Efficiency and feasibility study of a relocation of WHO ... · communication of study findings to internal and external stakeholders, clarification of capacity requirements for RHT

Efficiency and feasibility study of a relocation of WHO regulatory and prequalification services November 2019

Disclaimer This report has been prepared solely for the use and benefit of, and pursuant to a client-relationship exclusively with WHO. We disclaims any contractual or other responsibility to others based on its use and, accordingly, this information may not be relied upon by anyone other than above mentioned organizations.

2 Efficiency and feasibility study of a relocation of WHO regulatory and prequalification services | Table of contents

Table of contents

Executive Summary ........................................................................................................................................ 4

1. Introduction ........................................................................................................................................ 17

1.1. Institutional context .......................................................................................................... 17

1.2. RHT relocation study ....................................................................................................... 19

2. Current state assessment ................................................................................................................. 22

2.1. Strategic outlook for RHT ................................................................................................ 22

2.2. Business Model for regulatory and prequalification activities .......................................... 26

2.3. RHT Organization ............................................................................................................ 32

2.4. Cost structure .................................................................................................................. 41

3. Outlook on relocation ........................................................................................................................ 44

3.1. Insights from stakeholder consultations .......................................................................... 44

3.2. Lessons learned from other relocation experiences ........................................................ 51

4. Options assessment .......................................................................................................................... 54

4.1. Option definition ............................................................................................................... 54

4.2. Options ............................................................................................................................ 59

4.3. Summary of evaluation .................................................................................................... 73

5. Conclusions ....................................................................................................................................... 75

Appendix 1. List of documents consulted ..................................................................................................... 80

Appendix 2. Notes on Financial modelling ................................................................................................... 81

Appendix 3. List of interviewees ................................................................................................................... 85

Appendix 4. Staff survey results ................................................................................................................... 86

Appendix 5. External stakeholders survey results ........................................................................................ 87

Appendix 6. RHT group interviews results ................................................................................................... 88

Appendix 7. Site criteria ................................................................................................................................ 89

3 Relocation study of WHO regulatory and prequalification services | Executive Summary

Acronyms

API Active Pharmaceutical Ingredient

BOS Business Operations

BMGF Bill and Melinda Gates Foundation

CRP Collaborative Registration Procedure

CRS Country Regulatory Strengthening

Dx Diagnostics

EMP Essential Medicines and Health Products

FPP Finished Pharmaceutical product

GAVI The Vaccine Alliance

GBT Global Benchmarking Tool

GMP Global Malaria Programme

GPEI Gobal Polio Eradication Initiative

GSMS WHO Global Surveillance and Monitoring System

GSM Global Management System

IAU Innovation Access and Use

IVB Immunization, vaccines and biologicals

IVD In Vitro Diagnostic

KPI Key Performance Indicator

LMIC Low- and Middle-Income Countries

MVP WHO cluster of access to Medicines, Vaccines and Pharmaceuticals

Mx Medicines

NCD Non-communicable diseases

NCL National Control Laboratories

NRA National Regulatory Authority

NTD Neglected Tropical Disease

PEPFAR President’s Emergency Plan for AIDS Relief

PMS Post Market Surveillance

PQ Prequalification

PQT WHO Prequalification Team

RHT Regulation of Medicines and other Health Technologies

RN&H Regulatory Networks & Harmonization

RSS Regulatory Systems Strengthening

RWG RHT relocation study Relocation Working Group

SAV Safety and Vigilance

SFMP Substandard and Faslified Medical Products

SRA Stringent Regulatory Authority

TA&L Technical Assistance & Laboratory Services

TB Tuberculosis

TSN Technologies Standards and Norms

UHC Universal Health Coverage

UNICEF United Nations Children’s Fund

UNFPA United Nations Population Fund

UNDP United Nations Development Programme

USFDA US Federal Drug Authority

Vx Vaccines


Executive Summary Background We have completed a study on the feasibility and efficiency of the potential relocation of some or parts of the WHO regulatory and prequalification services. We started from the working hypothesis that there could be an objective case for relocating all or parts of the Regulatory and Prequalification activities; and assuming that such a case existed, the project sought to identify the key factors that management should consider to ensure a successful transition.

The work was organized to provide evidence on whether this working hypothesis proved correct or not. Care was taken to balance the independence of the consulting team with the necessary engagement and consultation with a broad range of internal and external stakeholders. The study was initiated on 1 September and finalised on 22 November 2019.

Conclusion WHO’s regulatory and prequalification services have a case for growth. One avenue to finance this expansion is through efficiencies. The study shows a relocation of RHT could generate up to 20% of savings to support programme expansion, with a payback period of one to two years depending on the option considered.

However, none of the options for relocation assessed fares best across all evaluation criteria of strategic alignment, efficiency and risk management. Transition risk is high: WHO does not have the experience relocating 100 staff to a new location and RHT does not have business continuity plans to mitigate transition risks. Overall staff attrition will be at best 20% and could exceed 50% depending on the chosen location and how well the transition is managed.

Given the imperative to balance the expansion agenda with business continuity management, WHO needs to consider 1) the likelihood that these savings can actually be retained by WHO; and 2) the risk appetite of the Organization given the high impact on business continuity and what we consider to be low organizational readiness for relocation. WHO leadership needs to form their own view on which path to take forward.

Recommendations We recommend a mix of improvements and paradigm shifts, and elements that are under the control of RHT while others require Organization-wide policy decisions:

1) A rehaul of the delivery model for regulatory and prequalifications services with the view to increase the leverage of external capacity;

2) An acceleration of the efforts underway to streamline, harmonise and integrate ways of working across RHT teams;

3) The progressive build-up of outposted capacity (as opposed to a complete relocation of existing teams) in one or two new locations, e.g. Budapest for additional PQ capacity and a travel hub in middle-East or Africa hub for RSS, PQT- Inspections and selected portions of SAV; and

4) In the longer run, that WHO reconsiders the governance over prequalification services, and that options to put the programme at ‘arms length’ from WHO be assessed in order to better balance control by WHO, responsiveness to stakeholder demand, and required flexibility and scalability for the programme.

These recommendations provide a blueprint for the transformation of WHO regulatory and prequalification services. They are strategically aligned, would be amenable to the concerns raised by internal and external stakeholders and their implementation can be owned by RHT management.


Options to move forward Should WHO elect to proceed with a relocation of current teams, WHO should first clarify and confirm funding sources for the transition. It should then set up the required project and change management structure and staffing notably: contingency planning, external and internal communications, city selection and management of relationships with authorities in the target location, facility management and office logistics, staff support for outbound and inbound transition, streamlining and harmonisation of ways of working between RHT and other departments, and overall project management office including a seasoned programme manager, financial and HR officer, change manager and administrative support.

Should WHO elect to implement our recommendations, the following should take place: communication of study findings to internal and external stakeholders, clarification of capacity requirements for RHT for the next 3-5 years based on a clear business plan, decision to create a location of future PQT capacity in a nearshore location (e.g. Budapest), and RSS/PQT-Inspections and selected members’ positions in SAV in a regional hub, setup of a delivery model task force to strengthen and expand the roster of consultants and related quality requirement, renewed efforts by RHT to streamline, integrate and harmonise ways of working across teams, setup of a RHT transformation governance and organization, and optionally, consideration by WHO leadership and Member States of the opportunity to adapt the programme governance for PQ services.


Summary The Study

The new operating model announced on 6 March 2019 introduces major changes in the way the Secretariat is set up and works across the seven major offices and three levels of the Organization. This includes the consideration of relocating some HQ activities such as the regulatory and prequalification services.

Following a competitive tender, WHO engaged a consulting firm in August 2019 to perform a study on the feasibility and efficiency of the potential relocation of some or parts of the WHO regulatory and prequalification services. The study started from the working hypothesis that there could be an objective case for relocating all or parts of the regulatory and prequalification activities; and assuming that such a case exists, the project sought to identify the key factors that management should consider to ensure a successful transition. The work was organized to provide evidence on whether this working hypothesis proved correct or not. Care was taken to balance the independence of the consulting team with the necessary engagement and consultation with WHO stakeholders. The project was initiated on 1 September and finalised on 15 November 2019.

Key stakeholders’ expectations were that by the end of the study: decision-makers can make an informed decision; affected stakeholders, notably staff, understand the rationale for what is proposed; the business continuity of regulatory and PQT operations is preserved; and actionable improvement opportunities have been identified, irrespective of which scenario is recommended.

In order to deliver on these expectations, we consulted with more than 85 RHT staff and close to 100 other stakeholders within and outside WHO, including leadership, WHO disease programmes, focal points at regional level, UN agencies, National Regulatory Agencies (NRAs), technical partners, key donors and manufacturers. We also used qualitative and quantitative data collection, performed an extensive desktop review, conducted an analysis of financial and HR data, and proceeded to the quantitative and qualitative modelling of seven options.

Throughout the course of the project, weekly meetings took place with a relocation working group (RWG) composed of selected representatives from MVP, BOS, Legal Department, and the Staff Association. Regular steering committee meetings and checkpoints with the Director General Office were also organized. This allowed us to validate findings, refine observations and gain endorsement on the resulting recommendations along the way.

Current state assessment of regulatory and prequalification services and related implication for relocation

The regulation and prequalification of health products are critical components of WHO’s mandate and its contribution towards the realisation of universal health coverage. The strategy for WHO regulatory and prequalification services is captured in the Member States endorsed ‘WHO Medicines and Health Products Programme Strategic Framework 2016 – 2030’ and in the ‘Towards Access: Roadmap on access to medicines and vaccines 2019-2023’. The 2016-30 vision is to achieve universal access to safe and quality-assured health products. This calls for expansion of the services.

The delivery model for regulatory and prequalification services is the result of a progressive consolidation into one department of various HQ teams which had developed related services. The different teams had developed different practices and operating procedures which have yet to be harmonised. In the context of the division of labour between the three levels of the organization, HQ, regional and country levels, a relocation can offer avenues to locate capacity-building and technical support closer to recipients. A relocation could present further opportunities to accelerate the harmonisation of practices between teams, but it would also be constrained by this lack of pre-existing harmonisation.

The delivery model mixes internal and external sourcing of capacity. As of September 2019, the RHT team had 114 staff. The teams have developed rosters of external short-term consultants, which in 2018 corresponded to 319 individuals who delivered an additional capacity of circa 40 FTE. These consultants are usually employees of national regulatory agencies or freelancers with regulatory, pharmaceutical and/or manufacturing expertise. They originate from countries with stringent regulatory authorities (SRAs) as well


as LMICs. RHT management is seeking to expand this roster of consultants. However, constraints exist such as the scarcity of skills and the need to manage the conflicts of interest within the roster of consultants depending on the product and manufacturer under consideration. This sourcing model must be taken into account for relocation since: 1) SRAs interviewed clearly mentioned that an important factor in their willingness to participate in PQ activities was ease of transit to and security of the location where assessments are done; 2) increased reliance on this external pool could form an effective mitigation strategy for staff attrition during the transition period; and 3) scaling up the external sourcing of expertise could form a cost-effective alternative to relocation.

Overall, all the RHT teams strongly interact within their group and with HQ based disease programmes, and with regional offices for RSS and SAV. We noted important synergies with a mutually reinforcing effect on the value provided to different stakeholder groups, e.g. with the participation of external consultants sourced from NRAs in assessment and inspections, or the PQ internship model where representatives from LMICs NRAs can be seconded to the PQ team for a period of usually 3-4 months. These two models increase NRAs’ trust in the robustness of PQ assessments and inspections since they can see the process from within, while at the same time building the capacity of their own national authorities. RHT and disease programmes (HIV, GMP, TB, IVB, NTD, GPEI) have close interactions, e.g. with PQT around the process of prioritising health products. We however could not identify a systematic model where operating procedures, meeting routines and supporting systems would be in place to manage these synergies both tactically, e.g. in terms of setting priorities, aligning demand and supply on PQ services, and operationally in terms of day-to-day management of interfaces between teams. Overall, while this increases the value of collocation of these activities, it also creates challenges. On the one hand, in the case where the whole RHT department would be relocated, the viability of the TSN and IAU activities should be assessed, and more formal interfaces with WHO technical and administrative departments should be introduced. On the other hand, in the case where RHT activities would be physically separated, e.g. in the case of relocation of prequalification only and relocation of selected activities in prequalification and regulatory teams, the impact on synergies should also be considered.

In terms of the financing model, RHT is primarily financed by voluntary donors, with a high level of earmarking and concentration. The top 5 contributors in (BMGF, UNITAID, GAVI, UNICEF and the USFDA) represented 81% of RHT donor financing in 2018 (not taking into account prequalification fees). In 2018, total donor financing amounted to USD 24.7m, while prequalification fees reached USD 14.6m in comparison. It also shows that donors are financing activities across RSS, SAV and PQT but PQT receives the largest amount of external funding (62%). To improve the independence and sustainability of the programme, WHO introduced a new fee system for prequalification of medicines, in vitro diagnostics and vaccines in 2017 and was broadened for diagnosis in August 2018. In the context of a potential relocation, the RHT financing model means that: 1) a relocation can hardly be justified due to funding shortfalls in the RHT programme or a need to downsize/lower the cost structure, given that the programme is fully funded; 2) a policy would need to be defined to guide the allocation of potential savings from a relocation since manufacturers would likely push for savings on PQ activities to result in lower application and renewal fees, and donors require costing of grant proposals based on unit costs for staff and activities; and 3) service delivery and performance will need to be maintained in order to secure ongoing donor support and manufacturer uptake of PQ services. This is likely to require structured and persuasive communication with key donors as part of the transition. For the same reasons, WHO will also need to identify who pays for the one-off transition costs. In this context the working assumptions should be that the transition would be financed by WHO core resources (AC or CVCA).

Salaries are by far the key cost driver across RHT, followed by consulting and contractual services and to a lesser extent travel costs. Given the high post-adjustment in Geneva and the salary scale for G staff, a relocation would generate significant savings. A relocation could also be used to reduce the cost of travel.

In terms of organization, the RHT structure is at odds with what is found across HQ. With 114 staff RHT is the one of the two biggest WHO departments. A relocation of the whole RHT team would mean moving the biggest department at HQ. It would be the first time WHO relocates so many staff at once. This calls for careful business continuity and transition planning. It may be best achieved in a phased manner. Overall, 5 out of the top 10 areas of expertise reported by P staff relate to skills not typically found in other WHO departments, as per the RHT staff survey. Due to the specific expertise of P staff in the key RHT skills, in the case of relocation there is a higher risk to business continuity due to loss of specific


skills. A location that enables talent retention and attraction is a key requirement to a potential relocation. Although general G staff in RHT represent only 27% of RHT staff compared with 35% at HQ, they are specialised and well-trained in the activities of the sub-teams they serve (PQT, RSS or SAV). In PQT for example, they provide administrative support to the entire process of dossier screening and assessments and are the ones handling PQT’s CRM system. Replacing these G staff positions, in particular, would require specific on-the-job training. Over half of RHT staff have a temporary appointment vs the 22% average at HQ in 2018. Vacancies in positions are expected to rise. While only 2 positions are showing as vacant in September 2019, since the announcement of the relocation in March 2019, 4 G staff have informed WHO of their decision to leave RHT and take on other internal roles. These vacancies are putting a strain on the group overall. A relocation could alleviate the issue of short-term contracts by allowing WHO to grant longer-term contracts. This is however not seen by RHT staff as a key benefit: 52% of RHT staff surveyed did not see it as a potential benefit of a relocation, irrespective of location.

The level of the 13 sub-teams is the most granular level at which activities and their specifics can be understood and where the determination of best location can be assessed. This is the level we used to model the options for relocation. As part of the roll-out of the new HQ organization, RSS and SAV are expected to be merged into one team. The current uncertainty on the exact delineation of teams makes the decision on potential future location harder. In case these new sub-teams are separated geographically, the impact on the functioning of the teams will be higher.

RHT teams travel at different frequency and to different destinations. GSM travel data shows that in 2018-19, Copenhagen is the main destination of travel (16%), followed by India (9%), China (6%) and the UK (4%). Most of the travels to Copenhagen are performed by the PQT product stream sub-teams, with the bulk of those travels performed by the PQT-Medicines sub-team (55 out of a total of 78 RHT trips to Copenhagen). The use of Copenhagen to perform these sessions is historical and there is no longer a compelling case to maintain it. RSS travels mostly to Africa (with connecting flights from Nairobi and Entebbe), while PQT-Inspections travels mostly to India (Hyderabad, Bangalore), China (Beijing) and South-East Asia (Singapore, Jakarta). The travels of the SAV team are spread out, with a larger number of travels to South America. Overall if the objective of relocation is to reduce travel frequency/time, the choice of a city with an international travel airport hub would best optimise travel time and there is also an opportunity to reconsider where the performance of assessment sessions and other RHT sessions take place. However, the variety of travel patterns identified make the choice of a relevant single location problematic.

Consultations with stakeholders

In order to inform the study, we consulted through surveys and interviews with external stakeholders, other internal stakeholders across WHO and RHT staff.

National regulatory agencies (NRAs), UN organizations, major donors, NGOs and manufacturers, overwhelmingly stressed the value they place on WHO regulatory and prequalification services and respect for progress made. Although globally positive about the service, they mentioned the opportunity to bring more transparency and more consultation in WHO’s work on regulatory and prequalification services, notably on the prioritisation of the demand placed on prequalification services. They also suggested the need for continuous efforts to improve the level of coordination of activities and integration of approaches between different WHO departments. Some UN procurers and mature regulatory authorities mentioned untapped opportunities to increase impact by strengthening the partnership with them, e.g. by linking procurement and surveillance, or for PQ to tap into regulatory expertise.

The external stakeholders we interviewed were taken aback by the 6 March announcement. In the survey there are only 16% who foresee a positive impact from a relocation of the services offered by the PQ, RSS and SAV teams. They do not see cost savings as a compelling justification for relocation. In the survey only 21% of stakeholders reported the cost of service to be a challenge. Donors mentioned value for money as their primary focus, rather than cost. They also questioned WHO’s right or ability to retain the savings from a relocation vs passing these savings on to donors and manufacturers. Respectively 72% and 66% procurers and donors see a negative impact from a potential relocation, the highest percentage among all stakeholders surveyed. During our interviews they mentioned the need to define the future role, positioning and potential business model for WHO regulatory and


prequalification services, at a minimum as a requisite to relocation, if not as an alternative and more powerful approach to improving value for money.

Staff attrition and the related loss of capacity and institutional knowledge is the main concern for external stakeholders, notably procurers and donors. They expressed concerns that this could lead to service disruption and potentially impact WHO’s ability to deliver on agreed commitments. Although a relocation would not cause a major operational constraint for most external stakeholders, they expressed a requirement for the careful choice of location, which: 1) should not adversely impact RHT’s ability to connect, align and integrate with other disease areas, and advocate for the ongoing importance of these services in the overall WHO programme of work; and 2) should enable ease of doing business, and the safe and effective use of stakeholders’ travel time and resources, notably for experts coming from mature regulatory authorities. There is limited external stakeholder support for offshored locations.

There is an expectation that WHO anticipates a material impact from a relocation on the delivery of regulatory and prequalification services, and consequently that it plans accordingly with affected partners, notably given the reliance of donors and UN procurement agencies on the services at stake. This means notably an expectation for: 1) transparent communication; 2) realistic impact assessment of the transition on likely RHT capacity, and what this means on WHO’s ability to deliver on agreed commitments, workplans, deliverables and capacity in the RHT department; and 3) collaborative reprioritisation of RHT’s workplans according to foreseen capacity.

Internal stakeholders, just as external stakeholders, stress the criticality of the regulatory and prequalification services to achieve GPW targets. Overall, they praise the programme for its relevance and achievements. They show an appreciation for the need to scale up the regulatory and PQ services, notably in terms of increased coverage of the essential medicines list by prequalification activities and scaled-up capacity-building at national and regional levels.

However, a number mentioned that scaling and expansion needed to be achieved by rethinking the overall approach to access, and the RHT delivery model. They notably stressed the need to better define what internal staff should do vs partners or external workforce, the ever-increasing need for speed and scale in the service they get, and the need to more clearly define the trade-offs and relative priorities between providing prequalification vs promoting alternatives pathways such as national capacity-building and reliance approaches.

Many internal stakeholders showed a limited understanding of the way the services within RHT actually work and reinforce each other, and a level of discomfort with how these services fit in the broader WHO organization. Although internal stakeholders are familiar with the services, they have very different levels of understanding of how these services work in practice. This was apparent when considering suggestions for improvement: internal stakeholders made a number of suggestions that are to different degrees already in place. Also a number of characteristics of the regulatory and prequalification programme (nature of the programme, department size, managerial structure, staff and contract mix as outlined above) put it at odds with the logic of the new HQ operating model and the consistency in implementation sought by the WHO transformation.

We noted conflicting views on relocation during our interviews, with interviewees oscillating between a push for bold decisions (e.g. offshoring the whole team) and an aversion for risk (do no harm principle), sometimes during the same interview. Overall, interviewees in leadership positions see relocation as a means to support the growth of regulatory and prequalification services while technical departments are concerned about the impact a relocation of RHT would have on their own work.

As far as RHT staff are concerned, they see no clear benefit of relocating for 76% of the benefit areas we surveyed them on. When they do, they consider that these benefits depend on the location chosen. In terms of barriers, 70% mentioned the loss of proximity from WHO stakeholders in Geneva, which they fear would make coordination more challenging given the lack of formal structured ways of working, impact responsiveness to requests and lower the visibility of the programme within and outside of WHO. In terms of transition, a relocation is seen as a high-impact exercise for all the proposed scenarios involving teams moving from Geneva. As a result, the impact of a relocation on business continuity and programme sustainability is seen as a major barrier by 72% of staff. They consider that a number of key enablers


are not in place: while over 50% noted a great level of cohesion in their team, only 12% trust that current HR policies and capabilities can support the transition and manage the hiring challenges associated with a relocation, and only a quarter have trust in management and WHO leadership ability to lead the change and make the right decisions on the future of the programme.

At this stage, 14% of staff mention they will move irrespective of location, 65% are waiting for more information and 21% will not move irrespective of the chosen location. When looking at the breakdown by contract type, none of the G staff stated wanting to move. This has important implications on the continuity of the services during the relocation period. The current uncertainty over the new location and the relocated teams make it harder for most of the staff to predict their behaviour and their choice in the case of a relocation. The survey should be repeated at regular intervals during the transition period, should there be a decision to relocate, given that staff attitudes will evolve as the direction becomes clearer.

Lessons learned from previous experience from relocation within WHO and at the European Medicines Agency

WHO has had relocation experiences in the past, notably with the creation of the Global Service Center in 2007 from Geneva to Kuala Lumpur, in 2016 with the creation of the WHO Budapest Center and in 2017 with the move of AFRO administrative services from Brazzaville to Pretoria. A high-level review of these experiences show that WHO relocations have typically related to administrative functions, resulting in the actual transfer of a relatively few staff (5-6 for the GSC, 2-3 for the WHO Budapest Center, and 29 for AFRO). The success criteria identified related to the attractiveness of working conditions offered in the target city, the availability of a travel hub that allowed reduced travel time, facilitate access to countries and resolve issues faster, and overall buy-in and acceptability from staff on the idea of relocation. Despite valuable lessons learned, we found limited comparability between these experiences and the relocation contemplated in this study, given the type (externally facing programmatic function vs administrative functions) and size (more than 100 staff vs a maximum of 29 staff) of the activity at stake here.

We also led interviews with EMA senior management involved in the relocation of the European Medicines Agency and its 900 employees from London to Amsterdam, which we complemented by desktop research. This move was initiated due to an external trigger – Brexit – and will be finalised by January 2020. Several factors were considered as essential in what has proven to be a successful transition to date. This included the fact that the trigger for the relocation – Brexit – was outside the organization’s influence, which allowed leadership and staff to ‘go into this together’; the choice of a new location which was the preference of staff; the time allowed for relocating to the new location; the important financial and human resources redirected to the transition, as well as the structured programme management that went into planning and scheduling the facets of the transition; and last, but not least, the pre-existence of mature, robust and well-tested business continuity plans and know-how. This notably materialised in a clear business impact assessment and transparent reprioritisation of the capacity and workplans during the transition. With a 20% staff attrition rate this transition can be considered a success from an operational perspective. When contrasting WHO’s situation against the above success criteria we found that WHO’s level of readiness is well below that of EMA when it initiated the relocation. To this extent, the 20% staff attrition should be considered as a best-case scenario.

Options assessment

We identified and assessed a broad range of seven options for relocation. Each option consisted of the combination of a coherent set of business rationale for the relocation, scope of activities subject to relocation, type of location where activities are relocated, as well as the likely impact of these choices on: the financials of the programme, staff attrition, future location for assessment and other sessions, and overall ability to enable the expansion of RHT services.

Four types of location were used for the financial modelling and qualitative evaluation: onshore (Geneva), offshore, nearshore A and nearshore B. The types of location were defined based on their distance from HQ, staff cost compared to Geneva, security and socio-economic environment, availability of an international travel hub, and anticipated level of staff attrition. Nearshore A differed from nearshore B in that


nearshore A assumed higher staff cost than nearshore B but better socio-economic conditions, resulting in less savings but lower likely staff attrition.

The 7 options considered for the assessment are as follows.

Table 1. Summary of 7 options considered for the assessment

Option Parameters

Option name Characteristics Scope Location Assessment

sessions Growth

Geneva-centred

All RHT activities remain in Geneva. This option assumes that the risks to move RHT are too high.

RHT Onshore Remain in Copenhagen

Low growth

All in One – Nearshore A

All RHT activities are moved to an attractive location for staff with the presence of a major external stakeholder to obtain programmatic synergies.

RHT Nearshore A Follow to new location

Moderate growth

At all costs – Nearshore B

All RHT activities are relocated to a cost-efficient location, with the goal to generate cost savings that could support programme expansion or that could be allocated to other WHO programmes.

RHT Nearshore B Follow to new location

High growth

PQ only – Nearshore A

PQT, due to the transactional nature of its services, is relocated as a standalone to an attractive location for staff, with lower risks of attrition.

PQT Nearshore A Follow to new location

Moderate growth

PQ only – Nearshore B

PQT, due to the transactional nature of its services, is relocated as a standalone to a cost-efficient location, with potentially higher risks of attrition.

PQT Nearshore B Follow to new location

Moderate-High growth

Travel hub – Offshore A

RHT’s sub-teams with the heaviest travel schedule to countries are posted to a travel hub that shortens travel time and increases proximity to visited countries. PQT (minus Inspections) & SAV remain in Geneva.

RSS – CRS RSS- RN&H PQT- Inspections (SAV – some members)

Offshore A Remain in Copenhagen

Moderate growth

Distributed model – different locations

Different components of RHT are in different locations. RHT’s sub-teams with the heaviest travel schedule to countries are posted to a travel hub that shortens travel time and increases proximity to visited countries. PQT is relocated to a city either close to a major stakeholder or to a cost-efficient location. SAV remains in Geneva due the nature of its work.

RSS – CRS RSS- RN&H

Offshore A Follow to new location

Moderate growth

PQT Nearshore B

SAV Geneva

We documented each option, modelled their financial impact in terms of running and one-off costs and a set of six qualitative evaluation criteria relating to:

Strategic alignment including: 1. Programmatic effectiveness; and 2. Alignment with delivery model; Efficiency including: 3. Cost (based on the result of financial simulations); and 4. Operational efficiency;

and Risk management including: 5. Transition risk; and 6. Sustainability.

The options, assumptions for the financial modelling and criteria were discussed with various stakeholder groups including the leadership of the BOS and MVP divisions, PRP, DGO and the relocation working group. They were then endorsed by the project Steering Committee.


The chart below presents the results of the financial modelling for each option, including running costs once implemented, one-off transition costs and the resulting payback period.

Graph 1. Total running costs per relocation option (USD million)

Graph 2. One-off costs per relocation option (USD million)

Graph 3. Payback period in years per relocation option

Overall the financial simulation shows that significant efficiencies could be gained from operating from a different location, with a payback period of one to two years depending on the option considered. Savings come from salary costs through lower post-adjustments and lower local salaries for G staff compared with Geneva. The ‘At all cost Nearshore B’ option would generate the highest savings, representing a 32% saving on staff costs and 21% saving of total programme costs compared with the status quo.


We then ranked each option against each qualitative criterion on a scale of 1 (the option does not and cannot meet the criterion) to 5 (the options responds entirely to the criterion).

1 The option does not meet the criteria and cannot meet the criteria

2 The option does not meet the criteria and significant adjustments or mitigations would need to be implemented

3 The option meets partially the criteria with major adjustments needed

4 The option meets largely the criteria, with some minor adjustments to be implemented

5 Responds entirely to the criteria

We made a breakdown of certain criteria and assessed them individually to re-aggregate them afterwards. This was done for all imperatives and explains the scoring for certain imperatives over >5 points in the summary table.

The table below summarises our assessment:

Table 2: Option evaluation summary Imperatives

Evaluation criteria Option 1: Geneva-centred

Option 2: All in One, Nearshore A

Option 3: At all Cost/ Nearshore B

Option 4: PQ only/ Nearshore A

Option 5: PQ only/ Nearshore B

Option 6: Travel Hub

Option 7: Distribu-ted model

1. Strategic alignment and programmatic effectiveness

6.3 6.7 6.7 5.3 5.0 7.7 7.3

1.1 Programmatic achievements 3.7 3.3 3.0 3.0 2.7 3.7 3.0

1.2 Alignment with delivery model 2.7 3.3 3.7 2.3 2.3 4.0 4.3

2. Efficiency 4.7 6.0 6.3 5.0 5.3 6.3 5.3 2.1 Cost efficiency 1.0 3.0 4.0 2.0 3.0 3.0 3.0

2.2. Operational efficiency 3.7 3.0 2.3 3.0 2.3 3.3 2.3

3. Risk management 8.0 8.0 6.0 7.5 6.5 7.0 4.0 3.1 Transition risk 5.0 3.0 2.0 3.0 2.0 3.0 1.0

3.2 Sustainability 3.0 5.0 4.0 4.5 4.5 4.0 3.0

Total 19.0 20.7 19.0 17.8 16.8 21.0 16.7

Overall we note that no option fares best across all evaluation criteria: strategic alignment is best achieved through regionalised ‘Travel Hub’ (6) and ‘Distributed model’ (7), cost efficiency through option 2 ‘All in One nearshore A’, 3 “Nearshore B” and 6 ‘Travel Hub’. Risks are best managed through status quo (1) and Nearshore A options (2 and 4).

In terms of overall score we observe that option 2 ‘All in One/Nearshore A’ (option 2) and ‘Travel Hub’ (2) fare overall best and equally well, and that ‘PQ only/Nearshore B’ (5) and ‘Distributed model’ (7) fare worst, with business continuity the main reasons for these rankings. We also note that the status quo option is not the option that fares best. It notably fares worst on cost efficiency.

The assessment of options shows that the decision on which model to pursue comes down to the level of risk WHO is willing to take to generate targeted efficiencies. It also shows that optimally balancing the expansion agenda through savings with business continuity management may require thinking about the issue in a different way.


Conclusion

The business case for RHT is a case for growth. Consultations have confirmed the critical importance of the RHT’s programme for WHO GPW and for partners who rely on it, and the broad support for the expansion of the programme.

In this light, the business case for relocation is about ensuring that the expansion can be financed, not merely about generating pure cost savings. The rationale is that the cost efficiencies generated by delivering from a cheaper location could be reused to finance the expansion of regulatory and prequalification services and that operating from a different location could help do away with the recruitment cap in Geneva. The financial modelling of the different options shows that significant cost-savings could indeed be achieved from relocation, with an ROI of less than 2 years for most options considered. There is however a need to challenge the assumption that the savings generated could be actually retained by WHO given the heavy level of earmarking and fee model, which do not make it straightforward for WHO to fully retain these savings. WHO’s actual ability to retain the savings should therefore be further confirmed prior to moving forward with relocation.

Besides this, the decision to proceed with relocation essentially comes down to WHO leadership’s appetite for risk. In this light, we noted that transition risk is high given: 1) the high business impact that should be anticipated with the attrition of from 25% to more than 50% of specialised P and G staff depending on the option chosen and how well it is transitioned into; and 2) the low level of organizational support and readiness observed, with RHT ways of working that are not harmonised, interfaces within and outside the programme that are not systematised, and no business continuity plan in place. We also note that WHO has never moved 120 staff and that previous relocation experience at WHO have showed mixed successes and were only partially comparable to what is considered here.

Recommendations

In the course of the project we identified other means to support programmatic expansion, which we recommend for leadership consideration. This includes a mix of improvements and paradigm shifts, and elements that are under the control of RHT while others require Organization-wide policy decisions.

In terms of improvements, WHO should consider the progressive build-up of capacity (as opposed to relocation) in one or two new locations as a means to balance the expansion agenda with business continuity management. This location would be staffed through natural attrition, incentives on staff mobility and incremental growth. In essence the policy would be that all new recruitments are done in these locations, that current staff in HQ can move to the new location on a voluntary basis and that WHO can ‘nudge’ staff to relocate through adequate incentives, such as less precarious contracts (fixed-term appointments instead of temporary appointments or recurring full-time consultants), promotion or move from G to P staff category. This model could apply on the one hand to an offshore location for RSS, the PQT-Inspections sub-team and selected members of SAV based on required proximity to key stakeholders, and on the other hand to a nearshore location such as Budapest for PQT. To enable the above and generate additional efficiencies, PQT should review the division of labour within its sub-teams, e.g. by using G staff across product streams or ensuring a clearer separation between capacity-building and process-driven work. RHT should also accelerate efforts to harmonise the ways of working across teams, notably through more joined-up planning between teams and sub-teams, and actively fostering convergence in the approach to perform assessments across PQT sub-teams. Finally, efforts should be made to reduce overreliance of the programme on individuals, through the implementation of a broader scope of process under formal quality management, the documentation of business continuity plans, and the automation of workflows and service-level reporting.

In terms of paradigm shifts, in the short term RHT should rehaul its delivery model with the view to increase the leverage of external capacity and related increase in the ratio of external vs internal FTEs. This involves a deliberate effort from RHT to sharpen the definition of those activities that can only be performed by internal staff vs those that can leverage external individuals or organizations. On this basis, protocols and requirement to ensure consistency in performance should be defined, e.g. certification or accreditation requirements and pathways to deliver prequalification services, as well as quality assurance protocols. Increased focus should also be placed on nurturing the roster of external consultants, e.g. by considering it as formal output, with the view to extend its coverage, reach, flexibility, and practicality.


The above recommendations provide a blueprint for the transformation of WHO regulatory and prequalification that are strategically aligned, can be owned by RHT management, and would be amenable to the concerns raised by external stakeholders.

There are however issues that the above recommendations alone will not address, notably the call from external stakeholders for increased input into the prioritisation of the demand placed on prequalification services, and the important differences noted between the programme and the rest of HQ in terms of funding model, organizational logic, department size, span of control within the programme, mix of contract types and mix of staff. These may be symptoms of the need for WHO to consider alternative governance arrangements for the programme. Also the need for WHO to build capacity in priority areas such as data and science compete with the need to enable the expansion of the regulatory and prequalification programme. This questions the extent to which the prequalification programme has outgrown its place within WHO. We recommend that WHO reconsiders the programme governance, and that options to put the programme at ‘arms length’ from WHO be assessed (e.g. partnership models with multistakeholder governance). The view should be to find a balance between control by WHO, responsiveness to stakeholder demand and required flexibility and scalability for the programme.

Way forward

Leadership needs to form their own view on which path to take forward. Should WHO elect to proceed with a relocation of current teams, the following requisite should be implemented: Clarify and confirm funding sources for the transition, assuming that donors are probably not willing

to finance this undertaking. Depending on the scope and location chosen, a budget between USD 2.5 and 8 million needs to be secured for the transition.

Set up the required project and change management structure and staffing, including the following streams of work: Contingency planning, responsible notably to:

- Assess the overall business impact various levels of staff attrition (e.g. 20%, 40% and 60%) will have on RHT’s ability to deliver on the RHT strategy, commitments to donors and services levels of prequalification services;

- Define and agree mitigation strategies, notably on the demand side, the reprioritisation of RHT programme of work based on commitments and importance, and on the supply side, the recruitment of temporary capacity to either shadow departing staff or back-fill staff that will work on making the transition happen;

- Monitor demand and supply throughout the transition, and reprioritise RHT workplans accordingly.

External and internal communications, with an immediate need to planning communication towards external stakeholders, with an articulate business case and rationale that can reassure donors, partners and staff on the vision for regulatory and prequalification services.

City selection and management of relationships with authorities in the target location. This team will need to keep in mind that staff preference for a city is ultimately an individual appreciation and that staff will need to be surveyed to understand their attitude towards specific sites, although the selection of a city in UN agency has a political dimension that may result in a choice different than the one staff prefer.

Staff support for outbound and inbound transition, starting with the clarification of HR policies for the relocation, notably the support provided to staff and the mobility policy that will apply to them, and the scaling of recruitment to target location.

Process and system adaptation, with a mandate for streamlining and harmonising ways of working between RHT and other departments and within RHT as a means to facilitate the transition

Facility management, office move logistics and location preparedness. Overall project management office including a seasoned programme manager, financial and HR

officer, change manager and administrative support.

The project management structure should be adequately capacitated from the RHT department, BOS division and if need be complemented by external assistance. It should be overseen through usual steering committee arrangements, which may consider the involvement of other internal divisions and key external stakeholders.


Alternatively, should WHO elect to proceed with our recommended approach, the following should take place:

Communication of study findings to internal and external stakeholders, with an emphasis on the case for growth and the need for RHT transformation that is collectively owned by WHO leadership, RHT management and staff and key stakeholders of the programme.

Clarification of capacity requirements for the next 3-5 years based on a refined business model, clear assumptions on demand for PQ, RSS and SAV services, and simulation of workload requirements.

Consideration of location of future PQT capacity in Budapest, and RSS/PQT and selected members positions in SAV performing NRA capacity-building activities in a regional hub.

Set up a task force to define the future delivery model and related requirement and renewed efforts to strengthen and expand the roster of consultants

Renewed efforts to: - Accelerate the convergence in harmonised ways of working between PQT sub-teams - Review the allocation of work in across the department, e.g. by consolidating some activities across

product streams such as assessment procedures, modalities for interactions with manufacturers and post-market surveillance tools and procedures

- Integrate delivery through joined planning tools and routines

Ensure the management, execution and monitoring of the above through a formal RHT transformation governance and organization.

Optionally, consideration by WHO leadership and Member States of the degree to which PQ services should be put at arm’s length from WHO.

17 Relocation study of WHO regulatory and prequalification services | Introduction

1. Introduction 1.1. Institutional context

13th Global programme of work

WHO’s role as a provider of global public goods has never been more relevant to ensure the highest possible standard of health and well-being for all within and across national boundaries. WHO’s thirteenth general programme of work 2019-2023 (GWP13) has set the Organization on an ambitious and critical path to achieving Goal 3 of the Sustainable Development Goals - which calls on all stakeholders to ‘Ensure healthy lives and promote well-being for all at all ages’. The GPW13 describes clearly the priorities to be tackled by WHO in the next 5 years.

The GPW13 describes three strategic shifts necessary in order to achieve this vision and its strategic goals of: reaching universal health coverage, responding to health emergencies, and promoting healthier populations. These important shifts consist of: 1. driving public health impact in every country through the delivery of a differentiated approach to technical support; 2. stepping up leadership through strengthened diplomacy and intersectoral action; and 3. focusing the delivery of global goods (including normative work) on the impact they generate.

The GPW13 also articulates five organizational shifts, which the WHO transformation is driving. They relate to: driving impact, performance value-for-money, and accountability by the Secretariat; reshaping the operating model, transforming partnership, communications and financing to shape global health decisions and improve health financing; strengthening critical systems and processes through the redesign and harmonisation of WHO’s core processes; and fostering cultural change.

WHO transformation

On the basis of the above strategic and organizational shifts, the Director General has initiated a five-pronged transformation agenda. While still underway, the transformation so far has consisted of: A new strategy, captured in the GPW13 mentioned above and in the Programme and Budget 2021-

22 approved in May 2019. The P&B plans for growth in regions and country office but caps HQ budget to a zero nominal growth. It also outlines areas of strategic resource allocation. At the time of writing this report, operational planning for 2020 was still underway;

The assessment, prioritisation and redesign of 13 core WHO processes including six technical, three external relations and four business processes;

Work on WHO culture and collaboration, notably through leadership development, the establishment of a change agent network and the definition of five corporate values: ‘Trusted to serve public health at all times’, ‘Professionals committed to excellence in health’, ‘Persons of integrity’, ‘Collaborative colleagues and partners’, and ‘People caring about people’;

The promotion of ‘agile ways of working’ in order to boost effectiveness and efficiency across and within the three levels of WHO; and

A new operating model that aims to ensure alignment and enablement of the objectives set out in GPW13, capacitate the organization to deliver its technical, external relations, and business and administrative processes in a consistent, best-in-class manner, and align the operating model across the seven major offices and three levels of WHO.

New WHO operating model

The new operating model announced on 6 March 2019 introduces major changes in the way the Secretariat is set up and works across the seven major offices and three levels of the Organization. Its main features consist of: The articulation of roles and responsibilities of country offices, regional offices and headquarters in

order to eliminate duplication and inefficiencies in areas of overlapping roles and work. In this context it is expected that headquarters will focus more specifically on producing the global health goods that Member States need, for instance in the areas of norms and standards, research, data products, and


the tools to apply them. Headquarters will also provide specialised technical assistance and surge capacity as needed.

A single, streamlined structure for the entire Organization consisting of: - Four pillars implemented across the three levels of the Organization. On one side Programmes and

Emergencies will be responsible for delivering WHO’s technical work in line with the three one billion targets of the Thirteenth General Programme of Work. These two pillars will be complemented by Corporate external relations and business functions.

- Headquarters-based corporate divisions for science and data and extend through the three levels of the Organization to enable more consistent, seamless work.

A new HQ structure, with: - Four divisions under the programmatic pillar; - Two divisions under the Emergencies pillar; - Four cross-cutting divisions, notably two new divisions for Chief Scientist, and Data and Analytics; - A stand-alone division responsible for WHO’s prequalification and regulation services.

Decisions to prioritise resource allocation to country and regional levels, the assumption of a zero nominal growth at HQ, and the requirement to relocate some HQ functions, including prequalification and regulatory services and teams closer to the Member States, clients or beneficiaries they serve.

WHO regulatory and prequalification services

The regulation and prequalification of health products are critical components of WHO’s mandate and its contribution towards the realisation of universal health coverage.

Within the Medicines and Health Products Division, the Regulation of Medicines and other Health Technologies (RHT) is composed of three teams with distinct and complementary missions: The Prequalification Team (PQT) enables UN Agencies and international organizations such as

UNICEF, UNFPA, UNDP, UNITAID, GAVI and the Global Fund to effectively procure and access a range of quality-assured health products and technology to confront high-burden diseases. The service also benefits national governments in LMICs who can rely on the assessments for their own national procurement. The PQ programme was established in 1987 for the prequalification of vaccines. It has since expanded to different diseases and products including medicines, vaccines, diagnostics, vector control products, devices and equipment. PQT is recognised for its contribution to ensure the availability, quality, safety and efficacy of health products used today by millions of people: as of 2019 65% of children globally are immunised with WHO prequalified vaccines, the team has prequalified a total of 1700 health products since the 1980s, and it enables sales of around USD 3.5 billion in life-saving health products every year.

The Regulatory Systems Strengthening (RSS) team offers capacity building and strengthening support to national regulatory authorities (NRAs). It supports national regulatory authorities and regional networks, through peer-review and self-assessment, to determine their level of regulatory maturity against international standards and to develop institutional development plans (IDP) that describe how they should build their functional capacity in areas such as legal frameworks, market authorisations and inspections. RSS supported and benchmarked NRAs in more than 70 MS between 2016 and 2019 and trained as many as 300 regulators in 2018 on topics of Global Manufacturing Practices (GMP) and other standards. RSS manages the WHO collaborative registration procedures (CRP) in conjunction with PQT, which fast-tracks national registrations of PQ-ed products in Member States. So far, this process has made possible the granting of 456 national registrations of PQ products in a median time of 78 days instead of the usual 2 to 3 years, thereby improving access.

The Safety and Vigilance (SAV) team has a unique role in assuring post-market monitoring and vigilance of medicines, vaccines and diagnostics as well as substandard and falsified products. SAV's activities include maintaining a reporting system on substandard and falsified (SF) medical products, Individual Case Safety Reports (ICSR) for medicines, Adverse Events following Immunization (AEFI) for vaccines, and complaints including adverse events reported for in vitro diagnostics. Among its flagships activities, SAV manages a Global Surveillance and Monitoring System for Substandard and Falsified (SF) medical products – a global alert system accessible to 70 Member States which enabled the detection of 2500 cases of SF products in 2018. The team also serves as Secretariat for the WHO Member State Mechanism on SF drugs, an intergovernmental process mandated by Member States via WHA Resolution 65.19 and established a decade ago. The mechanism has developed since its inception in 2012 into a positive, transparent and inclusive mechanism that convenes once a year in


Geneva and works in parallel working groups. Another critical facet of SAV’s work is to promote the safe use of medicines, vaccines and IVDs and minimize health risks through improved vigilance, monitoring and response to adverse events. The team plays a key role in strengthening the safety and pharmacovigilance systems of local NRAs through trainings and does this by building awareness on the importance of robust safety and monitoring systems and by promoting the effective use of pharmacovigilance principles and methods.

As of September 2019, the RHT department is composed of 114 P and G staff, making it one of the biggest departments in HQ.

1.2. RHT relocation study

Objectives and expected value

WHO engaged a consulting firm in August 2019 to assess the feasibility and efficiency of the potential relocation of some or parts of the WHO regulatory and prequalification services.

The project started from the working hypothesis that there could be an objective case for relocating all or parts of the Regulatory and Prequalification activities; and assuming that such a case exists, the project sought to identify the key factors that management should consider to ensure a successful transition.

The work was then organized to provide evidence on whether this working hypothesis proved correct or not. Care was taken to balance the independence of the consulting team with the necessary engagement and consultation with WHO stakeholders.

The benefits of a potential relocation were envisaged from the point of view of NRAs, donors, customers, WHO leadership and WHO staff. They included considerations of value for money, stability and opportunity for staff, business continuity, sustainability of the programme and effectiveness in activities.

The study considered three main relocation scenarios: Prequalification & regulatory team in their entirety; Prequalification team in its entirety; Selected components of the prequalification and regulation teams. Regulatory and prequalification services were defined as those activities delivered by the RHT department, which includes the PQT, RSS, SAV and RHT office units. Other departments in the MVP division such as IAU and TSN were excluded from the scope of the study.

The selection and recommendation of a specific city was not in scope of the feasibility phase. However, different ‘types’ of locations were defined and used to support the financial modelling and assessment of relocation options.

Key stakeholders articulated the value expected from the consulting firm upon project completion. The expectations came down to ensuring that by the end of the project: Decision-makers can make an informed decision based on a clear articulation of what is at stake

in terms of benefits, risks and impact, and on a comprehensive and fair representation of various stakeholder views.

Affected stakeholders, notably staff, understand the rationale for what is proposed. This meant that the approach and work had to conducted in a transparent and objective way, and that affected stakeholders needed to be associated with the analysis.

The business continuity of regulatory and PQT operations is preserved through a clear identification and assessment of potential risks, and the articulation of requisites enablers and adequate mitigations for proposed options.

Actionable improvement opportunities have been identified, irrespective of which scenario is recommended.


Approach

In order to deliver on expectations, we organized project delivery into five work packages (WP) in agreement with WHO, as follows: WP 1: Mobilisation: consisted of the planification of interviews, workshops and surveys, collection of

relevant data and information, high-level interviews to build an initial understanding of the ‘as is’ situation, and the execution of initial communications activities.

WP 2: Options Assessment: consisted of the understanding of RHT activities and interfaces with other stakeholders, the definition of option assessment criteria, the identification of possible options and the assessment of options against agreed evaluation criteria. This phase also delivered high-level location requirements that WHO could use to select a city should it decide to proceed with a relocation.

WP 3: Stakeholder Consultation: consisted of consultation with RHT staff, other WHO stakeholders and external stakeholders. This phase allowed us to identify opportunities, constraints and requisites for relocation, and to inform the definition of evaluation criteria and options.

WP 4: Business Case, consisted of documenting the pros and cons of each option and modelling the financial impact of each option.

WP 5: Reporting consisted of documenting the output of the study in the present report.

We used qualitative and quantitative data collection, stakeholder consultation and analytical methods including: Desktop review of WHO and RHT policy instruments and available documentation, including RHT’s

Action Plan and recent studies, notably the Impact Assessment of WHO Prequalification and Systems Supporting Activities. See Appendix 1 for list of documents consulted.

Quantitative data from GSM – i.e. costs, financing and travel patterns - were used to analyse the current financial situation of RHT and to conduct the financial modelling of relocation options. See Appendix 2 for more information on the financial modelling methodology.

49 Interviews with stakeholders inside and outside WHO including WHO disease programmes, focal points at regional level, UN agencies, key donors, technical partners and manufacturers. The list of interviewees is available in Appendix 3.

An online survey of RHT staff to understand their personal situations and their perceptions of the benefits, constraints and requisite enablers of a potential relocation. The survey gathered responses from 85 out of 114 surveyed staff. See Appendix 4 for the results of the staff survey.

An online survey of external stakeholders including National Regulatory Agencies (NRAs), technical partners, donors and manufacturers. The survey gathered 82 answers, i.e. 34% of the targeted population. See Appendix 5 for the results of the stakeholders survey.

13 workshops with RHT teams involving 111 RHT staff to identify their main activities, interfaces with other stakeholders, and perceived benefits and requisites of a relocation. See Appendix 6.

The quantitative and qualitative modelling of 7 main options, where each option was documented, costed and assessed in a systematic and comparable way.

Throughout the course of the project, weekly meetings took place with a relocation working group (RWG) composed of selected representatives from MVP, BOS, Legal Department, and the Staff Association. Regular steering committee meetings and checkpoints with the Director General Office were also organized. This allowed us to validate findings, refine observations and gain endorsement on the resulting recommendations along the way.

The project was initiated on 1 September and finalised on 22 November 2019.

Limitations

Key limitations pertaining to this study relate to:

The focus of the study is on the location of the RHT department. The definition of a new business model for RHT – i.e. a review of RHT’s services, service delivery and financing model - is out of scope of this study although interviews pointed out the need to consider this, and alternative business models for RHT may yield similar or higher benefits than a relocation. Also, the study did not intend to provide a systematic framework for decision-making or perform a systematic evaluation of locations for HQ functions in general nor of the MVP division. Care should however be taken by WHO when defining the future location


of HQ functions to ensure that systematic, coherent and comparable frameworks, approaches and policies are used.

Should WHO opt for a relocation, a competitive process will be required to select the future city. Acknowledging this, the study did not assess nor recommend the exact suitable or desirable cities for a relocation, but rather defined the list of location criteria that can be used by WHO to evaluate the respective city bids. This list is available in the Appendix 7.

Our role was to provide independent baselining and assessment of options. It is however management’s responsibility to make decisions relating to the way forward based on their risk appetite. We are not providing an audit opinion, attestation or other form of assurance with respect to the information provided to us. Our services were performed in accordance with the Standards for Consulting Services established by the American Institute of Certified Public Accountants (AICPA). Accordingly, we did not audit the information provided to us.

Our quantitative modelling is based essentially on 2018 financial and travel data extracted from GSM, and on the RHT organization as it stood as of September 2019. Some challenges were encountered that limited our analysis and modelling, e.g. on travel spend for consultants. Also, in a context of transformation, the RHT organization is evolving and may no longer correspond to the state we found in September 2019. The models are based on numerous assumptions which were explicitly documented. They will need to be challenged and potentially revised regularly throughout the implementation, as changes in assumptions would impact the qualitative and quantitative assessment of each option, and consequently how they fare against one another.

Structure of the report

This document consolidates the results of the study. It is structured as follows: Section 1 ‘Introduction’ presents an outline of the work performed, in terms of background, approach,

and limitations. It provides useful information to grasp the nature and objectives of the study. Section 2 ‘Current State Assessment’ provides an outline of current RHT strategy, business,

financing and operating models. It is accompanied by a cost analysis based on 2018 actual expenditures. This section also identifies the attributes of the current model, which will need to be taken into account when considering a relocation.

Section 3 ‘Outlook on relocation’ provides a summary of consultation with external stakeholders. It outlines the main benefits, constraints and requisites as perceived by different stakeholder groups. It also outlines relevant lessons learnt from previous relocation experience at WHO and at the European Medicine Authority (EMA).

Section 4 ‘Option analysis’ describes, assesses and compares different relocation options. This section also includes a description of the method used to identify and assess options, notably key assumptions, guiding principles and parameters used.

Section 5 ‘Recommendations’ outlines our recommendations relating to the options to be preferred, the changes required at strategic, structural, process, people, and technology levels to implement the recommended option in a timely manner, and other considerations for improvements that should be considered by WHO.

Additional appendices, presentations and spreadsheets have been made available to WHO separately.

22 Relocation study of WHO regulatory and prequalification services | Current state assessment

2. Current state assessment This section outlines the current state and strategy of RHT as the foundation of this relocation study. We have documented at each step the key implications (in italics) for a potential relocation.

2.1. Strategic outlook for RHT

2.1.1. Strategic drivers and opportunities

RHT’s work is anchored in the trends and challenges that have shaped the supply and demand for health products to LMICs so far. Three major strategic drivers shape the work of RHT: 1. Supply side drivers notably the need to control the quality and standards of an expanding base of manufacturers; 2. Regulatory capacity at national and regional level to facilitate access to quality, and safe and efficacious health products; and 3. Demand for prequalified products.

Supply side trends

The number of manufacturers participating in the PQ programme has been increasing. Between 2014-2018, PQT increased the number of manufacturers from 89 to 182, with an even split between HICs & LMICs.

This growth is observed across all types of products: For medicines, the total number of manufacturers producing at least one PQ product has significantly

increased in the last 15 years, reaching 72 manufacturers in 2018 from only 9 in 2003. For vaccines, prequalification is now done for 20 disease areas, compared with just 2 prequalified

vaccines (BCG and Yellow Fever) back in 1987 when the programme was started. For diagnostics, the number of PQ-ed products has almost tripled, from 25 to 70 products today in just

5 years, with active interest from manufacturers in China, South Korea, and India.

For manufacturers, prequalification of their products gives them valuable access to donor-funded procurement markets. Procurement agencies and governments also rely on the recommendation of WHO’s Prequalification Lists regarding the quality and safety of products to guide procurement decisions. The PQ stamp is a gauge of high quality and standards in the manufacturing of health products and at the same time offers manufacturers (and ultimately patients) easier paths to market. At the same time, some manufacturers have concerns that the new fee structure is a disincentive to investing in R&D for health products for the developing world and as a result could reduce their participation in the PQ market given its already low margins. Decreased attractiveness for some players might over time impact the alignment of the supply and demand.

In line with the increasing participation of LMICs manufacturers in the development of health products for the global health market, the share of manufacturers originating from LMICs in the prequalification programme has been increasing across PQ product streams: Medicines: Back in 2001 when PQT was launched, only 17% of manufacturers for medicines were from

LMICs. Today that share has steadily increased, and they now represent more than 40% of all medicine manufacturers. This trend was particularly evident when the prequalification of APIs was launched in 2013; a vast majority of the manufacturers (85%) came from LMICs.

Vaccines: Half of today’s vaccine manufacturers are from LMICs, with a total of 40 manufacturers in 2018, from 15 in 2003.

Diagnosis: The growth of LMICs in this category of products has also been increasing but their proportion is lower (20%) than for medicines and vaccines.

Manufacturers originate from a limited number of countries, but this number is poised to grow. The majority of LMICs’ manufacturers enrolling in the PQ programme are based in India and China. India and China are well-known suppliers of generic medicines and APIs. However, we are seeing a diversification of producer countries. LMICs – such as Egypt, Senegal and South Africa - are establishing sizeable pharmaceutical industries and building their vaccine capacity production.


The growing number of falsified drugs originating from LMICs is harming patients from all parts of the world. According to 2017 WHO research performed on the prevalence of SF drugs, it was found that out of 48,000 samples tested from 88 LMICs, 1 in 10 medicines in circulation was either substandard or falsified, costing USD 30.5 billion a year to the health systems due to failure of treatment. Antimicrobials and antimalarials are the most commonly reported fake drugs. An estimated 116,000 people die from malaria from ineffective anti-malarial drugs in sub-Saharan Africa (LSHTM). Another study based on WHO data estimated that between 79,000 and 169,000 children might be dying each year from pneumonia since they are being treated with falsified antibiotics. The trend in SF drugs is fuelled by a growing illegal market and weak market control and regulations in the LMICs where they are produced.

With more NRAs receiving pharmacovigilance and safety reporting trainings, the number of adverse events for medicines, vaccines and IVDs has grown significantly. The number of countries reporting 10 Adverse Events Following Immunization (AEFI) reports per 100,000 surviving infants nearly doubled from 77 in 2010 to 114 in 2017. For IVDs, the highest number of cases reported were issued from regions that benefited from trainings (mostly in Africa and Europe).

Implications for relocation With the increased involvement of new emerging LMICs’ manufacturers and the diversification of

national manufacturing production, we can assume that the demand for inspection services and laboratory testing will grow at the same rate, in parallel to supporting LMICs’ manufacturers to build their technical capacities for manufacturing safe and quality products. A relocation scenario will need to enable RHT to expand its testing and audit capacity.

The demand from countries for the Member States Mechanism on SF and the Global Surveillance & Monitoring System will rise as SF drugs are posing a greater threat to public health. The observed increase in the reporting of adverse events for medicines, vaccines and IVDs will require a greater response capacity from WHO. A relocation scenario will therefore require SAV to be able to maintain and increase its level of activities.

Strengthening national and regional regulatory capacity

Good regulatory systems that provide adequate oversight of health products from the laboratory to the medical facility are the foundation for guaranteeing access to quality medicines around the world.

Members states have set an expectation of a general uplift in the maturity of national regulatory systems. The WHO, called upon by the WHA Resolution 67.20 (2014) to evaluate the performance of regulatory systems, defines four levels of maturity (ML) according to the Global Benchmarking Tool (GBT) and states that all Member States should achieve a ML 3 “stable, well-functioning and integrated regulatory system of oversight for medical products”.

So far, progress is limited by lack of financial resources and expertise in national regulatory systems. As of today, only 26% of WHO Member States (50 out of 194) have achieved ML 3 & 4. The remaining 144 countries, including 100 countries with a maturity level of 1, are not able to assure the quality of their products by themselves. This includes countries with production capacity, such as Pakistan which has around 800 home-based manufacturers exporting to over 40 countries worldwide, and an NRA with little oversight capacity.

This is resulting in challenges with meeting standards for regulation and oversight of health products. Lack of market control and strong regulatory systems are some the main drivers for the growing number of falsified drugs worldwide as seen in the supply section above. In 2018, over 2,500 reports on SF drugs were issued.

This is also resulting in long lead times required for registration of new or innovative products at national level. A 2016 study estimated that it typically takes 4 to 7 years in LMICs after a market authorisation dossier has been submitted. The reasons for longer estimated times in LMICs include bottlenecks related to multi-stage approvals, inadequate funding and resources to review the dossiers and perform the right performance assessments, and varying levels of standards employed by NRAs.


Implications for relocation The growing demand from NRAs to develop their regulatory capabilities and the resulting national demand for benchmarking means that RSS as it currently stands will be overstretched in its ability to deliver training and capacity building support in the context of the GBT and IDPs activities. A relocation to a regional hub could leverage and strengthen the use of regional networks or local expertise to scale up capacity at national level.

Evolving demand on Prequalification services

Prequalification services remain focused on a limited set of product types and diseases. Prequalification of vaccines first began in 1987. As for WHO’s medicines prequalification programme, it was initially set up at a time when generics produced by new local manufacturers were coming onto the market with the aim to guide UN agencies and global health agencies such as the Global Fund, GAVI and others with the procurement of quality and safe ARVs. Over time, the PQ programme gradually expanded from vaccines and HIV to enlist other disease areas such as malaria and TB and broadened the type of products under scope to diagnostics and more recently vector control. Despite this progressive expansion, HIV has consistently been the largest disease area for PQ-ed medicines and diagnostics, followed by malaria and TB.

The impact of the programme on public health has been material, but the market currently addressed remains relatively niche. The work of the PQ programme has led to remarkable achievements. Today, 65% of children globally are immunised with WHO prequalified vaccines through the GAVI Alliance. 8/10 people on ARVs across the globe are treated with WHO-prequalified generic medicines. As of 2018, total sales of PQ-ed products were estimated at USD 3.5 billion, with half of those driven by vaccines sales. This is a fraction of the global pharmaceutical market. The global vaccine market alone is expected to reach USD 60 billion by 2020 in comparison. The narrow focus of prequalification services can also be assessed in terms of coverage of the WHO essentials medicine list: prequalification services cover 5-10% of products out of a list of 460 essential medicines.

Some shifts in the medicines PQ market have taken place in recent years, with repercussions in the way PQT and RHT will be conducting business in the future. The need for PQ of ARVs is slowing down as the price of products has dramatically gone down with an increase in safety and quality due to a maturing manufacturing sector. The market for malaria drugs is on the rise, with new product development partnerships and a growing number of pipeline products. TB’s market is much smaller, with challenges to bring in new manufacturers (especially for paediatric TB drugs) and TB is a disease area where PQ can play an important role in bringing new health products to the market.

Vaccine development is shifting from established to new LMICs market players. ‘Big Four’ global vaccine manufacturers have started reducing their vaccine development activities in the last 5 years due to low margins and ROI, and emerging market players driving growth with the development of ‘me too’ vaccines. Half of the vaccine manufacturers applying for PQ assessment are from LMICs. The work of PQ therefore continues to be of vital importance to ensure the sustainability and accessibility of safe and quality-assured vaccines coming increasingly from less-established manufacturers.

The number of diagnostic tests has considerably increased over the last 10 years, but many NRAs cannot regulate their use. Many NRAs still do not have the in-house capacity to regulate medical devices, including in-vitro diagnostics (IVDs). There is a growing need to strengthen regulatory capacity around diagnostics, to improve availability around test performance and to ensure the reliability of the manufacturing process.

The demand for existing products and disease areas is expected to remain strong in the coming years, with no short-term alternative to PQ. 40% of LMICs budgets are spent on health products. People around the world still depend on PQ-ed products for the three major diseases it covers. In 2018, 62% of all people living with HIV were accessing treatment. There continues to be considerable innovation and newcomers in some areas (e.g. TB), despite other areas stabilising/declining (ARVs). Until reliance processes are more established and national capacity improves it is anticipated that the demand placed on prequalification services will remain.


There is also still latent unmet demand for prequalification services. There is potential for the future expansion of the PQ list reflecting unmet needs in LMICs, by covering more products on the WHO Essential Medicines List and Essential Diagnostics List, such as biologics, biosimilars and chemotherapy drugs to treat basic cancers (e.g. leukaemia). RHT initiated a pilot for the assessment of insulin biosimilar and intends to explore new disease areas in the future, given the growing need to address NCDs and affordable cancer treatments. However, the demand for regulatory and prequalification support on these new products and disease areas is not confirmed, prioritised nor financed.

The new financing model requires continuous improvement in the value proposition and service delivery to manufacturers: a new fee structure was established in 2017 with the goal of ensuring the sustainability of the programme and to bring more value to manufacturers, through strengthened and expanded prequalification services. Following its introduction, the amount of revenue generated more than tripled, from under USD 4m (2016) to USD 13.4m (2017) and USD 14.6m (2018). It has resulted in the need for PQT to offer attractive economics/ROI for manufacturers and is at the same time putting more emphasis on reporting performance targets and KPIs. Prior to the introduction of the new fee model, manufacturers were concerned that it would put a strain on their ability to invest in a drug market with already low margins. Data analysis shows that so far the model has been accompanied by an overall increase in new prequalification applications, however withdrawals were observed for medicines to an extent because manufacturers considered not being able to generate adequate profits. Greater fees, in order to be justified, need to be accompanied by improved PQ application procedures, transparency and response timeliness.

Implications for relocation Shifts in the PQ market – such as the emergence of new LMICs vaccine manufacturers and the

stabilisation of the ARV market – will open new opportunities for PQT to conduct business. PQT has potential to extend its product niche to new disease areas (e.g. NCDs), include more products

from the essential medicines list (e.g. insulin) or broaden to new product categories (e.g. biosimilars). Such an expansion would dramatically impact the market covered by PQ and the related scale and skills required.

In addition, the introduction of the WHO Listed-Authorities framework will enable to build capacity of regulatory authorities and promote access to quality assured medical products. In view of this, RHT should plan its resource needs for the next 5-10 years to help inform potential relocation planning.

2.1.2. Strategic objectives for regulatory and prequalification services

Key policy documents

The strategy for WHO regulatory and prequalification services is captured in the ‘WHO Medicines and Health Products Programme Strategic Framework 2016 – 2030’ and in RHT’s action plan, the ‘Roadmap on access to medicines and vaccines 2019-2023’. Both documents call for the expansion of RHT’s services as a strategic priority in line with the GPW13.

The two strategic documents are complementary, reinforcing and aligned with GPW13. They have been endorsed by Member States.

Strategic orientations

In the context of WHO objectives to promote Universal Health Coverage, the 2016-30 vision is to achieve universal access to safe and quality-assured health products. The strategy focuses on four objectives: making prequalification more relevant to today’s current public health challenges; strengthening NRAs and championing best regulatory practices; improving safety and vigilance and minimising health risks; establishing pathways for accelerating R&D in the context of emergencies.

For the period 2019-23 the strategy for regulatory and prequalification services consists of four top strategic priorities and planned actions that RHT has identified as key to deliver on its objectives. These planned actions are aligned with the drivers and opportunities described in the section above and are


important in the context of this relocation study, as they will have a considerable impact on RHT’s operations and plans for expansion.

Table 3. Strategic priorities and planned actions from RHT’s Action Plan ‘Roadmap on access to medicines and vaccines 2019-2023’

Strategic priorities Planned actions

1. Strengthen country and regional regulatory systems in line with the drive towards UHC

Expand use of facilitated product introduction processes such as the CRP to accelerate market entry of PQ-ed products, with plans to expand the scope to diagnostics (underway) and vector control products.

Build regulatory capabilities so that PQ can expand its reliance on advanced regulators identified as the WHO-Listed Authorities.

Ensure monitoring of safety profile through vigilance and reporting adverse events related to medicines, vaccines and in vitro diagnostics.

2. Increase regulatory

preparedness for public health emergencies

Support NRAs address specific challenges of public health emergencies, by supporting countries establish legal provisions to fast-track clinical trial authorisations and registration in the context of emergencies.

Improve communication with NRAs during times of crisis. Continue the important work around the Member States Mechanism for SF drugs,

supporting MS to put in place the right safeguards and detection systems 3. Strengthen and

expand WHO prequalification and product risk-assessment processes

Expand the types of products considered for prequalification: - To therapeutic areas such as anti-cancer therapies and other therapies addressing

NCDs, AMRs or IVDs for meningitis and non-communicable diseases - To new product categories such as biosimilars. RHT intends to explore new TAs

in the future, given the growing need to address NCDs and affordable cancer treatments

- To cover a wider range of products under the Essential Medicines List and Diagnostics Medicines List, targeting priority unmet needs

Improve the process and speed for prioritising products. Prioritisation of products is currently taking place in close collaboration with the Disease Programmes following the issuance of disease-specific policy and guidance. The future will look at ways to optimise the timing between policy-making and the launch of Expression of Interests to bring priority health products to market in a timely manner.

Introduce alternatives to full-blown PQ assessments. Such as risk-based approaches such as Expert Review Panels (ERPs) and Model Quality Assurance Systems to respond to shorter procurement timelines. These approaches have recently been used successfully on snake venom and in the context of emergency responses for example.

4. Increase the scope and impact of WHO’s regulatory support activities

Continue building the capacity of national regulatory authorities. As of July 2018, the GBT had been used in 55 countries with over 25 Institutional Development Plans (IDPs) developed.

Enhance collaborative approaches in regulatory support activities. By establishing more transparent ways of working with Disease Programmes when it comes to disease prioritisation.

Monitor impact through KPIs.

2.2. Business Model for regulatory and prequalification activities

‘Business model’ is taken to mean the rationale of how WHO creates, delivers, and captures value through its regulatory and prequalification services. In other words, the RHT business model articulates clearly the value RHT is creating for its stakeholders, how it does so and in what way it allows regulatory and prequalification services to remain relevant given the strategic context described above.

This is important as it allows RHT to ensure both the coherence and relevance of its activities, to prioritise its efforts where they are most needed, to finance these accordingly, and to organize itself for impact. These have important bearings on the rationale and feasibility of a relocation.

We describe below the services delivered by RHT (value created), the delivery model for regulatory and prequalification services (value delivery) and their financing (value captured).


2.2.1. Services

The value and services delivered by RHT cover a complex mix of services to a variety of internal and external stakeholders. We list in the table below some examples of services delivered by RHT. Greater granularity can be obtained from the complementary RHT group interview analysis document, which details each sub-teams key activities.

Table 4. Overview of types of services in RHT Main beneficiaries

Type of service Examples (non-exhaustive) NRAs Member States

Manufacturers/ Laboratories

Procurement agencies

Tangible outputs

Product prequalification, recommendations, assessments (PQT)

X X

Capacity building

On-the-job training through participation in prequalification activities, secondment in the PQT, capacity building at country level, e.g. through training of NRAs on specific GBT modules and/or IDP capacity areas, benchmarking of maturity of NRAs or strengthening of safety and pharmacovigilance systems

X

Governance Services

Acting as Secretariat of the Member States Mechanism on SF drugs and managing three Steering Committee and one plenary session of 194 MS yearly (SAV-SFMP)

Acting as co-Secretariat for the Joint Meeting on Pesticide Specifications (JMPS) in collaboration with FAO to develop guidance and procedures when establishing pesticide specifications (PQT-Vector Control)

Acting as the Secretariat for the Global Diagnostics Working Group, a forum for global implementing partners to discuss matters related to quality, safety and performance of HIV-related IVDs (SAV-IVD Safety)

X X

Global public health goods

Global Benchmarking Tool (GBT) as mandated by the WHA Resolution 67.20 on Regulatory System Strengthening for medical products used in 70 countries since 2016 (RSS- CRS)

Global Surveillance & Monitoring System (GSMS) used by trained NRA focal points worldwide to report in real-time on SF products (SAV-SFMP)

X X

Technical Assistance

Tailored technical support to Member States at the time of Vaccines introduction in the context of mass immunisation campaigns or in cases of adverse events (PQT-Vaccines)

Surge technical assistance in cases of global alerts on SF health products or adverse events (SAV)

X X

Data Monitoring of safety data and global adverse events database (SAV-Medicines, Vaccines and IVD Safety)

Monitoring of information in the live GSMS database (SAV- SFMP)

X

Guidance, norms and standards development

Development and maintenance of prequalification and other guidelines (e.g. protocol reviews, WHO Good Regulatory Practice Guidelines, safety recommendations on specific products, guidance on sustainable local production, manufacturing norms & standards) (all teams)

X X

2.2.2. Service Delivery Model

The delivery model for regulatory and prequalification services is essentially centralised, but yet to be harmonised, mixing internal and external sourcing of capacity, and synergistic but not systematised.

Centralised and yet to be harmonised. Regulatory and prequalification services are delivered from the RHT team only in HQ. No similar capacity exists at regional and country level. At HQ, prequalification services have been progressively consolidated under a single unit, from the various units from which related services were initially developed. The different teams had developed different practices and operating procedures which has yet to be harmonised. For instance, the PQT-Medicines team works can be qualified as ‘batch’: dossiers are assessed through two-monthly cycles, which culminate in assessment sessions


where around 50 assessors from different NRAs (35 from LMICs NRAs and 15 from SRAs) meet in Copenhagen to finalise the assessment. In contrast, PQT-Diagnostics works more in continuous mode. It coordinates the reviews and inputs of assessors remotely and organizes a yearly 3-day meeting of assessors and inspectors in Geneva. PQT-Vaccines conducts 3 types of assessments: Quality (3 sessions per year, dossier screening in GVA); Clinical (performed remotely), and Variations (upon request). Finally, PQT-Vector Control conducts an Assessment Session for Vector Control Products (ASVCP) of assessors and manufacturers every 6 months in a location that rotates.

Implications for relocation In the context of the division of labour between the three levels of the organization, a relocation can offer avenues to locate capacity-building and technical support closer to recipients. A relocation could also act as a catalyst and force accelerated convergence and harmonisation of practices between teams, but it would also be constrained by the lack of pre-existing harmonisation.

Mixing internal and external sourcing of capacity. As of September 2019, the RHT team had 114 staff. PQT relies on a pool of external short-term consultants, which in 2018 corresponded to 258 individuals who delivered an equivalent of 30 Full Time Equivalent (FTEs). These consultants are usually employees of national regulatory agencies or freelancers with regulatory, pharmaceutical and/or manufacturing expertise. They originate from countries with stringent regulatory authorities (SRAs) as well as LMICs, with a majority coming from the EURO region (112), followed by AFRO (49), AMRO (45), WPRO (45), SEARO (6) and EMRO (1). They are used on an ad hoc basis to perform the review of dossiers submitted by manufacturers (as assessors) or participate in site inspections to assess the performance of manufacturers (as co-inspectors). RHT management is seeking to expand this roster of consultants. However, constraints exist such as the scarcity of skills and the need to manage the conflicts of interest within the roster of consultants depending on the product and manufacturer under consideration.

RSS and SAV also employ consultants, but a smaller pool. In 2018, RSS used the equivalent of between 5-8 FTEs for benchmarking and technical support activities to NRAs. SAV employs 2 external FTEs based in sub-Saharan Africa and an equivalent of between 1-1.5 FTEs were used for safety activities.

Implications for relocation This sourcing model must be taken into account for relocation since: SRAs interviewed clearly mentioned that an important factor in their willingness to participate in PQ

activities was ease of transit to and security of the location where assessments are done; Increased reliance on this external pool could form a mitigation strategy for staff attrition during the

transition period; Scaling up the external sourcing of PQ expertise, through further training and capacity-building efforts,

could form a cost-effective alternative or complement to relocation.

Synergistic but not systematised. We noted important synergies between the various activities, with a mutually reinforcing effect on the value provided to different stakeholder groups:

Between RHT teams: for e.g. between RSS and PQ activities where beyond the provision of capacity for PQ activities, the use of external resources has important positive side effects on regulatory objectives. The participation of external consultants sourced from NRAs in assessment and inspections, and internship model where representatives from LMICs NRAs can be seconded to the PQ team for a period of usually 3-4 months, increase NRAs’ trust in the robustness of PQ assessments and inspections since they can see the process from within. They also provide for more effective on-the-job training and national capacity-building than more traditional capacity-building workshops or training sessions.

Between RHT teams and other MVP teams: synergies exist between norm-setting and prequalification, with PQT sub-teams and inspectors being routine co-authors and key contributors to TSN norms and standards. The technical interactions and constant exchanges with PQT are essential inputs for the elaboration of the guidelines, with TSN technical workshops being organized at the back of assessment sessions to leverage the physical presence of key external experts in the same location. In the case of PQT-Inspections, the team has intensive face-to-face sessions with TSN every 2 months, and formal meetings twice a year in Geneva where they contribute field experience into the guidelines’


development. Interactions between RSS and TSN also include: identifying gaps in guidance from interactions with NRAs, evaluating use of WHO norms and standards, development of guidances, including on best regulatory practices, and use of TSN experts in missions. IAU and RHT are co-dependent with planning activities notably being conducted jointly. SAV and IAU interact on topics of pharmacovigilance and monitoring.

Between RHT teams and other WHO divisions: close interactions exist between disease programmes (HIV, GMP, TB, IVB, NTD, GPEI) and PQT around the process of prioritising health products – based on which manufacturers can submit their applications for PQ – and for developing a harmonised set of tools and policy recommendations for the disease programmes. Faced with concerns around timeliness and transparency of the prioritisation process, PQT has started working with disease programmes in tandem to deliver integrated solutions. SAV works closely with disease programmes on safety alerts; Geneva missions, ROs and COs in the context of the Member State Mechanism on SF drugs; and WHO Collaborating Centres for the maintenance of adverse events databases.

We however could not identify a systematic model where operating procedures, meeting routines and supporting systems would be in place to manage these synergies both tactically, e.g. in terms of setting priorities, aligning demand and supply on PQ services, and operationally in terms of day-to-day management of interfaces between teams.

Implications for relocation Overall while this increases the value of collocation of these activities, it also creates challenges: In the case where the whole RHT department (scenario 1 on WHO Terms of Reference for this study)

would be relocated, the viability of the TSN and IAU activities should be assessed, and more formal interfaces with WHO technical and administrative departments should be introduced.

In the case where RHT activities would be physically separated, e.g. in the case of relocation of prequalification only (scenario 2 in the ToR) and relocation of selected activities in prequalification and regulatory teams (scenario 3 in the ToR), the impact on synergies should also be considered.

2.2.3. RHT Financing

The financing model for RHT has historically been based on voluntary funding from a limited set of donors. It is currently diversifying with the increasing share being taken by PQ application and renewal fees.

Overview of RHT financing

The graph below outlines the evolution of MVP funding in the last 9 years, broken down by type of funding. Funding figures were made available for 2010-2019 for the whole of MVP, instead of RHT, so MVP figures are used as a proxy of the evolution of type of funding over time. Given the changes in the organizational structure over the last years, WHO was not able to disaggregate across the different MVP teams.


Graph 4. Evolution of MVP funding since 2010 (USD million)

Note: Not all application fees are recorded under the PQ fees. We understand from management reporting that the fee revenues were as follows: USD 13.6m (2017) and USD 14.7m (2018).

The graph below shows that the top 5 contributors in 2018 (BMGF, UNITAID, GAVI, UNICEF and the USFDA) generated 81% of RHT donor financing (not taking into account prequalification fees). In 2018, total donor financing amounted to USD 24.7m, while prequalification fees reached USD 14.6m in comparison. It also shows that donors are financing activities across RSS, SAV and PQT, with PQT receiving the largest amount of donor funding (62%). BMGF supports the prequalification of medicines in a variety of therapeutic areas, including priority diseases and reproductive health, while UNITAID funds prequalification of medicines that target HIV/AIDS, TB, and malaria.

Graph 5. Top donors to RHT, 2018 (USD million)

Overall the financing of RHT is aligned with the interests it serves and the value it creates.


Implications for the relocation: In the context of a potential relocation, the RHT financing model means that: Given that the programme is fully funded and that RHT does not experience funding shortfalls, the

rationale for a relocation is not about preserving short-term operational status through cost-savings A policy would need to be defined to guide the allocation of potential savings from a relocation: - Manufacturers would likely push for savings on PQ activities to result in lower application and renewal

fees. This was evident in the push-back from pharmaceutical associations experienced during the 2016 consultation on the new financing model for PQ.

- Donors require costing of grant proposals based on unit costs for staff and activities. It is possible that if these unit costs decrease as a result of relocation, grant proposals and related donor contributions will simply be lower.

- Assuming that savings from a relocation can be retained by WHO, it is unclear at this stage if these savings would be earmarked for the RHT programme or simply reallocated to other programmatic priorities.

Service delivery and performance will need to be maintained in order to secure ongoing donor support and manufacturer uptake of PQ services. This is likely to require structured and persuasive communication with key donors as part of the transition.

WHO will need to identify who pays for the one-off transition costs. It is unlikely that donors will want to finance an activity that does not directly contribute to the results they are trying to achieve. Also, the fees collected from manufacturers do not generate a surplus that could finance the transition to a new location. In this context the working assumptions should be that the transition would be financed by WHO core resources (AC or CVCA).


2.3. RHT Organization

2.3.1. Overview of RHT organization

The Regulation of Medicines and other Health Technologies (RHT) team is located under Access to Medicines, Vaccines and Pharmaceuticals (MVP). In WHO’s new HQ structure, MVP sits under the DDG Programmes as a special programme.

The graph below outlines the RHT organizational and staffing structure as of September 2019:

Exhibit 1. RHT organization structure (as of September 2019)

RHT is organized using a functional logic and consists of three teams: Prequalification Programme (PQT) Regulatory Systems Strengthening (RSS) and Safety and Vigilance (SAV) The RHT director oversees all three teams, each led by a coordinator

Prior to the consolidation of prequalification and regulatory activities in RHT, teams were structured along a product stream structure (e.g. vaccines, including multiple activities such as prequalification, safety monitoring related to vaccines) rather than a functional logic. In 2013, the former Prequalification of Medicines Programme was merged with the WHO programmes for prequalification of diagnostics and of vaccines, to create the WHO Prequalification Team (PQT), with the goal to optimise the procedures used by each programme and to improve consistency between prequalification teams. Recently, the Vector Control sub-team joined PQT from the WHOPES (WHO Pesticide Evaluation Scheme). A functional structure was chosen in order to facilitate the harmonisation of approaches to product evaluation across product types, and to differentiate better the functions within the programme. However, at the time of writing this report, this harmonisation is still very much work in progress and the activities between the three teams are still very much intertwined.

Implications for relocation The lack of harmonisation of processes across teams would favour a model based on collocation of RHT teams and should activities be separated, make for a more complex transition.


Teams are further divided into 13 sub-teams with distinct functions and each led by a group lead. While efforts have been made to harmonise processes, variances still exist between some sub-teams, in particular regarding different approaches to conducting the assessments for each product stream and the need to improve internal collaboration and cross-functional knowledge generally. A fact sheet summarising the main activities, interfaces inside and outside WHO and travel requirements for each sub-team is provided separately in Appendix 6.

Organizational changes are underway that will affect the RSS and SAV teams. As part of the roll-out of the new HQ organization, RSS and SAV are expected to be merged into one team. Within SAV, SAV Medicines & Vaccines Safety will consolidate under one lead to capitalise on synergies, similar activities and methodologies. Within RSS, there are ongoing talks of splitting the RN&H sub-team into two components – regulatory networks and the Collaborative Registration Procedure (CRP). A similar change is expected to affect Local Production team which in the new organization may be a separate team, and no longer part of RSS.

Implications for relocation The sub-team level is the most granular level at which activities and their specifics can be understood and where the determination of best location can be assessed. These organizational changes will need to be taken into account in the context of the future relocation. The current uncertainty makes the delineation of teams and related potential future location harder. In case these new sub-teams are separated geographically, the impact on the functioning of the teams will be higher.

2.3.2. RHT staffing structure

RHT is one of WHO’s largest departments. As of September 2019, RHT includes 118 positions (including 5 temporary appointments of under 60 days, 2 reported vacancies, 3 under recruitment and 1 P-staff in the SAV Medicines Safety team currently on secondment and which does not appear on the GSM staff list). In addition, 2 full-time consultants are employed by SAV in Sub-Saharan Africa and considered external consultants. Therefore, the difference between the 114 reported positions in GSM and the 118 positions can be explained as follows: 114 positions in GSM as of September 2019, including 2 reported vacancies (information from group

interviews) Plus 3 positions under recruitment (information from group interviews) Plus an additional 1 P-staff on secondment (SAV Medicines Safety)

Of the total 114 reported positions in GSM, the breakdown by team is as follows:

Table 5. RHT team composition (GSM data, September 2019)

PQT represents the biggest team, followed by RSS and SAV.

RHT team composition (includes vacancies and short-term consultants) Team and sub-team G Staff P Staff Total

HQ/PQT Prequalification Team 16 49 65PQT - Coordinator's office 2 2 4PQT - Diagnostics assessment 3 7 10PQT - Inspection 3 12 15PQT - Medicines assessment 4 13 17PQT - Vaccines assessment 3 11 14PQT - Vector control 1 4 5

HQ/RHT Regulation of Medicines and other Health Technologies 2 2 4RHT - Director office 2 2 4

HQ/RSS Regulatory Systems Strengthening 9 20 29RSS - Coordinator's office 1 2 3RSS - Country Regulatory Strengthening 2 5 7RSS - Local production 1 2 3RSS - Regulatory Networks and Harmonization 2 8 10RSS - TA&L 3 3 6

HQ/SAV Safety and Vigilance 4 12 16SAV - Coordinator's Office 1 1 2SAV - IVD Diagnostics Safety 1 1SAV - Medicines Safety 1 4 5SAV - Substandard and Falsified Medical Products 1 2 3SAV - Vaccines Safety 1 4 5

Total 31 83 114


G staff represent 27% of RHT staff compared with 35% at HQ. Interviews, surveys and group workshops have shown the specificities surrounding the work of G staff. This is a heterogeneous group working across RHT. G staff working at the level of the 3 Coordinators and Director are responsible for providing administrative support to the Coordinators and Director, managing HR planning, monitoring and recruitment activities, supporting with RHT publication releases, and handling logistical arrangements and event coordination amongst other activities. G staff within the 13 sub-teams are specialised and well-trained in the activities of the sub-teams they serve (PQT, RSS or SAV), and have responsibilities beyond administrative tasks. In PQT for example, they provide administrative support to the entire process of dossier screening and assessments and are the ones handling PQT’s CRM system.

Implications for relocation Replacing these G staff positions, in particular, would require specific on-the-job training. These would need to be featured in the transition plan.

Over half of RHT staff have a temporary appointment vs the 22% average at HQ in 2018. Only 32% are on continuing appointments compared with 52% on average at HQ. We understand that this situation is due to a policy at HQ to avoid recruiting staff on a permanent basis, and not to availability or predictability of funding. This however, creates a challenge to attract and retain talent.

Graph 6. Types of appointments (RHT vs HQ)

Vacancies in positions are expected to rise. While only 2 positions are showing as vacant in September 2019, since the announcement of the relocation in March 2019, 4 G staff have informed WHO of their decision to leave RHT and take on other internal roles. This includes a G staff member responsible for handling fee collection in PQ, a critical role to continue offering timely and quality services to manufacturers, and 3 G staff in the PQT-Inspections sub-team, responsible for scheduling and organizing inspections visits. These vacancies are putting a strain on the group overall.

Implications for relocation A relocation of the whole RHT team would mean moving one of the biggest department at HQ. It would

be the first time WHO relocates so many staff at once. This calls for careful business continuity and transition planning. It may be best achieved in a phased manner.

A relocation could alleviate the issue of short-term contract by allowing WHO to grant longer-term contracts. This is however not seen by RHT staff as a key benefit: 52% of RHT staff surveyed did not see it as a potential benefit of a relocation, irrespective of location.


2.3.3. RHT workforce

RHT staff skills are specialised. The staff’s educational qualifications vary between P and G staff relative to the nature of the daily job to be performed, as well as the highly technical skills required for P staff. P staff are highly qualified, with 90% of employees having a doctoral or a master’s degree. G staff have lower educational qualifications, with 32% of them having high school diplomas, as illustrated in the charts below. Educational qualifications vary from team to team, with RSS having the highest percentage of staff with a doctoral degree (50%).

Graph 7. Highest educational title per contractual category and sub-team

Overall, the main fields of study of P staff are public health, science & medicines and business & humanities. The educational profiles vary by sub-team: RHT has almost 3/4 staff having studied business and humanities disciplines, while 2/3 of PQT and RSS staff are specialised in science and medicinal studies. SAV staff have an even spread of staff educational profiles covering public health, science and medicine, and business and humanities.

Graph 8. Main field of study per sub-team

Overall, P staff have specific skills not typically found in other WHO departments. Despite the broad range of skills and expertise identified in the RHT staff survey, we noted that 5 out of the top 10 areas of expertise relate to specific skills not typically found in other WHO departments. These are highlighted in yellow in the graph below.


Graph 9. Top 10 areas of expertise (6 years of more of experience) – P staff

G staff have experience in areas enabling the smooth running of RHT operations e.g. event coordination, organization & activity planning, budget and financial planning. G staff also perform tasks that are directly related to sub-group technical activities e.g. database management, filing and archiving.

Graph 10. Top 10 areas of expertise (6 years of more of experience) – G staff

Implications for relocation Due to the specific expertise of P staff in the key RHT skills, in the case of relocation there is a high risk

to business continuity due to loss of specific skills. A location enabling talent retention and attraction is a key requirement to a potential relocation.

The sourcing of G staff profiles should not be the main challenge in the case of attrition related to relocation. However, these skills are typically acquired on the job which means that significant retraining of new G staff should be anticipated in the case of a potential relocation.

2.3.4. RHT operating procedures

RHT activities are organized using a mix of structured procedures and informal ways of working.

Prequalification activities use documented standard operating procedures, with variants per product stream and product type. The graph below provides a simplified outline of the type of workflow at stake for prequalification assessment.


Exhibit 2. Standard assessment process

PQT has developed a quality manual where a range of procedures are documented, e.g. dossier assessments, inspection of sites, lab accreditation, complaint handling, post-prequalification activities and others. This initial quality management system remains variable between product streams due to different histories and operational structures and has yet to mature.

Procedures exist in RSS for benchmarking activities or the collaboration registration procedure, but we understand that they are not under a formal quality management.

We noted the absence of business continuity plans.

PQT has also introduced key performance indicators to monitor the team’s throughput. While these are not reported on a systematic basis, there is an intent to automate service level monitoring and reporting with the anticipated introduction of a case management solution. These KPIs place emphasis on the speed and timeliness of prequalification services.

Most interactions within and outside the teams happen in ad hoc/informal ways. We understand from interviews with RHT staff and management that meetings at divisional or departmental level focus on managerial aspects (e.g. WHO transformation) rather than operational ones (e.g. weekly, monthly or quarterly scheduling of operations). We also understand from interviews with other WHO stakeholders that few formal coordination meetings exist, and that interactions are often informal.

Implications for relocation The existence of SOPs for some processes should facilitate the transition to different working

arrangements. However, robust business continuity plans will need to be devised in order to continue to meet the rather

stringent KPIs for prequalification services during transition. Currently the absence of a mature quality management system and business continuity plans does not

create enabling conditions to facilitate the transition of other activities.


2.3.5. Interfaces within and outside RHT

Overall, all the RHT teams strongly interact within their group. The graph below represents the strength of interactions based on triangulated information from a staff survey, workshops with each RHT sub-team, and a survey of external stakeholders. The darker the color, the stronger the interaction.

Exhibit 3. Strength of interactions of RHT sub-teams with stakeholders

It shows that PQT staff have strong interactions with MVP teams (TSN and IAU), disease programmes, manufacturers and other UN organizations. PQT staff are those displaying the interactions with the lowest strength for both internal and external stakeholders. RSS has a diverse range of interactions within RHT, MVP teams, HQ, Regional Offices and NRAs. SAV has strong interactions with TSN, RSS and RHT Directors office, Regional Offices, country offices, WHO legal department, NRAs and Technical partners.


Implications for relocation Given the high level of interactions between PQT, RSS and SAV, the preference would be to move the

team together, although taking into consideration a location closer to the regional level, in particular for the teams interacting most with WHO’s Regional Offices and NRAs (RSS and SAV as per the interaction matrix).

There is a need to revise RHT’s current division of labour and determine the activities that can best be performed in Geneva versus those best executed in the regions.

The surveys and interviews indicate the need to move towards more structured modes of interaction, within and outside the teams, by formalising meetings (e.g. through meeting plans) and interaction processes.

2.3.6. RHT travel patterns

We analysed the travel patterns based on the number of travels for all RHT’s staff extracted from GSM (2018). The data was broken down at the level of teams: PQT-Other (comprising PQT’s 4 product streams, in green in the map below), PQT-Inspections (blue), RSS (purple), SAV (orange) and RHT’s Director’s Office (red). The line thickness reflects the number of travels undertaken. The size of the bubbles reflect the travel cost in USD.

Exhibit 4. RHT travel patterns - World


Exhibit 5. RHT travel patterns - Europe

We also conducted a travel analysis of the GSM travel data on the top destinations visited by the team.

Graph 11. Top 10 countries visited by staff, GSM travel data

The analysis shows that: Copenhagen is the main destination of travel (16% based on GSM travel module), followed by India

(9%), China (6%) and the UK (4%). Teams have few destinations in common, apart from Copenhagen. Most of the travels to Copenhagen are performed by the PQT product stream sub-teams. Although the

bulk of those travels is performed by the PQT-Medicines sub-team (70% or 55 out of 78 travels for the whole PQT to Copenhagen), other RHT sub-teams RSS-RN&H and RSS-TAL however have Copenhagen in their top 3 destinations.

RSS travels most to Africa (Nairobi, Entebbe), while PQT-Inspections travels most to India (Hyderabad, Bangalore) China (Beijing) and South-East Asia (Singapore, Jakarta).

The travels of the SAV team are spread out.

Implications for relocation Overall if the objective of relocation is to reduce travel frequency/time, the choice of a city with an

international travel airport hub would best optimize travel time and there is also an opportunity to reconsider where the performance of assessment sessions and other RHT sessions take place.

However, the variety of travel patterns identified make the choice of a relevant single location problematic.


2.4. Cost structure

The total RHT cost can be defined as the sum of salaries, travel, consulting & contractual services costs, external travel costs and other expenses. We have further analysed RHT costs for these categories.

The figure below illustrates the breakdown of the total RHT spend for the year 2018 (USD k).

Table 6. Breakdown of total RHT spend, 2018 (USD k)

The main takeaways from the cost structure analysis for 2018 is that: Salaries are by far the key cost driver for each of the RHT sub-teams, followed by consulting and

contractual services. Travel costs have a marginal impact overall; Consulting & contractual services costs (composed of APWs and individual consultant contracts) are

highest for PQT- Medicines, PQT-Diagnostics, PQT-Vaccines and RSS-TA&L.

Staff costs is the main cost bucket across RHT, representing 68% of the total spend.

Components of staff costs included in the analysis are: Post adjustment multiplier; Staff net base salary; Employee benefits: Occupancy costs.

Activity costs include all the costs related to RHT service delivery. In 2018 these comprised 32% of total costs.

Sub-Team name Salary Travel

Consulting & Contractual Serv. Costs Other Costs Total

PQT - Coordinator's office 748 43 92 24 907 PQT - Diagnostics assessment 833 42 1'145 20 2'039 PQT - Inspection 2'674 493 422 25 3'613 PQT - Medicines assessment 2'961 243 1'712 3 4'920 PQT - Vaccines assessment 2'264 131 618 - 3'014 PQT - Vector control 682 76 199 - 958 Sub-total PQT 10'162 1'028 4'189 72 15'451 RHT - Director office 799 56 65 3 924 Sub-total RHT - Director office 799 56 65 3 924 RSS - Coordinator's office 444 57 116 4 621 RSS - Country Regulatory Strengthening 1'253 211 242 3 1'709 RSS - Local production 451 24 46 - 520 RSS - Regulatory Networks and Harmonization 1'589 224 145 6 1'965 RSS - TA&L 1'056 93 643 17 1'809 Sub-total RSS 4'792 609 1'193 30 6'624 SAV - Coordinator's Office 438 52 339 4 833 SAV - IVD Diagnostics Safety 214 22 67 - 303 SAV - Medicines Safety 880 71 75 52 1'077 SAV - Substandard and Falsified Medical Products 382 66 - - 448 SAV - Vaccines Safety 1'229 126 748 22 2'125 Sub-total SAV 3'143 338 1'229 78 4'787 Total RHT 18'896 2'031 6'675 183 27'786


Travel costs. We have analysed the travel costs based on the GSM data extraction for the year 2018 as per the table below.

Table 7. Travel analysis per sub-team, 2018

% of RHT travel costs

Top 3 travel destinations

# travels % travels Cost % of costs

PQT – Coordinator’s office 2% Denmark 4 29% 7 K$ 15% Ireland 2 14% 5 K$ 11% USA 2 14% 13 K$ 29%

PQT – Diagnostics assessment 2% China 3 23% 14 K$ 36% Denmark 3 23% 5 K$ 13% Kenya 2 15% 5 K$ 14%

PQT – Inspections 24% India 31 28% 187 K$ 39% China 13 12% 86 K$ 18% Romania 9 8% 13 K$ 3%

PQT – Medicines assessment 12% Denmark 55 83% 195 K$ 79% Uganda 2 3% 12 K$ 5% Cote d’Ivoire 1 2% 5 K$ 2%

PQT – Vaccines assessment 6% Denmark 8 24% 13 K$ 10% India 4 12% 24 K$ 20% China 3 9% 26 K$ 21%

PQT – Vector control 4% Italy 6 26% 11 K$ 15% Denmark 4 17% 8 K$ 10% Thailand 2 9% 9 K$ 12%

RHT – Director office 3% UK 5 20% 2 K$ 4% USA 5 20% 18 K$ 32% India 2 8% 10 K$ 17%

RSS – Coordinator’s office 2% Italy 3 18% 2 K$ 5% USA 2 12% 5 K$ 11% Cambodia 2 12% 14 K$ 29%

RSS – Country Regulatory Strengthening

10% Indonesia 4 7% 14 K$ 7% Thailand 4 7% 17 K$ 9% Viet Nam 4 7% 17 K$ 9%

RSS – Local production 1% Ethiopia 4 27% 3 K$ 13% China 2 13% 7 K$ 33% Ireland 2 13% 1 K$ 5%

RSS – Regulatory Networks and Harmonization

11% South Africa 8 13% 24 K$ 11% Denmark 6 9% 9 K$ 4% Kenya 5 8% 15 K$ 7%

RSS – TA&L 5% Denmark 4 13% 10 K$ 11% Germany 3 9% 2 K$ 2% India 3 9% 13 K$ 14%

SAV – Coordinator’s Office 3% UK 3 17% 2 K$ 3% Nigeria 2 11% 8 K$ 15% Guyana 1 6% 9 K$ 17%

SAV – IVD Diagnostics Safety 1% Singapore 1 20% 6 K$ 29% USA 1 20% 4 K$ 20% Nigeria 1 20% 8 K$ 39%

SAV – Medicines Safety 4% USA 4 16% 19 K$ 26% Armenia 3 12% 3 K$ 4% Cambodia 2 8% 7 K$ 10%

SAV – Substandard and Falsified Medical Products

3% UK 4 18% 4 K$ 5% Nigeria 2 9% 7 K$ 11% Indonesia 2 9% 17 K$ 26%

SAV – Vaccines Safety 6% France 5 16% 0 K$ 0% Chile 5 16% 28 K$ 23% Bangladesh 3 9% 14 K$ 12%

For the entire RHT team, Denmark ranks as the top destination with USD 267k spend a year, followed by India (USD 263k) and China (USD 178k). Together the three destinations cover almost 1/3 of total travel costs of nearly USD 2m for RHT.

The frequent travels to Copenhagen are confirmed by the analysis of the top 3 travel destinations per sub-team. 4 teams RSS-RNH, RSS-CRS, PQT-Inspections and PQT-Medicines make up for 58% of total RHT travel costs. The highest travel costs are incurred by PQT-Inspections.


Almost 2/3 of consulting & contractual services costs (63%) are concentrated in PQT. This is explained by their current delivery model including the participation of external assessors and co-inspectors. Overall, the sub-teams PQT-Diagnostics is the team that allocates the biggest portion of total costs to this expense category (56%).

The cost incurred by PQT-Inspections for consulting and contractual services represents only 12% of the sub-team’s total costs. This is a low figure in comparison with the service they deliver. There is potential to expand the number of external consultants used to support the scalability of inspections operations

Other costs are negligible for all the sub-teams and have minimal impact on the total costs.

Implications for relocation Staff costs are the cost driver most likely to be impacted by the choice of a new location for relocation - they are material for the programme and high in Geneva compared with other duty stations. Travel costs will also be affected but their weight in the programme is limited and the level of reduction may not be material, notably as assessment sessions remain in Copenhagen. It is assumed that consulting and other costs will not be affected by a relocation, given that external consultant rates stay unchanged.

44 Relocation study of WHO regulatory and prequalification services | Outlook on relocation

3. Outlook on relocation 3.1. Insights from stakeholder consultations

In order to inform the efficiency and feasibility study, we sought to understand how different stakeholders perceive the benefits and constraints of a potential relocation of all or parts of WHO regulatory and prequalification services, and what their expectations would be in such a context.

To this end we consulted through surveys and interviews with external stakeholders, RHT staff and other internal stakeholders across WHO.

3.1.1. External stakeholders

External stakeholders include representatives of national regulatory agencies, UN organizations, major donors, NGOs and manufacturers. In September and October 2019, we interviewed 29 of them, complemented by a survey sent to a group of 244 individuals selected by WHO based on their interactions with RHT. 82 out of 244 stakeholders responded to the survey, with most responses coming from manufacturers or quality control labs (24%), UN agencies (17%) and NRAs (13%) and NGOs (16%). Response rate from NRAs was among the lowest (22% out of 60) with UN agencies being the highest (56% out of 25).

Perceived value-add of WHO’s regulatory and prequalification services

External stakeholders overwhelmingly stressed the value they place on WHO regulatory and prequalification services and respect for progress made. Procurers noted the considerable impact RHT has had on shaping the global market for health products and on increasing access to medicines, while donors mentioned the progress made by the team in recent years in terms of defining clear strategies. Manufacturers noted the advantages from having PQ-ed drugs, notably the stamp of quality and the opportunity for market access. The analysis of manufacturer satisfaction surveys performed by PQT shows a positive trend. An NRA mentioned the intricate and deep work done with RHT to achieve Maturity Level 2.

Although globally positive about the service, they mentioned three main improvements opportunities: The opportunity to bring more transparency and more consultation into WHO’s work on regulatory

and prequalification services. The prioritisation of the demand placed on prequalification services appears as an area of concern. The current process is perceived as a ‘WHO internal affair’ and some stakeholders would value a more open and collaborative approach to prioritising the demand for PQ services. Increased transparency is also sought in terms of clarity, relationships and complementarity between the different registration processes, notably risk assessments and prequalification.

Improve the level of coordination of activities and integration of approaches between different WHO departments: some stakeholders noted instances of misalignment between RHT teams and leading to conflicting guidance, overlapping tasks, duplication of requests or missed opportunities for a coordinated approach. They stressed the need for improved internal communication overall and noted that relocation could exacerbate and negatively impact communication and efficiency.

Untapped opportunities for collaboration: some UN procurers and mature regulatory authorities mentioned that although collaboration does take place, there are synergies and opportunities to increase impact that are not currently leveraged, e.g. on the link between procurement and surveillance, or for PQ to tap into regulatory expertise.

Attitude towards relocation

The external stakeholders we interviewed were taken aback by the 6 March announcement. They reported that the decision came to them as a surprise and they failed to grasp the rationale for this decision. They expressed their frustration at not being consulted prior to the announcement. In the survey, only 16% foresee a positive impact from a relocation on the services offered by the PQ, RSS and SAV teams. NRAs and private sector organizations (i.e. manufacturers), which are located in countries and should arguably be more favourable to increasing RHT proximity to their location, were only 20% and 33% respectively to


see a potential positive impact. Procurers and donors reported the highest negative impact from a potential relocation, respectively 72% and 66%.

Overall, external stakeholders do not see cost savings as a compelling justification for relocation. Donors mentioned value for money as their primary focus, rather than cost. In the survey only 21% of stakeholders reported the cost of service to be a challenge. Donors also questioned WHO’s right or ability to retain the savings from a relocation vs passing these savings on to donors and manufacturers.

The main concern for external stakeholders is staff attrition and the related loss of capacity and institutional knowledge which would lead to service disruption and potentially impact on WHO’s ability to deliver on agreed commitments. This was of greatest concern to procurers and donors who on the one hand depend on prequalified products to grant access to safe and effective medicines in LMICs and on the other hand are committed to seeing RHT deliver on the agreed programmatic objectives. A failure to manage a transition successfully could threaten the programme future funding and viability.

The donors and procurement agencies interviewed mentioned the need to define the future role, positioning and potential business model for WHO regulatory and prequalification services, at a minimum as a requisite to relocation, if not as an alternative and more powerful approach to improving value for money.

Needs and expectations in the case of relocation taking place

We sought to understand what stakeholders would need in order to build sufficient acceptance in the case of relocation taking place.

The first requirement is the careful choice of location, which is seen by external stakeholders as a key success factor. The survey showed that most external stakeholders do not interact with RHT on a daily basis, and when they do, interactions are mostly through electronic means (e.g. emails, phones). In this light, although external stakeholders are not in favour of a relocation, it would not cause a major operational constraint for most external stakeholders. Also, in terms of impact on the brand of regulatory and PQ services, external stakeholders do not see the choice of location in itself as affecting the trust in the programme’s brand. However, they expressed two major factors that should influence the choice of location: The first one is the impact of choice of location on RHT’s ability to connect, align and integrate

with other disease areas, and on RHT’s ability to advocate for the ongoing importance of these services in the overall WHO programme of work;

The second is the ‘ease of doing business’ with WHO. The choice of the location will represent a key success factor for relocation and should enable ease of doing business, in particular the safe and effective use of stakeholders’ travel time and resources, especially for experts coming from mature regulatory authorities.

There is limited external stakeholder support for offshored locations. External consultations explicitly noted location requirements such as limited time zone difference with Geneva (e.g. maximum +/- 2 hours from CET), a country with facilitated visa procedures, availability of an international airport travel hub, and facilitated travel connections from airport to WHO location, as necessary criteria for a new location.

The second requirement to build external stakeholder acceptance relates to the way the transition is handled. Given the reliance of external stakeholders on the services at stake, they will need reassurance on the existence, robustness and effectiveness of contingency plans to manage the transition. There is an expectation that WHO anticipates a material impact on service delivery and plans accordingly with partners, notably in terms of: Transparent communication on the actual business case, mitigations measures implemented,

communication of progress and ongoing external stakeholder management; Transparent and realistic impact assessment of the transition on likely RHT capacity, and what this

means on WHO’s ability to deliver on agreed commitments, workplans, deliverables and capacity in the RHT department;

Collaborative reprioritisation of RHT’s workplans according to foreseen capacity.


3.1.2. Consultation with WHO internal stakeholders

We also consulted with WHO internal stakeholders who could provide us with a perspective from headquarters and from regions. This included 15 interviews with WHO leadership, HR, business operations and management of technical departments.

Perception of RHT

Internal stakeholders, just as external stakeholders, stress the criticality of the regulatory and prequalification services to achieve GPW targets. Internal stakeholders understand the role that providing access to safe and affordable medicine plays in enabling Universal Health Coverage. They see how the work of the regulatory system strengthening team fits in the agenda of building impact at country level. They understand the criticality of the surveillance work that the Safety and Vigilance team pursues. They appreciate the role PQT plays in performing product risk assessment during emergencies, as was done with vaccines during the 2015-16 Ebola outbreak. Interviewees from disease areas such as GMP and IVB highlighted the strategic nature of the interactions occurring within the regulatory and prequalification teams for their own programmatic effectiveness, e.g. when aligning on drug priorities and guideline development. Overall, they praise the programme for its relevance and achievements.

Internal stakeholders support the expansion of these services but challenge the business model to achieve this expansion. Internal stakeholders show an appreciation for the need to scale up the regulatory and prequalification services, notably in terms of increased coverage of the essential medicines list by prequalification activities and capacity building at national and regional level. However, a number of internal stakeholders mentioned that scaling and expansion needed to be achieved by rethinking the overall approach to access, and the RHT delivery model. They notably stressed the need to better define what internal staff should do vs partners or external workforce, the ever-increasing need for speed and scale in the service they get, and the need to more clearly define the trade-offs and relative priorities between providing prequalification vs promoting alternative pathways such as national capacity building and reliance approaches.

Many showed a limited understanding of the way the services within RHT actually work and reinforce each other. Although internal stakeholders are familiar with the services, they have very different levels of understanding how these services work in practice. This was apparent when considering suggestions for improvement: internal stakeholders made a number of suggestions that are actually, to different degrees, already in place. This includes for instance suggestions aimed at implementing a leverage model with external resources. Some stakeholders also advocated for increased division of labour, e.g. between norm setting, capacity building and transactional activities. While this makes sense in the context of the delineation of roles and responsibilities across the three levels of the Organization, this showed they do not appreciate the mutually reinforcing effect that has been developed between RHT activities, e.g. the level of capacity-building taking place in prequalification services, or the value add of inspectors in the definition of pragmatic Technology Norms and Standards.

We sensed a level of discomfort with how these services fit in the broader WHO context. A number of characteristics of the regulatory and prequalification programme put it at odds with the logic of the new HQ operating model and the consistency in implementation sought by the WHO transformation. This includes: The very nature of the programme which does not fit well in any of the functional building blocks used

to reorganize HQ: the programme is to a large extent an operational service, but would not fit well under business operations as the main users of the service are external. The programme could be seen as a headquarters-based corporate function, but it is too operational to fit alongside science and data. Finally, the programme has technical content, but it is mostly centralised in HQ.

The size of the RHT department, which is the largest one in WHO. This makes RHT a primary focus area in the search for a reduction of the HQ footprint.

The managerial structure: PQT alone is headed by a coordinator yet it has 65 positions. This is at odds with some of the principles on control span and alignment of roles across HQ sought by the WHO transformation.


The staffing structure of RHT with a different ratio of P to G staff and a higher level of temporary contracts compared with the rest of HQ.

In light of the above and given the criticality of the programme, we noted conflicting views during our interviews, with interviewees oscillating between the push for bold decisions (e.g. offshoring the whole team) and risk aversion (do no harm principle).

Attitude towards relocation

Interviewees in leadership positions see relocation as a means to support the growth of regulatory and prequalification services. Given the current cap on staff growth in Geneva, a relocation represents a possible way to strengthen RHT’s capacity and increase the size of programme operations. For these stakeholders, the case for change of a relocation rests on growth enabled by operating from a location where there is no cap on recruitments, and financed through savings generated from delivering from a less expensive location.

Technical departments are concerned about the impact a relocation of RHT would have on their own work. In the survey of stakeholders, WHO technical departments were the most negative about the value-add of a relocation: none of the 11 WHO respondents foresaw a positive impact of a relocation on the services offered by RHT. Interviewees for disease areas highlighted the strategic nature of the interactions occurring within regulatory and prequalification teams for their own effective service delivery, e.g. when aligning on drug priorities and guideline development. They reported that this collaboration is delivered through frequent, but unstructured and informal communications. They raised concerns that in the case of relocation, this lack of formalised ways of working would impair their ability to meet programmatic objectives. This concern was highest with other departments in the MVP division, some stakeholders raising concerns about the viability of their own department once separated from RHT.

Staff attrition and loss of institutional knowledge are key concerns for the preservation of business continuity. Whether they see value in a relocation or not, internal stakeholders pointed out that a relocation should only be considered if there is confidence that these risks can be minimised to ensure a smooth transition of operations. The risk appetite was observed to be low to moderate.

Implications for relocation The main requirements identified from internal stakeholders in the case a relocation takes place relate to: A clear business impact assessment and risk assessment of the relocation to inform decision-making; The implementation of robust contingency plans and careful choice of location, which should minimise

staff attrition and disruption; The standardisation of operational ways of working with RHT, notably in terms of planning capacity needs

from RHT.

3.1.3. Consultation with staff from the RHT Department

We collected the points of view of RHT staff on a potential relocation through 14 group interviews and a comprehensive staff survey with a 75% response rate. We focused on understanding the perceived benefits, the constraints and the enablers for different relocation scenarios. The findings and insights derived are the following:

Overall, RHT staff do not see the potential benefits of a relocation, and when they do, these benefits depend on the location chosen. For 76% of the items surveyed, staff see no clear benefit (over 50%) of relocating. Some of the items that fared better were: the ability to scale the programme (41% of staff see potential benefits depending on specific location) and the advantage of simultaneously complying with mobility requirements and remaining in the same team (40%). 35% of staff see relocation as a major benefit to progress in their careers, although over half of these responses are dependent on the location. Overall it is fair to say that the choice of location will have a material impact on perceived benefits, staff buy-in and level of retention.


Graph 12. Benefits from a potential relocation

Barriers to a potential relocation are considerable for staff. A clear majority of concerns relate to the programmatic and operational aspects of a relocation. A key concern for 70 % staff is the loss of proximity from WHO stakeholders in Geneva with a risk of making coordination more challenging given the lack of formal ways of working. Staff noted the risk of impacting responsiveness to requests and affecting the visibility of the programme within and outside of WHO. Impact on business continuity and programme sustainability is seen as a major barrier by 72% of staff. For staff and their families, impact on their quality of life and uncertainty on the status of a relocation vis-à-vis the mandatory mobility policy comes highest as barriers for over 60% of staff. Another concern, raised in group interviews, relates to the loss of neutrality and possible conflict of interest associated with the choice of a location that would be too close to participating PQT manufacturers.

Graph 13. Barriers to a potential relocation


A relocation is seen as a high-impact exercise for all the proposed scenarios involving teams moving from Geneva. RHT staff pointed out that the key concerns would be the isolation from other programmes leading to the delivery of an unharmonised set of solutions, the impact on collaboration and the risk of staff loss. Results from the staff survey and discussions with staff during group interviews revealed a number of necessary influencing factors that could limit the risks associated with a relocation:

Programme and work incentives To have a clear and objective rationale for relocating – 34% of staff said it would make an important

difference, scoring highest among programme items. Possibility to work remotely with flexible working setup – 32% of staff said it would make an important

difference Co-location of disease programmes and other WHO units, e.g. ex-IAU (TSN, pricing, etc.) – 16% of

staff view this as an influencing factor Well-functioning IT and communication infrastructure to allow for remote working – currently 55% of

staff do not consider the IT infrastructure at WHO to be adequate for teleworking

Assistance for relocation and future location 34% of staff would be inclined to relocate with an adequate relocation package – scoring highest among

items in assistance for relocation The top 3 items that would make an important difference in the choice of a future location are: high-

quality health services (58%), an open socio-cultural environment (55%) and strong educational system (48%).

Teams travelling frequently mentioned that a travel hub with good airline connections, travel support services and the presence of consulates/embassies for visa applications will be a necessity to support their work.

The staff survey highlighted that staff do not consider a number of key enablers to be in place to support a potential relocation. While over 50% of staff noted a great level of cohesion in their team, only 12% of staff trust that current HR policies and capabilities can support the transition and manage the hiring challenges associated with a relocation. The level of trust in management and WHO leadership to lead the change and make the right decisions on the future of the programme is also low (between 20-27%). Finally, more than half of the staff consider that the IT infrastructure at WHO is not adequate for teleworking.

Graph 14. Enablers of a potential relocation

Uncertainty over the new location and the relocated teams make it harder for most of the staff to predict their behaviour and their choice in the case of relocation. At this stage, 21% of staff mention they will not move irrespective of the chosen location, 14% will move irrespective of location, and 65% are waiting for more information. When looking at the staff breakdown, none of the G staff stated wanting to move with the relocation, with important implications on the continuity of the services during the relocation period.


Graph 15. Total likely attrition rate and attrition rate by staff category

Implications for relocation As of today, staff do not see the benefits nor the key relocation enablers to be in place for a relocation to happen. This will drive attrition up if not proactively addressed.

Consultations highlighted that some of the key elements that would need to be in place in order to support a future transition are: A clear objective and documented business case for relocation; The choice of a location that minimises staff attrition, preserves the programmatic brand and offers

excellent airline connections and travel services; Clarity on the implications of the mobility policy in the case of relocation; Support to staff during the relocation period – through a relocation package, administrative support and

more flexible HR arrangements during the transition phase; Availability of adequate IT infrastructures enabling remote ways of working in the new location; The formalisation of meetings through a detailed contact plan – in particular to handle distance with WHO

HQ Departments.


3.2. Lessons learned from other relocation experiences

3.2.1. Previous relocation experiences at WHO

Within and outside WHO, several experiences of relocation provide useful insights into the feasibility of relocating WHO’s regulatory and prequalification services. They are explored here to identify the similarities, differences and lessons learnt from which WHO could capitalise.

WHO has had relocation experiences in the past, notably in the transfer of HR and administrative services to new locations.

Table 8. Overview of WHO relocation experiences

Timeline Experience From To Types of services FTEs in scope

2007 WHO’s Global Service Center

Geneva Kuala Lumpur

Offshoring and build-up of administrative services in the field of: Finance Human resources Procurement and logistics Global IT operations

Creation of new team in KL 5-6 relocated from Geneva 250 new recruits hired locally

2016 WHO Budapest Centre

Geneva Budapest Offshoring and build-up of HR legal services

24 in scope, 2-3 relocated New recruits hired locally

2017 AFRO Brazzaville Pretoria Transfer of recruitment, compliance and financial services

29 in scope, 29 relocated

WHO Global Service Center – Kuala Lumpur

In 2006, WHO conducted an analysis of service delivery for WHO management and administration functions. Following this assessment and the choice of Kuala Lumpur as the location for WHO’s offshore services, in late 2007 WHO established its Global Service Center. The key objectives were to provide harmonised, consistent, high-quality and timely administrative services while reducing the costs and increasing the efficiency of the delivery of administrative services.

We understand 5 to 6 staff relocated from Geneva and that the rest were recruited locally.

Some of the major challenges encountered in the KL exercise were: The challenge of hiring adequate local profiles due to the ‘employee-driven market’ in Kuala Lumpur

and availability of employers and high packages; The difficulties of training local staff in the new Global Service Center due to 7h time zone difference

to Geneva; The simultaneous introduction of a new Global Management System tool and onboarding of 250

new recruits.

The GSC has allowed for cost-efficiency, bringing the cost of a single transaction down by 48% from 2009 to 2012. Currently, the GSC provides services to over 7000 WHO staff and programmes for all regions except for Americas/PAHO. It handles 260,000 transactions per year.

The feedback from stakeholders of this offshoring experience is heterogeneous and not aligned across the organization. Despite the above cost-efficiency, some WHO stakeholders perceive that the GSC has a low responsiveness to their requests and that it increased the complexity of the administrative processes.

WHO Budapest Centre

The main rationale for the establishment of WHO’s Budapest Centre was the need for new resources to support the new internal justice system and the additional resources needed to establish the Global Board of Appeal as per the EB138/54 (2015), which could not be afforded in Geneva. The triple drivers for relocation were reform, expansion and cost-efficiency. 24 new positions were to be established for the new system of justice including HRD (lawyers) and DGO staff.


Following considerations given to three locations - Tunis, Bonn and Budapest – the choice of Budapest was made. The main factors for making Budapest an attractive choice for relocation were: Availability of premises and the short period required for the host country agreement negotiation and

for making the centre fully operational; Presence of other UN agencies and the international appeal to the city (UNICEF established its

Global Shared Services Center in 2016); Availability of talent for the services in scope and attractiveness to international staff; Cost-efficiency offered through an attractive package with the host government and reduced staff

costs compared with the Geneva duty station.

From Geneva, we understand that 2 fixed-term staff members and 1 JPO accepted the offer to relocate to Budapest and additional staff have been recruited locally since 2017 to achieve the resourcing targets. Recruitment has followed the same WHO HQ regulations.

Relocation of administration services from AFRO RO to Pretoria

Following the appointment of the new RD in AFRO in 2015, the RO underwent a major reform of its structure to optimise its resources and bring value for money. Its main driver was: the right people at the right place at the right time with the right skills. Certain transactions and operations – notably recruitment in support of countries, compliance services and direct financial cooperation – were found to benefit from offshoring to a city which allowed for improved internet/communication infrastructure and has a travel hub facilitating travels within Africa.

We understand that all 29 employees in scope for the offshoring (50% P-staff) relocated to Pretoria. AFRO’s successful experience with relocation can be mainly explained by:

The attractiveness of working conditions offered in the city of Pretoria, compared with Brazzaville, even when salaries were lower;

Travel hub that allowed a reduced travel time, facilitated access to countries and resolved issues faster; Overall buy-in and acceptability from staff on the idea of relocation, for the improvement of the RO’s

operations.

3.2.2. Relocation of the European Medicines Agency (EMA)

Following the UK’s referendum on EU membership and a subsequent UK departure from the EU, the European Medicines Agency (EMA) initiated the process of relocating to another EU Member State. We analysed the move of the EMA, from London to Amsterdam, which will be finalised by January 2020. Information was gathered from interviews with EMA senior management involved in the relocation efforts and from desk research.

900 employees were under scope for the relocation and led to a 20% staff attrition rate – which can be considered a success from an operational perspective. Two parameters were considered as essential when deciding on a relocation of EMA premises. These were: 1. The choice of a new location; 2. The timing of the European Council’s decision on the new location and the time allowed for relocating there.

To cope with this transition, EMA adopted a set of measures to mitigate service disruption and which WHO could draw on in order to manage a potential relocation.

Detailed business contingency plans were already in place and ready to be actioned to avoid major service discontinuities, given EMA’s critical role in public health. This included a methodology for the prioritisation of EMA activities as well as for their implementation, guidelines for the estimation of the time spent for each EMA activity, quantification of freed-up resources and allocation of the latter to priority tasks. We understand that up to 20 FTEs (out of 900 employees) were diverted towards relocation efforts. During this period, activities were prioritised and programmes were streamlined.


To manage the relocation, the day after the decision of the UK to leave the EU, a dedicated Operation and Relocation Preparedness (ORP) taskforce and working groups were set up to deal with the different aspects of the relocation. The taskforce collected detailed information on the business (internal communication, HR, operations and preparedness) and set up working groups dedicated to the exploration of a robust and reasonable allocation of workload across the network specific to different parts of the business (scientific, industrial, financial, procurement and country operations).

Staff well-being was put at the centre of the EMA relocation plan. This included the development of staff retention support measures such as entitlements for staff and their household and other facilitation arrangements to make the transition for staff as smooth as possible. Examples of the support services implemented were: housing support, schooling & day-care and health care information, partner career advice and Dutch language courses. Incentives were offered in the form of educational allowances and travel costs linked to the relocation visits for staff and their families.

Despite the mechanisms implemented to mitigate the risks associated with the move from London to Amsterdam, staff attrition was 20%. In the case of RHT, attrition rate should be anticipated as higher due to: Case for change and relocation driver. For EMA, the trigger for a relocation was exogenous as it

was driven by the UK’s EU membership vote. All EMA’s staff were affected by the relocation. Enablers and relocation support infrastructure.

Implications for relocation Despite valuable lessons learnt, we found limited comparability between these experiences and the

relocation contemplated in this study, given the type (externally facing programmatic function vs administrative functions) and size (more than 100 staff vs a maximum of 29 staff) of the activity at stake here.

The example of EMA is highly relevant. When contrasting WHO’s current state situation (section 2) and stakeholders (section 3) against the success criteria outlined by EMA we find that WHO’s current level of readiness is well below that of EMA when it initiated the relocation. To this extent, a 20% staff attrition should be considered as a best-case scenario, and planning assumptions should consider higher levels of potential attrition.

54 Relocation study of WHO regulatory and prequalification services | Options assessment

4. Options assessment The section below will describe the approach used to determine the 7 options we assessed for this relocation study.

4.1. Option definition

4.1.1. Approach for options assessment

We employed an assessment model which consisted of: Developing a set of assumptions on which the business case would be built, and in collaboration

with WHO; Developing a set of assessment criteria upon which to assess each relocation option – based

on a set of imperatives – in the form of RHT and WHO expectations and objectives – that would need to be satisfied by the options for the successful relocation of RHT. The three imperatives agreed on for this study were:

o Strategic alignment and programmatic effectiveness o Efficiency o Risk management

Defining city types based on a set of parameters. A range of 4 city types was considered to offer RHT and WHO the art of the possible with regards to options. City types were also used to avoid narrowing down to specific cities. Appendix 7 offers an approach for site selection, which is out of scope for this study;

Developing viable options – based on a set of coherent and mutually exclusive parameters to help paint a unique option for relocation. We identified 7 unique options which we considered to be viable.

Exhibit 6. Approach for option assessment

The options, assumptions for the financial modelling and criteria, were discussed with various stakeholder groups including the leadership of the BOS and MVP divisions, PRP, DGO and the relocation working group. They were then endorsed by the project Steering Committee.


4.1.2. Assumptions

Following the consultation with RHT’s management, the Relocation Working Group and members of WHO’s Director’s General Office, a set of assumptions were developed for the purpose of portraying the business environment in which RHT and WHO operate as of today, and that we can consider as true for the purpose of building a relocation business case.

The assumptions, determined together with WHO, are as follows:

Growth constraints in GVA: we assume that the HQ budget and FTE growth in Geneva is capped at a zero nominal growth, as confirmed through discussions with DGO members. The decision for WHO’s transformation is to prioritise resource allocation to country and regional level and to relocate some of the HQ functions closer to Member States.

Growth potential: for the purpose of the assessment, we assume that donors will maintain the same level of funding, regardless of a relocation and cost structure. In addition, savings generated by the relocation are reinvested in full towards RHT recruitment and activities to enable growth.

RHT delivery model: we make a number of assumptions regarding RHT’s operations in a relocation scenario, notably that:

o RHT delivery model remains unchanged and that the PQ Medicine sessions take place in the new location on a 2-monthly basis

o The ratio of internal staff to external consultants remains constant o Travel destinations remain overall at the same level as for 2018, with exceptions for flights back

to Geneva. Mobility policy: After discussion and agreement with HR members on the RWG, we assume that staff

who have relocated will have completed their mobility under the new policy, but mobility will apply in the future. It is also assumed that 50% of staff would be subject to the mobility policy (as around 50% of RHT staff are FTE).

Hosting arrangements: we assume unlimited space for free (including storage capacity) at the new location. This would be part of the benefits offered by the host city.


4.1.3. Evaluation criteria

We identified 6 evaluation criteria derived from the three imperatives described above.

Table 9. 6 evaluation criteria for assessment Imperatives Evaluation criteria The option

1.Strategic alignment and programmatic effectiveness

1.1 Programmatic achievements

Supports programmatic objectives and growth ambitions including key considerations with respect to: Ability to achieve the objectives set out in GPW13 Ability to achieve the objectives set out in ‘Towards Access 2030’ and delivering

Quality-Assured Medical Products for all 2019-2023, notably implications on ‘scalability’ of WHO’s regulatory and prequalification services (RHT*)

1.2 Alignment with delivery model

Fits with current and future WHO and RHT* delivery model notably: How the options match the intended division of labour across the three levels of

Organization How leadership sees the evolution of HQ and core functions How RHT management sees the evolution of the RHT business and delivery

models

2.Efficiency 2.1 Cost efficiency Provides for lower costs compared with alternatives notably in terms of: Staff costs Travel costs Other costs

2.2 Operational efficiency

Provides for better use of resources compared with alternatives notably in terms of: Travel time and staff productivity Ease of doing business for other WHO divisions and offices Ease of doing business for external stakeholders

3.Risk management

3.1 Transition risk Minimises business continuity risk during transition notably risks relating to: Impact on quality of service/ability to meet service level agreements targets Execution of workplans and commitments to Members States and donors This essentially includes impact on staff morale, staff retention and operational resilience

3.2 Sustainability Ensures sustainability of the programme and high quality of WHO’s regulatory and prequalification services to MS, donors, customers and talent. This notably includes the preservation and enhancement of the reputation of WHO’s regulatory and prequalification services.

Each option was analysed across the spectrum of the evaluation criteria and rated as follows:

1 The option does not meet the criteria and cannot meet the criteria

2 The option does not meet the criteria and significant adjustments or mitigations would need to be implemented

3 The option partially meets the criteria with major adjustments needed

4 The option largely meets the criteria, with some minor adjustments to be implemented

5 Entirely meets the criteria

We made a breakdown of certain criteria and assessed them individually to re-aggregate them afterwards. This was performed for all imperatives.

4.1.4. Option parameters

In accordance with the terms of reference for this study, we identified 7 possible unique options for relocation. These were defined on the basis of the 3 scenarios described in the original RfP: Prequalification & regulatory team in their entirety; Prequalification team in its entirety; Selected components of the prequalification and regulation teams.


We subdivided these 3 scenarios into 7 options. By an option we mean a comprehensive model for relocation with a defined location for its activities (city type and underlying parameters) and a clear business rationale justifying the relocation option.

Location

4 city types were identified in order to offer a range that could be considered to represent the options. The selection of cities is out of scope of this study. The 4 city types under scope were developed on the basis of the following parameters: Travel time from Geneva: described as length of flight time from Geneva Staff cost (vs Geneva): described as potential cost savings mainly achieved through variations in post-

adjustment, reaching up to 35% depending on the location Security & socio-economic environment: rating from high (such as Geneva or comparable to

Geneva) to medium-high (e.g. European cities with slightly lower security situation and socio-economic environments in comparison with Geneva) to medium (e.g. cities in LMICs with history of safety issues, high traffic, high pollution and overall lower quality of life).

Staff attrition: ranging from the current 2.65% to over 55% depending on location. Staff attrition is a key parameter as it will dictate the success or challenges related to the various relocation options. Results from the staff survey indicated that 21% would be willing to relocate, independent of location, while 57% of staff indicated being unsure and their choice would depend on a range of factors including location.

Major travel hub: whether the location is considered a travel hub with good airline connections, enabling greater availability of flights and more direct connections

On this basis, we identified 4 city types as follows: onshore, nearshore A, nearshore B and offshore A.

Table 10. 4 city types and parameters Type Travel time from

GVA Staff Cost (vs GVA)

Security & socio-economic environment

Likely staff attrition

Major Travel hub (Y/N)

1. Onshore 0 Same High <5% (current)

No

2. Nearshore A 1-3 h - [0-20] % High - [20-30] % Yes

3. Nearshore B 1-3 h - [20-35] % Medium-high - [30-45] % Not necessarily

4. Offshore A >3h - [20-35] % Medium - [45-55] % Yes

Not a core focus in the context of the study

Offshore B >3h - [0-20] % High - [40-55] % Yes

Assessment sessions

For the purpose of the financial modelling, we assumed that the PQT-Medicines assessment sessions either stay in Copenhagen or move to the new home of PQT, to achieve cost efficiencies.

Growth

As mentioned earlier, we assume for the purpose of the assessment that the cost savings achieved from each option will be re-invested into RHT activities.


4.1.5. Option characteristics

The 7 options considered for the assessment are as follows.

Table 11. Summary of 7 options considered for assessment Parameters

Option name Characteristics Scope Location Assessment

sessions Growth

Geneva-centred All RHT activities remain in Geneva. This option assumes that the risks to move RHT are too high.

RHT Onshore Remain in Copenhagen

Low growth

All in One – Nearshore A

All RHT activities are moved to an attractive location for staff with the presence of a major external stakeholder to obtain programmatic synergies.

RHT Nearshore A Follow to new location

Moderate growth

At all costs – Nearshore B

All RHT activities are relocated to a cost-efficient location, with the goal to generate cost savings that could support programme expansion or that could be allocated to other WHO programmes.

RHT Nearshore B Follow to new location

High growth

PQ only – Nearshore A

PQT, due to the transactional nature of its services, is relocated as a standalone to an attractive location for staff, with lower risks of attrition.

PQT Nearshore A Follow to new location

Moderate growth

PQ only – Nearshore B

PQT, due to the transactional nature of its services, is relocated as a standalone to a cost-efficient location, with potentially higher risks of attrition.

PQT Nearshore B Follow to new location

Moderate-High growth

Travel hub – Offshore A

RHT’s sub-teams with the heaviest travel schedule to countries are posted to a travel hub that shortens travel time and increases proximity to visited countries. PQT & SAV remain in Geneva.

RSS – CRS RSS- RN&H PQT- Inspections (SAV – some members)

Offshore A Remain in Copenhagen

Moderate growth

Distributed model – different locations

Different components of RHT are in different locations. RHT’s sub-teams with the heaviest travel schedule to countries are posted to a travel hub that shortens travel time and increases proximity to visited countries. PQT is relocated to a city either close to a major stakeholder or to a cost-efficient location. Some activities of SAV remain in Geneva, some others move with RSS.

RSS – CRS RSS- RN&H (SAV – some members)

Offshore A Follow to new location

Moderate growth

PQT Nearshore B

SAV Geneva


4.2. Options

4.2.1. Option 1 – Geneva-centred

Description This option is about all RHT teams staying in Geneva and maintaining the status quo. It implies that no relocation takes place and that the current business model does not change.

Rationale This option assumes that the risks to move RHT from Geneva would be too high, either because of the disruption during the transition or because RHT activities are so intertwined with other HQ departments and Geneva-based partners that they cannot be performed, to a similar or improved level, elsewhere. Advantages Avoids transition risk, as no relocation would take place; Maintains momentum around recent RHT achievements; Maintains strong connection to disease areas.

Key limitations and risks Cost efficiency. Although this option would remove the transition risk associated to a potential

relocation, it represents the costliest option due to the post adjustment and G staff salary grids and travel costs;

Mismatch with WHO Leadership vision of the evolution of HQ and core functions. Given that the services offered by RHT’s team do not fall neatly under the definition of Global Public Goods for Health, keeping all the RHT teams in HQ represents a deviation from the strategic organizational view of WHO and its planned evolution;

Cap on scalability due to the zero-nominal growth at HQ and will not enable a long-term vision for growth with the current business model. Due to the limitations on budget and headcount growth at HQ, as well as to the contractual arrangements in place for staff, the expansion of RHT programmes with the current operating model is at risk due to the limitations on resources.

Financial analysis Option 1 is the most expensive in terms of annual running costs (USD 37.4 million). Salaries represent the highest cost portion of total running costs at 63.5%, while travel costs represent only 5%. Should RHT not relocate, it would miss out on potential savings of between USD 1.7 and 7.70 million a year compared with other options.

Exhibit 7. Option 1 – Geneva-centred


Assessment compared with Guiding Principles/assessment criteria

Here we evaluate Option 1 against the evaluation criteria defined in section 4.1 above.

Evaluation criteria Rating Evaluation

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3.7 This option allows RHT to provide its contribution to GPW13 targets by allowing the achievement of targets relating to access to quality and safe medical products in LMICs. It also increases the chances that disease areas have the adequate support from RHT for their programmes.

The status quo would enable to capitalise on recent efforts to harmonise, streamline and consolidate work of RHT and build on recent achievements.

This option envisages only limited space for RHT growth. Current HQ policies have put a strain on the ability of RHT to recruit and according to 'zero growth' policy at HQ, this situation is not likely to improve in this option. It would likely result in a shortfall in RHT's ability to scale up to meet the ambitions of the RHT strategy.


2.7

This option retains the whole scope of activities at HQ, including a substantial level of capacity-building and technical assistance. This is not necessarily in line with the intended division of labour in the new operating model, where normative work is located at HQ and the delivery of impact and results is located at country level.

This option partially matches with how leadership sees the focus of HQ on corporate and global good functions. The services at stake do not fall neatly into the definition of corporate functions or global goods.

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2.1 Cost efficiency

1.0 This option is the most costly of all alternatives assessed due to: 1) Post adjustments and G salary grids; and 2) Travel patterns which are not optimised to lower costs, e.g. high travel costs incurred by PQ-Medicines team travelling to Copenhagen for assessment sessions.


3.7 On the one hand, in this option travel time is not optimised as Geneva is not the best travel hub for airline connections. On the other hand, the collocation in Geneva allows for optimal alignment and communication within RHT.

Benefits from proximity to internal WHO stakeholders at HQ, notably enabling functions (HR, legal) and disease areas. Not necessarily optimal for collaboration with other regional offices however.

Benefits from proximity to global health partners (Health campus) and manufacturer associations based in Geneva. Major external stakeholders have noted the convenience of RHT being located in Geneva. Does not seem to negatively impact manufacturers since most interactions with PQ are asynchronous (e.g. email).

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3.1 Transition risk

5.0 The risk in this option is zero since there is no transition.

3.2 Sustainability

3.0 Partial match, as questionable whether RHT can keep up with growing demand of NRAs worldwide being located in Geneva. Brand protected and no impact on donor funding and future planning. Over long-term, concerns regarding RHT's resources and ability to cope and serve manufacturers with growing demands and expectations from the newly introduced fee structure.

The option results on the one hand in a location that can be attractive for talent. However, Geneva is not necessarily the most appealing destination for all talents, and with the zero growth assumption comes a continued trend of temporary arrangements leaving staff vulnerable.


4.2.2. Option 2 – All in One / Nearshore A

Description Option 2 assumes that all RHT teams (PQT, RSS and SAV) are moved in their entirety to a location that is nearshore, notably at maximum 2 hours flight from Geneva, and that offers a high socio-economic environment, high purchasing power and safety standards for staff and their household (location is referred to as ‘Nearshore A’). This option also assumes that all prequalification assessment sessions are moved to the new location and expects moderate growth.

Rationale This option assumes that programmatic synergies can be obtained from being located close to a major external stakeholder, but in order to maintain and enhance programmatic delivery, RHT teams should be co-located.

Advantages Compatible with the 2030 vision for access to medicine and WHO’s Leadership vision of the evolution

of HQ’s functions; Maintains the current interactions among RHT teams; Efficiency, notably time savings from reduced travel and partial cost savings; Attractive for future talent.

Key limitations and risks Impact on current interactions with technical and administrative departments at HQ and with

many Geneva-based stakeholders (key donors, manufacturers’ associations); Strategic impact and delivery of programmatic objectives in the short term; Transition risk and related possible impact on reputation and sustainability.

Financial modelling vs current situation This option generates savings of USD 3.9 million annually starting in year 1 and relocation costs are recouped after 2 years. We estimated that USD 200’000 in travel costs and per diems would be saved from having the PQT-Medicines assessment sessions in the same location.

Exhibit 8. Option 2 – All in one – Nearshore A


Assessment compared with Guiding Principles/assessment criteria Here we evaluate Option 2 against the evaluation criteria defined in section 4.1 above.


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3.3 Short-term negative impact due to transition period. Impacts RHT's ability to provide its contribution to GPW13 targets since the achievement of targets relating to access to quality and safe medical products in LMICs would be at risk during the transition. In addition, potential limited impact on GPW13 due to the disruption caused by RHT's relocation on other programmes which depend on RHT to achieve their own goals. Need for establishment of SOPs and detailed workplans with key stakeholders in HQ (i.e. Disease programmes, others).

Likely positive impact by 2030 due to another 7 years available to build and expand the programme following a likely transition period of 3-4 years with expected loss in productivity (e.g staff loss, establishment of new processes and workflows).


3.4 Partial match to Division of labour in WHO new operating delivery model. While PQT offers a global health service to manufacturers and procurers to the benefit of multiple countries across multiple WHO regions, it does not fit neatly with the definition of WHO's GPHG. While SAV and RSS oversee some GPHG - e.g. MS Mechanism of SF drugs, Global Benchmarking Tool and maturity assessment of NRAs- some of their other services would best fit at the RO level (RSS capacity building support to regional regulatory networks, NRAs and laboratories).

Partial match with how leadership sees the evolution of HQ. The option addresses the criteria for zero nominal growth of headcounts in Geneva by relocating the whole of RHT in a new location. The services at stake do no fall neatly into the definition of corporate functions or global goods.

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2.1 Cost efficiency

3.0 This option results in cost reduction for staff and travel since all assessments are performed in the same location. No major impact however on travel costs for teams with heaviest travel schedules (PQT-Inspections, RSS RN&H and RSS CRS) nor on travel costs for pool of assessors and co-inspectors. Expected cost to travel to Geneva are also to be factored in.


3.0 Positive impact on travel time and related productivity as all assessment sessions will be onsite and the availability of an international travel hub would increase availability of direct flights.

Ease of doing business for and with other WHO divisions and offices would be impacted negatively because of increased transaction costs due to distance. A majority of sub-teams have regular and vital interactions with Disease programmes and corporate functions, and have indicated that a relocation would considerably disrupt the current ways of doing business. A sizeable number of external stakeholders have noted that relocation would create disconnection with other WHO stakeholders and would make interactions harder. Such an option would be disruptive for some activities, such as the MS Mechanism of SF drugs which convenes in Geneva and requires extensive interactions with the Geneva missions.

No evident benefits for stakeholders as none of the key stakeholders are located 3h or less from Geneva other than Copenhagen, EMA or European Listed authorities.

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3.1 Transition risk

3.0 Material impact on quality of services from loss of 20-30% of staff and operational impact of a transition (need to dedicate resources to the transition). Mitigation measures to be considered include shadowing strategies and specialised training of new local G recruits. A compounded factor is the absence of a well-tested business continuity plan to support the roll-out of a relocation plan. Question around capacity to work from a distance can be mitigated through SOPs. Potential follow-on impact on donor confidence and availability of funding.

3.2 Sustainability

5.0 This option would offer the possibility over time to strengthen the capacity of RHT, by recruiting additional staff and external consultants, supported by the attractiveness of the location for talent. This would be beneficial in the long-term in view of expanding PQ and RSS services, i.e. processing more dossiers (and accommodating growing manufacturer demand for PQ products) and supporting more MS in their journey to strengthening their regulatory systems. No negative impact on donor financing is anticipated in the long-term.

Attractiveness to new staff is high, if not higher than Geneva since longer-term/fixed-term positions could be secured while at the same time offering a high standard of living. Also attractive for external talent (external assessor notably) from LMICs who we understood require excellent site connectivity and safety to commit to participation in sessions.


4.2.3. Option 3 – At all costs / Nearshore B

Description All RHT teams, activities and assessment sections are moved to a nearshore, cost-effective location (hereby referred to as ‘Nearshore B’). Due to the high cost savings that this option is likely to unlock, the expected growth under this option is expected to be high.

Rationale In this option, the primary driver is the generation of cost savings to either support programme expansion (e.g. recruiting additional assessors, investing in training of NRAs) or to be allocated to other WHO programmes. Advantages Compatible with the 2030 vision for access to medicine and WHO’s Leadership vision of the evolution

of HQ’s functions; Maintains the current interactions among RHT teams; Realises significant cost savings. Achieves significant cost savings on staff costs (32%) and,

partially, on assessment travel costs (5%); Long-term growth and scalability. Enables scalability since through the costs savings achieved, RHT

could strengthen its capacity by recruiting additional staff and external consultants and/or by improving systems and processes.

Key limitations and risks Impact on current interactions with technical and administrative departments at HQ and with

many Geneva-based stakeholders (key donors, manufacturers’ associations); Strategic impact and delivery of programmatic objectives in the short term; Transition risk and related possible impact on reputation and sustainability; Staff attrition of up to 45%. Risk of losing highly specialised P staff not readily available on the market

and G staff not willing to relocate as less attractive pension schemes in a Nearshore B location. Financial modelling vs current situation This option could save WHO up to USD 7.8 million as of year 1 following the relocation. It is the option with the highest potential for cost-savings, a very large part being driven by the post-adjustment multiplier. For example, the total Post Adjustment is reduced to USD 1.6 million vs 4.6 million in the Base Case. This leads to a reduction of 30% compared with baseline. Travel patterns for this option do not differ significantly from baseline. One-off costs are the second highest following Option 2 since the entire RHT would be moving, however those costs are recouped within 1 year (shortest lapse of time of all options). Exhibit 9. Option 3 – At all Cost / Nearshore B




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3.0 Short-term negative impact due to transition period. Impacts RHT's ability to provide its contribution to GPW13 targets since the achievement of targets relating to access to quality and safe medical products in LMICs would be at risk during the transition. In addition, potential limited impact on GPW13 due to the disruption caused by RHT's relocation on other programmes which depend on RHT to achieve their own goals. Need for establishment of SOPs and detailed workplans with key stakeholders in HQ (i.e. Disease programmes, others).

Likely positive impact by 2030 due to another 7 years available to build and expand the programme following a likely transition period of 3-4 years with expected loss in productivity (e.g. staff loss, establishment of new processes and workflows).


3.7 Partial match to Division of labour in WHO new operating delivery model. While PQT offers a global health service to manufacturers and procurers to the benefit of multiple countries across multiple WHO regions, it does not fit neatly with the definition of WHO's GPHG. While SAV and RSS oversee some GPHG - e.g. MS Mechanism of SF drugs, Global Benchmarking Tool and maturity assessment of NRAs- some of their other services would best fit at the RO level (RSS capacity building support to regional regulatory networks, NRAs and laboratories).

Partial match with how leadership sees the evolution of HQ. This option addresses the criteria for zero nominal growth of headcounts in Geneva by relocating the whole of RHT in a new location. The services at stake do no fall neatly into the definition of corporate functions or global goods.

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2.1 Cost efficiency

4.0 This option results in material cost reduction for staff (up to 35%) and for travel since all assessments are performed in the same location. No major impact however on travel costs for teams with heaviest travel schedules (PQT-Inspections, RSS RN&H and RSS CRS) nor on travel costs for pool of assessors and co-inspectors. Expected cost to travel to Geneva are also to be factored in. Depending on location and attractiveness of package, staff savings may be partially offset by higher staff attrition and challenges to recruit the right type of profiles.


2.3 Positive impact on travel time and related productivity (as session will be onsite, and all RHT teams will be co-located). However since the location may not be a convenient travel hub, travel patterns may not be optimised.

Ease of doing business for and with other WHO divisions and offices would be impacted negatively because of increased transaction costs due to distance. A majority of sub-teams have regular and vital interactions with disease programmes and corporate functions, and a relocation would require new ways of doing business. This may be exacerbated further if the chosen location is not a convenient travel hub. Would be disruptive for some activities such as the MS Mechanism of SF drugs which convenes in Geneva and requires extensive interactions with the Geneva missions.

No particular advantage for external stakeholders as no evident stakeholders are located 3h or less from Geneva other than Copenhagen, EMA or European Listed authorities. Further exacerbated if the chosen location is not a travel hub, as this would further impact the organization of face-to-face meetings in the new location.

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3.1 Transition risk

2.0 Material impact on quality of services from loss of staff and operational impact of a transition (need to dedicate resources to the transition). Option comes with a 30-45% attrition rate for P staff, whose profiles are highly specialised and not readily available on the market. The higher expected attrition level compared with Option 2: All in One/Nearshore A poses a substantial risk of losing key P staff and affecting the running of operations. It is also less likely that G staff would move in such an option, in particular since the pension schemes may be materially less attractive in a Nearshore B location.

3.2 Sustainability

4.0 Would offer significant cost savings to strengthen the capacity of RHT. This would be beneficial in the long term in view of expanding PQ and RSS services, i.e. processing more dossiers (and accommodating growing manufacturer demand for PQ products) and supporting more MS in their journey to strengthening their regulatory systems.

Expected challenges to recruit adequate profiles if the city is not appealing enough to talent or if access is not straightforward for external consultants. Would need to be counterbalanced with attractive packages. Given that Nearshore B is less attractive than Nearshore A, attractiveness in the long term may be an issue, for both staff and assessors. For assessors, the future location would need to be easily accessible and offer a pull (in the form of attractive per diems, for example).


4.2.4. Option 4 – PQ only / Nearshore A

Description Under option 4, RSS and SAV teams stay in Geneva with the current operating model, while PQT is relocated to ’Nearshore A’, a location that offers high socio-economic environment, high purchasing power and safety standards for staff and their household. In option 4, the assessment sessions are also moved to the new location. Given the partial savings and the increased proximity to strategic partners, the expected growth under this arrangement is moderate.

Rationale This option assumes that, due to the more transactional nature of its services, the entire PQT (including all health products and the PQT-Inspections sub-teams) can function as a standalone. It also assumes that the new location would allow PQT to expand its assessment capacity by leveraging the increased proximity to its strategic partners.

Advantages Have partial (although limited) cost efficiencies from the reduced staff costs and the assessment

travel costs; Limited transition risk compared to other options (narrower scope, lower attrition); Availability of a major travel hub, convenient for PQ staff and key stakeholders.

Key limitations and risks High impact on interaction within RHT and risk of loss of linkages with RSS and SAV; Reduced interactions with WHO stakeholders; Limited cost savings and therefore ability to finance programme expansion.

Financial modelling vs current situation Option 4 results in limited staff costs savings (around 10%), given that only PQT will be relocated. From a travel costs perspective, this option does not unlock major travel cost reduction, as there are no material differences between departures from Geneva vs a Nearshore A location. In addition, the travel savings that will be achieved by moving the PQT-Medicines assessment sessions to the new location are likely to be offset in the short/medium term by the need for PQT staff to visit Geneva on a regular basis. Exhibit 10. Option 4 – PQ only – Nearshore A




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3.0 Significant impact on PQT's ability to contribute to GPW13 targets during the transition period. In particular, the pace of the assessments will slow down due to the expected staff attrition (between 20-30% for nearshore A for PQT staff), expected loss in productivity and effectiveness with regards to the dossier reviews handling.

Ways of working with RSS and SAV and with Disease Programmes (GMP, HIV, NTD, TB, NCDs, GPEI and Emergencies) will be disrupted, leading to lower integration of products and ability to deliver on the RHT 2019-2023 strategy.

Likely positive impact by 2030 due to another 7 years available to build and expand the programme following a likely transition period of 3-4 years with expected loss in productivity (staff loss, establishment of new processes and workflows, etc.).


2.3 Partial match to division of labour in WHO new operating delivery model. While PQT offers a global health service to manufacturers and procurers to the benefit of multiple countries across multiple WHO regions, it does not fit neatly with the definition of WHO's GPHG. While SAV and RSS oversee some GPHG - e.g. MS Mechanism of SF drugs, Global Benchmarking Tool and maturity assessment of NRAs- some of their other services best correspond to activities meant to be undertaken at the RO level (RSS capacity building support to regional regulatory networks, NRAs and laboratories).

Partial match with how leadership sees the evolution of HQ. Option addresses partially the criteria for zero nominal growth of headcounts in Geneva by relocating PQT in a new location. However it does not respond to the need for RSS & SAV to be closer to the priority countries it serves.

Material impact on RHT to deliver as a whole and loss of linkages with RSS and SAV. May exacerbate already existing siloed approach and impact quality of delivery to manufacturers and NRAs, as well as expansion on new initiatives such as the Collaborative Registration Process (CRP).

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2.1 Cost efficiency

2.0 This option results in some cost reduction for the PQT staff only (up to 20%). In addition, important travel savings will be achieved by moving the PQT-Medicines assessment sessions to the new location. These will be offset however by the need for the PQT staff to visit Geneva on a regular basis. No major benefits on travel costs for teams with heaviest travel schedules (PQT-Inspections, RSS RN&H and RSS CRS). No impact on travel costs of pool of assessors and co-inspectors.


3.0 Positive impact on travel time and related productivity as assessment sessions will be onsite. This option supposes an international travel hub which would increase availability of direct flights for the PQT-Inspections sub-team in particular.

However the travel costs and schedules of the RSS and SAV will not be materially improved. Risk that PQT would be isolated and that important cross-team initiatives would be negatively affected.

Ease of doing business for and with other WHO divisions and offices, for PQT, would be impacted negatively because of increased transaction costs due to distance.

Slight impact for external stakeholders and to a lesser extent in Copenhagen where health procurement agencies are present. External stakeholders noted this option would be less convenient as travels would need to be planned in some cases to both the new location (to meet PQ) and Geneva (to meet with RSS, SAV and other stakeholders).

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3.1 Transition risk

3.0 Material impact on quality of services from loss of staff and operational impact of a transition (need to dedicate resources to the transition). Option comes with a 20-30% attrition rate for P staff (in PQT only), whose profiles are highly specialised and not readily available on the market. Expected high loss of G staff unless specific incentives offered (contract improvements to P positions, pension rate adjustments, etc.). This option comes with risk of operational isolation of PQ and disconnection from remaining RHT operations in Geneva. Mitigation measures to be considered include shadowing strategies and specialised training of new local G recruits. A compounded factor is the absence of a well-tested business continuity plan to support the roll-out of a relocation plan. Questions around capacity to work from a distance can be mitigated through SOPs. Potential follow-on impact on donor confidence and availability of funding.

3.2 Sustainability

4.5 Generates some cost savings to strengthen the capacity of PQT only. This would be beneficial in the long-term in view of expanding PQ services, i.e. processing more dossiers (and accommodating growing manufacturer demand for PQ products). Savings and efficiencies could benefit RHT as a whole and contribute in supporting more MS in their journey to strengthening their regulatory systems.

Attractiveness to new staff is high, if not higher than Geneva since longer-term/ fixed-term position could be secured while at the same time offering a high standard of living. Also attractive for external talent (external assessor notably) from LMICs who we understood require excellent site connectivity and safety to commit to participation in sessions. Retention of RSS and SAV staff in Geneva would not be impacted.


4.2.5. Option 5 – PQ only / Nearshore B

Description In this option, the whole prequalification team and assessment sessions are moved to a nearshore, cost-effective location (‘Nearshore B’). Under this option, RSS and SAV teams remain in Geneva, without applying changes to their business model. Moderate to high growth is expected for this arrangement.

Rationale This option assumes that, as option 4, PQT can be standalone due to the transactional nature of its activities. It assumes that significant cost savings will be reinvested in PQT’s capacity expansion, while maintaining the key linkages among the PQT sub-teams.

Advantages Cost-savings of c. 4.3 million as compared to option 1; Provides a platform for future growth and scalability of PQT capacity. Key limitations and risks High impact on interaction within RHT and risk of loss of linkages with RSS and SAV; Reduced interactions with WHO stakeholders; Higher transition risk compared to option 1 and 4.

Financial modelling vs current situation

Cost savings in this option are achieved primarily through staff costs reductions of USD 4.3 million. One-off costs are in the medium range compared with other options and the payback period of 1 year is among the lowest with option 3, also in nearshore B. Investments could therefore be rapidly reinvested into the programme. Exhibit 11. Option 5 – PQ only – Nearshore B


Assessment compared with Guiding Principles/assessment criteria

Here we evaluate Option 5 against the evaluation criteria defined in section 4.1 above.


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2.7 Significant impact on PQT's ability to contribute to GPW13 targets during the transition period. In particular, the pace of the assessments will slow down due to the expected staff attrition (between 20-30% for nearshore A for PQT staff), expected loss in productivity and effectiveness with regards to the dossier reviews handling.

Ways of working with RSS and SAV and with Disease Programmes (GMP, HIV, NTD, TB, NCDs, GPEI and Emergencies) will be disrupted, leading to lower integration of products and ability to deliver on the RHT 2019-2023 strategy.

Likely positive impact by 2030 due to another 7 years available to build and expand the programme following a likely transition period of 3-4 years with expected loss in productivity (staff loss, establishment of new processes and workflows, etc.).

1.2 Alignment

with delivery

model

2.3 Partial match to division of labour in WHO new operating delivery model. While PQT offers a global health service to manufacturers and procurers to the benefit of multiple countries across multiple WHO regions, it does not fit neatly with the definition of WHO's GPHG. While SAV and RSS oversee some GPHG - e.g. MS Mechanism of SF drugs, Global Benchmarking Tool and maturity assessment of NRAs- some of their other services best correspond to activities meant to be undertaken at the RO level (RSS capacity building support to regional regulatory networks, NRAs and laboratories).

Partial match with how leadership sees the evolution of HQ. Option addresses partially the criteria for zero nominal growth of headcounts in Geneva by relocating PQT in a new location. However it does not respond to the need for RSS & SAV to be closer to the priority countries it serves.

Material impact on RHT to deliver as a whole and loss of linkages with RSS and SAV. May exacerbate already existing siloed approach and impact quality of delivery to manufacturers and NRAs, as well as expansion on new initiatives such as the Collaborative Registration Process (CRP).

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2.1 Cost

efficiency

3.0 This option results in material cost reduction for the PQT only. Important travel savings will be achieved by moving the PQT-Mx assessment sessions to the new location. These will be offset by the need for the PQT staff to visit Geneva on a regular basis. No major benefits on travel costs for teams with heaviest travel schedules (PQT-Inspections, RSS RN&H and RSS CRS). No impact on travel costs of pool of assessors and co-inspectors. Depending on location and attractiveness of package, staff savings may be partially offset by higher staff attrition and challenges to recruit the right type of profiles.


2.3 Positive impact on travel time and related productivity as assessment sessions will be onsite. This option supposes an international travel hub which would increase availability of direct flights for the PQT-Inspections sub-team in particular.

However the travel costs and schedules of the RSS and SAV will not be materially improved. Risk that PQT would be isolated and that important cross-team initiatives would be negatively affected.

Ease of doing business for and with other WHO divisions and offices, for PQT, would be impacted negatively because of increased transaction costs due to distance.

Slight impact for external stakeholders and to a lesser extent in Copenhagen where health procurement agencies are present. External stakeholders noted this option would be less convenient as travels would need to be planned in some cases to both the new location (to meet PQ) and Geneva (to meet with RSS, SAV and other stakeholders).

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3.1 Transition

risk

2.0 Material impact on quality of services during the transition from loss of staff and need to redirect resources to the transition efforts. Option comes with a 30-45% attrition rate for P staff (PQT only), whose profiles are highly specialised and not readily available on the market. The higher expected attrition level compared with Option 4: PQ only/Nearshore A poses a substantial risk of losing key P staff and affecting the running of operations. It is also less likely that G staff would move in such an option, in particular since the pension schemes may be materially less attractive in a Nearshore B location. This option comes with risk of operational isolation of PQ and disconnection from remaining RHT operations in Geneva.

3.2

Sustainability

4.5 Significant cost savings to strengthen the capacity of PQT only. This would be beneficial in the long term in view of expanding PQ services, i.e. processing more dossiers (and accommodating growing manufacturer demand for PQ products), supporting more MS in their journey to strengthening their regulatory systems.

Expected challenges to recruit adequate profiles if the city is not appealing enough to talent or if access is not straightforward for external consultants. Would need to be counterbalanced with attractive packages. Given that Nearshore B is less attractive than Nearshore A, attractiveness in the long term may be an issue, for both staff and assessors. For assessors, the future location would need to be easily accessible and be incentivised (in the form of attractive per diems for example).


4.2.6. Option 6 – Travel Hub

Description The sub-teams in scope for this option are PQT – Inspections, RSS – Regulatory Networks & Harmonization, RSS – Technical Assistance & Laboratory Services, RSS – Country Regulatory Systems and selected members of SAV teams (those performing capacity-building in countries) to an international travel hub. Based on this option, the remaining activities and teams focusing on normative work would stay in Geneva and the assessment sessions would still be held in Copenhagen. Given the gains in efficiency and cost savings on travel, this option is expected to enable moderate growth.

Rationale The sub-teams that have the heaviest travel schedule are co-located in a hub that shortens the distance travelled and increases the proximity to countries and/or manufacturers. The increased ease of travel allows for a more optimal employment of relocated teams’ time and financial resources and therefore for operational efficiency gains. In addition, option 6 enables capacity-building and closer country and regional support thanks to the increased proximity to the key stakeholders of the relocated teams.

Advantages Aligned with WHO’s intended division of labour; Increased ease of doing business and collaboration with external stakeholders in regions.

Key limitations and risks High transition risk due to staff attrition that could exceed 50%; Limited savings.

Financial modelling vs current situation Cost savings in this option are limited given that post-adjustments in an Offshore A location are high and comparable with Geneva. One-off relocation costs are the lowest of all the options, given the restricted numbers of staff relocating, compared with the size of RHT. Exhibit 12. Option 6 – Travel hub




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Programmatic achievements

3.7 Aligned with GPW13 objective to bring services and technical assistance closer to regions and countries, by setting a Travel Hub. The new location would provide potential to serve as a training hub for the region on the prequalification of health products and regulatory strengthening, thus contributing to the strengthening of the technical capability of both NRAs and manufacturers.

Good alignment with Access 2030, with ability to strengthen regulatory capabilities and increase health products assessment capacity through the ramping up of capacity in the Travel Hub.

Impact on delivery of RHT 2019-2023 strategic objectives since in the short-term attrition could exceed 50% for the impacted teams and productivity would decrease during the transition period.

1.2 Alignment

with delivery

model

4.0 High match with WHO's intended division of labour, by bringing services and technical assistance closer to regions and countries, and with how leadership seeks to prioritize resource allocation to country and regional levels.

High alignment with how RHT management sees potential evolution of the business, in particular to build up regulatory strengthening activities in regions and countries.

However this option does not fully respond to zero nominal budget growth at HQ with PQT remaining at HQ. Also the splitting of PQT product streams impairs last 5 years efforts at harmonizing, integrating and aligning teams across RHT.

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2.1 Cost

efficiency

3.0 This option offers cost savings as savings may reach up to 35% of teams in scope in an offshore location. In addition, travel costs to targeted countries in Africa and Asia will be optimised (to up to 70% in some cases).

However this option does offer savings for PQT.


3.3 Travel times and schedules will be significantly optimized for the teams in scope. In addition, the teams will be in a better position to support an additional number of countries and increase their productivity.

This option would enable interacting more closely with ROs and COs. The Travel Hub will be closer to NRAs and manufacturers, Possibility to increase

involvement with national and regional institutions (universities, research centres, NRAs and NCLs).

However, RHT alignment and sub-team communication will be negatively impacted from the team being split in two distant locations This option will also create more complexities for RHT when having to speak in a harmonised manner to external stakeholders (especially to donors, technical partners and manufacturers).

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3.1 Transition

risk

3.0 Short term impact on the delivery of their services due to expected attrition and project management workload during the transition. The attrition rate for the teams in question in this option could exceed 50%, which is the highest of all options. The transition risk would therefore be higher for certain sub-teams.

3.2

Sustainability

4.0

This option will over time offer considerable benefits for Member States, their NRAs and manufacturers. Some of the major expected benefits include: 1. proximity enables immediate and effective response to country demands; 2. ability to participate in regional networks and harmonisation activities; 3. faster response to manufacturers who are currently applying for prequalification.

Talent preserved for teams remaining in Geneva while savings would enable building of regional and country capabilities. Expected challenges to recruit the appropriate profiles as compared with Geneva.


4.2.7. Option 7 – Distributed model

Description Under option 7, the different components of RHT are in different locations. Notably: SAV remains at HQ in Geneva All the PQ sub-teams, apart from PQT – Inspections, move either to nearshore location A or B

(nearshore A was used for financial modelling purposes) RSS and PQT – Inspections move to one or more travel hub with good airline connections

The proposed arrangement would also involve assessment sessions at the new PQ location.

Rationale This option assumes that effectiveness and efficiency are best achieved if each sub-team is located close to the stakeholders they interact with the most. This results in a distributed model where teams are located across several locations based on the nature of their activities. The option assumes that team are able to collaborate seamlessly at a distance.

Advantages Aligned with WHO’s intended division of labour; Increased ease of doing business and collaboration with external stakeholders in regions; Cost savings.

Key limitations and risks Highest transition risk with potential impact on sustainability of the programme; High one-off costs; Impact on interactions within the RHT team. Financial modelling vs current situation This option involves one of the highest relocation costs given the double relocation efforts required to relocate PQT to a nearshore A or B, and to set up a travel hub.

Exhibit 13. Option 7 – Distributed model


Assessment compared with Guiding Principles/assessment criteria Here we evaluate Option 7 against the evaluation criteria defined in section 4.1 above


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3.0 Aligned with GPW13 objective to bring services and technical assistance closer to regions and countries, by setting a travel hub. The new location would provide potential to serve as a training hub for the region on the prequalification of health products and regulatory strengthening, thus contributing to the strengthening of the technical capability of both NRAs and manufacturers.

Good alignment with Access 2030, with ability to strengthen regulatory capabilities and increase health products assessment capacity, with a limitation on the level of integration in approaches and delivery.

However the relocation of two major teams - PQT and RSS & PQT-Inspections), will significantly impact the delivery of RHT 2019-2023 strategic objectives since in the short term attrition could exceed 50% for the impacted teams and productivity would decrease during the transition period.

1.2 Alignment

with delivery

model

4.3 High match with WHO's intended division of labour, by bringing services and technical assistance closer to regions and countries, and with how leadership seeks to prioritize resource allocation to country and regional levels.

High alignment with how RHT management sees potential evolution of the business, in particular to build up regulatory strengthening activities in regions and countries.

Aligned with zero nominal budget growth at HQ whilst providing for programmatic expansion.

However, significant impact on RHT to deliver as a whole and risk of disjointed delivery with teams being spread out across different locations.

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2.1 Cost

efficiency

3.0 Option offers cost savings on staff and on ravel costs for resources located in the offshore location.

These savings will be partially offset from requirements to bring all of RHT to meet regularly in one location with associated travel costs.


2.3 Travel will be significantly optimized for the teams in scope since assessment sessions will take place in the same PQ location, and the teams in the offshore travel hub will have less and more convenient travel.

This option would enable RSS and SAV to interact more closely with ROs and COs. The travel hub will be closer to NRAs and manufacturers, with the possibility to increase involvement with national and regional institutions (universities, research centres, NRAs. NCLs).

However, RHT alignment and sub-team communication will be severely impacted from the team being split in three locations This option will also create more complexities for RHT when having to speak in a harmonised manner to external stakeholders (especially to donors, technical partners and manufacturers).

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3.1 Transition

risk

1.0 Option with greatest staff attrition in the short term (possibly in excess of 50% in offshore for the travel hub and 20% in nearshore A for PQT), with potential to expand over time both the PQ and RSS/PQT-Inspections services. Time to ramp up services and hire adequate profiles may be longer and more time-intensive in this option.

Highest transition risk of all options, as need to plan for the relocation of two major teams: PQT in a nearshore A location and the sub-teams to the travel hub in an offshore location. Staff attrition in the offshore location in particular is a major risk as some sub-teams may not follow and may have to be rebuilt entirely with a risk of loss of knowledge in transition.

The resources and planning around the transition will require significant redirecting of efforts, considering that WHO/RHT does not have the business continuity plans in place to support such a complex transition.

3.2

Sustainability

3.0 This option will over time offer major benefits for Member States, their NRAs and manufacturers. Some of the major expected benefits include: 1. proximity enables immediate and effective response to country demands; 2. ability to participate in regional networks and harmonisation activities; 3. faster response to manufacturers who are currently applying for prequalification.

However, it may be that this option appears to be disjointed and ineffective from the perspective of external stakeholders.


4.3. Summary of evaluation

The charts below present the results of the financial modelling for each option, including running costs once implemented, one-off transition costs and the resulting payback period.

Graph 16. Total running costs per relocation option (USD million)

Graph 17. One-off costs per relocation option (USD million)

Graph 18. Payback period in years per relocation option

Overall the financial simulation shows that significant efficiencies could be gained from operating from a different location, with a payback period of one to two years depending on the option considered. Savings come from salary costs through lower post-adjustments and lower local salaries for G staff compared with Geneva.

The ‘At all cost Nearshore B’ option would generate the highest savings, representing a 32% saving on staff costs and 21% saving of total programme costs compared with the status quo.


The table below provides a summary of the evaluation of each options:

Table 12: Option evaluation summary Imperatives

Evaluation criteria Option 1: Geneva-centred

Option 2: All in One, Nearshore A

Option 3: At all Cost/ Nearshore B

Option 4: PQ only/ Nearshore A

Option 5: PQ only/ Nearshore B

Option 6: Travel Hub

Option 7: Distribu-ted model

1. Strategic alignment and programmatic effectiveness

6.3 6.7 6.7 5.3 5.0 7.7 7.3

1.1 Programmatic achievements 3.7 3.3 3.0 3.0 2.7 3.7 3.0

1.2 Alignment with delivery model 2.7 3.3 3.7 2.3 2.3 4.0 4.3

2. Efficiency 4.7 6.0 6.3 5.0 5.3 6.3 5.3

2.1 Cost efficiency 1.0 3.0 4.0 2.0 3.0 3.0 3.0

2.2. Operational efficiency 3.7 3.0 2.3 3.0 2.3 3.3 2.3

3. Risk management 8.0 8.0 6.0 7.5 6.5 7.0 4.0

3.1 Transition risk 5.0 3.0 2.0 3.0 2.0 3.0 1.0

3.2 Sustainability 3.0 5.0 4.0 4.5 4.5 4.0 3.0

Total 19.0 20.7 19.0 17.8 16.8 21.0 16.7

Overall we note that no option fares best across all evaluation criteria:

Strategic alignment is best achieved through regionalised ‘Travel Hub’ (6) and ‘Distributed model’ (7)

Cost efficiency through option 2 ‘All in One nearshore A’, 3 “Nearshore B” and 6 ‘Travel Hub’.

Risks are best managed through status quo (1) and Nearshore A options (2 and 4).

In terms of overall score we observe that:

Option 2 ‘All in One, Nearshore A’ (option 2) and ‘Travel Hub’ (2) fare overall best and equally well;

‘PQ only/Nearshore B’ (5) and ‘Distributed model’ (7), with business continuity the main reasons for these rankings.

The status quo option is not the option that fares best. It notably fares worst on cost efficiency.

The assessment of options shows that the decision on which model to pursue comes down to the level of risk WHO is willing to take to generate targeted efficiencies.

It also shows that optimally balancing the expansion agenda through savings with business continuity management may require thinking about the issue in a different way.

75 Relocation study of WHO regulatory and prequalification services | Conclusions

5. Conclusions Observations

The business case for RHT relocation is a case for growth. Consultations have confirmed the critical importance of the RHT’s programme for WHO GPW and for partners who rely on it, and the broad support for the expansion of the programme.

The regulation and prequalification of health products are critical components of WHO’s mandate and its contribution towards the realisation of universal health coverage. Both the MVP 2016-30 vision and the RHT Action Plan call for the expansion of RHT’s services as a strategic priority in line with the GPW13.

In a nutshell, the study findings have shown that:

Savings of up to 20% could be generated from a relocation of RHT activities, with a payback period of 1-2 years depending on the options;

However, no option fares best across all evaluation criteria; WHO does not have the experience of relocating 100 staff to a new location and RHT does not

have business continuity plans to mitigate transition risks; Overall staff attrition will be at best 20% and may go up to 55% depending on the location chosen. Upon taking a decision on relocation, WHO leadership needs to consider: 1. The likelihood that savings can be retained and re-invested into RHT growth 2. The risk appetite of the organization, considering low readiness for relocation In this light, the business case for relocation is about ensuring that the expansion can be financed, not merely about generating pure cost savings. The rationale is that the cost efficiencies generated from delivering from a cheaper location could be reused to finance the expansion of regulatory and prequalification services and that operating from a different location could help do away with the recruitment cap in Geneva. The financial modelling of the different options shows that significant cost-savings could indeed be achieved from relocation, with an ROI of less than 2 years for most options considered. There is however a need to challenge the assumption that the savings generated could be actually retained by WHO given the heavy level of earmarking and fee model, which do not make it straightforward for WHO to fully retain these savings. WHO’s actual ability to retain the savings should therefore be further confirmed prior to moving forward with relocation. Besides this, the decision to proceed with relocation essentially comes down to WHO leadership’s appetite for risk. In this light, we noted that transition risk is high given: 1) the high business impact that should be anticipated with the attrition of from 25% to more than 50% of specialised P and G staff depending on the option chosen and how well it is transitioned into; and 2) the low level of organizational support and readiness observed, with RHT ways of working that are not harmonised, interfaces within and outside the programme that are not systematised, and no business continuity plan in place. We also note that WHO has never moved 120 staff and that previous relocation experience at WHO have showed mixed successes and were only partially comparable with what is considered here.

For this reason, none of the relocation options assessed are satisfactory and offer a clear direction on a way forward. Rather than a full-on relocation of RHT’s services, we would recommend a combination of various approaches to achieve WHO’s objectives of strategic alignment and growth.


Recommendations

In the course of the project we identified other means to support programmatic expansion, which we recommend to the leadership for consideration. This includes a mix of improvements and paradigm shifts, and elements that are under the control of RHT while others require Organization-wide policy decisions.

The key imperative is to balance the expansion agenda with business continuity management. To that end, we recommend:

Exhibit 6. Recommended mix of improvements and paradigm shifts

1. Increase the external leverage model

In terms of paradigm shifts, in the short term RHT should overhaul its delivery model with the view to drastically increase the leverage of external capacity and related increase in the ratio of external vs internal FTEs.

This involves a deliberate effort from RHT to sharpen the definition of those activities that can only be performed by internal staff vs those that can leverage external individuals or organizations. On this basis, protocols and requirements to ensure consistency in performance should be defined, notably:

Certification or accreditation requirements and pathways to deliver prequalification services; Quality assurance protocols.

Increased focus should also be placed on nurturing the roster of external consultants, e.g. by considering it as formal output, with the view to extend its coverage, reach, flexibility, and practicality.


2. Renew efforts to accelerate improvements already underway

To enable the above and generate additional efficiencies, RHT should accelerate efforts already underway to:

Review the division of labour within the teams, e.g. by using G staff across product streams or ensuring a clearer separation between capacity-building and process-driven work;

Harmonise the ways of working across teams, notably through more joined-up planning between teams and sub-teams, and actively fostering convergence in the approach to perform assessments across sub-teams;

Reduce overreliance of the programme on individuals, through the implementation of a broader scope of process under formal quality management, the documentation of business continuity plans;

Introduce automated workflows, digitize processes and provide real-time service level reporting.

3. New outpost in selected locations

In terms of improvements, WHO should consider the progressive build-up of outposted capacity (as opposed to relocation of entire teams) in one or two new locations as a means to balance the expansion agenda with business continuity management.

In order to inform this decision WHO should clarify the capacity requirements stemming from its strategy and action plan. This would clarify the manpower expected in the medium-term for the various RHT teams. On this basis for the decision to open one or two sites could be made as follows: On the one hand to an offshore location for RSS, the PQT-Inspections sub-team and selected

members of SAV based on required proximity to key stakeholders; and On the other hand to a nearshore location such as Budapest for PQT.

This/these locations would be staffed through natural attrition, incentives on staff mobility and incremental growth. In essence, the policy would be that all new recruitments are done in these locations, that current staff in HQ can move to the new location on a voluntary basis and that WHO can ‘nudge’ staff to relocate through adequate incentives, such as more permanent contracts, promotion or move from G to P staff category.

4. In the long-run, reconsider governance arrangements for the prequalification programme

There are issues that the above recommendations alone will not address, notably the call from external stakeholders for increased input into the prioritisation of the demand placed on prequalification services, and the important differences noted between the programme and the rest of HQ in terms of funding model, organizational logic, department size, span of control within the programme, mix of contract types and mix of staff.

These may be symptoms of the need for WHO to consider alternative governance arrangements for the programme. Also the need for WHO to build capacity in priority areas such as data and science compete with the need to enable the expansion of the regulatory and prequalification programme. This questions the extent to which the prequalification programme has outgrown its place within WHO.

We recommend that WHO reconsiders the programme governance, and that options to put the programme at ‘arm’s length’ from WHO be assessed, e.g. partnership models with multistakeholder governance. The view should be to find a balance between control by WHO, responsiveness to stakeholder demand, and required flexibility and scalability for the programme.


Way forward

The above recommendations provide a blueprint for the transformation of WHO regulatory and prequalification that are strategically aligned, can be owned by RHT management, and would be amenable to the concerns raised by external stakeholders.

Leadership however needs to form their own view on which path to take forward.

Should WHO elect to proceed with a relocation of current teams, the following requisite should be implemented:

Clarify and confirm funding sources for the transition, assuming that donors are probably not willing to finance this undertaking. Depending on the scope and location chosen, a budget between USD 2.5 and 8 million needs to be secured for the transition.

Set up the required project and change management structure and staffing, including the following streams of work:

- Contingency planning, responsible notably to:

o Assess the overall business impact various levels of staff attrition (e.g. 20%, 40% and 60%) will have on RHT’s ability to deliver on the RHT strategy, commitments to donors and services levels of prequalification services;

o Define and agree mitigations strategies, notably on the demand side, the reprioritisation of RHT programme of work based on commitments and importance, and on the supply side, the recruitment of temporary capacity to either shadow departing staff or back-fill staff that will work on making the transition happen;

o Monitor demand and supply throughout the transition, and reprioritise RHT workplans accordingly.

- External and internal communications, with an immediate need to planning communication towards external stakeholders, with an articulate business case and rationale that can reassure donors, partners and staff on the vision for regulatory and prequalification services.

- City selection and management of relationships with authorities in the target location. This team will need to keep in mind that staff preference for a city is ultimately an individual appreciation and that staff will need to be surveyed to understand their attitude towards specific cities, although the selection of a city in UN agency has a political dimension that may result in a choice different than the one staff prefer.

- Staff support for outbound and inbound transition, starting with the clarification of HR policies for the relocation, notably the support provided to staff and the mobility policy that will apply to them, and the scaling of recruitment to target location,

- Process and system adaptation, with a mandate for streamlining and harmonisation of ways of working between RHT and other departments and within RHT as a means to facilitate the transition

- Facility management, office move logistics and location preparedness; - Overall project management office including a seasoned programme manager, financial and HR

officer, change manager and administrative support.

The project management structure should be adequately capacitated from the RHT department, BOS division and if need be complemented by external assistance. It should be overseen through the usual steering committee arrangements, which may consider the involvement of other internal divisions and key external stakeholders.


Alternatively, should WHO elect to proceed with our recommended approach, the following should take place:

Communication of study findings to internal and external stakeholders, with an emphasis on the case for growth and the need for RHT transformation that is collectively owned by WHO leadership, RHT management and staff and key stakeholders of the programme.

Clarification of capacity requirements for the next 3-5 years based on a refined business model, clear assumptions on demand for PQ, RSS and SAV services, and simulation of workload requirements.

Consideration of location of future PQT capacity in Budapest, and RSS/PQT and selected members’ positions in SAV in a regional hub.

Set up a task force to define the future delivery model and related requirement and renewed efforts to strengthen and expand the roster of consultants

Renewed efforts to: - Accelerate the convergence in harmonised ways of working between PQT sub-teams - Review the allocation of work across the department, e.g. by consolidating some activities across

product streams - Integrate delivery through joined planning tools and routines

Ensure the management, execution and monitoring of the above through a formal RHT transformation governance and organization.

Optionally, consideration by WHO leadership and Member States of the degree to which PQ services should be put at arm’s length from WHO.

80 Relocation study of WHO regulatory and prequalification services | Appendix 1. List of documents consulted

Appendix 1. List of documents consulted

WHO strategy and transformation documents 13th General Programme of Work 2019-2023 Proposed programme budget 2020–2021, EB144/5 HQ Transformation Implementation Guidance, August 2019 WHO organizational chart: New, future HQ structure, April 2019 Transforming for Impact, Speech of WHO DG, Dr. Tedros, March 6 2019 Classification and Description of WHO Global Public Health Goods (GPHG), 2019 Global Goods Process Outline, 2019 HQ 2nd Pulse Check Survey, Preliminary results as of 19 July 2019 MVP/RHT strategy documents and studies Towards Access 2030, WHO Medicines and Health Products Programme Strategic Framework 2016-2030, 2017. Delivering quality-assured medical products for all, 2019-2023, 2019. Impact Assessment of WHO Prequalification and Systems Supporting Activities, External Assessment Report on programmes in the Department of Medicines and other Health Technologies, June 2019. PQ Financing Strategy, Compendium, 2014 RHT operations Overview of RHT, February 2019 and various team organigrams WHO Prequalification of in-vitro diagnostics, medicines, vaccines and vector control products, PQT briefing to new ADG WHO Prequalification Fact Sheet, February 2019 Overview of the WHO prequalification of in vitro diagnostics assessment PQT, Quality Manuel, Revision 02, November 2018 Overview of the WHO prequalification of vector control product assessment Concept note: A framework for evaluating and publicly designating regulatory authorities as WHO-Listed Authorities, May 2019. Consolidated version of RHT group activities, 2019 RSS-CRS Key functions and achievements, 2019 and other RSS-related documents Member State mechanism on substandard and falsified medical products, A722/22 SAV key achievements, 2019 Surveys and PQ fee model Pharmaceutical Manufacturer PQP Survey, August 2010 WHO Medicines Prequalification, Survey of Manufacturers 2016, July 2017 WHO IVD Prequalification, Diagnostics Products Manufacturer Survey, February 2016 PQ Fees – Impact analysis and monitoring, 2019 PQ Finance Model Qualitative Assessment, February 2015 Public consultation on new PQ fee model, 2016

81 Relocation Study of WHO regulatroy and Prequalification services | Appendix 2. Notes on Financial modelling

Appendix 2. Notes on Financial modelling Objective of the financial modelling and planned outputs

We built a financial model to allow apple to apple comparisons between options. The model calculates the impact on costs and travel time of 7 different relocation options as outlined in section 4.

The model was developed to derive the running costs and one-off relocation costs associated with each option.

The output was derived in USD for the Base Case (Geneva-centred option) and for each alternative option. Each option was analysed with the following level of granularity.

Table 13. Running and off-costs

Principles of the model

Location

The financial model allowed to calculate the impact of relocating the sub-teams to specific locations. For the purpose of this study, the following cities were used for the model. These cities should be understood as proxies to allow financial simulations. They do not constitute a recommendation or choice.

Running costs One-off costs

Salary • Net Base Salary • Post Adjustment • Employee Benefit • Occupancy Costs

Salary Increase

Shadowing Salary Costs

Recruiting Costs

Relocation Costs

Project Management Costs

Additional Travel Costs Travel • Flight Costs – Work • Flight Costs – To Geneva • Flight Costs – Assessment Workshop • Per Diem – Work • Per Diem – To Geneva • Per Diem – Assessment Workshop

External Travel Costs

Consulting & Contractual Serv. Costs

Other Costs


Table 14. City used for financial modelling Options Scope City used for financial

modelling Location of PQT- Medicines Assessment sessions

1. Geneva-centred RHT Geneva Geneva

2. All in One /Nearshore A RHT Copenhagen Copenhagen

3. At all Cost / Nearshore B RHT Budapest Budapest

4. PQ only / Nearshore A PQT Copenhagen Copenhagen

5. PQ only / Nearshore B PQT Budapest Budapest

6. Travel hub RSS – CRS RSS- RN&H PQT- Inspections (SAV – some members)

Nairobi

PQT – other sub-teams SAV – rest of team RSS – rest of team

Geneva Copenhagen

7. Distributed model RSS PQT

Dakar

PQT – other sub-teams Copenhagen Copenhagen

SAV Geneva

Sub-teams in scope

The principles underlying the model were discussed and aligned with WHO stakeholders in the PRP and Finance Departments. The financial modelling derives the cost impact based on sub-teams of the each of the teams in scope of the assessment: PQT and its sub-teams RSS and its sub-teams SAV and its sub-teams RHT (Director office)

Timeline

The following timeline was considered: 2018: Basis for defining the costs to analyse (not comparable with outputs due to different team

structure) 2018 recalculated: Calculated based on the defined approach Base Year: First year in new location Years 1 – 3: Built on the base year and potential growth assumptions for each sub-team

Cost categories

The four cost categories listed below were considered in the financial model as running costs. These consist of the respective expenditure types, which represent 99.8% of the total costs in 2018 according to the organizational cost structure. Salary: 501-Staff Costs: LT; 502-Staff Costs: ST and 503-Staff Costs: Supplementary Travel: 518-Travel Consulting & Contractual Services Costs: 512-Consulting, Research Serv. and 513-Contractual

Serv, General Other Costs: 514-Med. Supplies, Literature; 515-Equip, Veh, Furniture; 517-Training; 519-General Op.

Costs; 526-Agreements with UN and NGO and 555-Equip for third Parties


Salary costs

The salary costs are based on the staff list of the teams in scope, including their grade (P1 to D2 and G1 to G7) and level (I to XIII).

Net Base Salary: The net base salary costs for P and D staff are derived on the basis of the salary scales for the professional and higher categories. For the time periods 2018 and 2018 recalculated, we used the scale effective 1 January 2018, whereas for the other time periods we used the scale effective 1 January 2019. The net base salary costs for G staff is based on the general service scale of the respective location.

Post Adjustment: For P and D staff, the post adjustment is calculated as the net base salary multiplied by the post adjustment factor.

Employee Benefits and Occupancy Costs: Both cost categories are derived as a percentage of the net base salary. The percentages are based on the Post Cost Averages (“PCA”) for 2018-2019 and are dependent on the location and the grade of the employee.

Travel costs

The travel pattern has been analysed for the year 2018 (i.e. number of flights/trips, destinations and days per trip; all on a sub-team level) and used as a basis to estimate the travel costs for the alternative options.

Flight Costs: The destinations covering 50% of total costs were looked at in detail, whereas the other destinations were categorized into long haul flights (over nine hours of travel time) and short haul flight. The same travel pattern was applied for the alternative options as for the base case. Moreover, the flights to the assessment workshop as well as flights to Geneva (if a team is relocated) were taken into account.

Per Diem: The destinations covering 50% of total costs are looked at in detail, including the respective per diem rates, whereas for the remaining destinations, an average per diem rate is used. Moreover, the trips to the assessment workshop as well as to Geneva (if a team is relocated) are taken into account.

Further cost categories

The following cost categories are assumed to remain constant at 2018 level: External (non-staff) travel costs Consulting & contractual service costs Other costs

One-off costs

Salary increase: No salary increase/inflation is assumed. Shadowing Costs: We assume that all staff that are not relocated will remain for 3 months to transfer

knowledge to new hires (mainly G-staff). As such for 3 months, the salary will be paid for 2 FTEs per position. The 3 monthly salaries of the staff located in Geneva is considered as a one-off cost. The travel costs with regard to shadowing are considered under “Additional Travel Costs”.

Relocation Costs: For each employee that is relocated, a one-off relocation allowance is assumed. This relocation allowance is calculated as the sum of: 1) a lump sum of USD 10’000 for a single employee or USD 15’000 for an employee with dependents; 2) an installation grant of one monthly salary of the new location (referring to the net base salary and post adjustment); and 3) 30 days of per diem and additional 15 days per diem per dependent.

Recruiting Costs: - Recruiting Costs Abroad: For each FTE that needs to be replaced abroad, the same relocation

costs as described above under “Relocation Costs” occur. This only applies to D&P staff. The number of FTEs replaced abroad is defined by the number of FTEs not moving multiplied by an assumed percentage of FTEs recruited abroad.

- Costs Recruiting Time: The recruiting is assumed to be done by two recruiters with the grades P-3 and G-5. The costs are derived by multiplying the daily average grade of the two recruiters with the assumed amount of days spent for recruiting.

Project Management Costs: We assumed that 4 additional FTEs, 2 P3 and 2 G5 would be dedicated to the project management required for the transition period (1 year). This comes out to be approximately a cost of USD 5’000 per RHT employee.


Additional Travel Costs: These costs include: 1) the one-way ticket from staff and their family to the new location; 2) flight costs for shadowing purposes and management involvement to Geneva as well as to the new location; and 3) per diem with regard to shadowing and management involvement in Geneva as well as in the new location.

Data sources and limitations The table below outlines the main data sources used: Table 15. Main data sources

Subject Source

Actual 2018 Files received from WHO: • RHT Staff Costs_From_PQ_Stall_List_ONLY.xlsx • RHT_Travel_Expenditure_by_HR_OrgUnits_LISTED_Staff_Only.xlsx • RHT Activity Costs.xlsx • 20190926_PQ relocation budget data.xlsx

# FTEs Staff list provided by WHO

Standard Rates Salary (D, P & G staff)

https://www.un.org/Depts/OHRM/salaries_allowances/salary.htm

Post Adjustment Factor https://icsc.un.org/

Post Cost Averages Lists for 2018-19 provided by WHO

Cost per flight Provided by WHO travel team

Per diem DSA Circular | ICSC/CIRC/DSA/533 | Date: 1/Oct/2019

We note the following limitations of the financial modelling: The model is a transaction model and is not designed to be updated on a regular basis (not a “business

as usual” model). External travel costs, performed by external consultants, are not modelled (i.e. remain constant), as

the information required for the modelling was not available. Forecasted information will be expressed in nominal terms (i.e. no inflation consideration). All costs of the relocation are assumed to occur in one year. The one-off costs cannot be allocated over

several years. The calculations will be performed at sub-team level and aggregated on team level and by department.

This implies that all employees are assigned to one sub-team.

85 Relocation Study of WHO regulatroy and Prequalification services | Appendix 3. List of interviewees

Appendix 3. List of interviewees

Stakeholder type Organization / Division Name

1 WHO leadership DDG Zsuzsanna Jakab 2 WHO leadership DGO - Chef de cabinet Bernhard Schwartländer 3 WHO leadership DGO - Head of Transformation Bruce Aylward 4 WHO leadership BOS - ADG Raul Thomas 5 WHO leadership MVP - ADG Mariângela Simão 6 WHO leadership PRP - Director Imre Hollo 7 WHO leadership HRD - Director Jennifer Linkins 8 WHO leadership WHO Budapest center - Head Françoise Nocquet 9 WHO MVP management RHT - Director Emer Cooke

10 WHO MVP management PQT Coordinator Deus Mubangizi 11 WHO MVP management RSS Coordinator Michael Ward 12 WHO MVP management SAV Coordinator Michael Deats 13 WHO Relocation Working Group PQT - Diagnostics Irena Prat 14 WHO Relocation Working Group PQT - Medicines Antony Fake 15 WHO Relocation Working Group RSS - CRS Razieh Ostad Ali Dehaghi 16 WHO Relocation Working Group PQT - Inspections Vimal Sachdeva 17 WHO Relocation Working Group RSS - RN&H Elizabeth Pluut 18 WHO Relocation Working Group MVP - Internal liaison Jacqueline Sawyer 19 WHO Relocation Working Group HRD Josiane Sidibe Pimpie 20 WHO Relocation Working Group WHO Staff Association Laurent Constantin 21 WHO Relocation Working Group SAV - IVDs Anta Sands 22 WHO internal stakeholders WHO AFRO Nikiema Jean Baptiste 23 WHO internal stakeholders WHO/GMP Alonso Pedro 24 WHO internal stakeholders WHO/IVB Martin H. Friede 25 WHO internal stakeholders WHO/IAU Lisa Hedman 26 WHO internal stakeholders MVP/TSN François Xavier Léry 27 WHO internal stakeholders MVP/EMP Sue Hills 28 WHO internal stakeholders HRD Catherine Riedweg 29 Donor Bill and Melinda Gates Foundation Murray M. Lumpkin 30 Donor GAVI Dominic Hein 31 Donor UNITAID Robert Matiru 32 Donor/Technical partner UNICEF Hanne Bak Pedersen 33 Manufacturer Medicines Lupin Mansi Haldankar 34 Manufacturer Vaccines Merck Julles Millogo 35 Manufacturer Vector Control Sumitomo Chemical Co., Ltd Lucas John 36 Manufacturers Diagnostics Abbott Duncan Blair 37 Manufacturers representative organizations DCVMN Sonia Pagliusi 38 Manufacturers representative organizations IFPMA Janis Bernat 39 Manufacturers representative organizations IGBA Suzette Kox 40 NGO MSF Isabel Manzano 41 Quality Control Lab Intertek Life Bridge Yan (Helen) Xue 42 Regulatory agency MCAZ Gugu Nolwandle Mahlangu 43 Regulatory agency ANVISA João Paulo Ortega Terra 44 Regulatory agency National Regulatory agency ghana Mimi Darko 45 Regulatory agency EMA Agnes Saint Raymond 46 Regulatory agency EMA Frances Nuttall 47 Regulatory agency US FDA Gopa Raychaudhuri 48 Technical Partner CIOMS Lembit Rago 49 Technical Partner Stop TB Partnership Brenda Waning

86 Relocation Study of WHO regulatroy and Prequalification services | Appendix 4. Staff survey results

Appendix 4. Staff survey results

The results of the staff survey are provided separately.

87 Relocation Study of WHO regulatroy and Prequalification services | Appendix 5. External stakeholders survey results

Appendix 5. External stakeholders survey results

The results of the external stakeholders survey are provided separately.

88 Relocation Study of WHO regulatroy and Prequalification services | Appendix 6. RHT group interviews results

Appendix 6. RHT group interviews results

The results of the group interviews are provided separately.

89 Relocation Study of WHO regulatroy and Prequalification services | Appendix 7. Site criteria

Appendix 7. Site criteria This annex elaborates in more details on the requirements of the new location in a relocation scenario.

The location requirements listed below have been developed in conjunction with the RWG with the aim of painting the characteristics of the ideal location. These requirements are in our view essential for RHT to maintain its level of operations.

Not every selected location will meet however all 6 assessment criteria. Care must be taken to evaluate which requirements can fulfil the relocation assessment criteria and the underlying imperatives for relocation.

Table 16. Location requirements and description

Location requirement Description Rationale

1. A city that is attractive for international businesses

1.1 Major international travel hub

A travel hub that offers a broad range of direct and frequent short and long-haul flights The hub should also offer direct and frequent flights to Geneva

To minimize connecting flights, time spent travelling and improve overall efficiency This would be particularly relevant for the teams with the heaviest travel schedules

1.2 Good public transport connections from airport to new RHT premises

New premises are accessible by public transport or taxi within 1h of airport

To reduce travel time to a minimum and increase efficiency

1.3 Offers proximity to international organizations or external partners

The new location has an established international community and the presence of relevant external stakeholders

Seen as enabling business and leveraging synergies

1.4 Availability of consulates and embassies offering visa services

The new location offers: administrative support on travel and visa

arrangements close proximity to consulates and embassies

for passport related issues environment that favors visa applications from

all nationalities

To ensure that all nationalities can easily access the new location and that RHT staff can easily make travel arrangements without unreasonable delays

1.5 Robust telecommunication infrastructure

The new offers performant and reliable communication/IT systems (incl. high-speed internet connectivity) to maintain work flows between teams and with external stakeholders

Internet connectivity and functioning teleworking options are essential to ensure regular and continued interactions with HQ Departments mainly

1.6 Government incentives Government is willing to negotiate and meet WHO privileges and immunity requirements

Government or local authorities offer incentives to create and expand presence over time

As seen from other relocation experiences, government incentives can quicken the transition time and increase overall attractiveness to the new location

1.7 Time zones overlaps with other main WHO locations (incl. GVA, ROs)

The new location has no more than +/- 2h time zone difference with Geneva

To enable faster and more efficient communication

2. A city that is attractive to talent

2.1 Safe and open socio-cultural environment

The new location should offer security level 1 (minimal) or 2 (low) as described in the UN’s Security Level System. If higher, WHO should offer its staff measures to reduce any safety threats. The new location should be a tolerant and open socio-cultural environment, open to all religions or sexual orientations.

To attract staff and new recruits in new location. Safe and open socio-cultural environment was ranked as the top 2 criteria (55%) that would make a difference in the choice of a future location

90 Relocation Study of WHO regulatroy and Prequalification services | Appendix 7. Site criteria

Location requirement Description Rationale

2.2 Availability of quality healthcare services (both public / private)

The new location should offer high quality healthcare and multilingual communication to staff and their families

High quality health services was ranked by RHT staff (survey) as the top 1 criteria (58%) that would make a difference in the choice of a future location

2.3 Availability of a strong educational system

The new location should offer a range of multilingual schooling opportunities (from nursery to university) including international schools

Strong educational system was ranked by RHT staff (survey) as the top 3 criteria (48%) that would make a difference in the choice of a future location

2.4 Availability of adequate housing at a reasonable price

A city that offers a range of housing options at a price equivalent or lower to Geneva, and provision of housing support from host country

To enable staff and their families to find adequate and timely housing

2.5 Ability to recruit qualified and suitable P and G staff

The new location should have the capacity to attract P staff with specialized pharmaceutical and regulatory backgrounds as well as recruit locally qualified and English-speaking G staff

The study raised the challenge of losing highly specialized P and G staff.

91 Efficiency and feasibility study of a relocation of WHO regulatory and prequalification services |

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This report has been prepared solely for the use and benefit of, and pursuant to a client-relationship exclusively with WHO. We disclaims any contractual or other responsibility to others based on its use and, accordingly, this information may not be relied upon by anyone other than above mentioned organizations.

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