Sales and pricing decisions for HIV self-test kits among local drug shops in Tanzania: a prospective cohort study

Abstract

Background: Public health initiatives must look for ways to cost-effectively scale critical interventions to achieve high coverage. Private sector distribution channels, can potentially distribute preventive healthcare products to hard-to-reach populations, decongest public healthcare systems, and increase the sustainability of programs by getting customers to share costs. However, little is known about how sellers set prices for new products. By introducing a new product, HIV self-test kits, to local drug shops, we observed whether shops experimented with pricing, charged different buyers different prices, and whether prices converged within the local market over our study period.

Methods: From August to December 2019, we provided free HIV self-test kits, a new product, to 26 drug shops in Shinyanga, Tanzania to sell to the local community. We measured sales volume, price, customer age and sex using shop records. Using a multiple linear regression model, we conducted F-tests to determine whether shop, age, sex, and time (week) respectively were associated with price. We measured willingness-to-pay to restock test kits at the end of the study.

Results: 514 test kits were sold over 18 weeks; 69% of buyers were male, 40% were aged 25-34 and 32% aged 35-44. Purchase prices ranged from 1000 to 6000 Tsh (median 3000 Tsh; ~$1.30 USD). Within shops, prices were 11.3% higher for 25-34 and 12.7% higher for 45+ year olds relative to 15-19-year olds (p = 0.029) and 13.5% lower for men (p = 0.023) on average. Although prices varied between shops, prices varied little within shops over time, and did not converge over the study period or cluster geospatially. Mean maximum willingness-to-pay to restock was 2000 Tsh per kit.

Conclusions: Shopkeepers charged buyers different prices depending on buyers' age and sex. There was limited variation in prices within shops over time and low demand among shopkeepers to restock at the end of the study. Given the subsidized global wholesale price ($2 USD or ~ 4600 Tsh), further demand creation and/or cost-reduction is required before HIV self-test kits can become commercially viable in drug shops in this setting. Careful consideration is needed to align the motivations of retailers with public health priorities while meeting their private for-profit needs.

Keywords: Drug shops; HIV self-testing; Pricing; Private sector distribution.

Conflict of interest statement

The authors declare that they have no competing interests.

Figures

Fig. 1

Distribution of HIV self-test kit sales price within drug shops over time. Each graph represents a shop in our study (n = 23). Each graph plots the sales price (Tsh) of each test kit sold over the study period (August to December 2019). Blank spaces indicate no test kits sold. $1 USD approx. 2300 Tsh

Fig. 2

Accuracy of recall and beliefs about HIV self-test kit sales and pricing. Box plot of shop owners’ beliefs about other shops’ sales volume and pricing of HIV self-test kits and recall of their own sales volume and pricing in the last week and month respectively, measured at the end of the study period (n = 25)

Fig. 3

Willingness to restock HIV self-test kits at given price levels per kit (Tsh). Note: $1 USD approx. 2300 Tsh. The subsidized global negotiated wholesale price is ~ 4600 Tsh per HIV self-test kit. Only 15/25 (60%) of shops were willing to restock at 2000 Tsh per test kit (the mean maximum willingness-to-pay to restock)