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Subsidies for Malaria Testing and Treatment in Kenya: Balancing Health Benefits and Risks

Development Challenge

Malaria is one of the world’s foremost public health concerns, killing close to 1 million people every year. In many malaria-endemic regions, resistance has developed to all but one class of antimalarial drugs, called artemisinin combination therapies (ACTs). ACTs sold in the retail sector are unaffordable for the poor, and although heavy subsidies can make them accessible, the benefits of treating more people and lowering transmission rates must be balanced against the risk of overtreatment, which can hasten the development of drug resistance. A new malaria testing technology, the rapid diagnostic test (RDT), has made it possible to perform malaria testing in the retail sector, but these tests are not in demand at prevailing prices. How can policymakers tailor the prices of subsidized drugs and diagnostic tests to target those truly sick with malaria and prevent those who do not need ACTs from taking them?


In Kenya, ACTs are now the only effective class of antimalarial drugs. The incidence of malaria in Western Kenya is very high, with nearly 70 percent of households self-reporting an episode of malaria in the month before baseline. ACTs at government health centers in Kenya are nominally free, but health centers feature long waits and limited hours, are often stocked out of medication, and the remotely-located poor often cannot afford to travel the distance to get there. Consequently, many people opt to purchase cheaper, less effective anti-malarials over-the-counter at drug shops located closer to home.

The Affordable Medicines Facility for malaria (AMFm) is an initiative currently being considered by major international aid agencies in which ACTs would be heavily subsidized to first line buyers throughout Africa (the subsidy policy is currently being piloted in seven countries). But such a high subsidy could lead to overtreatment.  If people who do not have malaria presumptively buy ACTs without a diagnosis, this can contribute to drug-resistance, waste subsidy money, and delay appropriate treatment for the true cause of illness. Improving diagnostic access could considerably reduce overtreatment, but there has been little research so far in this area.

Evaluation Strategy

The intervention took place in the districts of Busia, Mumias, and Samia in Western Kenya. Researchers distributed vouchers redeemable at four local drug shops to all households within four kilometers of four rural market centers. The households were randomly assigned to one of three groups:

Comparison Treatment
No Subsidy ACT Subsidy Only ACT or RDT Subsidy 
Households received a voucher to buy ACTs at the market price of 500 Ksh (about US$6.25) Households received a voucher for ACTs giving them either and 80 percent, 88 percent, or 92 percent subsidy Households received an ACT voucher as in group II, and also received an RDT voucher with either an 85 percent or 100 percent subsidy.

In order to find out what fraction of people buying ACTs were truly malaria positive—a proxy for how well the ACT subsidy under the AMFm would be targeted—the researchers also selected a random subset of the households in treatment II and III to receive the offer of a “surprise” free RDT after they completed their transaction at the drug shop.

Trained study officers were posted at each of the four participating drug shops during opening hours every day throughout the study period. When a household member came into a drug shop to redeem his or her voucher, study officers recorded details such as medicines bought, symptoms, patient characteristics, and true malaria status in case an RDT was administered.

Results and Policy Implications

Under the subsidy, more people sought care for malaria. Specifically, the number of households not seeking any care decreased by 42 percent. The subsidy also increased the likelihood that an illness was treated with an ACT by nearly 60 percent. This impact was largely driven by illiterate-headed households. While literate households in the comparison group were over three times more likely to take an ACT than illiterate households (36.5 percent for literate-headed and 10.8 percent for illiterate-headed households), the introduction of an ACT subsidy significantly reduced this gap, increasing coverage rates to 44.6 percent and 38.0 percent, respectively.

The subsidy increased access among sick children, for whom malaria is particularly dangerous. The subsidy increased the share of ill children treated with ACTs, particularly in the poorest households, and overtreatment was rare: 84 percent of children under age 13 for whom subsidized ACTs were purchased tested positive for malaria. However, the subsidy led to a high rate of overtreatment among adults. Only 39 percent of adults (aged 14 and over) who took a subsidized ACT actually tested positive for malaria, which leaves room for improvement in targeting the subsidy

A slightly lower subsidy level improved targeting without significantly compromising overall access to ACTs. At the two lower subsidy levels (80 and 88 percent), households were less likely to use an ACT voucher for adults than at the AMFm target of 92 percent, but the use of vouchers for young children, who are more likely to have malaria and for whom malaria is most dangerous, was unchanged. On the other hand, while households were very willing to take RDTs, the RDT subsidy (whether full or partial) had little impact on targeting. This was likely caused by high noncompliance - among patients over the age of 5 who tested negative, 49 percent still purchased an ACT.

While these results suggest that a slightly lower ACT subsidy than the one proposed by the AMFm would improve targeting without compromising access, the results also make it clear that a large ACT subsidy is needed in order to increase access among the neediest. Taking some of the planned ACT subsidy money away from ACTs and putting it towards subsidizing and promoting RDTs could improve targeting and be particularly effective among adults, especially if adherence to test results can be improved.