Meeting of Ministers of Health and Finance o n Domestic Financing for Health 12 November 2013 Addis Ababa, Ethiopia

1. Innovative Solutions for Funding Health: Past, Present, & Future Meeting of Ministers of Health and Finance on Domestic Financing for Health 12 November 2013 Addis Ababa, Ethiopia

3. What we heard from the Honorable Ministers, MPs, Delegates, and Civil Society in the video was encouraging… • “Departure from traditional thinking…” • “Efficiency & effectively using existing resources…” • “Partnership with private sector…” • “Community…” • “Thinking outside of the box…” • “Go beyond the norm…” • “Sustainability” • “Homegrown…” • “Suite the needs of African continent…” • Value for Money • New technologies • “Political will…”

4. In 1962, child mortality and family size divided the world into developed and emerging economies, with little in the gap… Emerging Economies Developed Economies

5. …but over the past 50 years there has been a dramatic shift in the organization of the world trending to smaller families 1 First, child mortality declines… …and then family size declines 2

6. We also start to see longer life expectancy across all countries…

7. Over the past 50 years, life expectancy in the US gained just 7 years as new diseases become more prevalent in society Polio, Measles (1962/63) Influenza Epidemic (1918) Smallpox (1915) Penicillin (1925)

8. As countries experience economic growth, there is a tendency for higher health costs to accumulate later in life… “…nearly 30% of lifetime health expenditure is incurred during middle age… …and nearly an additional 40% during the senior years…” Total: 70-75%

9. In the past decade, Non-ODA has contributed greatly to the development aid universe creating new funding opportunities Total Development Aid from 1967 - 2011 499 (US$, billions) Non-ODA + ODA (9%) ODA (7%) 134 Source: OECD data 2013; Non-ODA is all aid related investments including PPP, other than Official Development Assistance as defined by OECD.

10. We might want to start thinking a little more creatively and collaboratively about funding health… As the world develops, demographics shift, people live longer… As health interventions become more expensive, and aid more dynamic

12. PRODUCT(RED) • Established: 2006 • Objectives: To build a commercial development product using consumer contributions • Source of funding: Percentage of profit generated from purchase of (RED) products (Apple, Microsoft, Starbucks etc) by consumers worldwide Pays a fee for (RED) trademark PRODUCT (RED) $10 $10 • Funding raised to date: > $ 215 Million • Impact: 14 million people with HIV/AIDS in Sub-Saharan Africa

13. Advanced Market Commitments (AMC) • Established: 2007 • Objectives: To stimulate manufacturer to produce new vaccines at affordable prices • Source of funding: Donor Governments of Canada, Italy, Norway, Russia, UK and Gates Foundation Assess if the vaccine meet criteria Independent Assessment Committee Vaccine Manufacturers Vaccines are delivered to countries UNICEF Enter into procurement agreement Contribute to long term cost of the vaccines Provide financial support to AMC Funds Donor Governments GAVI Alliance • Funding raised to date: US$1.5 billion donor commitment • Impact: Access to pneumococcal vaccine 10 years sooner. Could save 1.5 mm lives by 2020. Beneficiaries include Benin, Cameroon, CAR, Congo& other African countries

14. Debt2Health • Established: 2007 • Objectives: To convert debt service payments into new investments in health • Source of funding: Amount of debt foregone in developing country by creditor country Creditor Beneficiary Debt cancellation Counterpart Payment(s) Global Fund Funding of grants based on Performance based funding system • Funding raised to date: € 170 million • Impact: Debtor countries include Pakistan, Indonesia, Cote d’Ivoire, Egypt

15. The Global Fund’s Focus in Innovative Finance RDI Ratio ODA as a % of Total Development Aid Global Fund’s positioning in Innovative Finance Timeline 15 RDI Ratio: Relationship between a country’s lower disease burden & income level

16. Pay-for-Performance Instrument • Product design phase at the Global Fund • Objectives: To leverage upfront private investment for malaria intervention programs • Source of funding: Impact investors (e.g. high net worth individuals, foundations) • 5. Repayment and ROI from performance-based payments Outcome Funders 1. Upfront investment Instrument-issuing organization Impact Investors Verification Agent 4. Outcome and impact results are independently verified 2. Funding for operating costs Service Provider 3. Deliver interventions Funding targeted: US$ 20-30 million Impact: Increase efficiency of program implementation

17. Health Microinsurance • Product design phase at the Global Fund • Objectives: To build a business model for quality primary health care that is affordable, sustainable, scalable and replicable • Source of funding: Donors, private sector companies, government etc • High Fees • Sick Workers • Low Productivity • Family Members Falling Sick Solution requires high quality delivered at a very low cost and will need to conquer the barrier of cash payments that keep so many from seeking medical care. • Funding Targeted: In discussion with MI intermediaries, telecos, private sector companies • Impact: Overall goal is universal health coverage. Pilot will be initiated in a few countries

18. Numerous Innovative Financing mechanisms exist…

19. Contact Information Innovative Finance Department Makiko Takayama Specialist makiko.takayama@theglobalfund.org Adam Bornstein Specialist adam.bornstein@theglobalfund.org