Fake Malaria Drugs Are Complicating the Fight Against a Preventable Killer

    

Why It Matters

Malaria kills more than 400,000 people every year, most of them in Africa and many of them children under five. Yet efforts to make life-saving antimalarial medicines more affordable may unintentionally support the spread of counterfeit drugs.

Key Takeaways

• Counterfeit antimalarial drugs are widespread in many African markets and can account for up to 42% of medicines sold in some countries.
• Traditional subsidy programmes are not always the best solution when counterfeit medicines are present.
• Policymakers and donors should tailor subsidy strategies to local market conditions, including funding levels, drug quality, and consumer awareness.

When Cheap Drugs Come at a High Cost

Artemisinin combination therapies (ACTs) are the gold standard for treating malaria. They are highly effective and can prevent death in more than 95% of cases. However, in many malaria-endemic countries, legitimate ACTs remain too expensive for many households.

To improve access, governments and philanthropic organisations such as the Bill & Melinda Gates Foundation and the Clinton Health Access Initiative subsidise antimalarial medicines sold through private retailers. This approach has helped lower prices and increase availability, particularly in regions where public health clinics have limited reach.

However, there is an unintended consequence. High demand, combined with limited access to affordable medicines, has created fertile ground for counterfeit drugs. In Kenya, fake or substandard antimalarials account for about one in five ACTs sold in the private sector. In the Democratic Republic of the Congo, the figure is more than two in five.

These counterfeit products can be difficult to detect. Studies show that even trained pharmacists struggle to distinguish genuine medicines from fake ones because packaging is often nearly identical. Some counterfeit drugs contain reduced levels of active ingredients, while others contain none at all. Researchers estimate that substandard and falsified antimalarial medicines contribute to more than 100,000 deaths annually in sub-Saharan Africa.

Why More Subsidies Are Not Always Better

Most previous research has concluded that the best way to improve access to medicines is through purchase subsidies, which lower the cost for retailers buying approved drugs from certified suppliers.

This study challenges that assumption.

The researchers developed a model of the antimalarial supply chain that accounts for an uncomfortable reality: retailers may choose between certified suppliers and cheaper, uncertified suppliers that can offer a mix of legitimate and counterfeit medicines.

The findings show that the effectiveness of subsidies depends heavily on local market conditions. When donors have sufficient funding, purchase subsidies remain the best option. They not only improve access to legitimate medicines but can also eliminate counterfeit drugs from the market altogether.

But when budgets are tight, the picture changes. In markets where uncertified drugs are relatively high quality, sales subsidies, which reward retailers for medicines sold regardless of where they were sourced, can sometimes deliver better health outcomes than purchase subsidies.

In some cases, the researchers found that offering no subsidy at all may be preferable. This counterintuitive result arises when limited subsidies inadvertently encourage retailers to stock more uncertified medicines, increasing the prevalence of counterfeit drugs.

The study suggests that the long-standing assumption that one subsidy model fits all may no longer hold in today's complex pharmaceutical markets.

Rethinking the Fight Against Counterfeits

The researchers also examined other interventions commonly used to tackle counterfeit medicines.

One option is to impose penalties on retailers found selling counterfeit products. While penalties can discourage retailers from sourcing uncertified drugs, they can also backfire. If retailers continue to sell counterfeits despite the risks, consumers may ultimately face greater harm.

Another increasingly popular solution is traceability technology, which tracks medicines through the supply chain. Surprisingly, the study found that investing in traceability systems may not always be the best use of limited funds. In some settings, donors would achieve better outcomes by directing the same resources towards expanding subsidies for legitimate medicines.

The researchers also explored price controls, which are used in some countries to limit how much retailers can charge. Their findings suggest that pricing regulations can influence retailers' sourcing decisions, but their effectiveness depends on how competitive local markets are.

To test their conclusions, the team calibrated their model using malaria data from Mozambique. The results reinforced a central message: combating counterfeit medicines requires policies that are tailored to specific market conditions rather than relying on blanket solutions.

Business Implications

The study offers important lessons for governments, donors, pharmaceutical companies, and healthcare organisations operating in emerging markets.

First, funding levels matter. Small subsidy programmes can have unintended consequences if they fail to make legitimate medicines sufficiently competitive. Second, policymakers should invest in understanding local supply chains, particularly the prevalence and quality of uncertified drugs. Finally, efforts to improve consumer awareness about counterfeit medicines remain critical, as informed consumers are less likely to support markets for fake products.

More broadly, the findings extend beyond malaria. Similar challenges exist in markets for antibiotics, vaccines, and other essential medicines. As global supply chains become increasingly complex, organisations will need more nuanced strategies to balance affordability, access, and product integrity.

Authors and source

Authors: Jiatao Ding (Nanyang Technological University), Michael Freeman (INSEAD), and Saša Zorc (University of Virginia Darden School of Business).

Original Article: From Black to Gray: Improving Access to Antimalarial Drugs in the Presence of Deceptive Counterfeits (2026), Management Science.

---