A financial analysis of treatment strategies for Trypanosoma evansi in the Brazilian Pantanal

t PREVENTIVE VETERINARY

ELXV’IEi Preventive Veterinary Medicine 33 (1998) 219-234 MEDICINE

A financial analysis of treatment strategies for T~panosoma evansi in the Brazilian Pantanal

Andrew Seidl a, * , Andre Steffens Moraes b, Roberto Aguilar Machado S. Silva ’

a EMBRAPA/ PROMOAGRO, Agricultural Research Centerfor the Pantanal (CPAP), Brazilian Agricultural Research Corporation (EMBRAPA), Rua 21 de Setembro, 1.880, CX Postal 109, CEP 79.320-900,

Corumba, MS, Brazil b Difision of Technology Diuision, CPAP, EMBRAPA, Corumba, MS, Brazil

’ Laboratory of Ecopathology, CPAP, EMBRAPA, Corumba, MS, Brazil

Accepted 20 April 1997

Abstract

The Brazilian Pantanal is a 138000 km2 tropical seasonal wetland located in the center of South America bordering Bolivia and Paraguay. The Pantanal contains approximately 1100 cattle ranches, 3 million cattle, 49000 horses and a unique diversity of wildlife. Cattle ranching is the most important economic activity in the Pantanal. This study explores the direct financial impacts of the adoption of seven treatment strategies for the control of Ttypanosoma evansi in the Brazilian Pantanal. T. evansi adversely affects the health of the horse population in the region. Horses are indispensable to the cattle ranching industry in the Pantanal. Estimated costs include risk of infection, costs of diagnosis, alternative treatments, collecting animals for treatment, and costs of animal losses. The estimated total cost of T. euansi to the Pantanal region’s cattle ranchers is about US$2.4 million and 6462 horses/yr. Results indicate that one preventive and two curative treatment strategies are financially justifiable. The best available technology for the treatment of T. evansi from an economic perspective is a curative treatment employed year-round. This treatment represents an annual net benefit of more than US$2 million or US$1845/ranch and spares about 5783 horses. It represents an annual net benefit of over US$200000 and 600 horses relative to the currently most widely adopted strategy. 0 1998 Elsevier Science B.V.

Keywords: Trypanosoma euansi; Brazil; Economics; Control strategies

-- * Corresponding author. Tel.: + 55 67 231 1430; fax: f55 67 231 1011; e-mail: [email protected].

0167-587’7/98/$19.00 0 1998 Elsevier Science B.V. All rights reserved.

PIZ SO167-5877(97)00049-4

220 A. Seidl et al./ Preventive Veterinary Medicine 33 (1998) 219-234

1. Introduction

The Brazilian Pantanal is a 138 000 km2 seasonal flood plain found within the Upper Paraguay River Basin located in the center of South America, bordering both Bolivia and Paraguay, between 16” and 21”s and 55” and 58”W. Land-use in the Pantanal is determined by its climate, physical features and cyclical flood pattern. Extensive cattle

ranching is the most important economic activity in the region with sales valued at more than US$60 million/yr (EMBRAPA, 1993). The Pantanal’s approximately 1100 ranches vary in size from less than 1000 ha to over 200,000 ha and are populated with about 3 million head of cattle and 49000 horses (Silva et al., 1997). At cattle density of 1:4.5 ha, the region is considered within about 20% of its capacity for cattle ranching under traditional extensive management techniques. Horses play a central role in the industry.

Trypanosoma adversely affects tropical and sub-tropical livestock production. T. euansi is widely known as ‘surra’. In the Pantanal and the subtropical regions of

Argentina it is known as ‘Ma1 de Cadeiras’ (Monzon et al., 1990). If left untreated, certain death results from ‘Ma1 de Cadeiras’ in horses within about 7 to 10 days of infection. ‘Ma1 de Cadeiras’ is considered endemic to the Pantanal region (Franke et al.,

1994). Despite the reduced incidence of the disease in horses since the 1950s due to the widespread application of drug treatments, the problem remains important to the region.

The most serious outbreaks of ‘Ma1 de Cadeiras’ follow extensive seasonal flooding in the region. Unlike other extensive ranching systems, animals in the Pantanal are under greatest stress and are in their weakest condition during the rainy season due to inadequate forage and space (Wilcox, 1992). Within the Pantanal, T. evansi is found in or carried by dogs, capybaras (Hydrochaeris hydrochaeris), coatis (Nasua nasua),

buffalo and cattle (Franke et al., 1994; Monzon et al., 1990; Nunes and Oshiro, 1990). Buffalo, dogs and capybaras are susceptible to the disease (Monzon et al., 1990; Stevens et al., 1989). Although cattle are carriers, they are not directly affected by T. euansi.

During the rainy season there is greater interaction among these species due to space

constraints caused by flooding. In addition, traditionally, animals were only marketed once per year. In the 1990s however, auction markets opened within the Pantanal, increasing the frequency with which ranchers market their animals. Increased animal movement increases animal interaction and the risk of contracting and spreading diseases like T. euansi.

The incidence of T. euansi in the Pantanal correlates positively with the local population of Tabanidae (biting fly or ‘horse-fly’)(Hoare, 1972). In particular, the species Tubanus importunus is a principal vector of trypanosomosis in the Pantanal. High Tabanidae populations also coincide with the rain and flood season (Silva et al., 1995). Vampire bats (Desmodus rotundus) are considered important vectors of the disease during the dry season (Hoare, 1965).

Spraying as a means of vector control is not common in the Pantanal. Trypanotoler- ant horses are not yet available in the region. Currently, ranchers in the Pantanal control the impact of trypanosomosis through treatment of existing livestock. Treatment with ‘pour-on’ preparations is uncommon since most cases of T. evansi occur during the wet season when the treatment is likely to be washed off. A variety of alternative treatments

A. Seidl et al. / Preventive Veterinary Medicine 33 (1998) 219-234 221

and applications are employed. It is not clear which approach is the most economically effective treatment for Pantanal cattle ranchers.

The aim of this study was to detail the direct financial impact of T. evansi on the cattle industry of the Pantanal under seven potential treatment strategies. The estimated financial costs and benefits of each strategy were compared using a partial budget approach. Preliminary policy recommendations stemming from this analysis identify the most favourable strategy for controlling the financial impact of the disease on the cattle industry of the Brazilian Pantanal from the perspective of the individual rancher.

2. Methodological approach

2.1. Ind,ividual economic decision-making under conditions of risk

Cattle ranchers and horse breeders within the Pantanal region of Brazil make individual decisions regarding the treatment of ‘Ma1 de Cadeiras’ on their ranches. Ranchers are assumed to be motivated to maximize the net revenues derived from their ranching activities to the best of their abilities. Decisions over appropriate treatment strategies are risk-laden and it is assumed that ranchers in some way evaluate those risks. Ranchers are assumed to be risk-neutral decision-makers; a dollar of cure is equivalent to a dollar of prevention.

Each rancher chooses to treat or not to treat T. evansi. Although Pantanal cattle are habitually collected twice per year for evaluation, vaccines, culling etc., they are loosely monitored year-round. It is assumed that the rancher determines his strategy for treatment on an annual basis. He presumably chooses among the available treatment strategie:s based on minimizing the financial impact of the disease (Table 1). The anticipaied financial impacts of adopting each strategy are dependent upon its costs and benefits and the probability and effect of an outbreak of T. evansi on each ranch. For simplicity, risk of infection is viewed as independent of past behavior; the risk of infection this year is the same as it was last year.

2.2. Direct financial costs and benefits of alternative T. evansi treatment strategies

Animal mortality provides a proxy for the direct costs of T. evansi to Pantanal ranchers. Efforts to mitigate these losses through the adoption of treatment strategies present additional investment costs to ranchers including veterinary services and diagnostic examinations, treatment costs, and the costs of collecting animals. The direct financial benefits from these treatments are in the form of reduced animal mortality. The best available treatment strategy is that which most-greatly reduces animal mortality for minimum per animal cost.

2.3. Components of the estimated models

The components of the models used to estimate the direct financial costs and benefits of alternative treatment technologies for T. evansi were collected from the existing

222 A. Seidl et al. / Preventive Veterinary Medicine 33 (1998) 219-234

Table 1

Strategies available to Pantanal (Brazil) ranchers for T. evansi control

Strategy Description of rancher behavior

(1) No treatment

(2) Cure-annual

(3) Cure-seasonal

(4) Cure + prevention

(5) Prevention-annual

(6) Prevention-seasonal

(7) Imported prevention

Does not to treat for T. evansi in any way

Treats outbreaks of T. evansi using a curative strategy.

Chooses to monitor animals and apply this

treatment over the entire year, not only in

the high vector and easy monitoring rainy season

Treats outbreaks of 7’. evansi using a curative strategy.

Applies this strategy only during the rainy season.

‘No treatment’ strategy is chosen during the dry

season. Thought to be most commonly adopted strategy

Treats T. evansi by treating outbreaks during the dry

season using a curative treatment and a

preventive strategy in the rainy season

Treats 7. evansi through a preventive strategy over the entire year

Treats T. evansi through a preventive strategy

in the rainy season. ‘No treatment’ strategy

is chosen during the dry season

Treats T. evansi through an imported (not yet legal locally)

preventive strategy which requires year round

application for full effectiveness

literature and local expert opinion. Farm budget components were scrutinized in order to estimate the expected annual total cost of T. euansi to the ranchers of the Pantanal.

These components were chosen as the principal determinants of the financial impact of the disease on the Pantanal cattle industry.

2.3.1. Risk of infection From the rancher’s perspective, the annual risk of infection with the disease is

equivalent to the probability that he will have an outbreak on his farm in a given year.

Flora, fauna, hydrological patterns and ranching practices do not differ substantially across subregions of the Pantanal. Thus, it is considered reasonable to extrapolate risk in one sub-region to both the regional and the ranch level.

Franke et al. (1994) provided several measures from which risk might be extrapolated. They reported a parasitologically confirmed prevalence of 0.3% (HCT and m-AECT). However, confirmed prevalence was likely underestimated since the animals on the ranch with the confirmed case were treated two days prior to the study and the number of recently deceased animals was not reported. An antigen presence of 4.1% (ag-ELBA), 9.6% antibody presence cab-ELISA), and 14.6% agglutinating antibody presence (CATT/T. euansi) of T. euansi out of the 364 horses studied in the Pocone region of the Pantanal in 1990 were reported (Franke et al., 1994).

Reported positive ELISA results (‘high responders’) beyond an ‘intrinsic’ cut-off value were found using C.A.MAN. CATT positive results were reported with the intrinsic results, while intermediate plus positive results were reported with the ‘conventional’ results. Franke et al. (1994) reported that conventional cut-off values gave

Table 2


Components of the estimated cost-benefit equations for evaluating treatment strategies available to Pantanal

(Brazil) rsnchers for T. evansi control

Variable Published information Value Low range High range Units

Risk of infection Franke et al., 1994 13.20 0.30 56.30 %

Risk-high season Silva et al., 1995 90 - -

Animal losses Seidl et al., submitted 10.50 0.00 51.60 Ranches Silva et al., 1997 1131 _ -

Horses Cadavid Garcia, 1985; 48958 18240 79 676

Silva et al., 1997

Horse pric:es none 375 100 1200

Diagnostic costs Seidl et al., submitted 175.00 29.5 1 1024.51

Animal collection none 7.32 - -

Diminazine aceturate Peregrine and Mamman, 1993 10.12 10.05 10.19

Isometamdium chloride Peregrine, 1994 23.92 23.57 24.27

% % # #

us US$ US$/130 horse-day

US$/horse

US$/horse-yr

estimates of seroprevalence significantly greater than those obtained by the intrinsic

cut-off value ( x *, P < 0.001). Conventional negative cut-off values at the mean plus

three standard deviations were provided by tests of sera from non-native (German) non-exposed horses. Conventional cut-off values provided seroprevalence estimates of 31.6% tag-ELISA), 56.3% (ab-ELISA) and 19.8% (CATT). Finally, the employ of a categorical scoring system using both conventional and intrinsic cut-off values provided a composite estimate of seroprevalence of 13.2% (Franke et al., 1994).

The test year of 1990 was not unusual in terms of precipitation and the time of year of the study was not reported. However, it is likely that it was during the dry season since the road was usable. This would explain the low rate of parasitologically confirmed prevalence. Recent mortality rates of horses due to T. evansi were not reported due to the point estimate approach. Conventional cut-off values derived from

non-native horses are likely to over-estimate ELISA point estimates of seroprevalence of endemic diseases (Franke et al., 1994). Antibodies from treatment or exposure to the

disease can be detected for up to one year (Monzon et al., 1990). The composite estimate. is constructed such that either both antibody tests or the antigen test had to be positive to score as ‘suspect for infection’ (Franke et al., 1994). Taking all of this information into account it can be argued that a conservative estimate of risk of infection with T. euansi to Pantanal horses is between 0.3% and 56.3%. Here, we use the compos:te seroprevalence estimate of 13.2% and explore the implications of the risk range on policy in sensitivity analyses (Table 2). Since equine infection results in 100% mortality if untreated (Silva et al., 19951, the expected annual financial losses to the region are the monetary equivalent of 13.2% of the horses. Dead horses are not used in

any way; financial losses to animal deaths are equivalent to their estimated value.

2.3.2. Seasonality of infection risk

Silva et al. (1995) found that over 90% of the cases of T. evansi occurred between October and March, roughly coinciding with the rainy season (Table 2). While the region can expect to lose 13.2% of its horses in a given year, almost all of them (11.9%


of the total) will be lost during the rainy season when vectors and other contributing factors to infection are most abundant. These results allow seasonal strategies to be

potentially reasonable. Traditionally, hydrologic cycles in the Pantanal have demonstrated both annual

dry-wet seasons and a 5- to lo-yr cycle of relatively high amounts of precipitation and relatively low levels of precipitation (Wilcox, 1992). These cycles correspond to the relative severity of flooding which influences the factors affecting contamination with the disease. In the past 15 years these longer cycles have not been observed. As a result, we felt it appropriate to estimate risk based only upon an annual cycle (i.e., dry or wet). If the longer cycles reappear, the risk profile changes and should be recalculated.

2.3.3. Expected animal losses

Expected animal losses, apart from risk, are dependent upon the treatment strategy adopted. The expected animal losses is the estimated mortality rate due to the disease that is not captured by the risk estimates based on seroprevalence tests. If the rancher

uses a preventive strategy (none yet observed), or, alternatively, does nothing to combat the disease, the expected mortality rate is 0.0% or lOO.O%, respectively. If the rancher chooses a curative strategy, mortality losses between these extremes can be expected due to lags in the diagnosis and treatment of the disease or ineffectiveness of the cure.

Visible clinical signs of T. euansi are manifest three to four days after the horse contracts the disease. However, due to traditional extensive herd management, it is unlikely that the disease would be detected until the death of one or more horses, approximately one week post-infection. The disease does not affect an entire herd simultaneously. Rather, it begins with one or a few horses and spreads at an increasing

rate throughout the herd. In a 1994 outbreak in the Paiaguas subregion, 83 of 790 (10.5%) total horses on the nine known effected ranches died before curative treatments were administered. Due to the path of the disease and communication among ranchers,

individual ranch losses varied between 0.0% and 51.6% of all horses and all treated animals survived (Seidl et al., submitted).

It is assumed that treatment effectiveness is maintained. If strains of T. euansi

resistant to chemotherapy evolve, the effectiveness of the recommended treatment will diminish, necessitating a re-evaluation of treatment alternatives. However, resistant strains of T. euansi have not been reported to our knowledge (Peregrine, 1994). Here, we use the observed mean losses (10.5%) prior to treatment when a curative treatment strategy is chosen, and incorporate variability into the sensitivity analysis (Table 2).

2.3.4. Total number of ranches in the Pantanal

The total number of ranches in the Pantanal potentially adversely affected by ‘Mal de Cadeiras’ is not easy to determine since the region is a geophysical and not a distinct geopolitical entity. The census (IBGE, 1990) reports 16 513 ‘agricultural properties’ among the 15 municipalities within the Upper Paraguay River Basin. Each of the municipalities has some agricultural land within the Pantanal and virtually no crops are grown within the region. Census data suggest that 4107 agricultural properties lie within the Pantanal. However, 2976 of these properties are smaller than 1000 ha and thought unlikely to be viable cattle ranches requiring work animals (i.e., horses). Therefore, a

A. &id1 et al. /Preventive Veterinary Medicine 33 (1998) 219-234 225

conservative estimate of ranches in the Pantanal includes 113 1 properties of size greater

than 1000 ha (Silva et al., 1997) (Table 2).

2.3.5. JVumber of horses Prec:ise information reporting the total number of horses in the Pantanal region is not

available. Cadavid Garcia (1985) reports 22 (s.d. 191, 23 (s.d. 91, 61 (s.d. 441, and 90 (s.d. 47) horses/ranch on holdings of 1000-3600 ha, 3601-7200 ha, 7201-14400 ha,

and greater than 14401 ha, respectively. The most recent census (IBGE, 1990) suggests that 408, 271, 239, and 213 properties of these categories exist in the Pantanal (Silva et al., 1997) yielding an estimate of 48958 horses on cattle ranches in the Pantanal. Assuming horse populations of one standard deviation below the mean results in an

estimate of 18 240, and one standard deviation above the mean yields an estimate of 79676 horses (Table 2).

2.3.6. Price of horses The price of horses is their replacement cost. Ranchers tend to purchase 3-yr old to

8-yr old horses for immediate use. Horses are purchased locally and transportation costs are minimal (the cost of sending an employee to walk the purchased horse to the ranch). Only when ranchers are experiencing financial difficulty do they tend to purchase

younger animals. Prices in the Pantanal cattle industry are quoted in ‘arrobas’. One arroba is equivalent to 15 kg of animal. An ‘average’ 3- to 8-yr old horse is worth 2 to 3

cows at 7 arrobas each. The price of an arroba at this writing is R$22 (US$21.57) ’ and the price of an ‘average’ horse is about US$301.96-452.94. However, the local price of a productive-aged horse varies from about US$lOO-1200 depending on breeding, certification, etc., introducing substantial variance in replacement costs across ranches. An approximate mean replacement price of US$375 is used here (Table 2).

Of course, replacement cost and financial loss are not equivalent. The working life of a horse in the Pantanal is from age 3.5 to 12 years, approximately. As a capital asset, it would be appropriate to depreciate the productive value of a horse over its working life. The price of horses under 3 years of age is about 1 to 1.5 calves (7-10.5 arrobas). The

price of horses over 9 years of age is as much as, approximately, 2 cows (14 arrobas). However, the local market for horses over 9 years of age is quite thin. Thus, the horse market shows appreciation through the first 3 years of a horse’s life followed by 5 to 6 years of asset value based upon criteria other than age, followed by relatively rapid depreciation approaching zero market value in the eleventh or twelfth year of its life. Generally, disease tends to attack the most susceptible members of a population including the young, the sick and the aged (i.e., the less productive). If T. euansi tends to afflict horses near the beginning or end of their productive age, using mean replacement cost as a proxy for financial loss overestimates the financial impact of the disease. However, these data were not available.

’ At this writing R$1.02 = US$l.OO.


2.3.7. Veterinarian’s visit and diagnostic test

Veterinarians in the region charge US$lOO-15O/day plus transportation to and from the ranch. A veterinarian’s visit is generally 1 day, but sometimes 2 days in duration. Once T. evansi is detected, the rancher responds by treating the entire herd.

The transportation costs borne by the rancher are extremely variable and dependent

upon distance from the veterinarian, and the size and location of the ranch. For example, a ranch may be as close as 20 km from a municipal center. The transportation costs borne by the rancher of a veterinary visit are, then, 40 km worth of fuel for an

automobile or about US$5. In the one available study of an outbreak in the region (Seidl et al., submitted), the nine affected ranches were, on average, 114 km (range 45 to 200 km) from the municipal center of Corumba, yielding an average transportation cost of about US$28.50.

On the other hand, the ranch may be located 1.5- to 2-h flying time from a municipal center. At an estimated cost of US$200/h of airplane rental, transportation costs may be

as much as US$7OO/visit. Moreover, some ranchers are veterinarians and some have their own planes.

In addition, a blood test is administered by the veterinarian and paid for by the

rancher at a cost of US$24.5 l/test. Thus, diagnosis of T. evansi may cost a rancher anywhere from US$29.51 (test + fuel to and from the municipal center) to US$1024.51 (3.5 h air-taxi + 2 days veterinarian + test). However, toward the higher end of this scale, it can be assumed that some of the transportation costs can be allocated toward ranch business taken care of due to the necessity of going to the municipal center. It might also be argued that more self-diagnosis and decisions based on word-of-mouth would occur at the higher end of the anticipated cost scale. Taking into account considered opinion, the rough median diagnostic cost of US$175 is used here (Table 2).

2.3.8. Animal collection and treatment

The rancher or his employees can vaccinate an estimated 130 animals/day. All

horses on the effected ranch are vaccinated. The cost of collecting animals for treatment is estimated as the daily wages of two employees to gather 130 animals. In Brazil, monthly wages are quoted in ‘salaries’. At this writing, the national minimum wage, or ‘one salary’, is US$109.80/month. Ranch hands earn one salary per month, plus room and board, and work every day. Thus, the daily cost of collecting 130 animals is estimated at US$7.32 (Table 2).

2.3.9. Diminazine ace&rate treatments A chemical treatment has been developed which can be used as a preventive

treatment or as a curative treatment for T. evansi. The active ingredient, diminazine aceturate, is marketed under a number of different brand names in the Pantanal region, but is found in precisely the same concentrations under each brand name (0.7 g/ml). Diminazine is the most-commonly used compound for the treatment of trypanosome infections (Peregrine and Mamman, 1993). This treatment is effective at curing T. evansi (Silva et al., 1995). We assume that animals receiving treatment will live (100% effectiveness).


The protocol as a curative treatment for horses includes one application of a treatment at a concentration of 7 mg/kg of animal (Peregrine and Mamman, 1993). Working horses :in the Pantanal weigh 300-350 kg. The cheaper (and, reportedly, most popular) treatment sells for about US$9.60 for a 30-ml vial. Appropriately, ranchers use one vial per horse. One lo-ml syringe and one needle are required for each vaccination and are not reusable. Their cost is US$0.45-0.59/unit. An approximate mean of US$O.52 is used here. We assume that treatments are administered according to protocol (Table 2).

Diminazine aceturate has not been recommended as a prophylactic agent since it is rapidly excreted and, therefore, retains effectiveness only over a relatively short period of time. Tests in cattle (Van Hoeve and Cunningham, 1964) have demonstrated effectiveness of a horse-strength treatment against trypanosome infection for as many as 3 weeks. Variation in effective prophylaxis appears to depend upon both the sensitivity of the disease to the drug and the dose of the drug administered (Peregrine and Mamman, 1993). Here, a 2-week effective prophylactic effect of diminazine treatment to T. euarlsi infection in horses was assumed. The protocol for prophylactic treatment of horses at risk of T. evansi is precisely the same as the curative treatment, although, it needs to be administered every 2 weeks.

2.3.10. Isometamidium chloride treatments An alternative treatment technology has been developed which provides longer

protection from T. evansi. Isometamidium chloride is an effective prophylactic treatment against animal trypanosomosis (Peregrine, 1994). It is assumed that animals treated with isometamidium will not contract T. evansi (100% effectiveness).

No treatments using isometamidium chloride are currently approved for use in Brazil. However, due to the proximity of the Pantanal to Bolivia and Paraguay, where the treatment can be legally obtained, and the potential for de facto legalization through regional trade liberalization (i.e., Mercosul agreements), a Bolivian scenario is explored as roughly representative of the potential costs borne by Brazilian ranchers if it were registered.

Ten grams of the treatment are sold on the Bolivian side of the Brazilian-Bolivian frontier for US$60. The recommended dose is 0.5-1.0 mg/kg of animal. Ranchers use about 0.5 g/horse at a cost of US$3 excluding syringes and needles. The protocol for isometamidium as a preventive treatment involves four treatment sessions annually. However, considerable variation has been observed in the duration of this therapy’s prophylactic effectiveness (Peregrine, 1994; Stevenson et al., 1995). The first session involves two injections (1 diminazine aceturate and 1 isometamidium chloride) at a total cost of US$13.36 (9.42 + 0.52 + 3.00 + 0.52). The subsequent three sessions involve only isometamidium chloride injections at a cost of US$3.52/session (Table 2).

2.4. Sensitivity analysis

Due to data constraints and large observed variation in the measured components of the models, a sensitivity analysis of the principal components of the estimated models is undertaken. The sensitivity analysis explores the influence of the range of potential variablje values on the recommendations stemming from these estimations. In the


sensitivity analysis we reestimate the models with ‘high’ and ‘low’ values for the estimated degree of risk, animal losses, replacement cost, diagnostic costs, treatment costs, and estimates of the number of horses in the Pantanal, each in isolation.

The estimated risk of infection is 13.2%/yr. Each of the models is reestimated at 0.3% and 56.3% annual risk. The expected animal losses apart from risk are 10.5% and the range is 0.0% to 51.6%. The mean replacement price of horses is US$375 and the range is US$lOO- 1200. The median diagnostic cost used is US$175 and the hypothe-

sized range is US$29.5 l- 1024.5 1. Changes in treatment costs may influence our recommendations. Diminazine acetu-

rate costs US$lO. 12/treatment and the isometamidium chloride-based treatment regi- men costs US$23.92/horse-yr. Each of the models is reestimated assuming half, double

and triple the reported treatment price. Finally, regional-level policy recommendations may be influenced by the magnitude of the impact of the disease which is dependent upon the accuracy of our estimate of the number of horses in the region. Adjusting our estimate of 48 948 by one standard deviation yields a range of 18 240-79 676 horses in the region. We estimate the influence of this potential inaccuracy on our results.

3. Results

The expected financial costs and benefits of seven potential treatment strategies were evaluated from the point of view of the individual Pantanal rancher and extrapolated to

the regional level. Table 1 illustrates the strategies evaluated and Table 2 reviews the components of the estimated relationships. The rancher’s ‘best’ decision is to adopt the

available treatment strategy which minimizes the expected net losses due to the disease from an economic perspective.

3.1. Strategy 1: no treatment

The ‘no treatment’ or ‘do nothing’ strategy provides a baseline against which active strategies available to the rancher can be evaluated. The no treatment strategy translates the annual risk of infection with T. eoansi into financial terms and is equivalent to the risk of infection multiplied by the replacement cost of potentially exposed animals. All horses within the region are assumed to have the equal potential for exposure to the disease. The annual expected direct cost of an outbreak of ‘Mal de Cadeiras’ to the Pantanal region is US$2423 421 (Table 3) and 6462 horses. Expected annual losses are US$2143, or about 6 horses/ranch on average (Table 4). Of course, in general, ranches with more horses can expect greater losses than those with fewer horses.

3.2. Strategy 2: curative treatment-year-round application

The annual cost of the curative strategy is calculated by multiplying the risk of infection by the sum of the monetary expression of expected animal losses and the estimated cost of treatment. The monetary expression of expected animal losses is found by multiplying the percentage of expected animal losses by the replacement cost of

A. Seidl et al./ Preventive Veterinary Medicine 33 (1998) 219-234 229

Table 3

Treatment strategies for T. evansi in the Pantanal (Brazil), costs by category

Total annual Animal

0JSS) (% of total)

No treatment 2423421 100

Cure-annual 339444 75.0

Cure-seasonal 547 841 86.0

Cure + prevention 6510696 0.4

Prevention--annual 12953 503 0.0

Prevention-seasonal 6 7 19 094 3.6

Imported prevention 1182102 0.0

Veterinary and

diagnostic (% of total)

0.0

7.1

4.3

0.1

0.0

0.0

0.0

Treatment Animal collection

(% of total) (% of total)

0.0 0.0 17.2 0.1

9.6 0.1

99.0 0.6

99.4 0.6

95.9 0.5

99.1 0.9

horses. The estimated cost of treatment is found by multiplying the number of horses remain:ing by the cost of collecting horses and the per horse treatment costs. The expected annual cost of a curative treatment strategy employed year-round is US$339 444 (Table 3) and a loss of 679 horses. Expected annual costs are US$300, or less than 1 horse/ranch on average.

1nve:stment is total costs less costs in animal losses. Returns are the monetary equivalent of the number of horses saved compared to the ‘no treatment’ strategy. Regional investment of US$84985 in the curative strategy implemented year-round results in an annual net benefit of US$2083 977 (Table 3) and saves 5783 horses relative to the ‘no treatment’ strategy. The expected benefits per ranch are US$1843 and 5 horses on average. The return to investment ratio of the curative strategy is approximately 24.51 (Table 4).

3.3. Strategy 3: curative treatment- wet season application

The impact of the adoption of a ‘no treatment’ strategy during the dry season and a curativfe strategy for the wet season is calculated by multiplying the proportion of the risk characteristic of each season (10% in dry and 90% in wet) by the solutions to strategies 1 and 2, respectively, and then adding the results. This is the most common strateg:y for T. euansi treatment strategy in the Pantanal. The anticipated annual cost of

Table 4 Treatment strategies for T. evansi in the Pantanal (Brazil), comparison of benefits and costs relative to a ‘no

treatment’ strategy

Strategy Total annual expected costs or benefits

Pantanal region Mean ranch Return: Invest (US$)

Invest (US$) Return (USO) Horses Invest (US$) Return (USS)

Cure-annual 84985 2 083 977 5783 75 1843 24.52:1 Cure-seasonal 76486 1875 579 5205 68 1658 24.52: 1 Cure + prevention 6485250 (4087275) 6394 5734 (3614) 0.37: 1 Prevention-annual 12953503 (10530253) 6462 11453 (93111 0.19:1

Prevention-seasonal 6476751 (42957521 5816 5727 (3798) 0.341 Imported prevention 1182 102 1241319 6462 1045 1097 1.05:1


adopting strategy 3 is US$547842 (Table 3) and the deaths of 1257 horses. A regional investment of US$76 486 results in an annual net benefit of US$l 875 579 (US$1658/ranch) and spares 5205 horses relative to no treatment. The return to investment of the seasonal curative strategy is also 24.5:1 (Table 4).

3.4. Strategy 4: cure + prevention

The curative treatment could be used preventively during the high vector season in order to avoid diagnostic costs and losses due to lags between detection and treatment. The anticipated costs of this strategy are equivalent to the sum of 10% of the total cost of strategy 2 (cure-annual application) and 13 applications of that treatment less diagnostic and expected animal losses. This strategy results in an anticipated total annual cost of US$6 5 10 696, but a loss of only 68 horses to the region (Table 3). The regional investment of almost US$6.5 million results in an annual net loss of about US$4 million (US$3614/ranch) and spares 6394 horses’ lives. The return to investment from this combined strategy is 0.37:lCTable 4).

3.5. Strategy 5: prevention

If the curative treatment is applied preventively (26 treatments), the expected total annual cost to the region is almost US$13 million (Table 3). However, no horses will die of T. evansi, an improvement of 6462 over the ‘no treatment’ strategy. The preventive strategy is 100% investment in treatments and collecting animals, resulting in an annual net loss of about US$10.5 million and a return to investment of O.l9:1(Table 4).

3.6. Strategy 6: seasonal prevention

Adopting the ‘no treatment’ option for the dry season and the preventive treatment option for the rainy season, the expected total annual cost of T. evansi to the Pantanal region is found by multiplying strategy 1 by 10% and adding the cost of six months of prevention (50% of strategy 5). The total anticipated annual cost of a rainy season preventive strategy is US$6719094 (Table 3). Regional investment of US$6476751 (US$5727/ranch) results in anticipated losses of US$4 295 753 (US$3798/ranch) or a 0.34: 1 return on investment. Under this scenario, 646 horses die due to the disease in the dry season, but 5816 are spared through the wet season strategy relative to ‘no treatment’ (Table 4).

3.7. Strategy 7: imported prevention

The total expected costs of adopting of this strategy can be described similarly to the preventive strategy based on drug treatments currently registered in Brazil. The total annual cost of the imported treatment is US$l 182 102 (US$1045/ranch), comprised entirely of investment as no animal deaths are anticipated (Table 3). The net annual return to investment is US$1241319 (US$1098/ranch) or about 5%/yr (Table 4). No seasonal options exist for the imported preventive strategy.


3.8. Sensitivity analysis

The usefulness of our results is linked to the sensitivity of our estimations to variation in important variables. Table 5 illustrates the effect of alternative variable values on the relative: attractiveness of each strategy. The effect of ‘high’ and ‘low’ values for risk, animal losses, horse population, horse replacement cost, and diagnostic costs from Table 2 are shown. Similarly, Table 6 illustrates insensitivity to potential changes in drug treatment costs.

The sensitivity analysis shows that our results are quite robust to potential variations in measured variables. High and low values for horse population levels and diagnostic costs have no influence on the relative attractiveness of the strategies explored (Table 5). Halving, doubling, or tripling the cost of diminazine aceturate had no effect on the relative attractiveness of each of the strategies. Equivalent estimations with isometamidium chloride made the imported preventive treatment financially unjustifiable at triple prices :md had no influence in the other two cases (Table 6).

In general, higher risk, horse replacement prices, and animal losses increase the attractiveness of prevention. Under conditions of low risk or prices only the two curative strategies are financially justified. With high risk or prices, all strategies, except for using diminazine aceturate treatments for year-round prevention (strategy 5), are favoured over ‘no treatment’ on a financial basis. When diagnosis and treatment are extremely slow such that over 50% of infected horses die, imported prevention becomes the most favoured strategy. However, a mean ranking of each strategy across the 10 different variable changes reveals the same relative ranking of the estimated strategies as when mean or median values were used (Tables 5 and 6).

Table 5

Sensitiviry analysis of treatment strategies for T. evansi in the Pantanal (Brazil), relative rankings

Strategy Strategy ranka

Reported Variable components of estimations

ranking

(mean)

No treatment

Cure-annual

Cure-seasonal

Cure + prevention

Prevention-annual Prevention-seasonal

Imported prevention

Risk

(%I

Low High

4 (3.8) 3 6

10.1) 1 1

2 (2.3) 2 3

5 (4.8) 5 4

7 (7.0) 7 7

6c5.81 6 5

3 (2.8) 4 2

Animal Horses Horses prices Diagnostic costs

losses (%) (#) &JSS) WSS1

Low High Low High Low High Low High

4 4 4 4 3 6 4 4

1 2 1 1 1 1 1 1

2 3 2 2 2 3 2 2

5 5 5 5 5 4 5 5

7 7 7 7 7 7 7 7

6 6 6 6 6 5 6 6

3 1 3 3 4 2 3 3

‘Rankings are from 1 to 7 in descending order of financial attractiveness. Those strategies with lower numbers

than ‘no treatment’ are considered financially justifiable. ‘Mean’ is an unweighted mean of the 10 rank

positions reported in each row.


Table 6 Analysis of treatment strategies for T. evansi in the Pantanal (Brazil), variations in drug prices

Strategy Reported Strategy rank=

ranking (mean)

Diminazine Isometamidium

aceturate chloride

OSTCH 2TCH 3TCH 0.5TCH 2TCH 3TCH

No treatment 4 (3.8) 4 4 4 4 4 3 Cure-annual l(1.0) 1 1 1 1 1 1

Cure-seasonal 2 (2.0) 2 2 2 2 2 2

Cure + prevention 5 (5.0) 5 5 5 5 5 5

Prevention-annual I (7.0) 7 I I 7 7 I

Prevention-seasonal 6 (6.0) 6 6 6 6 6 6 Imported prevention 3 (3.2) 3 3 3 3 3 4

‘Rankings are from 1 to 7 in descending order of financial attractiveness. Those strategies with lower numbers

than ‘no treatment’ are considered financially justifiable. ‘Mean’ is an unweighted mean of the six rank

positions reported in each row. O.STCH = one-half the observed drug treatment cost per horse; 2TCH = two

times the observed drug treatment cost per horse; and 3TCH = three times the observed drug treatment cost

per horse.

3.9. Summary of results

The results of this study indicate that the estimated direct annual financial cost of ‘Ma1 de Cadeiras’ on the Brazilian Pantanal is US$2423 421, or, on average, US$2143/ranch/yr. The most economical treatment of T. euansi in the Pantanal is the adoption of a curative treatment on a year-round basis. Adopting a year-round curative approach results in an annual net benefit to the region of US$2 083 977 (US$l843/ranch) and spares about 5783 horses compared to not treating the disease.

The imported preventive and both curative strategies are shown to be financially

feasible solutions. The adoption of a seasonal curative strategy results in a regional annual net benefits of US$1875579 (US$1658/ranch) and about 5205 horses. The imported preventive strategy results in a regional annual net benefits of US$1241319 (US$1098/ranch) and about 6462 horses over the ‘no treatment’ scenario. Locally- available preventive strategies are not financially justifiable under current conditions.

Most of the costs associated with curative strategies stem from expected animal losses due to risk and time lags between infection, detection and treatment. Most of the costs associated with preventive strategies stem from treatment costs; the greater the required frequency of treatment the greater the overall cost. Animal-collection costs are higher for preventive than for curative strategies.

4. Discussion

Several explanations or caveats are in order to weigh the validity of the adopted techniques. First, this study only attempted to estimate the direct effects of ‘Mal de


Cadeiras’ on ranchers. Changing the boundaries of analysis to include other potential

stakeho:lders would include additional sources of benefits and costs, often considered

indirect effects. For example, veterinarians benefit from disease outbreaks and the

adoption of curative treatments. It is unclear whether horse breeders reap net benefits or suffer financial losses from T. euansi.

Potential spillover effects of the various treatments on other flora and fauna of the region are not considered here. Chemical companies and their employees benefit from the adoption of either preventive or curative treatments. Multiplier effects of adoption of imported treatments would certainly be lower than those of local suppliers. Dependence on imported treatments may introduce additional risk of inconsistent supplies of

chemical treatments not considered here. Distributional effects of potential strategies are not explored here; there are economies of scale to curative strategies over preventive strategies. Animal-welfare impacts are not addressed; preventive strategies are preferable to curative treatments on this dimension. Sensitivity analyses address variation in

important variables in isolation. If more than one of these variables is found to differ substantially from the value used in this analysis, there may be unforeseen implications for the validity of the derived results.

Further, it is assumed that the influence on the animal of either contracting T. euansi and being subsequently cured or being injected with prophylactic drugs is roughly equivalent. If curative treatments versus preventive treatments have differential impact on animal health or market value, these issues should be taken into consideration. Information revealing such differences were not found.

Finally, this analysis assigned collective risk based on the assumption of individual risk; it iassumed independence among economic agents. It did not allow for the potential to mitigate risk over time via strategic cooperation. For example, if four neighboring ranches agreed to notify one another at the first indication of an outbreak of the disease

(i.e., first deaths) the risk for the region as a whole would remain the same (13.2%), but the risk for the consortium of four could be diminished to as little as 3.3%, or one

quarter of the regional risk. Cooperative strategies would have implications for all scenarios involving curative treatments. While ranchers are renowned as fiercely indi- vidualistic, informal (radio announcements) and social networks do exist in the region. In view of the potential relationship between diagnostic costs, distance from a municipal center, and anticipated animal losses, it may be useful to develop more formal

communication networks.

5. Conclusions

This study estimated the financial impact of the adoption of seven treatment strategies for T. euansi in the Brazilian Pantanal. Findings indicate that the most financially effective strategy for the management of this disease departs somewhat from the most prevalent strategy currently employed. Rather than the seasonal curative strategy, our results recommend the consideration of a curative treatment year-round. The seasonal strategy appears to result in unnecessary annual losses of over US$200000 and about 600 horses as compared to the year-round strategy. An annual increase in investment of


US$7/ranch bridges the gap between the two strategies. A formal experimental trial may contribute to our confidence in recommending costly investments to ranchers. Finally, outbreaks of T. evansi in horses and buffalo tend to correlate with the incidence of T. uiuux in cattle. The wet season of 1995 marked the first confirmed incidence of T. vivux in the Pantanal and the lowlands of Bolivia. Further study should explore control strategies for both cattle and horses suffering from the same family of diseases.

Acknowledgements

We would like to take this opportunity to acknowledge the review and helpful comments on earlier versions of this work by John Holt, H.N. Erb and three anonymous referees. This paper benefitted substantially from their efforts. All errors remain, as usual, our responsibility.

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A financial analysis of treatment strategies for Trypanosoma evansi in the Brazilian Pantanal

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