Cost-Effectiveness of Price Reductions in Fortified Powdered Milk for the Reduction of Micronutrient Deficiencies in 6-23 Month Old Children in the Philippines

Abstract

Objectives: To estimate the effectiveness and cost-effectiveness of price-based interventions with commercially distributed packaged fortified powdered milk (FPM) for the reduction of iron and vitamin A deficiencies in 6-23 months old Filipino children. Methods: We carried out a survey stratified by socio-economic status among 1600 households and performed a hypothetical marketing experiment to estimate the price elasticity of the demand for FPM. These results were then combined with a systematic review on the efficacy of food fortification in controlled trials and with a model of the lifetime cost-consequences of micronutrient deficiencies (MNDs) in infancy. Results: While a high proportion of children living in wealthier households consume substantial amounts of FPM, consumption is much lower in poorer households. Demand for FPM is considerably more elastic in poor households (price elasticity of -0.8 in lowest versus -0.3 in the highest socio-economic decile). A relative 20% reduction in disability adjusted life years (DALYs) lost can be achieved by discounting prices by 30% among the poorest 20% of the population. This intervention has a cost-effectiveness ratio of 329 USD per DALY gained. Conclusions: Interventions with commercially distributed FPM have the potential to efficiently reduce the burden of MNDs in the Philippines. Interventions targeting poor households are more cost-effective because of the higher prevalence of MNDs, lower levels of current consumption and higher price elasticity of demand.  These results may have important implications for the design and implementation of complementary feeding interventions aimed to reduce MNDs.