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The Intersection of Economics and Access: Sustainability Issues. Andrew Farlow University of Oxford Oxford Conference on Innovation and Technological Transfer for Global Health 9 th -13 th September 2007. Overview of Session. Sustainable infrastructure and human resources

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The intersection of economics and access sustainability issues

The Intersection of Economics and Access:Sustainability Issues

Andrew FarlowUniversity of Oxford

Oxford Conference on Innovation and Technological Transfer for Global Health9th-13th September 2007


Overview of session

Overview of Session

  • Sustainable infrastructure and human resources

  • Sustainability of vaccine programs

  • Sustainability of global health funding

  • Power from the bottom to drive sustainability?


Hiv aids reverses life expectancy

HIV/AIDS Reverses Life Expectancy

Source: United Nations Population Division, World Population Prospects (2004 Revision)


Projections of future burden due to hiv aids

Projections of Future Burden due to HIV/AIDS


Capital flight at its peak

Capital Flight at its Peak…

Now the problem is human brain drain and depletion of human resources…

With severe consequences…


The intersection of economics and access sustainability issues

Infrastructure: Health WorkersDistribution of health workers by level of health expenditure and burden of disease

Source: WHO World Health Report (2006)


The intersection of economics and access sustainability issues

Infrastructure: Health WorkersCountries with a critical shortage of health service providers (doctors, nurses and midwives)

Source: WHO World Health Report (2006)


Infrastructure consequences for maternal mortality

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


Maternal mortality per 100 000 live births in 2000

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


Sustainable vaccine programs countries with dtp3 coverage 50

Sustainable Vaccine Programs?Countries with DTP3 Coverage < 50%

1990

DTP3 coverage < 50% (19 countries)

2000

DTP3 coverage < 50% (20 countries)

2004

DTP3 coverage < 50% (10 countries)

Source: WHO/UNICEF estimates, 2005

192 WHO Member States. Data as of September 2005


The intersection of economics and access sustainability issues

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% )

Source: WHO/UNICEF estimates, 2005192 WHO Member States. Data as of September 2005


Cost fully immunized child

$35.0

HepB

DTP+HepB+Hib

DTP+HepB

(mono)

$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

$-

Mali

Haiti

Kenya

Ghana

Zambia

Burundi

Uganda

Gambia

Vietnam

Rwanda

Tanzania

Lao PDR

Tajikistan

Kyrgyzstan

Cambodia

Uzbekistan

Côte d'Ivoire

Madagascar

Mozambique

Burkina Faso

Cost / Fully Immunized Child

Avg. Resource Requirements per DTP3 Targeted Child (Total Period)


Estimated deaths saved by vaccination

Estimated DeathsSaved by Vaccination


Epi coverage select countries

EPI Coverage, Select Countries


27 million children still not vaccinated dtp3 2003 a

27 Million Children Still Not Vaccinated (DTP3 2003a)


Sustainability global fund requirements to 2010 for tb malaria hiv aids

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


Vaccine funding 2005 15

Vaccine Funding 2005-15

18.0

New Vaccines

Existing Vaccines

Billions required to achieve targeted €vaccine programs over 10 yr. period.

8.5

3.4

2.7

1.4

0.9

UK

Germany

Poland

Mexico

Thailand

GAVI

A prospective analysis in UK, Germany, Poland, Mexico, Thailand - Smart Pharma Consulting


Financial sustainability

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.”


Phasing in

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


Meeting the resource gap

Meeting the Resource Gap

Immunization Program Financing


Future resource requirements financing gaps

Future Resource Requirements, Financing & Gaps

$250

$200

Gap

$150

Other

Bilaterals

Multilaterals

GAVI

Government

$100

$50

$-

Pre-VF Year

VF Year

2004

2005

2006

2007

2008


Financial sustainability1

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 2006-2010


1 what is the iffim

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


International finance facility for immunization

$700

Over 2005-15, 5.3 million under 5 deaths and an additional 5 million adult deaths could be prevented

$600

New and under-used vaccines: $1.9 b

$500

Systems support for new vaccine introduction: $290m

US$ (millions)

$400

Mortality reduction campaigns: $515m

$300

$200

Funds for services strengthening: $1.1b

$100

Polio stockpile: $175m

2010

2015

2005

2006

2007

2008

2009

2011

2012

2013

2014

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


The iff donor pledges

The IFF: Donor Pledges

Disbursements (to programs)

Pledges from Donors

Spare cash – “cushion”


Implications of the iffim

Implications of the IFFIm

  • Influencing the market

    • Long-term predictable commitments allow longer-term 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


Implications of the iffim1

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?


Prizes previous vaccine prices

Price declines over time

Marginal cost

Prizes: Previous Vaccine Prices

Price

pays for R&D

Quantity(& time)


Prize two stage pricing

sponsorsguarantee to top upprice

developing countriesbuy at lowprice

sponsors top upthe price for a maximum numberof treatments

Prize: Two Stage Pricing

Guaranteedfirst stage price

Price

In return, firms obliged to sell at lowerlong run price

$(x)bntotalmarket

Marginal cost

Quantity(& time)


Some issues though

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?


Pneumococcal vaccine pipeline recent developments

Pneumococcal Vaccine Pipeline:Recent Developments

Pre-clinical stage

Clinical trial

Phase I

Clinical trial

Phase II

Clinical trial

Phase III

Launched

Development

Stage

Multi-national

13-valent

9-valent

Prevnar

(7-valent)

~20 vaccines

in research/

Pre-clinical

stage

(includes

conjugate &

protein-based

vaccines)

Steptorix1 10-valent

Expected launch 2008

11-valent

7-valent

Emerging suppliers

>5 mulit-valent conjugate vaccine projects

Discontinued

1Completed first Phase III trial; results announced in Jun05

Source: BCG Global Supply Strategy 2005

PneumoADIP team analysis


Projected impact from accelerated pneumococcal vaccination

Projected Impact from Accelerated Pneumococcal Vaccination

3.9 million child deaths prevented by 2025

5.4 million by 2030


Strategic demand financing requirements

Strategic Demand Financing Requirements

US$ millions


However

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


Thank you comments and feedback always welcome andrew farlow@sbs ox ac uk

THANK YOUComments and feedbackalways welcome:[email protected]


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