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Embracing Humanity Worldwide

Our Mission is to facilitate the development and implementation of solutions to the health, economic, and social problems caused by malaria.

Executive summary for Economics of Malaria Center for Development,
Harvard University and the London School of Hygiene and Tropical Medicine

Economic analyses indicate that the burden of malaria is great

Malaria takes an enormous toll on human health and well-being, in tropical regions including the Indian subcontinent, Sri Lanka, Sub-Saharan Africa, Oceania, and parts of the Americas. In many of these regions, the burden has been increasing even further in recent years.

The costs of malaria are also enormous when measured in economic terms. Highly malarious countries are among the very poorest in the world, and typically have very low rates of economic growth; many have experienced outright declines in living standards in the past thirty years. Malaria has played a significant role in the poor economic performance of these countries.

Malaria imposes a heavy cost not only on a country's current income, but also on its rate of its economic growth, and therefore on its level of economic development in the long run.
The evidence strongly suggests that malaria obstructs overall economic development. During the period 1965-1990, highly malarious countries suffered a growth penalty of more than one percentage point per year (compared with countries without malaria), even after taking into account the effects of economic policy and other factors that also influence economic growth. The annual loss of growth from malaria is estimated to range as high as 1.3 percentage points per year. If this loss is compounded for fifteen years, the GNP level in the fifteenth year is reduced by nearly a fifth, and the toll continues to mount with time. (see table 1)

Traditional analyses have underestimated the short-run costs of malaria.
These considerations indicate that the cost of malaria is substantially greater than economists have previously estimated. Traditional estimates have looked at some of the short-run costs of malaria without taking into account the longer-term effects of malaria on economic growth and development. (see figure 1) Short-run costs— including lost work time, economic losses associated with infant and child mortality and morbidity, and the costs of treatment and prevention— are typically estimated to be higher than one percent of a country’s gross national product.

These estimates, however, neglect many other short-run costs. For instance, very few studies include the economic costs of the pain and suffering associated with the disease. Yet researchers have found that households might be willing to pay several times the direct income loss caused by malaria in order to avoid it, suggesting that the pain, suffering and uncertainty associated with the disease is very high and should certainly be included among its short-term costs.

Furthermore, these short-run costs are likely to have risen in recent years due to increasing number and complexity of cases in many countries. Moreover, the spread of drug-resistant malaria is substantially raising the costs of treatment in many cases, as well as the burdens of morbidity and mortality. Children and adults needing blood transfusions due to malaria are too often inadvertently infected with HIV, hepatitis C virus, and other infectious agents which taint the blood supply.

Furthermore, these analyses have completely neglected the long-run costs.
Beyond these high and rising short-run costs, malaria impedes economic growth and long-term development in many ways. Malaria may impede the flows of trade, foreign investment, and commerce, thereby affecting a country’s entire population. Tourists shun regions with high malaria, as do multinational firms choosing the location of foreign investments. Also, the economic effect of malaria on infected individuals may greatly exceed the direct costs of any single episode of the disease. Repeated bouts of malaria tend to hinder a child’s physical and cognitive development, and may reduce a child’s attendance and performance at school. Furthermore, repeated bouts of malaria may expose individuals to chronic malnutrition and to increased vulnerability to other diseases.

Malaria may have adverse demographic consequences as well. Malaria substantially raises the chances of infant and child mortality. Households respond to this increased risk by having more children, thereby increasing the overall rate of population growth. In addition, the investments which parents of many children can afford make in the well being of each child is limited— so that average levels of health care and education per child tend to be reduced. Moreover, mothers of large numbers of children are less able to participate in the formal labor force, thereby also reducing the household income.

Malaria interventions should be an important part of poverty alleviation.
Individual households in malarious regions do not escape the risk of malaria infection simply by being relatively well off. In surveys of households from 22 countries in Africa, no correlation could be found between the incidence of childhood fever in households and their relative wealth. Malaria is not a simple consequence of poverty. The wealth of the household, however, does play a substantial role in determining whether a child receives treatment for fever and influences the kind of treatment. Poor families very often lack the resources to obtain proper treatment of the disease even in complicated and life-threatening cases. Poverty alleviation strategies should therefore recognize the importance of effective antimalaria interventions, since the poor by themselves are unable to escape the burdens of the disease.

The burden of malaria is very high and rising. Short-term costs alone are likely to result in economic losses of several percent of GDP in a single year. Moreover, malaria hinders long-term economic growth, so that the burden of the disease increases over time as countries are deprived of the rise in living standards that they would experience if not for malaria.

There are important differences in malaria across regions and countries

The patterns and costs of malaria incidence are highly place-specific
No single biological, economic or political reason can be adduced for the observed patterns and trends in malaria transmission. No single intervention, therefore, is appropriate in all contexts. Interventions should be adapted to specific local ecological, epidemiological, economic, and social conditions. Even the goals of malaria interventions should be place-specific.

The effects of human behavior on malaria are similarly place-specific. Anthropogenic changes such as deforestation, road-construction and agricultural development generally increase the intensity of malaria transmission. But the specific effects of such ecological disturbances are often unpredictable, due to geographical diversity in the biology of the mosquitoes that transmit the disease.

Any drug therapy strategy should be designed to minimize the threat of resistant parasites. Specific strategies, however, must be tailored to the patient, the community and the region in which they are employed. The selection of drugs and treatment protocols must be based on reliable clinical and epidemiological assessments of efficacy.

Therefore, the patterns of incidence of malaria, and the costs associated with it, are different in different contexts. No magic bullet can be applied universally.

Many cost-effective malaria interventions are available

Various available cost-effective interventions may strengthen efforts designed to prevent and treat malaria, including:

All have been demonstrated to provide excellent value in terms of the health gains achieved per dollar spent.

Although improved treatment in the public sector is essential, we must recognize that malaria treatment generally takes place through self-administration of drugs purchased in a variety of private outlets. Improving the quality of treatment for all will require interventions targeted at both households and providers:

Much can, thereby, be done to improve care using existing drugs and technologies.

In addition, various promising technologies are becoming available:

Addressing the problem of drug resistance requires intensive attention. Replacing an ineffective first line drug brings substantial and immediate health benefits, but strategies must be put in place to prevent resistance growing rapidly to the replacement, as there are few effective, safe and affordable antimalarials available. There are a range of implementation issues to consider, such as the effects on compliance of changing drug regimens, and the need to inform public and private providers about the new policy. Combination therapy, which has the potential to protect new drugs from the development of resistance, is a promising new development, but needs to be introduced together with strategies to promote rational drug use in the public and private sectors.

A substantial expansion of preventive interventions is required

Although insecticide-treated mosquito nets (ITNs) provide a cost-effective means of ameliorating the effects of malaria, this measure will be expensive if large human populations must be protected. Innovative mechanisms for financing and providing ITNs are needed to increase their use. The small commercial markets for nets that currently exist in many places, provide miniscule commercial markets for insecticide retreatment, and it is essential to find ways to expand such markets sustainably:

Although commercial markets for ITNs can be expanded substantially, the poorest households will be unable to afford to purchase nets and insecticide at commercial prices, and innovative mechanisms will be required to subsidize the purchase of ITNs by such people:

Social marking can help raise awareness of the value of ITNs and encourage their appropriate use.

Enhanced commitment to research will improve the effectiveness of existing technology

Research is essential at every level, from basic scientific studies to social science and policy analysis, in order to design, evaluate and reevaluate new and existing malaria intervention strategies. Any effective strategy will require enhanced scientific capacity at the local level to monitor the disease and its ecology, and to evaluate the effectiveness of alternative strategies.

Ongoing research is a vital part of any intervention.
No strategy should ever be exempt from scrutiny by the research community. Any policy has unintended consequences— ongoing program analysis is essential to identifying them and mitigating their costs. Implementation of any intervention is an adaptive process, requiring performance evaluation and operational research. This includes identifying the reasons for low compliance, and finding more efficient and cost-effective implementation strategies.

Research helps to identify unintended consequences, to refine even the most promising strategies, and to streamline the use of existing resources.
Even one of the most promising antimalaria intervention strategies, employing the use of insecticide treated nets (ITNs) will benefit from further research scrutiny. ITNs constitute a cost-effective means for ameliorating the effects of malaria. Their effectiveness in different epidemiological conditions, however, must be reassessed continually. In addition, the mechanisms of morbidity reduction by incomplete ITN coverage, and the potential for similar effects by other incomplete interventions should be explored. Most notably, the relationship between superinfection and parasite diversity requires study.

Research into underutilized technologies is important. Analysis of the historical record indicates that many successful interventions employed techniques which were highly effective, but have since been abandoned, possibly due to socioeconomic upheavals and loss of interest among donors. In certain cases, these techniques may still be useful, although research is essential to adapting them for specific contexts. Many of these approaches would require research input by epidemiologists, environmental scientists, entomologists, agronomists, and economists.

Research is also necessary in order to understand what communities are already doing on their own to defend themselves. Many residents of malarious areas buy commercial products for this purpose even in the absence of externally designed interventions. In many cases, the market in these products may be worth much more, and may save more lives, than publicly financed interventions. Researchers and policy makers must learn all they can from local communities.

A commitment must be made to track status and trends in malaria more closely.
There is a dire lack of extensive and comparable data about malaria. For example, there is inadequate information available on the status and trends in incidence and prevalence, epidemic outbreaks, clinical epidemiology, and interactions with other conditions (including for example other diseases, nutrition, and growth). The absence of this information is very costly to advocacy, policy design and implementation, epidemic preparedness, and resource allocation. A commitment must be made to the arduous work of collecting these data in order to replace the existing gross extrapolations, widely varying estimates, and missing information.

Interventions against malaria can have synergistic beneficial effects. Research is essential for designing programs which provide increasing returns to scale.
As research efforts begin to provide a detailed understanding of the burden of malaria, it is becoming possible to consider targeted interventions designed to produce additive or synergistic beneficial effects even beyond their direct impact on human well-being. Where important ports or centers of economic activity are malarious, for example, the economic burden of disease tends to be particularly high; interventions which target such locations are likely to improve economic conditions directly, in addition to improving individual well-being.

Similarly, malaria infection can aggravate underlying micronutrient deficiencies in children; interventions which target malnourished children are likely to improve the outcomes of simultaneous nutritional deficiencies in addition to directly protecting children from the devastating effects of malaria.

Malaria requires a commitment to applied as well as basic research as much as it does to a broad implementation of existing intervention methods.

There is an urgent need for developing powerful new technologies

New policies and institutions are necessary to facilitate vaccine development.
In addition to increased research into existing technologies, new antimalaria intervention tools are required. An effective vaccine, for example, could form the basis of a highly sustainable and effective intervention strategy. Interest in developing such a vaccine among private pharmaceutical and biotechnology firms, however, is limited.

One important policy initiative to spur private sector interest in this effort would be for donor governments, international organizations and private foundations to ensure a profitable market for a malaria vaccine, if one were to be developed. Such a policy would ensure that those with the most information would decide which projects are to be pursued. In addition, it would ensure that no public funds are expended unless the technology was successfully developed.

President Clinton has proposed a policy along these lines, involving a tax credit for companies that develop new vaccines. The World Bank has also publicly raised the possibility of creating a $1 billion revolving fund to subsidize purchases of new vaccines.

These proposals should be linked together and expanded with commitments from donor governments, foundations, and international agencies into a Malaria Vaccine Purchase Fund. This fund would provide guarantees to the private sector and to the research community that any successful malaria vaccine will have a large market, thereby encouraging the necessary outlays on research and development in future years.

Even with these efforts, however, a useful vaccine may not be available for many years. In the meantime, new medicines are essential to address problems of spreading drug resistance as well as affordability. These projects are also of little interest to firms. The dynamics of drug markets are not identical to those of vaccine markets, but enhancing private sector interest in drug development is just as essential. Any effort to spur the development of new drugs must explicitly take market dynamics into account.

In the meantime, new therapeutic, preventive, and diagnostic tools must be developed - particularly drugs, insecticides, and dipstick tests.
Similarly, few general purpose insecticides suitable for use in entomological malaria interventions are under development now. These insecticides are essential to future antimalaria programs, due to widespread and intensifying insecticide resistance among anopheline vector populations. Market-based policies to facilitate insecticide development projects must be designed and implemented. In the meantime, however, the use of DDT in malaria interventions should not be banned.

Inability to diagnose malaria quickly is a contributing factor to increased mortality, prolonged morbidity, the spread of drug resistance and delayed response to emerging epidemics. Dipstick tests and other rapid, user-friendly field diagnostics are essential for addressing these challenges. Enhanced effort should be given to producing these tests at lower cost and increasing their availability in developing countries. Private sector interest in developing new and hardier diagnostics should be encouraged. In the meantime, the use of existing rapid diagnostic technologies in malarious regions should be financed by developed country governments.

It is important not to forget that the primary objective is improving human well-being.
Development of new intervention methods, however, should not occur at the expense of new and innovative uses of existing technology. Ethical issues in clinical research and development must be acknowledged in any policy that is adopted, and ethical guidelines must be strictly enforced.

Therefore, new technologies can provide important avenues for mitigating the burden of malaria, provided that appropriate markets can be created.

These considerations call for an integrated global effort against malaria

Global investment in antimalaria activities must be increased many times over. Incremental increases are not sufficient.
Anti-malaria programs, whether at the national, regional, or global level, suffer from a chronic lack of funding. Funding decisions have been based on dramatic underestimates of the real costs of malaria. The international community of nations, together with the multilateral agencies and private foundations, should commit to increased current expenditures for malaria interventions and research programs of at least $1 billion per year, in the coming years. This level of effort should be sustained for an indefinite period, and concentrated primarily in Sub-Saharan Africa. Today, the level of effort worldwide amounts to only a small fraction of this amount.

In addition to greatly increased current expenditures, the donor governments, foundations, and international agencies, should establish a Malaria Vaccine Purchase Fund. Such a fund would only make disburse money if an effective malaria vaccine becomes available, but its establishment now would greatly increase research and development incentives, and thereby greatly reduce the time until such a vaccine is available.

An increase of $1 billion per year, sustained for many years, is clearly justified in economic terms.
The amount of $1 billion per year, heavily concentrated in Sub-Saharan Africa, is appropriate based even on traditional assessments of the burden of malaria which do not take the economic growth penalty into account. Such traditional assessments suggest that malaria’s economic costs are likely to exceed one percent of GDP and could well be several times higher than that. Since Sub-Saharan Africa’s GDP is around $300 billion, and since malaria affects nearly the entire region, the short-term benefits of malaria control can reasonably be estimated at between $3 and $12 billion per year. Thus, interventions costing $1 billion per year which substantially reduce the disease burden are justified.

The case for the large increase in expenditures is further strengthened by taking into account the sustained growth penalty associated with malaria, which greatly multiplies the true economic burden of the disease. Taking into account the growth effects of malaria, the benefits of controlling the disease are in the dozens of billions of dollars per year after a few years of malaria control. These benefits would exceed the costs by a widening margin over time, as the program supports a sustained increase in economic growth with cumulative benefits to the level of national income (see figure 2).

This money must be committed to a multifaceted program, including capacity enhancement in malarious countries.
The international community, working closely with the countries of Sub-Saharan Africa and other malarious regions, must immediately begin to elaborate the interventions which would make the most effective use of this additional $1 billion per year. Efforts would focus on the increased use of impregnated bednets, improved case management, enhanced vector control programs where feasible, basic research into drugs and vaccines, and ongoing massive disease surveillance and project evaluation efforts.

In addition, international cooperation in training and research in epidemiology, ecology, entomology, immunology, economics, program evaluation, and other relevant fields must be enhanced. This training and research should be designed to enhance technical capacity in developing countries, and should involve interaction between the public and private sector, and between developed and developing countries. The combination of direct interventions (e.g. bednets) with increased surveillance, project evaluation, basic research, and training constitute an integrated approach to malaria control that will be vital for a long-term, successful, and sustainable effort.

The benefits of committing substantial new economic resources to malaria will greatly exceed the costs. Furthermore, the benefits will be greatest when the new resources are deployed in an integrated and multifaceted program of anti-malaria interventions, enhanced surveillance, and greatly intensified research and training programs.

Table 1. Loss from the economic growth penalty of malaria endemicity in 31 African countries, 1980-1995

Country Aggregate loss (millions of PPP-adjusted 1987 $) Per person loss
(PPP-adjusted 1987 $)
As a fraction of actual 1995 income
Benin 1172 214 18%
Botswana 503 347 5%
Burkina Faso 1684 162 18%
Burundi 730 117 18%
Burundi 730 117 18%
Cameroon 4227 318 18%
Central African Republic 884 270 18%
Chad 995 154 17%
Congo 759 288 18%
Congo 759 288 18%
Congo, Dem. Rep. 7125 162 18%
Cote d'Ivoire 4107 294 18%
Gabon 1389 1290 17%
Gambia 251 226 18%
Gambia 251 226 18%
Ghana 5355 314 18%
Guinea Bissau 152 142 14%
Kenya 5272 198 18%
Lesotho 0 0 0%
Lesotho 0 0 0%
Madagascar 2280 167 18%
Malawi 1072 110 18%
Mali 1222 125 17%
Mauritania 611 269 15%
Mauritius 0 0 0%
Mauritius 0 0 0%
Namibia 832 539 10%
Niger 1457 161 17%
Nigeria 17315 156 18%
Rwanda 656 102 18%
Rwanda 656 102 18%
Senegal 2426 286 18%
Sierra Leone 366 87 17%
South Africa 4056 98 1%
Togo 1166 285 18%
Zambia 1359 151 18%
Zimbabwe 4214 383 18%
Total 73 638 185 10%
Based on results in John Luke Gallup and Jeffrey D. Sachs, "The Economic Burden of Malaria" in Economics of Malaria (forthcoming).
Please note that these figures are reported in purchasing power parity (PPP) adjusted dollars held constant at 1987 prices. This corrects for the effects of price inflation, as well as the fact that in Africa, non-traded goods and services (for example, health services or land) are cheaper relative to internationally traded goods than they are in the United States. In order to convert these units into current US dollar terms, it would be necessary to divide by a factor of about 3, then multiply by the rate of price inflation between 1987 and 1995.

Figure 1. Loss associated with the malaria growth penalty, compared to traditionally estimated static effects, in 31 African countries, 1980-1995

Gallup Based on results in John Luke Gallup and Jeffrey D. Sachs, "The Economic Burden of Malaria" and Pia Malaney, "Microeconomic Approaches to Evaluating the Burden of Malaria" in Economics of Malaria (forthcoming)

Figure 2. Hypothetical benefits of sustained malaria intervention, incorporating only the short-run benefits, and improved economic growth

Reproduced with courtesy of Roll Back Malaria

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