Download Antiretroviral (ARV) drugs in Sub

From Balance sheet to economic
analysis
Dott.ssa Notaro
Dott.ssa Stefanoni
What we are going to study
Balance sheet analysis and Income
Statement analysis
 Financial CBA
 Economic CBA

Producing ARV in Sub-Saharan Africa
Project Objective

The project aims to increase the offer of
Antiretroviral drugs in Sub-Saharan Africa by
reducing the price of Antiretroviral therapy

Project stakeholders
–
–
Private sector
Government
Sigma Tau
Sudan Government
Project activities

Build up a plant to produce and can
Antiretroviral (ARV) drugs in Sudan

Finance the research on AIDS vaccine
for both adults and children
Expected impact

Increase life expectancy of infected people

Improve the quality of life by transforming a
mortal disease in a manageable chronic
illness

Alleviate the economic impact of HIV/AIDS in
Sub-Saharan Africa
Analysis structure
Balance Sheet and
Income statement analysis
Financial CBA
Economic CBA
Sigma Tau
Sudan Government
Social and Economic Framework




In the world there are 40 millions people living with
HIV
Africa accounts for 10% of the total world's
population but the 83% of deaths caused by AIDS
occurs in Africa
Sub-Saharan Africa accounts for 28.1 people living
with HIV/ADS.
WHO’s members have reached an agreement to
allow LDCs countries to make use of compulsory
licenses to import or produce in loco low cost
generic drugs
Market Analysis: Demand



Africa didn’t experiment any reduction in the
rate of prevalence of HIV/AIDS
Between 1990 and 2000 the spread of
epidemic has increased in the region
At present in Africa the 99% of people living
with HIV don’t have access to ARV Therapy
(ART)
Potential demand
Country
All people Adult 15-49
with HIV
Women
15-49
Children
0-15
Adult rate
%
Sudan
Chad
Eritrean
Ethiopia
Iraq
Tanzania
Total
450.000
150.000
55.000
2.100.000
< 1.000
1.500.000
4.256.000
230.000
76.000
30.000
1.100.000
150
750.000
2.186.150
30.000
18.000
4.000
230.000
n.a.
170.000
452.000
2,6
3,6
2,8
6,4
< 0,1
7,8
4.64
410.000
130.000
49.000
1.900.000
< 1.000
1.300.000
3.790.000
Estimated
deaths
in
2001
23.000
14.000
350
160.000
n.a.
140.000
337.350
Market Analysis: Supply

ART has become more affordable through
international competition between producers of
generic drug. (From 10.000 US$ per year to
290US$ per year)

So far there are not factories that produce ART in
Sub-Saharan Africa
Expenditures

Investment costs
–
–

Engineering costs
Personnel costs
Operating costs
–
–
–
Row materials
Personnel
Distribution
CBA and Balance sheet
Costs
Balance sheet
Income Statement
Intangible assets
+ Property Plant
and Equipment
Financial ACB
Investment costs
Production Costs:
-Raw materials
-Service Expenses
-Personnel Costs
-Other Accruals
Operating costs
Economic ACB
Investment costs
* Conversion
Factors (=
Shadow Prices)
Operating costs *
Conversion
Factors (=
Shadow Prices)
Benefits
Benefits
Balance sheet
Income Statement
Financial ACB
Production value:
Revenues
deriving by
selling the drug
on the market
-Revenues from
sales (adults)
-Revenues from
sales (pediatric)
Others Revenues
Economic ACB
Value of life +
Economic
Growth