Cost of conducting deworming programs – fair value of deworming meds, part 3

I have found a few sources that suggest the cost to conduct a large-scale deworming program is in the range of pennies per child.  If I’m reading these articles correctly, the amounts include the cost to buy the medicine.

A meta-study from the World Health Organization: Estimation of the cost of large-scale school deworming programmes with benzimidazoles.

The abstract says:

This study estimates the cost of distributing benzimidazole tablets in the context of school deworming programmes: we analysed studies reporting the cost of school deworming from seven countries in four WHO regions. The estimated cost for drug procurement to cover one million children (including customs clearance and international transport) is approximately US$20000. The estimated financial costs (including the cost of training of personnel, drug transport, social mobilization and monitoring) is, on average, equivalent to US$33000 per million school-age children with minimal variation in different countries and continents. The estimated economic costs of distribution (including the time spent by teachers, and health personnel at central, provincial and district level) to cover one million children approximately corresponds to US$19000.

That works out to 2 cents to buy the medicine on the open market, 3.3 cents for training & transport, plus 1.9 cents of time for teachers and schools to distribute to children.  Total cost is around 7.2 cents per child.

The full report is behind a paywall.  If I understand the way things work, that means I can’t link to it.  Not sure I can even quote it directly.  So I’ll just mention some highlights.

The point worth mentioning is that the 2 cents number is for buying the meds. The report indicates an average price for albendazole is 1.81 cents with a range of 1.41 to 2.8 cents. Cost to buy 500mg mebendazole is a median of 1.91 cents with range of 1.10 to 2.76 cents.  Transportation costs are about 10%, so the study estimates 2.0 cents each for a program covering one million children.

The report lists programs in 7 countries that have costs ranging from 1.2 cents to 6.0 cents per child.

I’ve seen other articles along this line in the last few months.  Need to track those down again.

Here are a few other sources I found from an internet search:

Michael & Susan Dell FoundationDeworming Delhi: A low-cost, high-impact approach to public health – expected cost:

Administered annually or bi-annually, depending on the prevalence of worm infections in a particular area, each dose costs only pennies per child.

World Economic ForumKenya Launches Scheme to Deworm 5 Miliion Children Annually for next Five Years:

Hundreds of millions of children worldwide are infected with parasitic worms, with serious health and economic consequences. Working with public-private partnerships, the Deworm the World programme can tackle the scourge for US$ .50 a child.

Program in Cambodia – Another paper from PubMed.gov:  Financial costs of deworming children in all primary schools in Cambodia. The Abstract reads:

In 2002, Cambodia’s Ministry of Health launched a deworming programme to deliver an anthelmintic drug (mebendazole 500 mg) and health education to 75% of its school children twice a year. Cambodia’s school population is approximately 2.8 million. The deworming programme was organized into two phases: the first phase (December 2002-March 2003) targeted more than one million school children from 11 provinces; and the second phase (July 2003-January 2004) targeted the entire school population. The cost to treat each child was 12 cents (0.11 USD) during the first phase, 6 cents during the second phase, and 3 cents for re-treatment in areas where the campaign was conducted for the second time. The Cambodian experience demonstrates that, with political commitment, high coverage for deworming is achievable even in a country with minimal resources. Cambodia’s deworming programme represents a successful model for other developing countries.

That’s two doses of 500mg mebendazole for cost of 18 cents, if I read the abstract right.

Vietnam – Grant request from the government of Vietnam to the Japan Fund for Poverty Reduction: Grant Assistance – Socialist Republic of Viet Nam: Improving Vitamin A Nutrition and Deworming for Poor and Vulnerable Children:

From the details inside the request:

1.8 million mebendazole tablets will be needed for each distribution to cover all 1.6 million children aged 12–60 months in the 18 project provinces. The deworming tablet cost of $0.017 is based on costs currently incurred by school-based deworming programs in Viet Nam.

There are quite a few more pages of proposal detail to go through, but I think I’ve found enough for the moment.  Keep in mind this is a grant proposal and it includes purchase cost for the meds.

Summary

Those five articles cover a continuum of data: 2 background discussions, 1 grant proposal, 1 completed program, and 1 meta-survey.  I think all of them include the purchase of deworming meds in the amounts, but I’m not sure about the background articles.  I am sure the three other reports do include purchases on the open market. 

Of note is that all the data mentioned in those articles point toward deworming meds costing pennies per dose on the international market.

Am I missing something?

If anyone knows of large-scale programs that have costs in the range of US$1 to US$10.50, please point them out.

If I’m missing the boat here, please let me know.  If I don’t understand some part of the story, please point out where I’m confused.  Feel free to comment.  E-mail me at gikvalue at earthlink dot net if you prefer.

2 Responses to Cost of conducting deworming programs – fair value of deworming meds, part 3

  1. Leif says:

    I think there is a couple things missing here. (1) All of the examples that you quote are NGO, donative markets, not commercial markets. Fair value according to GAAP must be based on commercial reciprocal markets. (2) The definition of fair value according to ASC 820 is exit market, not entry market.

    In order to determine fair value you need to get away from donative markets, and away from entry markets and look to reciprocal exit markets.

    You should also look at discussing ASC 958-605-15-6 which states that a transaction can be a part-exchange, part-contribution if the fee paid is substantially less than the fair market value. Then a contribution is recorded for the fair value that exceeds the fee paid, which I believe is what is occurring for most NGOs.

    So in that case, the difficulty is in finding the commercial, reciprocal, exit market value. It appears that many large NGOs are purchasing reliable third party data on actual transactions to come up with a viable method for fair value. Vague pricing sources from the internet are not valid for proper accounting and/or auditing.

  2. Jim Ulvog says:

    Leif, thanks for your post.

    You are quite correct that there is more to discuss on the issue. You have touched on several ideas I plan to discuss in future posts. Published articles on this issue have not touched on the bargain purchase issue you mention. That concept still leaves us with having to address the question of what is fair value.

    Looking forward to more discussion with you.

    Thanks again for taking time to comment. You are obviously well informed and have much to contribute to the discussion.

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