Avoidance of Macroeconomic Distortions in Endemic Countries

An issue that surfaces in discussions of a significant expansion of overseas development assistance flowing into countries is that it can lead to unintended and often detrimental macroeconomic effects. These include unfavorable effects on the currency exchange rate, imbalances among sectors in the wage structure, and the diversion of resources from intended uses to other sectors. The nature and consequences of such effects was reviewed by the Commission on Macroeconomics and Health in relation to their recommendation for a large increase in external funding for core health services (Commission on Macroeconomics and Health Working Group 3, 2002).

The design of the subsidy recommended in this report should avoid these effects, to the greatest extent possible. The subsidy arrives in each country in the form of lower prices for antimalarial drugs (prices that should be similar to prices for chloroquine and SP in recent years), not as currency. No other method of subsidization would appear to be as neutral in this respect.

Potential Difficulties with a Global Subsidy for Antimalarials

A global subsidy for ACTs does pose some difficulties, in terms of both how ACTs are used and the way in which bilateral and multilateral aid programs are structured.

Potential Negative Impacts of ACT Use

If ACTs become as inexpensive to consumers as chloroquine is now, chances are they will be used as frequently as chloroquine, including overuse for febrile illnesses due to causes other than malaria. All overuse increases the probability that artemisinin-resistant parasites will arise and spread. Experience with other antimalarials suggests that resistance is less likely to develop in high-transmission areas than in low-transmission areas where people develop high parasite loads accompanied by clinical symptoms of malaria (see Chapter 9). This is not guaranteed, however.

Low-priced ACTs also could dampen incentives to expand the use of diagnostic tests (traditional microscopy or rapid dipsticks) for malaria. Currently, most antimalarial use in sub-Saharan Africa follows self-diagnosis (or parental diagnosis, in the case of children) and purchase of drugs through the private sector. Even in formal health facilities, diagnosis is often based on clinical symptoms. One confounding issue is that the currently available diagnostic tests have drawbacks. Microscopy is time-consuming, and technically demanding. Present-day dipsticks are relatively



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