Swaziland: A Total Market Approach. PSI/UNFPA Joint Studies on the Total Market for Male Condoms in Six African Countries.

Publication date: 2013

A TOTAL M A R K E T A P P R O A C H SWAZILAND F O R M A L E C O N D O M S Missions: UNFPA and PSI This study was approved by the Swaziland Ministry of Health Scientific and Ethics Committee (SEC). Please contact the SEC Secretariat at +268 2404 7712 or +268 2404 5469, should you have any questions. Recommended citation: Pallin, S.C., D. Meekers, O. Lupu, K. Longfield. November 2013. Swaziland: A Total Market Approach. PSI/UNFPA Joint Studies on the Total Market for Male Condoms in Six African Countries. Retrieved from www.psi.org/total-market-approach UNFPA, THE UNITED NATIONS POPULATION FUND, delivers a world where every pregnancy is wanted, every birth is safe, and every young person's potential is fulfilled. PSI, POPULATION SERVICES INTERNATIONAL, makes it easier for people in the developing world to lead healthier lives and plan the families they desire by marketing affordable products and services. Contents GREETINGS 1 EXECUTIVE SUMMARY 2 METHODS 3 STATE OF THE MARKET 4 INTRODUCTION 6 Health Context 6 HIV Situation 7 Public Sector 8 Social Marketing Sector 9 Commercial Sector 10 RESULTS 11 Universe of Need 11 Condom Use 12 Market Volume 13 Market Value 14 Subsidy 15 Number of Brands 15 Equity 16 CHALLENGES AND OPPORTUNITIES 17 RECOMMENDATIONS 19 Informed Demand 19 Government Support 19 Coordination 19 Equitable Distribution 19 Reporting 19 Pricing 19 ACRONYM KEY 20 ACKNOWLEDGEMENTS 20 REFERENCES 21 COVER PHOTO: MWANA BERMUDAS TOTAL MARKET APPROACH CASE STUDY | SWAZILAND 1 M ale condoms offer dual protection against HIV and other sexually transmitted infections (STIs), as well as unplanned pregnancy. All of these factors are important to our two agencies— UNFPA, the United Nations Population Fund, and PSI, Population Services International — and are critical for delivering the health impact we both strive to achieve. This case study is part of a series that UNFPA and PSI have produced over the course of a year. The series takes a critical look at the communities in which we operate and helps us understand how both agencies can improve our support in those communities and our engagement with other stakeholders, to grow and strengthen the total market for condoms. We focused our efforts on six African countries — Botswana, Lesotho, Mali, South Africa, Swaziland, and Uganda — that have large condom social marketing programs, are affected by the HIV epidemic, and have high maternal morbidity and mortality relative to their economic development. This series of case studies is intended to inform appropriate evidence-based decisions that increase condom use equitably and sustainably through actions undertaken in all supply sectors. Employing such a total market approach (TMA) means that all three sectors — public, social marketing, and commercial — work together to deliver health choices for all population segments. We will work together and with other partners to increase condom use and grow the market in a responsible way. Our long-term goal is to offer options to those most in need, people seeking to live their lives free from HIV and unplanned pregnancy. ● Sincerely, BRUCE CAMPBELL Director, Technical Division, UNFPA KIM LONGFIELD Director, Research and Metrics, PSI Greetings A MESSAGE FROM BRUCE CAMPBELL AND KIM LONGFIELD We will work together and with other partners to increase condom use and grow the market to serve those most in need. MALI UGANDA BOTSWANA SOUTH AFRICA LESOTHO SWAZILAND TOTAL MARKET APPROACH CASE STUDY | SWAZILAND 2 Executive Summary S waziland has the highest HIV prevalence of any country in the world, with more than one-quarter of the adult population infected. Although large-scale HIV prevention efforts have resulted in a decline in incidence since 1998, risky sexual behavior and insufficient condom use continue to drive the epidemic. Male condoms are a key component of Swaziland’s HIV prevention strategy, and because condoms offer dual protection against both HIV and unplanned pregnancy, they also play an important role in meeting the need for family planning. In Swaziland, the number of condoms needed to protect all sexual acts from HIV infection and unplanned pregnancy (universe of need) is much higher than the actual number of condoms on the market (volume). Public health efforts encouraging condom use for HIV prevention and family planning have, however, resulted in some very positive trends, and demand for condoms has increased over the years. In 2012, approximately two-thirds of men and women reported using a condom the last time they had sex, compared to fewer than half in 2006. Rates of condom use have also increased among unmarried youth. In addition, condom use is no longer concentrated among just the wealthy: nearly 40% of condom users fell into the bottom two wealth quintiles in 2012, compared to less than 25% in 2006. The condom market in Swaziland has traditionally consisted of three sectors: the public sector, which distributes fully subsidized (free) condoms; the social marketing sector, which distributes partially subsidized condoms at low cost; and the commercial sector, which sells condoms for a profit. While the role of the public and commercial sectors has not changed, the social marketing sector no longer sells partially subsidized condoms. In 2012, PSI/Swaziland, the only social marketing organization in the country, transferred the management of its condom brands to PSI/South Africa, a PSI regional branch for Southern Africa. As a result of this change, socially marketed brands that were previously subsidized are now sold at full cost recovery. Despite these improvements, the market remains heavily subsidized and dominated by free public sector condoms. Concerns about appropriate pricing strategies, “crowding out” the commercial sector, and a desire to collaborate with the government to maximize use of public funds, have prompted UNFPA and PSI to adopt a total market approach (TMA) to help manage the condom supply in Swaziland. TMA requires that all three sectors work together to “grow the condom market” and meet the needs of different segments of the population. The results of our study yielded several important findings. In order to meet increasing demand, the three sectors must address occasional shortages or inconsistencies in supply that could damage the perception of availability by consumers. Limited coordination between the public sector and implementing partners, including non-governmental organizations (NGOs), results in overstocks of free condoms in some places while other sites are severely under-stocked. Although the change to a regional cost recovery model indicates progress toward market sustainability, two-thirds of the Swaziland market is still fully subsidized. Additionally, the commercial sector continues to account for a negligible share of the market. This study presents a picture of the current market, analyzes past market trends, and provides a set of recommendations intended to help policymakers, donors, and other stakeholders better manage Swaziland’s condom market. ● The Total Market Approach (TMA) seeks to maximize market efficiency, equity, and sustainability through the coordination of the public, social marketing, and commercial sectors. * USAID CYP conversion factors provide the units of products needed per one couple year of protection2 **In cases where some condoms are partially subsidized (e.g., socially marketed), the calculation is “For each brand: the difference between market volume multi- plied by COGS, and market volume multiplied by average consumer price.” METRIC DEFINITION CALCULATION The number of products or services needed to reach universal coverage in the market HIV: Male population 15-64 multiplied by average number of risky sex acts per man per year FP: Female population 15-49 multiplied by method mix multiplied by CYP conversion factor* The number of products or services sold, distributed, or provided in a given market The percentage of the population at risk using a product or service, or adopting a behavior Total number of condoms distributed in the public, social marketing, and commercial sectors Percentage of males and females reporting condom use at last sex The dollar value of the total number of products or services in a given market Average consumer price multiplied by market volume The number of distinct brands for a product in a given market Total number of condom brands on the market The value of total subsidies (excludes operating and support costs) For fully subsidized (free) condoms: market volume multiplied by unit cost of goods sold (COGS) ** The degree to which products or services are used or adopted across socio-economic strata Percentage of condom users that fall within the bottom two wealth quintiles UNIVERSE OF NEED USE MARKET VOLUME MARKET VALUE MARKET SUBSIDY EQUITY INDEX NUMBER OF BRANDS TOTAL MARKET APPROACH CASE STUDY | SWAZILAND 3 Methods This list of TMA metrics comes from the literature and a set of metrics PSI has committed to measuring across countries.1 TOTAL MARKET APPROACH CASE STUDY | SWAZILAND 4 State of the Market Sources: UNAIDS Investment Framework Study Group3; UN Population Division, 2010 revision4; Swaziland DHS 06/075; USAID conversion factors2; Guttmacher Institute. Adding it up: The costs and benefits of investing in family planning and maternal and newborn health (estimation methodology),2011.6 Sources: DHS 2006/075, Soul City Regional Programme Evaluation 20127,8,9 DHS (2006) and Soul City (2011) are nationally representative surveys and are weighted for comparability. Soul City baseline data is not included due to differences in sampling techniques and questionnaire wording across the study years. 48.8% 70.1% 36.9% 53.9% 66.9% 80.8% 60.4% 71.6% UNIVERSE OF NEED CALCULATION: HIV: Male population 15-64 multiplied by average number of risky sex acts per man per year FP: Female population 15-49 multiplied by method mix multiplied by CYP conversion factor MARKET VOLUME CALCULATION: Total number of condoms distributed in the public, social marketing, and commercial sectors USE CALCULATION: Percentage of males and females reporting condom use at last sex 14 12 10 8 6 4 2 0 2006 2007 2008 2009 2010 2011 2012 2013 48.8% 70.1% 36.9% 53.9% 66.9% 80.8% 60.4% 71.6% *For 2013, the social marketing sector is considered “commercial sector” because its condoms are profitable. Where data were unavailable, figures used are best estimates. **2012 public sector distribution figures were used for 2013 Sources: DHS 2006/075, Soul City Regional Programme Evaluation 20127,8,9 Sources: PSI10, Swaziland MOH11 Percentage of males reporting casual or multiple partners in the last year who used a condom at last sex TOTAL MARKET APPROACH CASE STUDY | SWAZILAND 5 Sources: PSI10, Swaziland MOH11, PSI/Swaziland and PSI/South Africa12 Sources: DHS 2006/075, Soul City Regional Programme Evaluation 20127,8,9 DHS (2006) and Soul City (2011) are nationally representative surveys and are weighted for comparability. Soul City baseline data is not included due to differences in sampling techniques and questionnaire wording across the study years NUMBER OF BRANDS CALCULATION: Total number of condom brands on the market EQUITY CALCULATION: Percentage of condom users that fall within the bottom two wealth quintiles SUBSIDY CALCULATION: For fully subsidized (free) condoms: market volume multiplied by unit COGS $255,945 R2,621,769 ● ● ● ● ● ● ● ● ● ● ● ● at least 12 different brands of condoms on the market MARKET VALUE CALCULATION: Average consumer price multiplied by market volume AVERAGE CONSUMER PRICE MARKET VOLUME MARKET VALUE 85% of condoms fully subsidizied $627,586 R5.1 million Estimated subsidy for public sector condoms 15% commercial sector condoms* Sources: PSI10, Swaziland MOH11, PSI/South Africa14 *Includes Trust and Lovers+ brands $99,455 R670,543 Source: PSI/Swaziland13 ■ MALES 2006 PE RC EN TA GE WEALTH ■ MALES 2012 ■ FEMALES 2006 ■ FEMALES 2012 0 10 20 30 40 50 QU INTILE 1 QU INTILE 2 QU INTILE 3 QU INTILE 4 QU INTILE 5 O A N A L U P U TOTAL MARKET APPROACH CASE STUDY | SWAZILAND 6 Introduction HEALTH CONTEXT Swaziland has the highest HIV prevalence of any country in the world, with an estimated 26% of the population aged 15-49 infected.15 More women (31%) than men (20%) are infected.15 Risky sexual behavior continues to drive the HIV epidemic in Swaziland, especially multiple and concurrent partnerships and low levels of condom use.15 Major HIV prevention efforts have resulted in a steady decline of incidence since 1998, which is projected to decline to 2.4% by 2015.16 Male condoms remain an important component of Swaziland’s HIV prevention strategy. Condom use is essential for those who engage in casual or multiple partnerships, or when at least one partner in a relationship is HIV positive. In addition to providing protection against HIV infection, condoms play a role in preventing unplanned pregnancy. Although the frequency with which condoms are used for dual protection is unknown, approximately one quarter of married Swazi women have an unmet need for family planning.17 A consistent supply of high-quality condoms is required to fill the need for both HIV prevention and family planning. However, it is clear from our research that the current market falls short of meeting those needs. Stabilization and strengthening of the condom market is necessary to increase condom use and ensure long-term, equitable access to condoms. Male condoms are an important part of Swaziland’s national strategy for HIV prevention. TOTAL MARKET APPROACH CASE STUDY | SWAZILAND 7 Swaziland: HIV Situation HIV PREVALENCE IS THE HIGHEST IN THE WORLD, APPROXIMATELY 26%15 NEED FOR CONSISTENT SUPPLY OF HIGH QUALITY CONDOMS RATES ARE EVEN HIGHER IN KEY POPULATIONS17: Sex workers 70% Migrant or mobile populations 30% Prisoners 35% RATES ARE HIGHER AMONG WOMEN THAN MEN15: 31% 20% RISKY SEXUAL BEHAVIOR REMAINS COMMON15 Multiple partnerships Concurrent partnerships TOTAL MARKET APPROACH CASE STUDY | SWAZILAND 8 PUBLIC SECTOR Swaziland’s HIV prevention system is based on the “Three Ones” principles developed by UNAIDS to achieve the most effective and efficient use of resources, and to ensure rapid action and results-based management. It consists of one HIV/AIDS Action framework that provides the basis for coordinating the work of all partners; one national AIDS coordinating authority, with a broad-based multi-sector mandate; and one agreed country-level monitoring and evaluation system.18 The Sexual and Reproductive Health Unit (SRHU) is responsible for the overall coordination of condoms in Swaziland. The Ministry of Health (MOH) Reproductive Health Commodities (RHC) system is a health supply system that oversees national condom procurement and distribution to health facilities and non-governmental organizations through the country’s Central Medical Stores (CMS), which also distribute other contraceptives and essential medicines. Management Sciences for Health (MSH) has supported the integration of RHC into CMS by providing technical assistance on supply chain management for sexual and reproductive health commodities. The National Emergency Response Council on HIV and AIDS (NERCHA) was established in 2001 and oversees HIV prevention activities in Swaziland, including condom procurement. Swaziland's National AIDS Programme (SNAP) focuses on promotion of condoms as well as community-level distribution, and relies on regional structures. Major donors for public sector condoms and condom programming in Swaziland currently include UNFPA, the Global Fund to Fight AIDS, Tuberculosis and Malaria, the U.S. Agency for International Development (USAID), and AIDS Healthcare Foundation (AHF). UNFPA provides technical support for condom programming in addition to supporting the procurement of condoms to ensure that public sector condoms are efficiently distributed. The Global Fund provides funding to NERCHA for the procurement of condoms, while USAID provides funding each year for millions of free condoms to PSI/Swaziland, which distributes these condoms on the government’s behalf. AHF procures and distributes a branded condom, “Love,” free of charge as part of a global condom campaign. The main coordinating structures are SRHU , MOH RHC System, NERCHA, and SNAP PSI/Swaziland distributes millions of condoms each year on behalf of the government UNFPA, the Global Fund, USAID, and AHF are major donors for condoms in Swaziland Currently, there is no targeting strategy for free condoms SWAZILAND ECONOMIC INDICATORS19 ■ Development category: developing ■ Income level: lower middle ■ GDP: $3.98 billion (USD) ■ Population: 1.07 million TOTAL MARKET APPROACH CASE STUDY | SWAZILAND 9 PSI is the only social marketing organization with a presence in Swaziland PSI's regional office headquartered in South Africa coordinates procurement, distribution, and marketing for Trust and Lovers+ brands Trust and Lovers+ are the only socially marketed brands, and have been profitable since late 2012 Income from Trust and Lovers+ condoms are used to grow the brands as well as to support public sector distribution Small-scale distribution occurs through a “cash van” system, where small retailers can buy condoms from a traveling distributor SOCIAL MARKETING SECTOR The social marketing sector has changed considerably in the last five years. Prior to 2012, PSI/Swaziland sold subsidized Trust and Lovers+ condoms. In August 2012, PSI/Swaziland transferred the management of its condom brands to a regional foreign branch office of PSI based in Johannesburg, South Africa. PSI's regional office manages procurement, distribution, marketing, and all other activities related to Trust and Lovers+ condoms in Swaziland, South Africa, Botswana, and Lesotho. PSI sells Trust and its brand extension, Trust Studded. It also sells Lovers+ as well as two extensions of the Lovers+ brand: Lovers+ Coloured and Flavoured and Lovers+ Ribbed and Studded. Logico, a commercial entity that sells and distributes condoms along with other fast moving consumable goods, has contracted with PSI to deliver Trust and Lovers+ condoms to five major wholesalers in Swaziland. Small-scale distribution occurs through a "cash van" system in which small businesses like mom-and-pop stores, bars, and restaurants can purchase a small amount of condoms from a traveling distributor. Trust is positioned as a caring brand for couples, while Lovers+, a higher-end brand, has more modern, bold packaging and is positioned as a playful brand. Since late 2012, steps have been taken to bridge price disparities in the region through price increases for Trust and Lovers+ condoms and to reach full cost recovery. Regional pricing was standardized across all countries and condom brands by April 2013. Consistent price increases over the years, in addition to brand popularity, have allowed Trust and Lovers+ brands to keep pace with inflation and even become profitable. Profits from PSI condom sales in Swaziland are not only used to support the Trust and Lovers+ brands, but also to fund PSI's distribution of public sector condoms. The Kingdom of the Netherlands is the main donor for socially marketed condoms; however, a plan to eliminate donor funding is in place and the social marketing sector should become completely self-sustainable by 2015. . PUBLIC SECTOR 85% BRAND NAME: Unbranded, Love PRICE PER CONDOM: Free POSITIONING: None TARGET AUDIENCE: None PLACES AVAILABLE: Public hospitals and health facilities, non-medical outlets, such as public toilets, shopping malls, and workplaces SOCIAL MARKETING 13% BRAND NAME: Trust, Lovers+ PRICE PER CONDOM: from R1.22 for Trust to R3.06 for Lovers+ Coloured and Flavoured ($0.13 to $0.33) POSITIONING: Trust: caring brand; Lovers+: modern, playful brand TARGET AUDIENCE: Trust: couples; Lovers+: middle income individuals, youth PLACES AVAILABLE: Shops, supermarkets, pharmacies, petrol stations, mobile vendors and kiosks COMMERCIAL SECTOR < 2% BRAND NAMES: Dr. Long’s, Casanova, Sure, Romantic, Durex, Prudence, Dr. Lee Rocky PRICE PER CONDOM: R1.65 to R9.83 ($0.18 to $1.04) POSITIONING: Enhance the sexual experience TARGET AUDIENCE: Middle-income and wealthy individuals Places available: Large supermarkets, liquor stores, and specialty shops S T E P H A N IE O 'C O N N O R TOTAL MARKET APPROACH CASE STUDY | SWAZILAND 10 COMMERCIAL SECTOR The commercial sector in Swaziland accounts for a very small share of the total market. Larger corporations and wholesalers buy commercially branded condoms from South Africa while smaller retailers purchase condoms from local wholesalers. Commercial sector condoms are found only in a few outlets, such as large supermarkets, liquor stores, and specialty shops. At least nine commercial brands have been identified on the market.13 Dr. Long and Casanova, both mid-priced condoms, are two of the most popular commercial brands in Swaziland. Dr. Long advertises delayed climax for males due to a Chinese herbal paste in the condom. Casanova is sold in packs of four, advertising one free condom when you buy three. Other available commercial brands, including Sure, Romantic, Durex, Prudence, and Dr. Lee Rocky, are more expensive and are positioned as sexual enhancement products. ● MARKET MAP (2012) The commercial sector accounts for less than 2% of the total market Commercial brands are available in pharmacies, large supermarkets, liquor stores, and specialty shops Dr. Long’s and Casanova are the most popular commercial brands TOTAL MARKET APPROACH CASE STUDY | SWAZILAND 11 Results UNIVERSE OF NEED* In 2012, approximately 18 million condoms were needed to cover all risky sex acts, about 18% more than were needed in 2006. The need for condoms is expected to increase as the population increases. For family planning, the universe of need increased from 6.2 million in 2006 to 7 million in 2012. While the universe of need greatly exceeded total distribution in all years, there was some encouraging growth: in 2012, distribution of male condoms met 65% of the need for HIV prevention, compared to only 11% in 2006. UNIVERSE OF NEED & TOTAL CONDOMS DISTRIBUTED In Swaziland’s current market, the number of condoms needed to protect all sexual acts from HIV and unplanned pregnancy is much higher than the actual number of condoms on the market. 2006 M IL LI ON S OF C ON DO M S 20 18 16 14 12 10 8 6 4 2 0 2007 2008 TOTAL DISTRIBUTION UNIVERSE OF NEED - FAMILY PLANNING UNIVERSE OF NEED - HIV PREVENTION 2009 2010 2011 2012 Sources: UNAIDS Investment Framework Study Group3; UN Population Division, 2010 revision4; Swaziland DHS 06/075; USAID conversion factors2; Guttmacher Institute. Adding it up: The costs and benefits of investing in family planning and maternal and newborn health (estimation methodology),2011.6 * Total universe of need for condoms could be as low as the number needed for HIV prevention or as high as the sum of the universe of need for HIV prevention and family planning. Most likely, total need falls somewhere between these two figures. A lack of data on dual protection prevents our ability to estimate the total number of condoms needed per year for both HIV prevention and family planning. TOTAL MARKET APPROACH CASE STUDY | SWAZILAND 12 CONDOM USE The percentage of males and females who reported using condoms increased between 2006 and 2012, but still remained too low to prevent all new HIV infections. In 2012, 67% of males and 60% of females reported using a condom the last time they had sex, compared to only 49% of men and 37% of women in 2006.5,7 Condom use was higher among those who reported having multiple partners, casual partners, or paying for sex in the last year, but levels of use were still inadequate for these key populations.5,7,8,9 Reported condom use among youth increased from 70% among males and 54% among females in 2006, to 81% among males and 72% among females in 2012.5,7,8,9 DHS (2006) and Soul City (2011) are nationally representative surveys and are weighted for comparability. Soul City baseline data is not included due to differences in sampling techniques and questionnaire wording across the study years. PERCENTAGE OF RESPONDENTS WHO USED A CONDOM AT LAST SEX The percentage of males and females using condoms in Swaziland increased between 2006 and 2012, but is still too low to halt the spread of HIV. 48.8% 70.1% 36.9% 53.9% 66.9% 80.8% 60.4% 71.6% Percentage of males reporting casual or multiple partners in the last year who used a condom at last sex Sources: DHS 2006/075, Soul City Regional Programme Evaluation 20127,8,9 Sources: DHS 2006/075, Soul City Regional Programme Evaluation 20127,8,9 Swaziland’s condom market is dominated by the public sector. TOTAL MARKET APPROACH CASE STUDY | SWAZILAND 13 MARKET VOLUME Between 2006 and 2012, the number of condoms on the market increased more than sixfold, from 1.6 million to 11 million condoms.10,11 Market share for the public sector grew considerably, and free condoms dominated the condom market in Swaziland. In 2012, 85% of condoms distributed were free to the consumer, a substantial increase from the 41% that were distributed free of charge in 2006.10,11 The number of socially marketed condoms on the market increased after 2006 , hitting a peak of 2 million in 2010. In 2012, PSI/ Swaziland distributed approximately 13% of all condoms in Swaziland.10,11 Projections for 2013 estimate that 2.3 million socially marketed condoms will be sold. Commercial sector data are unavailable for most years, but we estimate that the commercial market share was less than 2% for all seven years of the study. Now that socially marketed condoms are being sold as commercial brands, the commercial sector will account for a greater percentage of the total market. DISTRIBUTION BY SECTOR Sources: PSI10, Swaziland MOH11 *For 2013, the social marketing sector is considered “commercial sector” because its condoms are profitable. Where data were unavailable, figures used are best estimates. **2012 public sector distribution figures were used for 2013 14 12 10 8 6 4 2 0 2006 2007 2008 M IL LI ON S OF C ON DO M S 2009 2010 2011 2012 2013 PUBLIC SECTOR** SOCIAL MARKETING COMMERCIAL SECTOR* O A N A L U P U TOTAL MARKET APPROACH CASE STUDY | SWAZILAND 14 MARKET VALUE The value of the total market in 2012 was estimated at $255,945, more than twice the size of the estimated market value in 2006.10,11,12,13 Price increases took effect in 2012 and 2013 for socially marketed brands. There is a wide range of price points for condoms. In 2013, prices ranged from $0.13 for a Trust condom to $0.33 for a Lovers+ Coloured and Flavoured or Lovers+ Ribbed and Studded condom.12 Commercial prices vary between $0.18 and $1.04 per condom.13 COST TO CONSUMER PER CONDOM (ZAR AND USD) AVERAGE CONSUMER PRICE MARKET VOLUME MARKET VALUE The value of the total market for condoms has more than doubled since 2006. S T E P H A N IE O ’C O N N O R FREE TRUST TRUST STUDDED LOVERS+ SMOOTH LOVERS+ RIBBED & STUDDED LOVERS+ COLOURED & FLAVOURED COMMERCIAL BRANDS INFLATION20 2006 0 R0.42 $0.06 R0.69 $0.10 R2.00 $0.30 - - - 2007 0 R0.42 $0.06 R0.69 $0.10 R2.00 $0.28 - - - 8.08% 2008 0 R0.42 $0.05 R0.69 $0.09 R2.00 $0.25 - - - 12.66% 2009 0 R0.42 $0.05 R0.69 $0.09 R2.00 $0.24 - - - 7.45% 2010 0 R0.42 $0.06 R0.69 $0.09 R2.00 $0.27 R2.36 $0.32 R2.36 $0.32 - 4.51% 2011 0 R0.42 $0.06 R0.69 $0.10 R2.00 $0.28 R2.36 $0.33 R2.36 $0.33 - 6.11% 2012 0 R0.67 $0.08 R1.04 $0.13 R2.42 $0.30 R2.85 $0.35 R2.85 $0.35 - 9.40% 2013 0 R1.22 $0.13 R1.42 $0.15 R2.57 $0.27 R3.06 $0.33 R3.06 $0.33 R1.65-R9.83 $0.18-$1.04 Sources: PSI/Swaziland and PSI/South Africa12, PSI/Swaziland13 TOTAL MARKET APPROACH CASE STUDY | SWAZILAND 15 SUBSIDY To ensure sustainability of the market, major changes have been made to the social marketing sector in Swaziland. Donor funding for socially marketed condoms has historically come from the Kingdom of the Netherlands; however, in August of 2012, PSI implemented a full cost recovery plan that will eliminate the need for external funding support by 2015. In 2012, total market subsidy was $627,586.10,11,14 This figure takes into account only the cost of the product, packaging, and shipping. Operating and support costs, as well as marketing costs, are not included in the COGS calculation, which means that the value of subsidies would actually be much higher. NUMBER OF BRANDS At least twelve condom brands were available on the market in 2012, including the public sector brand Love, and two social marketing brands.13 Many of these brands include brand extensions, which cater to a variety of audiences. Because data on commercial brands are limited, we cannot calculate trends in the number of brands on the market over time or know how many commercial brands have had a long-term market presence in Swaziland. Dr. Lee Rocky and Casanova are among the most popular commercial condom brands. Many of the brands available in Swaziland are the same as those sold in South Africa, such as Durex, Casanova, and Contempo. Prudence condoms are also imported from Mozambique. S T E P H A N IE O ’C O N N O R 85% of condoms fully subsidizied $627,586 R5.1 million Estimated subsidy for public sector condoms 15% commercial sector condoms* *Includes Trust and Lovers+ brands ● ● ● ● ● ● ● ● ● ● ● ● at least 12 different condom brands on the market AVERAGE UNIT COGS VOLUME OF FULLY SUBSIDIZED CONDOMS SUBSIDY TOTAL MARKET APPROACH CASE STUDY | SWAZILAND 16 EQUITY Although condom use in Swaziland was previously concentrated in the wealthiest quintiles, that is no longer the case. In 2012, approximately 40% of condom users fell into the bottom two wealth quintiles.7 This was a significant improvement from 2006, when only one-quarter of condom users fell within the bottom two quintiles.5 There was greater improvement in equity among men than women. In 2012, only 10.3% of males and 11.6% of females who reported condom use belonged to the wealthiest quintile, compared to nearly one-third in 2006.5,7 ● DHS (2006) and Soul City (2011) are nationally representative surveys and are weighted for comparability. Soul City baseline data is not included due to differences in sampling techniques and questionnaire wording across the study years. CONDOM USERS BY WEALTH QUINTILE Sources: DHS 2006/075, Soul City Regional Programme Evaluation 20127,8,9 40% of males reporting condom use at last sex belonged to the poorest two quintiles in 20127 Equity in condom use has improved over time. 37% of females reporting condom use at last sex belonged to the poorest two quintiles in 20127 Q1 Q2 Q3 Q4 Q5 Q1 Q2 Q3 Q4 Q5 Q1 Q2 Q3 Q4 Q5 Q1 Q2 Q3 Q4 Q5 S T E P H A N IE O ’C O N N O R ■ MALES 2006 PE RC EN TA GE WEALTH ■ MALES 2012 ■ FEMALES 2006 ■ FEMALES 2012 0 10 20 30 40 50 QU INTILE 1 QU INTILE 2 QU INTILE 3 QU INTILE 4 QU INTILE 5 TOTAL MARKET APPROACH CASE STUDY | SWAZILAND 17 Challenges and Opportunities S ince 2006, there has been substantial growth of the social marketing sector for male condoms as well as the number of free condoms distributed in Swaziland. However, there are still many improvements that must be made in order to meet the country’s need for male condoms. While rates of condom use have risen, the number of people using condoms is still too low to prevent all new HIV infections. It is vital that condom use continues to increase, especially among those who have casual or multiple partners, and among sexually active youth. Furthermore, there is a need for increased behavior change communication to continue emphasizing the importance of consistent condom use. Although there have been no stock-outs of public sector condoms at the central level, distribution of condoms, either to the health facility or the consumer, is occasionally delayed. Recent developments in tax revenue and collection procedures have re-classified condoms as well as other essential health supplies as taxable commodities. Consequently, there are no tax breaks on male condom imports, and steps for requesting an exemption are not clearly defined. The MOH is aware of this limitation and plans to request that the Revenue Authority re-classify essential health goods, including condoms. M W A N A B E R M U D A S GAPS AND BARRIERS ■ Informed demand for condoms remains too low to prevent all new HIV infections ■ Delays in distribution result in an irregular supply of public sector condoms ■ Monitoring and reporting systems are inadequate ■ Limited coordination between all three sectors results in an inconsistent supply of condoms ■ Poor clarification of roles contributes to inefficient supply of free condoms TOTAL MARKET APPROACH CASE STUDY | SWAZILAND 18 Limited coordination between public sector entities also contributes to an inefficient supply of public sector condoms. Overlapping responsibilities between the coordinating structures inhibits efficient procurement and distribution of male condoms. Additionally, limited coordination between the public sector and implementing partners, including international NGOs, results in overstocks of condoms in some health facilities while other sites may be under-stocked. Disputes over geographic territories and target venues for condom distribution between all three sectors are common and create additional gaps in distribution. Improved coordination and clarification of roles between all public sector stakeholders would result in a more consistent overall supply and would allow each to target the appropriate population. The value of the total market has more than doubled in the last six years and is projected to increase as both market volume and prices increase. The change to a cost recovery model for the social marketing sector indicates progress toward market sustainability. However, more than two-thirds of the Swaziland market continues to be fully subsidized. Progress has also been made with regard to equity and more of the poorest Swazis are using condoms. Effective targeting of free condoms and demand creation for socially marketed and commercial sector condoms will help increase use among all wealth quintiles and ensure that condoms are consistently available to those who need them. ● P H O T O S H A R E Recommendations Our research yielded the following recommendations for policymakers, donors, and other stakeholders. Recommendations come from a TMA perspective and are intended to support the three sectors – public, socially marketed, and private – to work together to grow and sustain Swaziland’s condom market. INCREASING INFORMED DEMAND Although condom use has increased, many people in Swaziland still do not use condoms. Additional condom promotion and behavior change communication is critical, with an emphasis on generic communications that promote the condom category, not just specific brands. Communications that target key populations, including youth, are also necessary. INCREASING GOVERNMENT SUPPORT FOR CONDOMS Because condoms are an essential part of HIV prevention in Swaziland, they should not be classified as taxable commodities in the country’s tax code. It is imperative that the MOH continue its efforts to exclude condoms and other essential health supplies from the current tax schedule, as per the current plan. IMPROVING COORDINATION BETWEEN KEY STAKEHOLDERS Better coordination between government entities, donors, and distributors is needed to ensure a consistent supply of free condoms. Should stock-outs in health facilities and other sites occur, they are likely to hinder condom use and damage market equity by affecting the poor and others who rely on free condoms. It is critical that all public sector entities coordinate and agree on the roles and responsibilities of each player. Better communication between distributors of public sector condoms in Swaziland’s male condom market would help improve market efficiency, prevent supply shortages, and ensure that products are not wasted. EQUITABLE DISTRIBUTION Free condoms should be targeted at those most in need and unable to pay. Effective targeting and a stable supply of free condoms could improve equity by helping ensure that subsidies are reaching the poor. REPORTING Improved reporting systems are required for forecasting how many condoms are needed on the market. Consistent reporting would facilitate efficient and effective decisions by donors, the Swaziland government, and other stakeholders. A common data repository might be one way for sectors to work together to share select information that would benefit the total market. Information on dual protection and other TMA metrics should also be collected in national surveys. This information would permit more accurate estimates for the universe of need for male condoms and other market indicators. In addition, information about dual protection could help to inform targeted distribution for HIV prevention and family planning sites. PRICING Price increases for socially marketed condoms in Swaziland have already helped improve market sustainability. Additional measures should be taken to open up the commercial sector and encourage participation by more brands. ● TOTAL MARKET APPROACH CASE STUDY | SWAZILAND 19 TOTAL MARKET APPROACH CASE STUDY | SWAZILAND 20 Acronym Key AHF AIDS Healthcare Foundation FP Family Planning CMS Central Medical Stores COGS Cost of goods sold DHS Demographic and Health Survey MOH Ministry of Health MSH Management Sciences for Health NERCHA National Emergency Response Council on HIV and AIDS NGOs Non-governmental organizations PSI Population Services International RHC Reproductive Health Commodities SNAP Swaziland National AIDS Programme SRHU Sexual and Reproductive Health Unit STIs Sexually Transmitted Infections TMA Total Market Approach UN United Nations UNAIDS Joint United Nations Programme on HIV/AIDS UNFPA United Nations Population Fund UoN Universe of need USAID United States Agency for International Development USD United States Dollars ZAR South African Rand Acknowledgements We would like to thank Soul City for allowing us to use their data in this report. We would also like to acknowledge those who contributed their time and input into this case study, including: Dejus Abreu – Head of Consumer Marketing, PSI/South Africa Wendy Benzerga – Deputy Country Director, USAID/PEPFAR Doug Call – Regional Director, Southern Africa, PSI Collin Chengapear – Head of Sales, PSI/ South Africa Jennifer Christian – Global Social Marketing Advisor, PSI Futhi Dennis-Langa – National HIV Prevention Coordinator, NERCHA Linda Dlamini – Admin and Registration Officer, NERCHA Mphikeleli Dlamini – Marketing Manager, PSI/Swaziland Zanele Dlamini – Prevention Program Coordinator, AIDS Healthcare Foundation, Swaziland Wendy Dlamini – M&E Officer, Grant Monitoring Unit, NERCHA Pamela Faura – Acting Country Representative, PSI/Swaziland Ghairunisa Galeta – Regional Project Coordinator, PSI/South Africa John Hlophe – Career Guidance Director, Ministry of Education and Training, Swaziland Krishna Jafa – Vice President, Sexual and Reproductive Health and TB, PSI Lucas Jele – HIV and AIDS Program Monitoring System Manager, NERCHA Ben Light – Senior Technical Advisor, UNFPA Sibongile Mabuza - Reproductive Health Commodity Security Coordinator, Central Medical Stores Swaziland Luis Fernando Martinez – SBCC Advisor, PSI/Swaziland Victoria Masuku – HSS Director, PSI/ Swaziland Marjorie Mavuso – Assistant Representative, UNFPA Swaziland Brian McKenna – Deputy Regional Director, Southern Africa, PSI Regina Moore – Manager, Communications, PSI Hlobsile Motsa – Programs Monitor, Research and Evaluation Manager, Lusweti Institute for Health and Development Communication, Swaziland Thulani Mtetwa – Prevention Program Manager, AMICAALL Swaziland Nozipho Mthande – SHAPMoS Officer, NERCHA Dr. Smangele Mthethwa – SRHU Medical Officer, SRHU Sifiso Ndwandwe – Research and M&E Manager, FLAS Sharon Neves – Shiselweni REMSHACC Coordinator, NERCHA Bonsile Nhlabatsi – National PMTCT Program Coordinator, SRHU, Swaziland Ministry of Health Rejoice Nkambule – Deputy Director, Public Health, Swaziland Ministry of Health Wandile Nkosi – Monitoring and Evaluation Analyst, NTCP, Swaziland Ministry of Health David Nowitz – Head of Customer Marketing, PSI/South Africa Elena Pirondini – Special Assistant to the Deputy Executive Director, UNFPA Maria Sese-Paul – Graphic Designer, Streetsense Amy Ratcliffe – Senior Technical Advisor, Metrics, PSI Meghan Reidy – Technical Advisor, Metrics, PSI Gashaw Shiferaw – Senior Technical Advisor, Management Sciences for Health/ SIAPS Lindiwe Sibiya – National Family Planning Officer, Swaziland Ministry of Health Thamary Silindza – Program Analyst, Maternal Health, UNFPA Swaziland John Stover – President, Futures Institute Kanyanta Sunkutu – Programme Specialist, HIV/AIDS, UNFPA Renata Tallarico – Project Coordinator, UNFPA Noah Taruberekera – Regional Researcher, PSI Jagdish Upadhyay – Chief, Commodity Management, UNFPA David Walker – Director, Global Social Marketing, PSI Renay Weiner – Executive of Strategic Integration, Soul City Josiane Yaguibou – Technical Advisor, Reproductive Health and Commodities Security, UNFPA TOTAL MARKET APPROACH CASE STUDY | SWAZILAND 21 REFERENCES 1. 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O A N A L U P U UNFPA HEADQUARTERS 605 Third Avenue New York, New York 10158 USA Telephone: + 1-212-297-5000 Fax: + 1-212-370-0201 Website: www.unfpa.org UNFPA SWAZILAND 2nd Floor, Lilunga House Somhlolo Street, Mbabane Swaziland Telephone: + 268-404-2301 Website: www.unfpa.org PSI HEADQUARTERS 1120 19th Street, Suite 600, NW Washington, DC 20036 USA Telephone: +1-202-785-0072 Fax: +1-202-785-0120 Website: www.psi.org PSI/SWAZILAND Dlanubeka Building, 6th Floor Mbabane Swaziland Telephone: + 268-404-9716 Fax: + 268-404-9772 Website: www.psi.org/swaziland Swaziland

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