Does subsidizing the private for‐profit sector benefit the poor? Evidence from national antimalarial subsidies in Nigeria and Uganda

Subsidising quality‐assured artemisinin combination therapies (QAACTs) for distribution in the for‐profit sector is a controversial strategy for improving access. The Affordable Medicines Facility—malaria (AMFm) was the largest initiative of this kind. We assessed the equity of AMFm in two ways using nationally representative household survey data on care seeking for children from Nigeria and Uganda. First, the delivery of subsidized drugs through the for‐profit sector via AMFm was compared with two alternative mechanisms: subsidized delivery in public health facilities and unsubsidized delivery in the for‐profit sector. Second, we developed a novel extension of benefit incidence analysis (BIA) methods based on the concept of pass‐through, and applied them to Uganda. In Nigeria, the use of subsidized QAACTs from both public health facilities and for‐profit outlets was concentrated among the rich, while in Uganda, the use of QAACTs from both sources was concentrated among the poor. Similarly, the BIA of AMFm found that the intervention was pro‐poor in Uganda. Unsubsidized antimalarials from for‐profit outlets were distributed equally across wealth quintiles in both countries. Private sector subsidies may have a role in bolstering access to effective malaria treatments, including among the poor, but the equity impact of subsidies may depend on context.