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Final report of an operations research project: "A Study to Increase the Availability and Price of Oral Contraceptives in Three Program Settings", Contract CI90.59A.
[Unpublished] 1991 Oct 10. , 32,  p. (PER-19; USAID Contract No. DPE-3030-Z-00-9019-00)In an effort to reach more clients while increasing self-sufficiency, a group of private and public agencies in Peru collaborated in 2 operations research (OR) studies. This OR project, which cost US $62,040, was affected by the action of the newly elected government which ended price controls and subsidies in August 1990 and resulted in changes in the spending habits of most Peruvian families. Sales of all oral contraceptives (OCs) fell from an average of 141,400 to 73,400 cycles/month, and sales of Microgynon in pharmacies fell from 76,400 to 38,000 cycles/month. The first OR study tested the use of community-based distributors (CBDs), Ministry of Health (MOH) facilities, and private midwives as contraceptive social marketing (CSM) outlets by adding the OC Microgynon (sold at pharmacy prices) to CBD programs and raising the price of the donated OC, Lo-Femenal, over time. Specific objectives were to determine 1) if total CBD sales increased with the method mix, 2) whether CBD from homes of small businesses was more effective, 3) if the new distribution of Microgynon would increase sales of the OC as a whole, and 4) the impact of Lo-Feminal price increases on sales and user characteristics. The study was carried out in 44 experimental and 44 control groups in Lima and 20 experimental and 21 control groups in Ica. Baseline data were obtained for December 1989-April 1990, and monthly sales were monitored during the 12 months from May 1990 to April 1991. Data were also obtained from surveys of dropouts and new Microgynon acceptors. It was found that the August 1990 price increase effectively destroyed the significant market penetration exhibited by Microgynon in the first 4 months of the study. Adding an affordable CSM brand to CBD programs will, however, increase sales and self-sufficiency, although the sale of donated OCs for around $0.30/cycle will reduce sales of the new brand by 20-40%. It was also found that most clients who dropped out because of side effects were less likely to be contracepting than those who dropped out because of cost, indicating a need for improved distributor counseling. The second study tested the price elasticity of demand for OCs in CBD programs by measuring the demand for Microgynon. Specific objectives were to determine 1) the level of Microgynon sales in MOH facilities, 2) the level of sales by nurse-midwives, 3) the number of Microgynon users who formerly used Lo-femenal from the MOH, and 4) the number of Microgynon users in MOH and nurse-midwife facilities who formerly obtained the OC from pharmacies. A demonstration project was carried out in the rural departments of Ayacucho and Huancavelica, the poorest areas of Peru. 4 MOH hospitals in 4 cities and 17 nurse-midwives participated. The hope was that the CSM products would mitigate the effect of stock-outs in the hospitals. It was found that no Microgynon was sold because of a reluctance to recommend it and other unfavorable study conditions (the necessity for separate accounting, the lack of stock-outs, the reluctance of the midwives to sell a contraceptive, and the decline in client purchasing power). Cost recovery in the MOH would be better served by charging a modest amount for donated contraceptives.