Should New Anti-Malarial Drugs be Subsidized?

Ramanan Laxminarayan (), Ian Parry, David L. Smith and Eili Klein ()
Additional contact information
Eili Klein: Resources for the Future

RFF Working Paper Series from Resources for the Future

Abstract: We use analytical and numerical models to explain and quantify the welfare effects of subsidies for artemisinin combination treatments (ACTs), a valuable new class of antimalarial drugs. There are two (second-best) efficiency rationales for such subsidies: by expanding drug use, they reduce infection transmission from one individual to another, and they slow the evolution of drug resistance by deterring use of substitute monotherapy drugs for which resistance emerges more rapidly than for ACTs. Our analysis merges epidemiological models of malaria transmission among individuals and mosquitoes, evolution of drug resistance, and economic models of the demand for alternative drugs; parameter values for the simulations are representative of malaria prevalence in sub-Saharan Africa. We find that large subsidies for ACT are welfare improving across many plausible scenarios for malaria transmission, drug-demand elasticities, and evolution of drug resistance; the benefits of the policy are often several times larger than the costs.

Keywords: antimalarial drugs; resistance externality; transmission externality; subsidies; welfare effects (search for similar items in EconPapers)
JEL-codes: H23 I18 O15 (search for similar items in EconPapers)
Date: 2006-09-25
New Economics Papers: this item is included in nep-afr and nep-hea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.rff.org/RFF/documents/RFF-DP-06-43.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.rff.org/RFF/documents/RFF-DP-06-43.pdf [301 Moved Permanently]--> https://www.rff.org/RFF/documents/RFF-DP-06-43.pdf)

Related works:
Journal Article: Should new antimalarial drugs be subsidized? (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rff:dpaper:dp-06-43

Access Statistics for this paper

More papers in RFF Working Paper Series from Resources for the Future Contact information at EDIRC.
Bibliographic data for series maintained by Resources for the Future ().