Transcript Andrew Farlow

The Intersection of Economics and Access:
Sustainability Issues
Andrew Farlow
University of Oxford
Oxford Conference on Innovation and
Technological Transfer for Global Health
9th-13th September 2007
1
Overview of Session
• Sustainable infrastructure and human
resources
• Sustainability of vaccine programs
• Sustainability of global health funding
• Power from the bottom to drive
sustainability?
2
HIV/AIDS Reverses Life Expectancy
Source: United Nations Population Division, World Population Prospects (2004 Revision)
3
Projections of Future Burden due to
HIV/AIDS
4
Capital Flight at its Peak…
SSA
South Asia
East Asia
Public
capital
per
worker
1,962
2,008
4,505
Private
wealth
per
worker
1,758
1,930
10,331
Private
capital
per
worker
1,062
1,840
9,704
Capital Capital
flight
flight
per
ratio
worker
696
0.4
90 0.05
627 0.06
Now the problem is human brain drain and depletion of
human resources…
With severe consequences…
5
Infrastructure: Health Workers
Distribution of health workers by level of health expenditure
and burden of disease
Source: WHO World Health Report (2006)
6
Infrastructure: Health Workers
Countries with a critical shortage of health service
providers (doctors, nurses and midwives)
Source: WHO World Health Report (2006)
7
Infrastructure: Consequences for
Maternal Mortality
Source: WHO “The World Health Report 2005 – make every mother and child count” (2005)
http://www.who.int/whr/2005/chap1-en.pdf
8
Maternal Mortality per 100 000 Live
Births in 2000
Source: WHO “The World Health Report 2005 – make every mother and child count” (2005)
http://www.who.int/whr/2005/chap1-en.pdf
9
Sustainable Vaccine Programs?
Countries with DTP3 Coverage < 50%
1990
DTP3 coverage < 50% (19 countries)
2000
DTP3 coverage < 50% (20 countries)
mpty Picture>
2004
DTP3 coverage < 50%
(10 countries)
mpty Picture>
10
Source: WHO/UNICEF estimates, 2005
192 WHO Member States. Data as of September 2005
Hib Vaccine and Hib3 Coverage
1997: 26 countries introduced
Hib vaccine introduced but no coverage data
reported (26 countries)
Hib vaccine not introduced (166 countries)
2004: 92 countries introduced in infant immunization
schedule
Hib3 > 80% (78 countries or 41%)
Hib3 < 80% (12 countries or 6% )
Hib vaccine introduced in part of the country
(2 countries or 1% )
Hib vaccine not introduced (100 countries or
52% )
11
Source: WHO/UNICEF estimates, 2005
192 WHO Member States. Data as of September 2005
Cost / Fully Immunized Child
Avg. Resource Requirements per DTP3 Targeted Child (Total Period)
$35.0
HepB
(mono)
DTP+HepB+Hib
DTP+HepB
$30.0
$25.0
$20.0
Non-Vaccine Costs
$15.0
New/Underused Vaccines
(HepB; Hib; YF)
$10.0
Traditional Vaccines
(BCG; DTP; Measles; Polio)
$5.0
Kyrgyzstan
Haiti
Kenya
Gambia
Burkina Faso
Rwanda
Tanzania
Uganda
Zambia
Burundi
Ghana
Côte d'Ivoire
Lao PDR
Cambodia
Mali
Madagascar
Mozambique
Uzbekistan
Tajikistan
Vietnam
$-
12
Estimated
Deaths
Saved by
Vaccination
14
EPI Coverage, Select Countries
15
27 Million Children Still Not
Vaccinated (DTP3 2003a)
16
Sustainability:
Global Fund Requirements to 2010
for TB, Malaria, HIV/AIDS
Source: The Global Fund “Partners in Impact Progress Report” (2007)
http://www.theglobalfund.org/en/files/about/replenishment/oslo/Progress%20Report.pdf
17
Billions required to achieve targeted €
vaccine programs over 10 yr. period.
Vaccine Funding 2005-15
18.0
New Vaccines
Existing
Vaccines
8.5
3.4
2.7
1.4
0.9
UK
Germany
Poland
Mexico
Thailand
GAVI
GAVI New
Vaccines
New Vaccines
Conj. Men ACWY, Men B, HPV, MMRV
+ Hib. MenC,
Rota
+ Rota
+ Rota, TB
+ TB
+ Rota, TB,
Dengue,
Malaria
in UK
in Germany
in Poland
in Mexico
in Thailand
Men AC, HPV,
Rota, TB,
Malaria, Strep
A prospective analysis in UK, Germany, Poland,
Mexico, Thailand - Smart Pharma Consulting
18
Financial Sustainability
• GAVI: “Although self-sufficiency is the ultimate goal,
in the nearer term, sustainable financing is the ability
of a country to mobilize and efficiently use domestic
and supplementary external resources on a reliable
basis to achieve target levels of immunization
performance.”
19
Phasing in…
• 5 year Vaccine Fund commitment extended over 8
year phase
• Countries will be notified of 5 year Vaccine Fund
commitment
Investments
in
Immunization
program
Year 2
Vaccine Fund
Government & Partners
Year 4
Year 6
Year 8
20
Meeting the Resource Gap
Immunization Program Financing
Gap
$50
Possible External
Probable External
Probable Gov't
Secure External
Secure Gov't
$0
Year 2
Year 4
Year 6
Year 8
21
Future Resource Requirements,
Financing & Gaps
$250
$200
Gap
Other
Bilaterals
Multilaterals
GAVI
Government
$150
$100
$50
22
$-
Pre-VF Year VF Year
2004
2005
2006
2007
2008
Financial Sustainability
‘Innovative’ Financing Mechanisms
– Global Alliance for Vaccines & Immunization
• The Vaccine Fund
• Advanced Development & Introduction Plans
• International Finance Facility for Immunization
– Other Funding Mechanisms
• PAHO Revolving Fund
• Vaccine Independence Initiative
• ARIVAS (Appui au Renforcement de l’independence
Vaccinal en Afrique Sub-Saharien )
• ‘Advance Market Commitments’/prize funds
GAVI, IFFIm, and prize funds $5bn-$10bn 20062010
23
1. What is the IFFIm?
• An IFF for immunization (IFFIm) has been proposed
as a pilot for the IFF mechanism in general
– IFF a large-scale US$50-75 billion per year
mechanism to double global aid and help meet the
MDGs
– On September 9th 2006 the IFFIm was launched in
London with the five donors - UK, France, Italy,
Spain, and Sweden: now Norway and Brazil have
announced contribution as well; South Africa is
considering a contribution
– Estimated disbursable of $3.2 billion before 2015
– Ongoing effort to secure resources from additional
donors to reach $4 (now $6) billion resource goal
• First bond issuance took place late 2006
24
International Finance Facility for
Immunization
• IFFIm will raise additional funds for GAVI programs
– Pilot of the UK-sponsored International Finance Facility to
frontload immunization financing over 10 years
– $4 billion borrowed from the capital markets in the form of
bonds
$700
Over 2005-15, 5.3 million under 5
deaths and an additional 5 million
adult deaths could be prevented
New and under-used
vaccines: $1.9 b
$500
Systems support for
new vaccine
introduction: $290m
Mortality reduction
campaigns: $515m
$400
$300
$200
Funds for services
strengthening: $1.1b
$100
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
Polio stockpile: $175m
2005
US$ (millions)
$600
25
The IFF: Donor Pledges
Base Case
Disbursements (to programs)
700
600
Pledges from Donors
Spare cash – “cushion”
$USm
500
400
300
200
100
0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Disbursements
Pledges
Cash Available
26
Implications of the IFFIm
• Influencing the market
– Long-term predictable commitments allow longerterm planning for supply strategy
– Increased industry capacity and lower vaccine
prices
• Better planning and sustainability for countries
– Commitments can be made to countries over
longer-term allowing for better integration within
national planning cycles and longer lead time to
plan for country financing and eventual
sustainability
27
Implications of the IFFIm
• Additional financing & donors
– Countries not previously contributing to GAVI
attracted
• Accelerating coverage of immunization with traditional
and new and under-used vaccines
• But:
• Transaction costs have proved much higher than
expected (not per se negative, but must be factored in)
• It has to be repaid, and will phase out at a later date
• How will funding be sustained if still needed?
28
Prizes: Previous Vaccine Prices
16
Price
14
12
Price declines over time
10
8
6
pays
for R&D
4
Marginal cost
2
0
1
2
3
4
5
6
7
8
9
10 11 12 13
14
Quantity
(& time)
29
Prize: Two Stage Pricing
Guaranteed
first stage price
16
Price
14
12
sponsors
10
guarantee
to top up 8
price 6
In return, firms
obliged to
sell at lower
long run price
$(x)bn
total
market
Marginal cost
4
developing 2
countries
0
buy at low
price
sponsors
1 2 3top 4up 5
the price for a
maximum number
of treatments
6
7
8
9
10 11 12 13 Quantity
14
(& time)
30
Some Issues Though
• No Simple one-off vaccine solution,
– Can’t have a quantity guarantee
– Must allow less exhaustive technical standards
– Firms must face demand risk?
• How to set right?
• How to make credible and avoid time
inconsistency
• Still need to keep pressure on affordability
• If a package of measures, how to use a ‘prize’ for
one of them?
• What about all those ‘on-the-ground’ infrastructure
failures?
• How to fit in with the typical ‘philosophy’ of PDPs?
31
Pneumococcal Vaccine Pipeline:
Recent Developments
Development
Stage
Pre-clinical
stage
Clinical trial
Phase I
13-valent
Multinational
~20 vaccines
in research/
Pre-clinical
stage
(includes
conjugate &
protein-based
vaccines)
Clinical trial
Phase II
Clinical trial
Phase III
9-valent
Steptorix
1 10valent
Launched
Prevnar
(7-valent)
Expected
launch
2008
11-valent
7-valent
Emerging
suppliers
>5 mulit-valent conjugate
vaccine projects
Source: BCG Global Supply Strategy 2005
PneumoADIP team analysis
Discontinued
32
Projected Impact from Accelerated
Pneumococcal Vaccination
500
450
400
350
300
250
200
150
100
50
0
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
Cumulated Deaths
Averted (1000s)
Annual Deaths Averted (1000s)
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
500
0
2007
Annual Deaths Averted
(1000s)
Accelerated Introduction Plan -- Routine Immunizations
Potential Annual & Cumulative Deaths Averted
Cumulative Deaths Averted (1000s)
3.9 million child deaths prevented by 2025
5.4 million by 2030
33
Strategic Demand Financing
Requirements
400,000
US$ millions
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
10
20
12
20
14
20
16
20
18
20
Donors
Country
20
20
22
20
24
20
34
However…
• According to key sponsor files, most
resources are gone by 2015
– Leaving 98% of total burden out to 2030
– Follow on vaccines
– Capacity risks
– Cost of goods
– Packaging issues in first round countries
– Costs of sustaining first round countries
35
THANK YOU
Comments and feedback
always welcome:
[email protected]
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