Editorial note

This report is a “shallow” investigation, as described here, and was commissioned by GiveWell and produced by Rethink Priorities from February to April 2023. We revised this report for publication. GiveWell does not necessarily endorse our conclusions, nor do the organizations represented by those who were interviewed.

The primary focus of the report is to provide an overview of market shaping in global health. We describe how market shaping is typically used, its recent track record, and ongoing gaps in its implementation. We also spotlight two specific market shaping approaches (pooled procurement and subscription models). Our research involved reviewing the scientific and gray literature and speaking to five experts.

We don’t intend this report to be Rethink Priorities’ final word on market shaping, and we have tried to flag major sources of uncertainty in the report. We hope this report galvanizes a productive conversation within the global health and development community about the role of market shaping in improving global health. We are open to revising our views as more information is uncovered.

Key takeaways

• Market shaping — in the context of global health — comprises interventions to create well-functioning markets through improving specific market outcomes (e.g., availability of products) with the end goal of improving public health. Market shaping interventions tend to be catalytic, timebound, and have a strong focus on influencing buyer and supplier interactions. [more]
• Market shaping interventions are used to address various market shortcomings. A commonly used framework to assess shortcomings in various market characteristics is some variation of the “five As”: affordability, availability, assured quality, appropriate design, and awareness. [more]
• There is no commonly agreed upon set of interventions under the term of market shaping, but they can be broadly categorized by the main type of lever they use: reduce transaction costs (e.g., pooled procurement), increase market information (e.g., strategic demand forecasting), balance supplier and buyer risks (e.g., advance market commitments). [more]
• New developments have been taking place in the field in recent years: (1) New intervention types have been devised and implemented (e.g., ceiling price agreements); (2) there has been a drive toward institutionalization with the launch of several new organizations whose sole policy instrument focus is market shaping (e.g., MedAccess); (3) there is an increase in co-ownership with national governments in low- and middle-income countries (LMICs); (4) the field is increasingly experiencing diminishing returns as most of the “low-hanging fruits” have been picked, and projects are getting more complex with narrower indications and smaller health impacts. [more]
• Market shaping has recently seen both wins and disappointments. Recent wins include: (1) Results for Development’s (R4D) amoxicillin dispersible tablets (amox DT) program; (2) ceiling price agreements for optimized antiretroviral (ARV) regimens; (3) a ceiling price agreement for HIV self test; (4) significant price reductions in vaccines achieved by Gavi. Recent disappointments include: (1) the continued price instability of malaria ACTs; (2) the failure of a uterotonic agent to be registered in Kenya; (3) the sole supplier of malaria rapid diagnostic tests (mRDTs) threatening to leave the market due to unsustainably affordable prices; (4) a tuberculosis (TB) drug in Brazil not being procured. [more]
• We describe three case studies of recent market shaping activities:
  1. The Affordable Medicines Facility—malaria (AMFm) was launched by the Global Fund in 2009 (and discontinued in 2017) as a financing mechanism aimed at increasing access to affordable and high-quality antimalarial medicines (ACTs) in eight LMICs. It consisted of price negotiations with manufacturers, a buyer subsidy, and various supportive programmatic interventions. The program was very controversial, but is overall considered successful at achieving its goals. [more]
  2. Gavi has been coordinating pentavalent vaccine (a vaccine protecting against five diseases) market shaping interventions since 2001, mainly to increase uptake of the Hib and HepB vaccines in LMICs while reducing the number of shots needed. This was a large undertaking involving many actors and interventions (e.g., pooled procurement, market analyses, demand forecasts, technical assistance to regulators and manufacturers). The pentavalent vaccine is the first Gavi-supported market to reach fully satisfied demand. Moreover, pentavalent vaccine prices in 2023 are only one-third of the price level in 2006. However, the interventions may have had some unintended consequences. [more]
  3. Unitaid/CHAI’s Paediatric HIV/AIDS and Innovation in Paediatric Market Access (IPMA) projects ran between 2007 and 2016, largely as a way to pool and coordinate procurement for pediatric ARVs. The Paediatric HIV/AIDS project focused on pooled procurement, price negotiations with suppliers, and consolidating ARV formulations, while IPMA focused on technical assistance and global coordination efforts. Prior to 2010, Unitaid served as the sole funder and procurer. The projects were evaluated as being highly successful in terms of public health impact, near- and medium-term market effects, and cost-effectiveness; however, the transition away from central procurement in 2010 was likely inadequately executed. [more]
• Many actors are involved in the market shaping field (e.g., Global Fund, Gavi, UNICEF, USAID, R4D) and perform three functions: funding, research, and implementation. BMGF is the main philanthropic funder of market shaping work. Most actors we’ve seen focus on the “big three” infectious diseases (TB, HIV/AIDS, malaria), and/or on vaccines. [more]
• Our impression is that the mandates of most (with the exception of some more recent organizations) of the major players do not stipulate any particular market shaping approaches, but rather a focus on specific diseases, product types, and public health goals). We have not found any comprehensive overview of funding streams in the market shaping field, but some example funding figures we found point to a total annual spending in the billions of dollars. [more]
• Market shaping funders and implementers have historically neglected several areas, which we summarize in three groups: [more]
  1. Therapeutic areas: Non-communicable diseases, certain infectious diseases (e.g., hepatitis), maternal and child health (excluding family planning), and cross-therapeutic products (e.g., medical oxygen) have been neglected relative to the “big three” infectious diseases (HIV/AIDS, malaria, TB). Moreover, comprehensive primary care provision has received less attention relative to verticalized, donor-supported programs.
  2. Intervention types: Market shaping interventions have historically focused heavily on the supply side, with less attention devoted to the demand side. Moreover, interventions focused on the scale-up of new medical products have lagged behind the support of R&D programs. Non-traditional financing solutions are under-utilized.
  3. Market types: National and subnational, and “fragmented” product markets have been neglected mainly due to structural challenges (e.g., the market for maternal and child health products is highly decentralized and fragmented across many different national health ministries and procurers).
• We spotlighted two intervention types:
  1. Pooled procurement dates back to the 1970s and means that buyers “pool” their financial, technical, or human resources to purchase products to increase the buyers’ bargaining power and procurement efficiencies. It is a frequently used intervention type to help reduce prices, improve quality standards, increase product availability, and speed up drug access. [more]
  2. Antibiotic subscription models are a novel concept in which payments to antibiotics manufacturers and developers are delinked from the volumes sold. They are used to increase pharmacological innovation in antibiotics while at the same time reducing incentives for antibiotic overprescription to hinder the spread of antimicrobial resistance. Two pilots are currently being implemented in the UK and in Sweden. [more]

Click here for the full version of this report on the Rethink Priorities website.

Acknowledgments

Jenny Kudymowa and James Hu jointly researched and wrote this report. Melanie Basnak supervised the report. Thanks to Melanie Basnak, Bruce Tsai, Tom Hird, and Siddhartha Haria (Development Innovation Lab) for helpful comments on drafts. Further thanks to Neel Lakhani, David Ripin, Susie Nazzaro, and two senior US-based market shaping experts (who preferred not to be named) for taking the time to speak with us. GiveWell provided funding for this report, but it does not necessarily endorse our conclusions.

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