5
The Market for New Contraceptives: Translating Unmet Need into Market Demand

Chapter 2 documents the existence of a considerable unmet need for contraception in both the industrial and developing economies of the world. The argument is made that there is a compelling public health1 case for broadening the portfolio of contraception options, for women and men everywhere. Chapters 3 and 4—most particularly the latter—offer rich evidence for new paths in contemporary science that could expand those options and answer specific and highly critical needs for which there are now no adequate or appropriate solutions.

Yet, as irrefutable as the need may be and as promising the science, response from pharmaceutical firms in the United States and western Europe will be conditioned by the difficulties of translating need and promise into a profitable market. The high costs and risks of committing to the development of any medical technology are such that no firm will undertake commercialization without at least a strong belief in the existence of a substantial market of consumers able and willing to pay, in other words, the existence of market demand. In the case of new contraceptives, that belief is qualified by factors whose effects are economic and whose causes are several and complex. This is a major dilemma.

The present chapter explores this dilemma from several perspectives. The first is a qualitative look at present market demand as expressed in overall patterns of contraceptive use, worldwide and in the United States.

The second focus is on specific areas of contraceptive need that seem most readily translatable into market demand, that is, ''niches" that are either empty or quite inadequately filled. The indicators of these niches include the various limitations in the current array of contraceptives as expressed in the side effects experienced by users, failure and discontinuation rates reflecting side effects and



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--> 5 The Market for New Contraceptives: Translating Unmet Need into Market Demand Chapter 2 documents the existence of a considerable unmet need for contraception in both the industrial and developing economies of the world. The argument is made that there is a compelling public health1 case for broadening the portfolio of contraception options, for women and men everywhere. Chapters 3 and 4—most particularly the latter—offer rich evidence for new paths in contemporary science that could expand those options and answer specific and highly critical needs for which there are now no adequate or appropriate solutions. Yet, as irrefutable as the need may be and as promising the science, response from pharmaceutical firms in the United States and western Europe will be conditioned by the difficulties of translating need and promise into a profitable market. The high costs and risks of committing to the development of any medical technology are such that no firm will undertake commercialization without at least a strong belief in the existence of a substantial market of consumers able and willing to pay, in other words, the existence of market demand. In the case of new contraceptives, that belief is qualified by factors whose effects are economic and whose causes are several and complex. This is a major dilemma. The present chapter explores this dilemma from several perspectives. The first is a qualitative look at present market demand as expressed in overall patterns of contraceptive use, worldwide and in the United States. The second focus is on specific areas of contraceptive need that seem most readily translatable into market demand, that is, ''niches" that are either empty or quite inadequately filled. The indicators of these niches include the various limitations in the current array of contraceptives as expressed in the side effects experienced by users, failure and discontinuation rates reflecting side effects and

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--> other constraints to adoption and continued use, and sterilization as a contraceptive option that is not always appropriate. This focus also encompasses the implications of the sexually transmitted diseases for contraceptive technology and their relevance for the contraceptive market. The third perspective has to do with consumer preferences, with particular attention to the content and character of the "woman-centered agenda" and the issues it raises. The fourth perspective is quantitative: a look at today's market for contraceptives in terms of numbers of actual and potential users and dollar values; lessons to be learned from the world vaccine market, with which the contraceptives market is in some ways analogous; and subsidized procurement as a market factor. The chapter closes with a discussion of the cost-effectiveness of contraception and what that might mean as an incentive to investment in contraceptive R&D and the intimate and necessary relationship of that investment with the market for contraceptive technologies. Current Contraceptive Use Contraceptive Use Worldwide Contraceptive prevalence2 among women currently married or in union (a group designated by the abbreviation MWRA, or "married women of reproductive age") increased worldwide from 30 percent during 1960-1965 to 57 percent in 1990. The increase was much more dramatic in the developing countries, where prevalence rose from 9 percent to 53 percent in that same period (UN 1994, cited in WHO/HRP 1995). The increase was especially dramatic in eastern Asia and Latin America, slightly less so in other parts of Asia and in North Africa, least of all in Sub-Saharan Africa. The range is wide: Contraceptive use prevalence in Africa is currently estimated at 17 percent, quite a difference from Latin America, for example, where prevalence is almost 65 percent (see Table 5-1 and Table 5-2 for data for developing countries). There is also great variability within regions. While overall prevalence in the Arab States and Europe averages 44 percent, the range is from almost zero in some Persian Gulf countries to 68 percent in Turkey. And, in Asia, where the overall prevalence is 62.5 percent, the range is from 10 percent in Afghanistan to a use prevalence of 80 percent or more in China. Variability in contraceptive use prevalence among the industrial countries is much narrower (Guttmacher Institute 1995a; WHO/HRP 1995). The overwhelming majority—90 percent-—of women using contraception in the developing countries are using modern methods. Globally, the most used method is female sterilization (tubectomy or tubal ligation). Thirty percent of all contracepting couples worldwide relied on female sterilization as of 1990; in the

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--> TABLE 5-1 Basic Data, Total Population, and Contraceptive Use, World and Developing Countries, 1994 and Projected for 2005 (in thousands)   1994 2005   World   Total population 5,646,200 6,665,120 Total female population 2,803,790 3,307,980 Women of reproductive age (aged 15-49) 1,415,810 1,681,040 Women of reproductive age, married or in union (MWRA)a 976,728 1,145,490 Contraceptive users among all women 595,103 755,817   Developing Countries Total population 4,418,180 5,364,550 Total female population 2,172,230 2,642,990 Women of reproductive age (aged 15-49) 1,106,570 1,368,950 Women of reproductive age, married or in union (MWRA)a 784,897 953,815 Contraceptive users among all women 457,759 625,521 Contraceptive users among married/in union women 445,692 602,417 a MWRA = married women of reproductive age, defined as "married or living with a man," vis-à-vis "now widowed, divorced, or no longer living together." Source: United Nations Population Fund. Contraceptive Use and Commodity Costs in Developing Countries, 1994-2005. New York, 1995. Data for total population are from the United Nations 1992 estimates and projections. User data are derived from sample surveys carried out in 69 developing countries in the 1980s and 1990s; these countries contained 90 percent of the population and 94 percent of contraceptive users of all developing countries in 1990. Contraceptive prevalence for the period of analysis was projected using a demographic approach that takes the level of contraceptive prevalence as estimated from the latest national survey and then projects increases in contraceptive prevalence as a function of estimated changes in total fertility rates. The basis is the United Nations medium population projection. These rates are then applied to the number of MWRA and unmarried women who use contraception; the fact that there are now data from 34 countries for this second population group makes its inclusion in global calculations of contraceptive prevalence possible for the first time.

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--> TABLE 5-2 Number of Contraceptive Users, by Method, World and Developing Countries, 1994 and Projected for 2005 (in thousands)     Sterilization             Total   All Female Male Pill Injectable IUD Condom Other Users         World           1994 233,597 183,323 50,274 92,060 11,879 127,156 51,451 78,960 595,103 2005 290,599 232,514 58,085 120,097 9,375 152,325 58,965 4,456 755,817         Developing Countries         1994 200,149 161,107 39,042 51,352 10,461 112,115 24,778 46,837 445,692 2005 258,847 210,031 48,816 76,603 17,058 137,079 35,702 77,128 602,417   Source: United Nations Population Fund. Contraceptive Use and Commodity Costs in Developing Countries, 1994-2005. New York, 1995. Data are derived from sample surveys carried out in 69 developing countries in the 1980s and 1990s; these countries contained 90 percent of the population and 94 percent of contraceptive users of all developing countries in 1990. Contraceptive prevalence for the period of analysis was projected using a demographic approach that takes the level of contraceptive prevalence as estimated from the latest national survey and then projects increases in contraceptive prevalence as a function of estimated changes in total fertility rates. The basis is the United Nations medium population projection. These rates are subsequently applied both to the number of MWRA (married women of reproductive age) and to the number of unmarried women who use contraception; the fact that there are now data from 34 countries for this second population group makes its inclusion in global calculations of contraceptive prevalence possible for the first time.

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--> developing countries, that figure was 38 percent (UNFPA 1994; WHO/HRP 1995). As for reversible methods, the IUD is the second most used method in the developing countries, primarily because of its extensive use in the People's Republic of China; it ranks fourth in the industrial economies, a ranking that might be higher were it not for the unavailability of the IUD in most of eastern Europe and its very limited use in the United States. The pill ranks third in the developing countries and is the most prevalent method in the industrial countries. The condom fails to even approach the levels of utilization in the developing countries that it has achieved elsewhere. In fact, all coitus-related methods (condoms, vaginal methods, withdrawal) are far less likely to be used in most developing countries than in the industrial countries. Because Norplant is so new and available in very few developing countries, use prevalence data are not included in the tables below. As of 1993, there were an estimated 1.5 million users of that method in developing countries (of whom 1.3 million were in Indonesia), with an admittedly arbitrary estimate of 6.8 million by 2005 (UNFPA 1994). It is important to remember that any ranking of method utilization reflects only what people do, not necessarily what they prefer; in much of the developing world, the full "mix" of methods that would permit individuals to truly express preference by choosing among real options is not generally available (WHO/HRP 1995) (see Table 5-3 and Table 5-4). Contraceptive Use in the United States In 1988, over two-thirds of women of reproductive age in the United States were at risk of unintended pregnancy, that is, they were sexually active and did not want to become pregnant but would be physically able to become pregnant if they or their partner used no contraceptive method (Forrest 1994b). Of those 39 million women, 35 million (9 in 10) were using a contraceptive and 4 million were not (Forrest 1994b). Key problems in the use of reversible contraception in the United States and elsewhere are the high rates of discontinuation of use by 12 months after initiation and the number of unintended pregnancies among women who state that they or their partners were regularly using a method of contraception. There is also evidence of unrealistic expectations regarding contraceptive use. This, in very small part, is due to side effects unidentified in premarketing clinical trials. In addition, known side effects are not taken into account appropriately in prescribing practice or the product information materials are so fully detailed that they are not read or fully understood (Carpenter 1989; Forrest 1994a). Further, the fact that contraceptives are used by theoretically healthy individuals who are not seeking prevention or cure, as those are medically understood, conditions the extent to which users are willing to make trade-offs, even when the costs of a potential pregnancy may be very high. The combination of all these factors with the unfettered litigiousness that characterizes the contemporary

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--> American scene results in a distinctive and difficult environment in the United States. Figure 5-1 presents the proportionate use of each principal contraceptive method in the United States in 1955, 1965, and 1988. Figure 5-2 presents a more detailed picture of shifts in that trajectory between 1960 and 1988. Figure 5-2 makes clear what is sometimes forgotten, that is, that the picture in 1955 in the United States was far from being a blank slate: Among currently married white women aged 18-39 in that year, 70 percent had used contraception at some point and 34 percent had used a method before their first pregnancy. Nonetheless, what was available for use was quite limited, in variety and efficacy, and either coitus-dependent (condom, diaphragm, douche, withdrawal, spermicides) or linked to the timing of coitus (periodic abstinence); only 4 percent of U.S. women had been sterilized for contraceptive purposes. The broad pattern changes since the availability of oral contraceptives beginning in 1960 have been: Increase in total contraceptive use and pill use between 1955 and 1965 and decreased use of the diaphragm, condom, and periodic abstinence. Steep increase in interest in coitus-independent methods and in method efficacy. Increased reliance on female-controlled methods, especially in the 1960s. Steady growth in resort to contraceptive sterilization since the mid- 1960s. Increased IUD use from the early 1960s till the early 1970s, then a sharp decrease to a stable but low plateau in the late 1980s. Decline in condom use in the early 1960s and 1970s, then increase in the 1980s. Rapid adoption of new methods—pill, Today sponge, injections, Norplant—as each appeared, with diminished utilization as side effects were experienced. In addition to these larger patterns, there have been smaller patterns in contraceptive method use that have been dictated by differences and changes in the circumstances of women's lives. The result is a profile of how various female subpopulations tend to adopt or reject certain methods over time (see Table 5-5). Specific Needs and Market Opportunities: The Limitations of Available Contraceptives Side Effects Like any medical intervention, all contraceptive methods have side effects. Some of those can be life threatening when a method is prescribed inappropriately for women for whom it is medically contraindicated or when an infection

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--> TABLE 5-3 Contraceptive Use Among Married/in Union Women, by Method, and Region, 1994 (in thousands)   Africa Arab States and Europe Asia and Pacific Method No. % No. % No. % Sterilization 1,625 11.8 1,057 5.3 179,318 49.2 Female 1,541 11.2 1,030 5.2 140,905 38.7 Male 84 0.6 27 0.1 38,413 10.5 Pill 3,507 25.5 6,081 30.7 28,579 7.8 Injectable 1,748 12.7 146 0.7 7,559 2.1 IUD 1,145 8.3 5,461 27.6 100,205 27.5 Condom 512 3.7 1,225 6.2 21,076 5.8 Othera 5,240 38.0 5,818 29.4 27,545 7.6 Otherc — — — — — — Total 13,777 100.0 19,791 100.0 364,282 100.0 Note:—= no data available. a Data for Africa designate as "Other" vaginal methods, Norplant, and traditional methods. In the U.S. National Survey of Family Growth, "Other" included jellies and creams, suppositories and inserts, the Today sponge, douche, diaphragm, foam, periodic abstinence, and withdrawal. b No implants were available in the United States at the time these data were gathered. c 'This category includes data on users as follows: diaphragm, 2 million/5.7 percent; periodic abstinence, 0.8 million/2.3 percent; withdrawal, 0.8 million/2.2 percent; spermicides, 0.6 million/1.8 percent; sponge, 0.4 million/l. percent. Source: For all data except for the United States, United Nations Population Fund. Contraceptive Use and Commodity Costs in Developing Countries, 1994-2005 (Technical Report No. 18). New York, 1994. For the U.S. data, National Center for Health Statistics, 1988 National Survey of Family Growth, cited in Alan Guttmacher Institute, Facts in Brief: Contraceptive Use. New York, March 1993. results from an associated surgical intervention (Carpenter 1989; Hatcher et al. 1994). Nonetheless, while not negligible, the mortality attributable to contraceptive use is very small. For the most part, women's concerns about the contraceptive technologies that are currently available have to do with side effects that are distressing or annoying in themselves or that lead women to conclude that something bad may be going on in their bodies. These side effects include nausea, headaches, and weight gain due to the pill; increased bleeding, dysmenorrhea, and expulsion associated with the IUD; menstrual changes from implants and injectables; and the irreversibility of sterilization. These will vary among individuals according to severity, cultural meaning, and the extent to which they impinge on the ability to live life. Other health-related considerations have to do

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-->   Latin America and Caribbean Total Developing Countries USA (1988) Method No. % No. % No. % Sterilization 18,148 37.9 200,149 44.9 13,686 39.2 Female 17,631 36.9 161,107 36.1 9,617 27.5 Male 517 1.1 39,042 8.8 4,069 11.7 Pill 13,183 27.6 51,352 11.5 10,734 30.7 Injectable 1,008 2.1 10,461 2.3 —b — IUD 5,303 11.1 112,115 25.2 703 2.0 Condom 1,965 4.1 24,778 5.6 5,093 14.6 Othera 8,233 17.2 46,837 10.5 76b 0.6a Otherc — — — — 4,620 13.1 Total 47,840 100.0 445,692 100.0 34,912 100.0 Note:—= no data available a Data for Africa designate as "Other" vaginal methods, Norplant, and traditional methods. In the U.S. National Survey of Family Growth, "Other" included jellies and creams, suppositories and inserts, the Today sponge, douche, diaphragm, foam, periodic abstinence, and withdrawal. b No implants were available in the United States at the time these data were gathered. c 'This category includes data on users as follows: diaphragm, 2 million/5.7 percent; periodic abstinence, 0.8 million/2.3 percent; withdrawal, 0.8 million/2.2 percent; spermicides, 0.6 million/1.8 percent; sponge, 0.4 million/l. percent. Source: For all data except for the United States, United Nations Population Fund. Contraceptive Use and Commodity Costs in Developing Countries, 1994-2005 (Technical Report No. 18). New York, 1994. For the U.S. data, National Center for Health Statistics, 1988 National Survey of Family Growth, cited in Alan Guttmacher Institute, Facts in Brief: Contraceptive Use. New York, March 1993. with method qualities that produce difficulty, such as manipulation of the genitals; associated physical exams; fear of surgery, loss of potency, or diminution of libido; and random myths (Bongaarts and Bruce 1995). Table 5-6 presents the risks and side effects of currently available contraceptive methods; it also presents their noncontraceptive benefits. Developing Countries An extensive review of published and unpublished studies of contraceptive utilization in the developing world indicates that one in every five women with an unmet need for contraception is not using a modern contraceptive method, owing

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--> TABLE 5-4 Contraceptive Usage, Method Rankings, Selected Regions and Countries Total Developing World (1994) Africa Arab States and Europe Asian and Pacific Latin America and Caribbean More Developed Regionsa USA (1988) USA (1995) Tubectomy Other Pill Tubectomy Tubectomy Pill Pill Pill IUD Pill Other IUD Pill Condom Tubectomy Tubectomy Pill Injectable IUD Vasectomy Other Tubectomy Condom Condom Otherb Tubectomy Condom Pill IUD IUD Vasectomy Periodic abstinence Vasectomy IUD Tubectomy Otherc Condom   Otherc Injectabled Condom Condom Injectable Condom Injectable   Diaphragm Diaphragm Injectable Vasectomy Vasectomy Injectable Vasectomy   IUD IUD Note: Tubectomy = tubal litigation. a Northern America, Japan, Europe, Australia/New Zealand, former USSR. b "Other" here includes vaginal methods, Norplant, and traditional methods. c "Other" includes vaginal methods, periodic abstinence, and withdrawal. d Depo-Provera. Sources: United Nations Population Fund. Contraceptive Use and Community Costs in Developing Countries 1991-2005. Technical Report No. 18. New York, 1994. Ortho Pharmaceutical Corporation. 1995, 1993, and 1991 Annual Birth Control Studies. Raritan, NJ, 1995. Shah IH. The advance of the contraceptive revolution. Health Statistics Quarterly 47(1):9-15. 1994.

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--> Figure 5-1 Contraceptive use, United States, 1955, 1965, and 1988, percentages of users. Source: JD Forrest. Contraceptive use in the United States: Past, present, and future. Advances in Population 2:29-48, 1994. Note: (a) = currently married white women 18-39; (b) = married women under 45.

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--> Figure 5-2 Trajectory of change in method use, United States, 1960-1988. Source: Adapted from JD Forrest. Contraceptive Use in the United States: Past, present, and future. Advances in Population 2:29-48, 1994. to poor or absent access to services, perception of side effects, or health concerns associated with modern contraceptives (WHO/HRP 1995). Health concerns, sometimes deriving from lack of clear understanding about the method and its side effects—are by far the most important single reason for nonadoption and, in most countries, are more frequently reported than all other concerns combined. Access in many rural settings is also a major problem. The principal foci of concern are the pill, the IUD, and sterilization. Among women with health concerns, contraceptive prevalence is reduced by an average of 86 percent for the IUD, 71 percent for the pill, and 52 percent for sterilization (Bongaarts and Bruce 1995). This does not mean that other factors do not matter, only that they may be somehow qualified or cannot be documented as quantitatively significant. For

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--> $30 per Disability-adjusted Life Year (Cochrane and Sai 1993), ranks among the 10 most cost-effective interventions to improve adult health. Nonetheless, the cost of providing condoms in urban Africa alone surpasses present government per capita expenditures on all health interventions (Piot and Rowley 1992). UNFPA projects requirements for condoms for STD/AIDS prevention in developing countries between 1993 and 2005 at 14,635 million, at a total cost of about $406.5 million, around $31.3 million annually. This figure is based on use in high-risk, transient encounters, that is, outside marriage or stable union; thus, the costs of condoms for use with a regular partner would be additional (UNFPA 1994). Paying for Contraception The savings that can be realized from contraception are of such magnitude that it is hard to understand why they appear to be so unappreciated by virtually all providers of health insurance coverage. The probability is that there are two general health care markets that will grow dramatically: managed care for the employed and Medicaid managed care, with the latter becoming more and more a for-profit, competitive enterprise (Winslow 1995). As of July 1994, about 65 percent of all private payers, close to 115 million people, were enrolled in some form of managed care plan, an increase of about 10 percent from the preceding year, a rate that is expected to persist (Bailit 1995). As managed care plans "industrialize," expand their dominance, and consolidate in different ways, they can be expected to be increasingly capable of driving other components of the health market, including the market for pharmaceuticals. Thus, the extent to which they reimburse contraception as one strategic element in the preventive and cost-savings components of their portfolios could become more of an incentive and, perhaps, a stabilizing force in the marketplace, both of which can serve as stimuli to innovation. At least one of the dimensions of that shift would not seem to have been predictable. In April 1995, the Wall Street Journal reported the new interest of health maintenance organizations (HMOs) in the poor. Once shunned by HMOs, those eligible for Medicaid are now seen as a major source of enrollment growth—and of profits. The logic is that by providing Medicaid patients with their own primary-care doctors, HMOs believe they can curb the use of high-cost emergency rooms for routine care, thereby reining in costs while vastly improving health care for the poor. Since family planning services are a logical part of primary care and apparently much desired by many plan participants, and since it is not hard to grasp the cost-effectiveness of contraceptives, it would not be implausible for managed care plans to incorporate those components into their service delivery packages. It may be that some states at least will seek to mandate such inclusion. As of August 1995, a landmark bill had been passed by the

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--> California State Assembly and was pending in the State Senate, calling for all health insurance plans to include most contraceptives. If this is to be the case, it would represent a major change in current patterns. Not surprisingly, given a tradition of covering surgical procedures but not prevention, laparoscopic tubal ligation is routinely covered by 86 percent of large-group plans, preferred provider organizations (PPOs), and HMOs, and 90 percent of point of service (POS) networks. Coverage of vasectomy is roughly the same. This may partly explain some of the high rates of surgical sterilization in the United States and the low rates of IUD use (Lee and Stewart 1995), yet another case in which availability shapes demand, rather than vice versa. Two-thirds or more of all plan types—including 66 percent of large-group fee-for-service plans, 67 percent of PPOs, 83 percent of POS networks, and 70 percent of HMOs—routinely cover induced abortions employing dilation and curettage-suction aspiration. However, almost one-fourth of all coverage of abortion by large-group plans is restricted in some way, for instance, by requiring the provider to certify the concurrent presence of a specific medical indication (Guttmacher Institute 1995c). However, coverage of reversible contraception is, indeed, "unequal and uneven" (Guttmacher Institute 1995c). Half of typical fee-for-service plans written for large groups or PPOs cover no reversible contraception whatsoever. Less than 20 percent of large-group indemnity plans or PPOs, and less than 40 percent of POS networks and HMOs, routinely cover all five of the most effective reversible methods (IUD and Norplant insertion, Depo-Provera injection, and oral contraception) in their typical plans. What is particularly surprising is that 66 percent of large-group plans do not cover oral contraceptives, the most used reversible method in the United States, even though 97 percent of those same plans typically cover prescription drugs. Similarly, even though 92 percent of those plans cover medical devices generally, only 24 percent cover Norplant, 18 percent cover IUDS, and 15 percent cover diaphragms. Coverage of oral contraceptives is much higher in POS networks and HMOs. Only 7 percent of HMOs provide no contraceptive coverage at all, and 39 percent cover all five methods (Guttmacher Institute 1995c). From a cost-effectiveness standpoint, these patterns are not logical. An increase of just 15 percent in new oral contraceptive users would produce enough savings in the costs of pregnancy care to cover oral contraceptives for all users in a given health insurance plan. Another instance: A 4 percent increase in copper-T IUD use continued over five years would pay for all IUD users in the plan; an 18 percent increase in one-year IUD users would produce the same result (Lee and Stewart 1995). In an environment that will see dramatic growth in managed care, expanded coverage that would offer a full array of all available contraceptive methods would produce savings to plans and to the society at large, as well as a potentially guaranteed market for both new and existing contraceptives. While these shifts are preeminently a U.S. phenomenon, they are not exclusively so, and

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--> their power to move a market that is so responsive to U.S. demand is highly relevant to the wider market that includes the developing countries. Public Sector Coverage of Contraception in the United States Unlike private insurers and health maintenance organizations, all 50 states and the District of Columbia are required by law to provide reimbursement for contraceptive services, and one in three women who made a family planning visit in 1988 (the last year for which comprehensive data are available) reported going to a publicly funded family planning clinic (Guttmacher Institute 1995c). The proportions of public funding for family planning through different channels have changed a great deal in recent years. The overall pattern has been that, since the late 1980s, Medicaid has assumed the role of lead public funder for contraceptive services, as provision of contraceptive services through other mechanisms, notably Title X, has declined (see Figure 5-9). As of 1990, Medicaid accounted for 58 percent of all federal family planning expenditures, at a level of approximately $270 million; by 1992, that amount was $319 million and amounted to 50 percent of all public funding (Guttmacher Institute 1995c). Another overall pattern has been that, when inflation is taken into account, total public funding for contraceptive services fell by 27 percent between 1980 and 1992, with Title X funding falling by 72 percent over that same period, with a corresponding increase in unintended pregnancy. At the same time, the costs of providing those services, including costs of contraceptive commodities, have risen; for example, the average price for oral contraceptives to publicly funded family planning clinics rose 42 percent in just one year, between 1991 and 1992 (Daley and Gold 1993). The third pattern of interest is that of the general distribution of payment source for family planning visits. A striking 41 percent of all women who received family planning services paid for their most recent visit out of their own pockets, 25 percent were completely covered by insurance, 17 percent used insurance with a copayment or deductible, and 7 percent of visits were covered by Medicaid (Kaeser and Richards 1994). The fact that women pay so much out of their own pockets for these services can be viewed in two ways: One is that they value the services and the commodities enough to pay for them; the other is that systems that could cover at least some of the costs of contraceptive services do not, for one reason or another, do so. Both possibilities can coexist and both have market implications. The first is the expression of market demand; the second is that there is a large institutional purchasing capacity that remains unused. This leaves unaddressed the economics of over-the-counter contraceptive purchases, a question that has been raised in the many discussions about the wisdom of making oral contraceptives available without prescription. The decision for the time being, at least in the United States, is that OCs will remain a prescription product, so that the economic issues are moot for now. Still, it is worth noting that such

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--> Figure 5-9   Public expenditure for contraceptive services, United States. Source:  Alan Guttmacher Institute. Uneven and Unequal: Insurance Coverage and Reproductive  Health Services. New York and Washington: The Alan Guttmacher Institute. 1995. purchases would not be covered by third-party payers but by individuals, who would assume the responsibility for purchase and for a greater share of physical risk. Concluding Comment At the beginning of this chapter, we used the term "dilemma," one of whose meanings is "a difficult problem . . . seemingly incapable of a satisfactory conclusion" (Merriam-Webster's New International Dictionary 1986). The analysis reflected in this chapter persuades us that the problem of translating unmet need for new contraceptive options into market demand, though difficult, is not insoluble. While the existing array of contraceptive options represents a major contribution of science and industry to human well-being, it still fails to meet the needs of significant numbers of individuals in significant populations. Even if the general need is not seen as constituting attractive market demand (defined as need plus willingness and ability to pay), substantial components of that overall need do respond to such a definition. The epidemic of sexually transmitted infections; large gaps in an array of "menses-inducers" tailored to the wide range of women's practical, physiologic, and ideologic concerns; the paucity of methods for male participation in contraception; and the persistent importance of

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--> reducing method side effects; all are plausible indicators of commercially appreciable market demand. A quantitative case can also be made. The numbers of contraceptive users has grown and continues to grow. While sterilization rates qualify those numbers, sterilization rates also represent an indeterminate number of consumers, particularly younger consumers, who might prefer a reversible method. Because availability shapes demand and because a full range of contraceptive options is often inaccessible, there is a potentially large population, importantly consisting of method-discontinuers and method-switchers, for new products. Availability of a good method mix has an independently positive effect on contraceptive useprevalence, as well as on reduction in crude birth rates, and might be seen in itself as a market-driver. Finally, while it is true that inability to pay conditions profit margins in many instances, the cost-effectiveness of contraception is clear enough so that it should motivate expanded coverage where third-party payment is a factor, and subsidy for bulk purchases where that is required, again improving the level of demand and the size of the market for contraceptives, in the United States and abroad. References Alan Guttmacher Institute. Hopes and Realities: Closing the Gap Between Women's Aspirations and Their Reproductive Experiences. New York: The Alan Guttmacher Institute. 1995a. Alan Guttmacher Institute. Issues in Brief: The U.S. Family Planning Program Faces Challenges and Change. New York and Washington: The Alan Guttmacher Institute. 1995b. Alan Guttmacher Institute. Uneven and Unequal: Insurance Coverage and Reproductive Health Services. New York: The Alan Guttmacher Institute. 1995c. Alan Guttmacher Institute. Sex and America's Teenagers. New York: The Alan Guttmacher Institute. 1994. American Health Consultants. Contraceptive Technology Update 16(9):105-120, 1995. Ashford LS. New perspectives on population: Lessons from Cairo. Population Bulletin 5(1):22, 1995. Bailit HL. Market strategies and the growth of managed care. IN Academic Health Centers in the Managed Care Environment. D Korn, CH McLaughlin, M Osterweis, eds. Washington, DC: Association of Academic Health Centers. 1995. Birdsall N, SH Cochrane, J van der Gaag. The cost of children. IN Economics of Education: Research and Studies. George Psacharopoulos, ed. New York: Pergamon Press. 1987. Bongaarts J, J Bruce. The causes of unmet need for contraception and the social content of services. Studies in Family Planning 26(2): 57-75, 1995. Bosch FX, MM Manos, N Muñóz, et al. Prevalence of human papillomavirus in cervical cancer: A worldwide perspective. Journal of the National Cancer Institute 87:796-802, 1995. Bruce J, A Jain. A new family planning ethos. IN The Progress of Nations. New York: UNICEF. 1995. Bulatao RA, RD Lee. An overview of fertility determinants in developing countries. IN Determinants of Fertility in Developing Countries, Vol. 2, RA Bulatao, RD Lee, eds. New York: Academic Press. 1983. Carpenter PF. Innovation in patient information: The importance of facilitating informed choice. Infectious and Medical Disease Letters for Obstetrics and Gynecology XI(3), 1989.

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--> Ingrassia M, K Springen, D Rosenberg. Still fumbling in the dark-—Contraception: With all the condoms, pills and foams, why are so many women getting sterilized? Newsweek, 13 March 1995. Institute of Medicine (IOM). The Children's Vaccine Initiative: Achieving the Vision. VS Mitchell, NM Philipose, JP Sanford, eds. Washington, DC: National Academy Press. 1993. IOM. The Best Intentions: Unintended Pregnancy and the Well-Being of Children and Families, S Brown, L Eisenberg, eds. Washington, DC: National Academy Press. 1995a. IOM. The Children's Vaccine Initiative: Continuing Activities—A Summary of Two Workshops Held September 12-13 and October 25-26, 1994. GW Pearson, ed. Washington, DC: National Academy Press, 1995b. International Development Research Centre (IDRC). Position Paper on IDRC Support for Development of Immunological Contraceptives. Ottawa, Canada, June 1995. Kaeser L, CL Richards. Barriers to Access to Reproductive Health Services . Paper submitted to the Institute of Medicine Committee on the Role of Planned Childbearing in the Health and WellBeing of Children, Women, and Families, Washington, DC. 1994. Kaiser/Fact Finders. Survey on Obstetricians/Gynecologists' Attitudes and Practices Related to Contraception and Family Planning. Menlo Park, CA: The Henry J. Kaiser Family Foundation. 1994. Kaiser/Harris. National Survey Results on Public Knowledge and Attitudes on Contraception and Unplanned Pregnancy. Menlo Park, CA: The Henry J. Kaiser Family Foundation. 1995. Kolata G. Will the lawyers kill off Norplant? New York Times, section 3, p. 1. 28 May 1995. Kost K, JD Forrest. American women's sexual behavior and exposure to risk of sexually transmitted diseases. Family Planning Perspectives 24:244-254, 1992. Landry DJ, TM Camelo. Young unmarried men and women discuss men's role in contraceptive practice. Family Planning Perspectives 26:222-227, 1994. Lee PR, FH Stewart. Editorial: Failing to prevent unintended pregnancy is costly. American Journal of Public Health 85(4):479-480, 1995. Maynard R. The Effectiveness of Interventions on Repeat Pregnancy and Childbearing. Paper prepared for the Institute of Medicine Committee on Unintended Pregnancy. Washington, DC: Institute of Medicine. 1994. Meheus A. Women's Health: Importance of reproductive tract infections, pelvic inflammatory disease and cervical cancer. IN Reproductive Tract Infections: Global Impact and Priorities for Women's Reproductive Health, A Germain, KK Holmes, P Piot, J Wasserheit, eds. New York: Plenum. 1992. Mercer Management Consulting. Summary of UNICEF Study: A Commercial Perspective on Vaccine Supply. New York: Mercer Management Consulting. 1994. Moore KA, BC Miller, D Glei, DR Morrison. Adolescent Sex, Contraception, and Childbearing: A Review of Recent Research. Washington, DC: Child Trends, Inc. June 1995. Mosher WD, WF Pratt. Contraceptive use in the United States, 1973-88. Advance Data from Vital and Health Statistics of the National Center for Health Statistics 182:20, 1990. Mosher WD. Contraceptive practice in the United States, 1982-1988. Family Planning Perspectives 22(5):198-205, 1990. National Adolescent Reproductive Health Partnership. NARHP Update. Washington, DC: Association of Reproductive Health Professionals. 1995. Ortho Pharmaceutical Corporation. Executive Summary: 1995 Ortho Annual Birth Control Study. Raritan, NJ. 1995. Ortho Pharmaceutical Corporation. Highlights, 1993 Ortho Annual Birth Control Study. Raritan, NJ. 1993. Ortho Pharmaceutical Corporation. Report on 1991 Ortho Annual Birth Control Study. Raritan, NJ. 1991.

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--> Over M, P Piot. HIV infection and sexually transmitted diseases. IN Disease Control Priorities in Developing Countries, DT Jamison, WH Mosley, AR Measham, JL Bobadilla, eds. New York: Oxford University Press. 1993. Piot P, J Rowley. Economic impact of reproductive tract infections and resources for their control. IN Reproductive Tract Infections: Global Impact and Priorities for Women's Reproductive Health. A Germain, KK Holmes, et al., eds. New York: Plenum Press. 1992. Pleck JH, FL Sonenstein, L Ku. Changes in adolescent males' use of and attitudes toward condoms, 1988-1991. Family Planning Perspectives 25:106-110, 117, 1993. Program for Appropriate Technology in Health (PATH). Contraceptive research and development update. Outlook (Special Issue) 13(20), 1995. PATH. Enhancing the private sector's role in contraceptive research and development. IN Contraceptive Research and Development 1984-1994: The Road from Mexico City to Cairo and Beyond. PFA Van Look and G Pérez-Palacios, eds. Delhi: Oxford University Press. 1994a. PATH. Market-Related Issues Affecting the Participation of the Private Sector in Contraceptive Development: A Final Report to the Rockefeller Foundation, 30 November 1994. Seattle, WA: 1994b. Public Health Service, Department of Health and Human Services. Healthy People 2000: National Health Promotion and Disease Prevention Objectives. Washington, DC: U. S. Government Printing Office. 1991. Ravindran TKS, M Berer. Contraceptive safety and effectiveness: Re-evaluating women's needs and professional criteria. Reproductive Health Matters 3:6-11, 1994. Reprogen. Confidential Business Plan. Irvine, CA 1995. Rinzler CA. The return of the condom. America's Health 6(6):97-107, 1987. Rosenberg MJ, MS Waugh, S Long. Unintended pregnancies and use, misuse, and discontinuation of oral contraceptives. Journal of Reproductive Medicine 40(5):355-360, 1995. Russell C. The pill is popular but not well understood: New survey shows many women overestimate the risks, underestimate the benefits. Washington Post, Health section, pg. 9, 6 February 1996. Schrater AF. Immunization to regulate fertility: Biological and cultural frameworks. Social Science and Medicine 41(5):657-671, 1995. Schrater AF. The pros and cons: Guarded optimism. Reproductive Health Matters 4, November 1994. Snow R. Each to her own: Investigating women's response to contraception. IN Power and Decision: The Social Control of Reproduction. G Sen, R Snow, eds. Cambridge, MA: Harvard School of Public Health. 1994. Stewart FH. Integrating essential public health services and managed care: Family planning and reproductive health as a case study. Western Journal of Medicine 163(Suppl.):75-77, 1995. Tanfer K. Unpublished data on Norplant knowledge, use, and intentions, presented at National Institute of Child Health and Human Development conference on long-acting contraceptives, Bethesda, MD, September 1995. Trussell J, L Grummer-Strawn. Contraceptive failure of the ovulation method of periodic abstinence. Family Planning Perspectives 22(2):65-75, 1990. Trussell J, K Kost. Contraceptive failure in the United States: A critical review of the literature. Studies in Family Planning 18(5):237-283, 1987. Trussell J, B Vaughan. Aggregate and lifetime contraceptive failure in the United States. Family Planning Perspectives 21(5):224-226, 1989. Trussell J, J Koenig, C Ellertson, F Stewart. Emergency Contraception: A Cost-Effective Approach to Preventing Unintended Pregnancy. Unpublished manuscript. Princeton, NJ: Office of Population Research. November 1995.

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--> Trussell J, JA Leveque, JDD Koenig, et al. Documenting the economic value of contraception: A comparison of 15 methods. Technical addendum to: The economic value of contraception: A comparison of 15 methods. American Journal of Public Health 85(4):494-503, 1995a. Trussell J, JA Leveque, JDD Koenig, et al. The economic value of contraception: A comparison of 15 methods. American Journal of Public Health 85(4):494-503, 1995b. United Nations Development Programme (UNDP), United Nations Population Fund (UNFPA), World Health Organization (WHO), and World Bank Special Programme of Research, Development and Research Training in Human Reproduction (HRP). Perspectives on Methods of Fertility Regulation: Setting a Research Agenda. Background Paper. Geneva: WHO/HRP. 1995. UNFPA. Global Contraceptive Commodity Programme: Report of the Executive Director (DP/ 1996/3) . Prepared for the First Regular Session of the UNDP and UNFPA Executive Board, 15-19 January 1996. New York: United Nations Population Fund. 1995. UNFPA. Contraceptive Use and Commodity Costs in Developing Countries 1994-2005. Technical Report No. 18. New York: UNFPA. 1994. Washington AE, RE Johnson, LL Sanders. Chlamydia trachomatis infections in the United States: What are they costing us? Journal of the American Medical Association 257(15):2070-2072, 1987. Washington AE, PS Arno, MA Brooks. The economic cost of pelvic inflammatory disease. Journal of the American Medical Association 255:1732-1735, 1986. Waugh MS. Report from European and U.S. surveys: OC compliance poorer among American women. Contraceptive Technology Update 15(12): 157-172, 1994. Westoff CL, F Marks, A Rosenfield. Physician factors limiting IUD use in the US. Paper presented at a conference on A New Look at IUDs-Advancing Contraceptive Choices, New York, 2728 March 1992. Wilcox LS, SY Chu, ED Eaker, et al. Risk factors for regret after tubal sterilization: 5 years of follow-up in a prospective study. Fertility and Sterility 55(5):927-933, 1991. Wilcox LS, SY Chu, HB Peterson. Characteristics of women who considered or obtained tubal reanastomosis: Results from a prospective study of tubal sterilization. Obstetrics and Gynecology 75(4):661-665, 1990. Winslow R. Medical upheaval: Welfare recipients are a hot commodity in managed care now. Wall Street Journal, 12 April 1995. World Bank. World Development Report 1993: Investing in Health. New York: Oxford University Press. 1993. World Health Organization (WHO). An Overview of Selected Curable Sexually Transmitted Diseases. (WHO/GPA/STD/95.1). Geneva: WHO/Global Programme on AIDS. 1995. WHO. Perspectives on Methods of Fertility Regulations: Setting a Research Agenda (Background Paper). Geneva: UNDP/UNFPA/WHO/HRP. 1995. Zabin LS. Addressing adolescent sexual behavior and childbearing: Self-esteem or social change. Women's Health Issues 4:93-97, 1994. Zabin LS, HA Stark, MR Emerson. Reasons for delay in contraceptive clinic utilization: Adolescent clinic and nonclinic populations compared. Journal of Adolescent Health 12:225-232, 1991. Zelnick M, JF Kantner. Sexual activity, contraceptive use and pregnancy among metropolitan-area teenagers: 1971-1979. Family Planning Perspectives 12:230-231, 233-237, 1980. Notes 1.   For many reasons, all well beyond the purview of this study, the definition of "public health" has occupied the scholarly attention of many. For purposes of economy, we accept the following: "The application of scientific and medical knowledge to the protection and improvement of the health of the group" (F Brockington, cited in KL White, Healing the Schism: Medicine, Epidemiol-

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-->     ogy, and the Public's Health. New York: Springer-Verlag, 1991, p. 1). The ability to determine the number and spacing of births and the prevention of unwanted births is understood as central to the protection of the health of women, children, families, and communities. 2.   The contraceptive prevalence rate is defined in terms of the percentage of currently married (or in union) women aged 15-49 using a contraceptive method at the time of survey (WHO/HRP 1995). 3.   Emergency contraceptive pills (ECPs) are high-dose oral contraceptives known for approximately 20 years to be effective in preventing pregnancy if taken within 72 hours after unprotected sex. Nausea and vomiting are common side effects and contraindications for oral contraceptives (OCs), such as history of stroke or heart attack, also apply to ECP users, though clinicians may make exceptions for some women for one-time use. Although OCs have not been approved by the Food and Drug Administration (FDA) for emergency contraception, doctors and other health providers who can write prescriptions may use any drug licensed by the FDA for unlabeled purposes. 4.   Two data sets were used for this analysis. One included Ecuador, Egypt, Indonesia, Morocco, Thailand, and Tunisia; the other included Northeast Brazil, Colombia, Dominican Republic, Paraguay, and Peru. While the two sets of information are not exactly comparable, they provide useful insights with a reasonable degree of confidence (WHO/HRP 1995). 5.   Diaphragm, jelly, douche, and foam tablets. 6.   With the caveat that statements like the following are fraught with peril, this subset in the analytic sample-Northeast Brazil, Colombia, the Dominican Republic, and Peru is quite representative geographically and, in a number of ways, culturally. 7.   The figure is based on calculations of direct costs (medical services for abortions, pregnancy, and delivery) and indirect costs (work time that may be lost, costs resulting from complications of pregnancy) (Rosenberg et al. 1995). 8.   The two are the CuT 380A (ParaGard), approved for 10 years of use, and the progesterone T (Progestasert System), approved for 1 year of use. The levonorgestrel-IUD (LNg IUD), developed by Leiras Oy in Finland, is not yet approved for use in the United States but may receive approval soon. 9.   The acquisition in the summer of 1995 by Ortho of Gynopharma and its IUD and spermicide lines could be a noteworthy contributor to restoring the method to a greater share of the market. 10.   The questions asked in the 1982 and 1988 National Survey of Family Growth permitted responses that indicated the following: Respondent had had all the children she wanted, or wanted none; her husband wanted no more; a pregnancy would have been dangerous to her health; she could not carry the pregnancy to term; she could not afford or take care of more children; or she did not like her previous method of birth control (Mosher and Pratt 1990). 11.   ''Safety" is defined by the Human Reproduction Programme of the World Health Organization as "fewer side-effects" (WHO/HRP 1995). The term also comprises the more general concept of "health concerns." 12.   Strictly speaking, contraceptive effectiveness or efficacy is the proportionate reduction in the monthly probability of conception. In its loose everyday sense, the question of whether method X is effective is simply equivalent to: "Will it work?" (Hatcher et al. 1994). 13.   There is, for example, a total dearth of knowledge about what male preferences for new contraceptives might be, simply because such questions have so rarely been asked. The authors of a recent study of spermicide acceptability in Zambia observe that, to their knowledge, theirs is the first prospective study of this sort to include male participants (Hira et al. 1995). 14.   "Immunologic contraception" is the term that is increasingly being used to refer to immunologic applications whose purpose is to regulate fertility. They are directed against the immunologically accessible molecules involved in reproduction, either molecules on the surface of mature gametes (sperm and ova), or the hormones involved in the reproductive process, some of which play a role in the maturation of gametes, others regulating their release. 15.   For example, a woman would be unable to determine whether or not her antibody levels were

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-->     providing a contraceptive effect without some sort of home diagnostic capability, for instance, a urine dipstick test. 16.   MWRA, or "married women of reproductive age." 17.   New population estimates suggest that, as of 1994, this figure is 25 percent. 18.   The EPI vaccines target seven diseases: diphtheria, pertussis, tetanus, tuberculosis, polio, measles, and hepatitis B. 19.   External funding sources for UNFPA procurement have included the World Bank, Germany, Canada, Finland, the Asian Development Bank, the United Nations Development Programme (UNDP), the United Kingdom's Overseas Development Agency (ODA), and the Government of Sri Lanka (UNFPA 1995). 20.   UNFPA is not the only agency that procures contraceptives: In 1994, the United States Agency for International Development procured $46 million worth of contraceptives (down from $59 million in 1991); the International Planned Parenthood Federation procured a little over $6 million in contraceptives for its own affiliates and, during 1995, for some agencies and governments; and the World Health Organization spends $2.5 million of its $69 million budget for pharmaceuticals and medical supplies and equipment on contraceptives (UNFPA 1995). 21.   The data sources for these calculations were as follows: Incidence rates from the Centers for Disease Control and Prevention, payment data from the literature and claims data, treatment protocols defined in Hatcher et al. (1994), and the private payer database and the 1993 edition of the Red Book to cost out each treatment. Cost per case was defined as the cost of treating each disease for as long as a person has it.