Abstract
BackgroundPublic health initiatives must look for ways to cost-effectively scale critical interventions to achieve high coverage. Private sector distribution channels, can potentially distribute preventive healthcare products to hard-to-reach populations, decongest public healthcare systems, and increase the sustainability of programs by getting customers to share costs. However, little is known about how sellers set prices for new products. By introducing a new product, HIV self-test kits, to local drug shops, we observed whether shops experimented with pricing, charged different buyers different prices, and whether prices converged within the local market over our study period.MethodsFrom August to December 2019, we provided free HIV self-test kits, a new product, to 26 drug shops in Shinyanga, Tanzania to sell to the local community. We measured sales volume, price, customer age and sex using shop records. Using a multiple linear regression model, we conducted F-tests to determine whether shop, age, sex, and time (week) respectively were associated with price. We measured willingness-to-pay to restock test kits at the end of the study.Results514 test kits were sold over 18 weeks; 69% of buyers were male, 40% were aged 25–34 and 32% aged 35–44. Purchase prices ranged from 1000 to 6000 Tsh (median 3000 Tsh; ~$1.30 USD). Within shops, prices were 11.3% higher for 25–34 and 12.7% higher for 45+ year olds relative to 15–19-year olds (p = 0.029) and 13.5% lower for men (p = 0.023) on average. Although prices varied between shops, prices varied little within shops over time, and did not converge over the study period or cluster geospatially. Mean maximum willingness-to-pay to restock was 2000 Tsh per kit.ConclusionsShopkeepers charged buyers different prices depending on buyers’ age and sex. There was limited variation in prices within shops over time and low demand among shopkeepers to restock at the end of the study. Given the subsidized global wholesale price ($2 USD or ~ 4600 Tsh), further demand creation and/or cost-reduction is required before HIV self-test kits can become commercially viable in drug shops in this setting. Careful consideration is needed to align the motivations of retailers with public health priorities while meeting their private for-profit needs.
Highlights
Public health initiatives must look for ways to cost-effectively scale critical interventions to achieve high coverage
We present the first systematic evidence on how drug shops set prices for HIV self-test kits by providing 26 drug shops in Shinyanga, Tanzania with free samples and observing their sales and pricing over an 18-week study period
Study population Using a prospective cohort design, we collected data from 26 drug shops (23 Accredited Drug Dispensing Outlets [ADDOs] and 3 pharmacies) in Shinyanga, a semi-urban small municipality in Tanzania, between August 2019 and December 2019.2 This focus on pricing behavior for new products was an ancillary study to a randomized controlled trial evaluating the impact of an intervention promoting adolescent girls and young women (AGYW) friendly services on drug shop patronage and uptake of various sexual and reproductive health services, including HIV self-testing (NCT 04045912, hereafter ‘parent study’)
Summary
Public health initiatives must look for ways to cost-effectively scale critical interventions to achieve high coverage. Can potentially distribute preventive healthcare products to hard-to-reach populations, decongest public healthcare systems, and increase the sustainability of programs by getting customers to share costs. Private sector distribution channels, such as drug shops, are underutilized when distributing preventive healthcare products, like HIV self-testing, to hard-to-reach populations [1,2,3,4,5]. Given the potential to increase community-based access, governments and donors exploring distribution strategies for HIV self-testing are strongly considering retail distribution [15]. This is potentially more sustainable than long-term free distribution since testers share costs (by paying out of pocket)
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