (accessed February 28, 2007).
3. Gavin Yamey, "New Roundup: Health Agencies End In-Fighting on Malaria," British Medical Journal 328, no. 7448 (May 8, 2004): 1085-1142, available here (accessed February 28, 2007).
4. Nicholas J. White, "The Malaria Medicine Chest, Part 2."
5. World Health Organization (WHO), Global Malarial Programme, "Meeting on the Production of Artemisinin and Artemisinin-Based Combination Therapies" (Arusha, Tanzania, June 6-7, 2005), available here (pdf) (accessed March 1, 2007).
6. Nicholas J. White, "Malaria--Time to Act," New England Journal of Medicine 355, no. 19 (November 9, 2006): 1956-57, available here (accessed March 12, 2007).
7. Medicins sans Frontières [Doctors Without Borders], "Malaria: Unconvincing Arguments," MSF Reports (April 24, 2004), available here (accessed February 28, 2007).
8. Roll Back Malaria (RBM), The Use of Antimalarial Drugs: Report of a WHO Informal Consultation, WHO/CDS/RBM/2001.33 (Geneva: WHO, 2001); and RBM, Antimalarial Drug Combination Therapy: Report of WHO Technical Consultation, WHO/CDS/RBM/2001.35 (Geneva: WHO, 2001).
9. Ibid.
10. International Federation of Pharmaceutical Manufacturers & Associations, "Novartis Coartem," program description, available at (accessed March 8, 2007).
11. Amir Attaran et al., "The World Bank: False Financial and Statistical Accounts and Medical Malpractice in Malaria Treatment," The Lancet 368, no. 9531 (April 25, 2006): 247-252.
12. Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM), "Current Funding Rounds," available at www.theglobalfund.org/en/apply/current (accessed February 28, 2007).
13. GFATM, "Factsheet--Coartem," available from IFPMA or The Global Fund (accessed February 28, 2007).
14. GFATM, "Grant Performance," in Global Fund Annual Report, 2005, available here (pdf) (accessed February 28, 2007).
15. WHO, Global Malarial Programme, "Facts on ACTs: January 2006 Update," January 2006, available here (pdf) (accessed March 9, 2007).
16. Of the $10.5 million worth of antimalarials procured by UNICEF's supply division in 2005, ACTs accounted for $8.5 million of the amount providing over 9 million ACT treatments. For further details, see United Nations Children's Fund, "Supply Division Annual Report 2005," available here (pdf) (accessed March 9, 2007).
17. Melanie C. Renshaw (UNICEF senior malaria advisor), telephone conversation with author's staff, March 1, 2007.
18. In coalition with the President's Malaria Initiative (PMI), USAID in fiscal year (FY) 2006 allocated almost $2.4 million for the procurement of ACTs and antimalarial drugs (out of the total PMI budget of $30 million) in the first three focus countries: Uganda, Tanzania, and Angola. In FY 2007, PMI is allocating nearly $19 million for ACTs and antimalarial drugs in seven focus countries, expanding to Malawi, Mozambique, Rwanda, and Senegal. For further details, see U.S. Agency for International Development, "Artemisinin-Based Combination Therapies Effective in Treating Drug-Resistant Malaria," program description, available here (pdf) (accessed March 12, 2007).
19. U.S. Government Accountability Office (GAO), Global Health: The Global Fund to Fight AIDS, TB and Malaria Is Responding to Challenges but Needs Better Information and Documentation for Performance-Based Funding, GAO-05-639 report to Congressional committees, June 2005, available here (pdf) (accessed February 28, 2007).
20. GFATM, "Guide to the Global Fund's Policies on Procurement and Supply Management," April 2004, available here (pdf) (accessed March 1, 2007).
21. GAO, Global Health, 26 n. 20.
22. Without alleging any corruption, Sanofi-Aventis spokesman Rene Cazetien said that his company produced 917,000 treatments of ART-AM for May 2006 delivery in the Democratic Republic of the Congo, but as of December 2006 they remained undelivered pending confirmation of the order.
23. Ruairi Brugha et al., "Global Fund Tracking Study: A Cross-Country Comparative Analysis" (draft study, GFATM, Geneva, August 2, 2005), available here (pdf) (accessed March 1, 2007).
24. Uganda had a Global Fund grant suspended for mass corruption. For further details on this story, see Felix Osike, "Uganda Loses $16M Global Fund Aid," New Vision (Kampala), March 11, 2007.
25. Amir Attaran et al., "The World Bank."
26. The exact number was 635 out of 3,935 treatments. For further details, see GFATM, "Implementation of the Quality Assurance Policy" (records, Sixth Portfolio Committee Meeting, Geneva, February 22-23, 2007).
27. Revised Continuing Appropriations Resolution of 2007, HJRes 20, 110th Cong., 1st sess., SA 252, Congressional Record 153 (February 12, 2007): S 1870.
28. Senator Coburn hosted several key hearings exploring the efficacy of USAID's malaria programs in 2004 and 2005. He once likened the new criticisms to bursts of sunlight shining on the malaria program. The Senate subcommittee hearing in May 2005, coupled with persistently unfavorable coverage in the academic and popular press, marked a turning point for USAID's Bureau for Global Health. For further details, see Roger Bate, "Blind Hydra: USAID Policy Fails to Control Malaria," testimony before the Senate Committee on Homeland Security and Government Affairs, Subcommittee on Federal Financial Management, Government Information and International Security, Examining USAID's Anti-Malaria Policies, 109th Cong., 1st sess., May 12, 2005, available here .
29. John Donnelly, "Disease-Fighting Fund's Expenses Hit," Boston Globe, February 5, 2007.
30. Richard Feachem (GFATM executive director), personal communication with the author, February 13, 2007.
31. Senior Senate staffer, personal communication with the author, February 12, 2007.
32. WHO, Global Malarial Programme, "Meeting on the Production of Artemisinin and Artemisinin-Based Combination Therapies."
33. Lee Wells (Novartis) and Rene Cazetien (Sanofi-Aventis), personal communication with the author, February 25, 2007. Novartis supplied 9 million treatments of Coartem in 2005, which at the time was the most widely used ACT.
34. Dana G. Dalrymple, "Artemisia, Agriculture and Malaria in Africa: The Interplay of Tradition, Science and Public Policy" (working paper 1, International Center for Underutilised Crops, Colombo, Sri Lanka, July 1, 2006), available here (pdf) (accessed February 28, 2007).
35. Center for Global Development, Consultation Report of the Global Health Forecasting Working Group (February 2007), available here (accessed March 1, 2007).
36. Jessica Pickett, "Novartis Reduces the Price of Anti-Malarials below Costs," Global Health Policy blog, October 31, 2006, available here (php) (accessed March 1, 2007).
37. Center for Global Development, Consultation Report of the Global Health Forecasting Working Group, 55.
38. Ibid.
39. Ibid., 22.
40. Roger Bate, "Malaria in Africa," testimony before the House Committee on International Relations, Subcommittee on Africa, Malaria and Tuberculosis in Africa, 108th Cong., 2nd sess., September 14, 2004, available here .
41. GFATM, "Implementation of the Quality Assurance Policy."
42. Roger Bate, "Misguidance," New York Sun, December 13, 2006, available here .
43. At a seminar at the Safari Park Hotel in Nairobi, Kenya, on March 1, 2007, Willis Akhwale, the malaria program coordinator for the Kenyan government, said that his government would be buying Cipla's ACT later in 2007. When challenged that this drug was not proven to be bioequivalent to the drug it was copying (Coartem), he immediately backed down and said the order had not yet gone through.
44. It is important to note that Indian copycat drugs are often not tested for bioequivalence, which means they may not work properly. Patients may die or relapse. Survivors may become resistant to the drugs, undermining the only class of malaria treatments currently available for which resistance is not exhibited.
45. For further discussion of drugs of questionable quality, see Donald G. McNeil Jr., "In the World of Life-Saving Drugs, a Growing Epidemic of Deadly Fakes," New York Times, February 21, 2007.
46. For more information on the categories of approved products, see GFATM, "Global Fund Compliance List for Single and Limited Source Pharmaceutical Products," March 2, 2007, available here (pdf) (accessed March 9, 2007). According to the U.S. Food and Drug Administration (FDA), bioequivalence is "the absence of a significant difference in the rate and extent to which the active ingredient or active moiety in pharmaceutical equivalents or pharmaceutical alternatives becomes available at the site of drug action when administered at the same molar dose under similar conditions in an appropriately designed study." See FDA, Center for Drug Evaluation and Research, "The FDA Process for Approving Generic Drugs: Definition of Bioequivalence," slide presentation, October 29, 2002, available here (accessed March 13, 2007).
47. Ibid.
48. GFATM, "Implementation of the Quality Assurance Policy."
49. Gabrielle Holmgren, Jose P. Gil, Pedro M. Ferreira, Maria I. Veiga, Charles O. Obonyo, and Anders Bjorkman, "Amodiaquine Resistant Plasmodium falciparum Malaria In Vivo Is Associated with Selection of pfcrt 76T and pfmdr1 86Y," Infection, Genetics and Evolution 6, no. 4 (July 2006): 309-14.
50. Coartem contains lumefantrine, which was never used as a monotherapy and hence has no resistance problems. Amodiaquine was used as a monotherapy, which is why resistance is a problem.
51. Andrew Jack, "WHO Warns Global Fund on Malaria Policy," Financial Times, May 14, 2006.
52. Betsy McKay and Nicholas Zamiska, "Global Health, China's Pride on Line in Malaria Clash," Wall Street Journal, March 6, 2007.
53. Ann M. Thayer, "Fighting Malaria," Chemical & Engineering News, October 24, 2005, available here (accessed February 28, 2007).
54. Ibid.
55. Sanofi-Aventis and Drugs for Neglected Diseases Initiative, "New, Once-a-Day Drug Fixed Dose Combination against Malaria Now Available," news release, March 1, 2007, available here (pdf) (accessed March 1, 2007).
56. Rene Cazetien, personal communication with the author, January 15, 2007.
57. The Novartis Institute for Tropical Diseases was cofounded by Novartis with the Wellcome Trust, the Bill & Melinda Gates Foundation, the Swiss Tropical Institute and Singapore's Economic Development Board.
58. Matter's team is studying helicases, cyclohydrolases, hexose transporters, novel peroxides, and plasmodial kinases, among other approaches. They have eleven staff members working in Singapore on malaria, collaborating with many around the world. See Alex Matter, personal communication with the author, January 24, 2007.
59. Paul Herrling (Novartis), personal communication with the author, January 24, 2007.
